Sunday, January 30, 2011
Monday, January 24, 2011
Lethbridge Real Estate 2010 Market Report
Well, another year has come to a close and it's time to reflect on all that happened this year in the Lethbridge Real Estate Market. As I sit down to put together my 2010 Year End Report, I keep in mind that statistics are a funny thing. Though there are proven numbers and facts to base a report on, any report can be skewed to favour the writer's position. As I represent both buyers and sellers in this market, I feel it very necessary to be as unbiased as possible. With that said, I will put some of the more interesting numbers in front of you and let you draw your own conclusions. But of course, I do have the experience to make some general conclusions and predictions for the coming year, which I will do as well.
The media had a fun time glamorizing the doom and gloom in the real estate market this year. Shall we say they are genius for predicting a slide in sales and average home prices? I think not. Our market has not grown cold, rather, it has merely returned to a state of "normal".
In March of 2010, the Canada Mortgage and Housing Corporation forecasted a slight increase in sales for the year from 2168 in 2009 to 2400 in the year 2010. I'm not entirely sure where they received their data from, but the MLS Statistical Reports for the Lethbridge and District Association of Realtors shows an actual number of 2354 total home sales in 2009 down to 2078 total home sales in 2010, or a 12% decrease. (I can only assume CMHC doesn't include vacant lots in their statistics, which may explain the discrepancy). Regardless, they were a bit off. Why??
Well, first of all, they do not have a crystal ball either, but my guess is that although at that time they were aware of the tighter lending practices that were about to take effect in April of 2010, they may have underestimated the impact it would have on the ability for many homeowners to qualify for a mortgage.
They were also a bit off on their prediction of a 4% increase in the Average MLS Price in 2010. The average price did rise ever so slightly from $258,156 in 2009 to $259,064 (these numbers are across the board, and include many of the smaller communities where more modest values skew city stats) but in the City of Lethbridge itself, there was also a slight rise in average home price from $274,863 to $275,795 in 2010 (also representing about a 1% increase).
CHMC also missed the mark on vacancy rates (which are an item of interest to anyone who owns or is looking to purchase a single family home for revenue purposes). They predicted a decrease from 3.8% in October of 2009 to 2.5% in 2010 when actual figures show a slight increase in vacancy rates to 4.1% for the Lethbridge area.
So what can we take from some of these numbers that might help us all to make wise real estate decisions in 2011??
1. Real estate should never be thought of as a "get rich quick" investment, as it erroneously has been in the past few years. I often hear people lament that they wish they had purchased prior to this last "boom". Well, real estate is cyclical and there will be another boom. It's just a matter of purchasing and HOLDING that investment until it's the right time to sell. Interest rates are still VERY attractive, with a 5 year rate at 3.69% and a 10 year rate of just 5.10% at the time of writing.
2. Now more than ever, you need an experienced Realtor on your side if you are selling your home. Pricing is very key and you will want someone who can give you an ACCURATE range in value, and who will be honest with you about what it will take to get your home sold and your estimated time on the market.
3. How you can make smart decisions in this market will depend on many things including the type of property you own or wish to purchase, whether you are upsizing, downsizing, relocating or purchasing for investment. There is not one set strategy for each person. It is crucial to find a Realtor who will take the time to understand your goals and to help you make the decisions that are best for you, even if that means staying right where you are.
Now, we've seen that even CMHC had a tough time predicting what the market would do, but just for fun, here are my predicitions for 2011:
1. I think CMHC was perhaps just a year ahead of themselves and a little overzealous with a 4% predicted increase in home values across the board for 2011, so I will predict a more modest increase of 2% over the course of the year followed by a larger increase in 2012.
2. As the Canadian economy recovers slowly and consumer confidence returns to the point where the Bank of Canada can gradually increase interest rates, I would expect we will see a decrease in vacancy rates. My number out of the hat for October 2011 is 3.6%.
3. Based on the fact that there is still some "levelling" to do with regards to average home prices within the City of Lethbridge, I would predict a very slight decrease in average home values within city limits with a more noticeable increase in the smaller communities surrounding Lethbridge which will effectively boost the average home price across the board.
If you have any questions throughout the year about the real estate market in Lethbridge, I am always happy to sit down with you to have a candid discussion. Please don't hesitate to call or email!!
***For a full market report including prices and the number of homes sold in each area of the city and across the board, please visit www.ldar.ca and click on Market Statistics
The media had a fun time glamorizing the doom and gloom in the real estate market this year. Shall we say they are genius for predicting a slide in sales and average home prices? I think not. Our market has not grown cold, rather, it has merely returned to a state of "normal".
In March of 2010, the Canada Mortgage and Housing Corporation forecasted a slight increase in sales for the year from 2168 in 2009 to 2400 in the year 2010. I'm not entirely sure where they received their data from, but the MLS Statistical Reports for the Lethbridge and District Association of Realtors shows an actual number of 2354 total home sales in 2009 down to 2078 total home sales in 2010, or a 12% decrease. (I can only assume CMHC doesn't include vacant lots in their statistics, which may explain the discrepancy). Regardless, they were a bit off. Why??
Well, first of all, they do not have a crystal ball either, but my guess is that although at that time they were aware of the tighter lending practices that were about to take effect in April of 2010, they may have underestimated the impact it would have on the ability for many homeowners to qualify for a mortgage.
They were also a bit off on their prediction of a 4% increase in the Average MLS Price in 2010. The average price did rise ever so slightly from $258,156 in 2009 to $259,064 (these numbers are across the board, and include many of the smaller communities where more modest values skew city stats) but in the City of Lethbridge itself, there was also a slight rise in average home price from $274,863 to $275,795 in 2010 (also representing about a 1% increase).
CHMC also missed the mark on vacancy rates (which are an item of interest to anyone who owns or is looking to purchase a single family home for revenue purposes). They predicted a decrease from 3.8% in October of 2009 to 2.5% in 2010 when actual figures show a slight increase in vacancy rates to 4.1% for the Lethbridge area.
So what can we take from some of these numbers that might help us all to make wise real estate decisions in 2011??
1. Real estate should never be thought of as a "get rich quick" investment, as it erroneously has been in the past few years. I often hear people lament that they wish they had purchased prior to this last "boom". Well, real estate is cyclical and there will be another boom. It's just a matter of purchasing and HOLDING that investment until it's the right time to sell. Interest rates are still VERY attractive, with a 5 year rate at 3.69% and a 10 year rate of just 5.10% at the time of writing.
2. Now more than ever, you need an experienced Realtor on your side if you are selling your home. Pricing is very key and you will want someone who can give you an ACCURATE range in value, and who will be honest with you about what it will take to get your home sold and your estimated time on the market.
3. How you can make smart decisions in this market will depend on many things including the type of property you own or wish to purchase, whether you are upsizing, downsizing, relocating or purchasing for investment. There is not one set strategy for each person. It is crucial to find a Realtor who will take the time to understand your goals and to help you make the decisions that are best for you, even if that means staying right where you are.
Now, we've seen that even CMHC had a tough time predicting what the market would do, but just for fun, here are my predicitions for 2011:
1. I think CMHC was perhaps just a year ahead of themselves and a little overzealous with a 4% predicted increase in home values across the board for 2011, so I will predict a more modest increase of 2% over the course of the year followed by a larger increase in 2012.
2. As the Canadian economy recovers slowly and consumer confidence returns to the point where the Bank of Canada can gradually increase interest rates, I would expect we will see a decrease in vacancy rates. My number out of the hat for October 2011 is 3.6%.
3. Based on the fact that there is still some "levelling" to do with regards to average home prices within the City of Lethbridge, I would predict a very slight decrease in average home values within city limits with a more noticeable increase in the smaller communities surrounding Lethbridge which will effectively boost the average home price across the board.
If you have any questions throughout the year about the real estate market in Lethbridge, I am always happy to sit down with you to have a candid discussion. Please don't hesitate to call or email!!
***For a full market report including prices and the number of homes sold in each area of the city and across the board, please visit www.ldar.ca and click on Market Statistics
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