Karri's Alberta Real Estate & Mortgages State of the Union - 2023 Year End
How are you feeling about 2024? Personally, I'm very optimistic. After an historic rate cycle of increase after increase after increase (phew!), it looks like we may get a breather soon. The economy is softening. Of course, Alberta is characteristically 'bucking' some of the trends . Let's dive in...
Karri's Year End Alberta Real Estate State of the Union 2023:
Canadian Prime Interest Rate: 7.2%. The Bank of Canada did not increase its key lending rate in its last 3 policy announcements. Woohoo!
Fixed Rates: On the downswing of late, including some attractive 3-year rate offers.
🔥 Hot Tip: 3-year terms can be a fab option for those trying to split the risk difference between locking in at peak fixed rates or choosing the much higher variable offerings.
Variable Rates: Move with Canadian Prime. Best rates hover around Prime (7.2) - 0.90%.
Inflation: November came in at 3.1%, despite predictions for a modest decrease. However, as higher interest rates continue to work their way through the economy, inflation should get closer to target (2%) in 2024. That means the Bank of Canada could look at reducing its policy rate as early as mid-2024.
Alberta real estate: Seller's market overall with under 3 months' inventory, November Year-to-Date. If you're about to shop for a home, get a fully underwritten pre-approval, stat. If you present an offer with no pre-approval, in a competing buyer situation, you may get laughed out of town. Don't do it.
Calgary real estate: TIGHT as Santa's pants after the holidays 🎅 Seller's market all the way. Serious buyers only. Less than 2 months' inventory. Go Cow Town!
Lethbridge real estate: November saw a shift toward quasi-balanced territory. However, in all my years selling homes here, I've not seen inventory this low in November. If you're shopping the ever-popular $300-400k range, prepare to act fast. Foot shuffling won't cut it in the Windy City anymore. [Alberta market inventory stats: Alberta Real Estate Association]
Housing affordability: The politicians can shout from the rooftops on this one, but for the foreseeable future, affordability will continue to be a major challenge across Canada. Supply is not keeping up with demand. And supply-demand dynamics dictate price.
According to CMHC, the 2030 forecasted Canadian housing gap is 3.1 million units. Yet, less than 300,000 homes per year are being built (StatsCan).
I've represented a builder. I've sold builder homes. I've owned multiple builder homes. Costs are going up. Labor is not cheap nor plentiful. And red tape continues to be a problem across Canadian industry. Real solutions will be long term and multi-faceted.
If there is a real and measurable solution to the housing shortage on the table, I've not seen it. And y'all know I'm a political watcher. Nothing to see here I'm afraid, from any party.
Despite Some Headwinds, You Can Still Buy, Invest or Refinance
No matter the market, I can always make a case to be assertive with your real estate endeavours. I believe in the value of home ownership, full stop. And according to the millions of Canadians pursuing home ownership, this 'value' isn't going away. Prices may fluctuate, but over time, they always go up, up, up, eventually.
What costs $400k today may cost $425k tomorrow.
I've put clients into homes this year who weren't sure it could work. Who got nowhere with 'the bank.' Who felt defeated by this disordered market. But who were willing to do the work upfront so they could shop with confidence and get those keys. That's it. Hard work, optimism, and a professional mortgage broker who cares about doing the right thing for every client, every time.
On that note, reach out any time to book a call in the New Year. Who knows what great things lie ahead for you in 2024?
Happy New Year and Merry Christmas to you and your loved ones! 🎄🎄🎄