“We are at some of the lowest inventory levels that have been recorded since June 2002. So we are just at an interesting time right now with inventory levels,” says Matt Teel, president of the board.
The problem stems from a lack of homes above $500,000 entering the market.
Realtor Elizabeth McNally says this causes a ripple effect on homes in between the $200,000 and $400,000 market range that would typically be purchased by first- or second-time home buyers.
“So then the people down here that are sort of in that ‘need to make moves’ so ether first time home buyers, people who are getting married having babies looking for that second home, that’s the market we are seeing there’s no availability for that ,” says McNally.
That means when a property in that price range hits the market, it generates lots of interest among buyers.
“It’s a challenge because at that price point you might have several different attempts at trying to purchase a property and lose out in a multiple offer situation with the kind of activity we are seeing and that can be frustrating so I think it’s all the more important right now to be prepared,” says Teel.
Teel says rising interest rates are also having a large impact on the market.
“Perhaps any people who have properties right now with lower interest rates locked in are taking this time to be patient and wait until they are forced to change their interest rate. And every penny you can save now obviously you want to try and do that,” says Teel.
McNally says homeowners are also taking advantage of the climbing cost of rental properties. Traditionally these properties would enter the market for sale.
“People who own rental properties that may be would have been thinking about selling them, they are keeping them because the rental market is really driving right now and the rents have been increasing so they are valuable to those owners right now,” explained McNally.
According to the latest board reports, new listings were down seven per cent compared to July 2022. New listings for single-family homes have dropped by 11 per cent respectively.
So what do the experts recommend if you’re looking to buy a home? They say it’s important to be prepared and speak with professionals.
Make sure you seek guidance from your mortgage broker, bank or real estate professional as well as a lawyer and accountant.
They also recommend giving yourself six to 12 months to prepare your finances before purchasing a home
“And it’s just patience, you know? Essentially if you do those steps you’re ready to go then you get someone working for you and you’ll be golden,” says McNally.
“Any piece of information you can get together before you go out into the market is that much more of a leg up when you are able to write an offer. It makes you a stronger buyer at that time too,” explains Teel.
The Medicine Hat Real Estate Board says the market is in a cycle and they don’t expect supply issues to last indefinitely.
However, they don’t see any immediate relief on the horizon, stating more home development would help alleviate the problem.