The Medicine Hat real estate market is seeing higher prices but fewer sales at the end of 2023 as buyers consider the cost of higher interest rates, according to the head of the Medicine Hat Real Estate Board.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
House prices in Medicine Hat are still rising, but sales are lower due to tight inventory and now-cautious buyers who are watching interest rates, according to the head of the Medicine Hat Real Estate Board.
Matt Teel said the end of 2023 is not much different than the first 11 months – high demand tempered by a lack of listings.
“We had the lowest inventory on record this month and the biggest decline is in houses (priced) under $300,000,” Teel said Thursday. “With interest rates where they are, it’s making people hesitant.”
Latest figures for the southeast Alberta region and Medicine Hat show sales through 11 months are down about 11 per cent for single-family homes, but prices rose 4 per cent to $367,000 on average over almost 800 transactions.
Considering all classes, the average residential property sale in 2023 closed for $322,200, including semi-detached (with higher sales and prices), row (steady) and apartment and condos (also up on both counts).
That put the average closing price at $327,250 for semi-detached (up 9 per cent), $218,400 for row housing (up 1 per cent), and $191,500 for apartment-style and condos (up 5 per cent).
In terms of new listings, totals at Nov. 30 were down 5 per cent for detached homes.
With only 64 house sales within city limits in November, the month was the second slowest November in 10 years, despite interest among prospective buyers, said Teel.
With general economic uncertainty, concerns about inflation and the higher interest rates to battle rising prices, Teel said, buyers and sellers are now weighing options.
Does a homebuyer get in the market of upgrade now or wait for potentially lower borrowing costs in 2024?
“It’s a difficult question,” said Teel. “I’m hoping the listings increase come the new year and, if interest rates come down, we’ll be well set up for a strong year.”
Another complicating factor, he said, is the number of mortgage rates set at low pandemic or pre-pandemic levels that are now due for renewal.
Building permits plunge
Residential construction in Medicine Hat fell behind in 2023.
At the end of November, building permits for 28 new detached homes were let by the city’s planning department, compared to 38 in all of 2022 and 51 in 2021.
That brought estimated construction value down to about $13.9 million for this year, a $6-million drop.
Multi-family and other housing construction faired worse, with no new permits for tri- and four-plexes through 11 months (there were five in 2022), six duplexes (15 in 2022) and six apartment-related permits creating nine units. Eleven apartment projects in 2022 permits added 58 suites.
Total new residential spending fell $15.6 million, about half the previous year’s figure.
Existing home and residential renovations remained fairly strong however, as $5.4 million in work was an 18 per cent improvement.
