Real estate market strengthening into 2018

By Collin Gallant on January 16, 2018.

cgallant@medicinehatnews.com @CollinGallant

After dropping like the price of oil in 2016, the ground under Medicine Hat’s real estate market seems to be firming up.

Final figures for 2017 released by the Medicine Hat Real Estate Board show growth in sales and prices, essentially pushing home prices back to pre-recession levels.

Local realtor Tim Seitz, who takes over at real estate board president for 2018, said stronger sales and prices are welcome.

“We finished really well in the last quarter we were up 10 per cent overall,” Seitz told the News on Monday.

“Every year brings a few new challenges … but we had a pretty good year.”

Considering all 967 single-family home sales last year, the average price moved to $306,655. That’s up 3.6 per cent over 2016’s average for detached homes, but that had slumped by about the same amount compared to 2015.

That year, 974 home sales were closed for an average price of $306,709.

That three-year time span coincides with the general downturn in the Alberta economy.

“I think there’s a lot of optimism, that people are feeling that we’re stable and moving forward at least in Medicine Hat,” said Seitz. “People have made up their minds about getting into the housing sector, but the new build sector might still be slow.”

National figures showed increased activity late in the year, which officials from the Canadian Real Estate said Monday could be attributed to buyers attempting to get ahead of tighter mortgage rules and higher interest rates.

Analysts said this month a glowing national employment report could lead to the Bank of Canada’s third increase to lending rates in recent months.

Governor Stephen Poloz is scheduled to announce any decision on the rate on Wednesday.

Seitz said the local market is not immune to rate changes, but the effect of mortgage restrictions — such as so-called stress tasting for insured mortgage, could be muted here due to the lower cost of housing.

“We’ve had a couple of rate increases already,” he said.

New home construction could continue to lag in the year ahead, he said, considering new building code costs. That could however, add strength to the resale market, which is hardly overstocked when listings are analyzed.

Condo and other residential unit sales also moved upwards over the past 12 months — 364 sales netted $76.7 million for an average price of $210,850. That’s still off the 2015 average figure of $219,700 in the extremely varied category of residential properties that also includes mobile homes, recreation property and townhouses. The recent yearly average is a 4.7 per cent jump over 2016, however.

Overall sectors, including commercial, farm and multi-family housing, volume was up 7 per cent on 6.8 per cent more transactions.

Total receipts reached $402.3 million on 1,434 sales. That’s up from $375.2 million on 1,342 sales in 2016.

The recent high was $469.1 million on 1,708 sales in the relative boom year of 2014.