This is perhaps the most difficult year yet for making predictions about where Lethbridge real estate will be heading. As I write, Libya and other middle eastern countries are in a state of unrest. The concern of course is the price of oil and the uncertainty that will cause in world financial markets.
For Alberta, high oil prices are usually a driver of our economy and a positive for the real estate industry. However, if the price goes too high, then a world wide recession can, and usually does follow, taking the real estate market down with it.
The other unknown quantity is Canadian interest rates and how high they may go. I have read a multitude of predictions recently, including one which claims real estate prices could fall sharply once rates start to rise. I consider that to be wildly speculative and highly unlikely to happen. However, there is no doubt that steep interest rate rises would make it harder for people to finance and pay down mortgages, thereby reducing demand in the real estate market. Countering that, a recent poll suggests that 30% of Albertans are planning to buy a home in the next two years.
$100 barrel oil here to stay?
My best guess is that $100 a barrel oil (or close to it) is here to stay. I believe this will revitalise the oil patch and be a positive for Alberta. Interest rates will rise, but only by very small amounts (because the economy is still uncertain), meaning the negative effects on real estate will be minimal.
For many years, prior to the boom, Lethbridge real estate prices rose only 3 or 4% a year, basically in line with inflation. The conditions for another property boom are no longer there (easy credit, strong economy, etc.). However, conditions are ideal for a return to a balanced market with price increases in line with inflation.
A great time to buy
So what does that mean for buyers? In short, it is a great time to buy, there is an excellent selection of homes available and interest rates are still at historically low levels. For sellers, it means more competition and a need for realistic pricing. Whether you are a buyer or seller a professional realtor is essential to represent your best interests and negotiate the best possible deal on your behalf. My fees for sellers are reasonable and negotiable and there is no fee whatsoever for buyers.