May 27th, 2024

Local real estate market continues to favour sellers

By COLLIN GALLANT on April 16, 2024.

Home prices are roaring in Medicine Hat through the first three months of 2024, with the Medicine Hat Real Estate board reporting a double-digit percentage increase in average prices.--News Photo Collin Gallant

Pressure in the Medicine Hat housing market continues to push prices higher ahead of the traditionally busy real estate season.

The ongoing tension moved single-family home prices up 4 per cent over the course of 2023 – leading local observers to boast about the relative stability compared to the rest of the province.

For the first quarter of 2024 however, the price jump came in at 14 per cent for detached homes to power a general double-digit increase for all residential units – in line with the rest of the province.

“It’s significant for a three-month time frame, and for March we had the lowest inventory of any March on record,” said Greg Keen, president of the Medicine Hat Real Estate Board. “We’re historically low for inventory and it continues to put pressure on prices for sure.”

Houses on the market compared to sales show Medicine Hat has a rating of two and one-quarter months of supply at the end of March.

At the same point, sales for the calendar year produced an average price of $374,300 for a detached home, $322,200 for semi-detached home (slightly down), $213,400 for row housing (up 9 per cent) and $201,600 for condos and apartments (up 10 per cent).

Considering all residential housing types, the average unit sold for $338,500 – about $50,000 more than five years ago.

While prices move higher, demand and sales remain fairly constant, said Keen, who adds that some portions of demand are underserved and his colleagues are now openly advertising for interested sellers with certain home types.

“Historically as warm weather comes, listings increase and sales increase, so we’ll see what comes,” said Keen. “There’s no indicators yet to say that’s easing, and we’ll need a couple months to see. It’s still a seller’s market.”

Interest rates that had risen in hopes of taming inflation have been held steady recently, leading observers to expect stability until a rate drop in late summer.

So far in 2024, residential construction figures are mimicking a very slow 2023.

Last week, city council approved three rezoning applications toward moving forward with multi-family housing projects, such as apartment complexes, on vacant parcels in Riverside and the Flats.

Speakers in opposition called on council to pull back on allowing larger complexes in older neighbourhoods, but Mayor Linnsie Clark said housing affordability is a top concern of council. Adding more units is important for affordability and economic development, she said.

“Housing is a barrier for us and a lot of cities – most cites in Alberta – and across the country,” she said. “We don’t want to drastically change the character of any neighbourhood … the need we have for housing in Medicine Hat does weigh on me. That’s why multi-family housing on infill lots is being pursued.”

Median price is higher in Calgary at $545,000, according to the Alberta Real Estate Association, followed by Edmonton at $380,000. Lethbridge ($350,000), Fort McMurray ($340,000) and Red Deer ($335,000) were higher than the Hat, while Grande Prairie ($312,800) was lower.

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