Local drop in real estate not as bad as elsewhere

By Collin Gallant on January 19, 2019.

cgallant@medicinehatnews.com @CollinGallant

Medicine Hat’s real estate market faired better than Alberta’s over the past 12 months, according to new figures from the Medicine Hat Real Estate board.

Specific to the residential market, local activity fell by 9 per cent compared to 2017, but that’s half the decrease experience in most Alberta markets.

In terms of home prices, as well, Medicine Hat listings reported mild growth, compared to a drop in general across the province.

“That’s the right direction; that’s positive,” board president Norbert Klaiber said.

“I think we’re holding our own. We don’t crash and we don’t spike. We even expected a bit of a soft start in January, but things are popping up.

“There are still some very good deals closing.”

That might not be the analysis of the public, which is treated to reports about real estate woe in major centres, anxiety over rising interest rates, or a move to stricter lending rules over the past few years.

Klaiber says deeper analysis, expanded to include positive industrial and economic news in Medicine Hat, should give home buyers, and sellers, confidence in the Medicine Hat market.

“It’s perceived that we’re in a bit of buyers market, but I think we’re still holding our own,” he said. “If you’ve lived in your home for more than a couple years, you’re doing OK. Our prices are solid.

“Interest rates aren’t terrible, it’s a matter of a (low) reference point.”

As well, this week the Royal Bank lowered its five-year mortgage rate in contrast to a general expectation that rates will rise and moves by the Bank of Canada to that effect. Klaiber expects other lending institutions to follow, while adding that worry over new stress tests for larger mortgages “raise the bar, but that’s settled out now.”

Listings, while up, remain below levels from 2008 to 2011, when the local market was experiencing the pain from hard economic contraction across North America.

In terms of current price, the typical home sale, of 1,249 in total in 2018, closed at $277,300, marking an increase of 1.2 per cent compared to 2017 figures. That’s compared to a price drop of 1.9 per cent across the province last year. Activity across Alberta was down 21.3 per cent, according to the Canadian Real Estate Association.

Overall, $372.8 million worth of property changed hands in 2018 across all property classes, including farms and vacant land. That is $30.5 million less than the 2017 total, which saw 9.4 per cent more transactions.

Last month, 55 single family homes were sold for a total of $15.43 million — two sales more than December 2017, but cumulatively $1.3 million less in value

The December figures were helped along by four commercial properties changing hands. Those receipts, totalling $3.77 million, along with a $450,000 multi-family unit sale, helped make up for a in-month drop in condos and townhouses.

That class saw only nine sales, worth $1.6 million, close in December 2018, compared to 21 sales, worth $3.66 million one year earlier.

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