The Lethbridge housing market is a draw for many homebuyers, thanks to its close proximity to the Canadian Rocky Mountains, warm summers and mild winters, offering a welcome change from Alberta’s harsh, snow-filled winter seasons.
Home to just over 100,000 residents, Lethbridge sits just a few hours north of the United States border, making it an ideal location for those who wish to be close to the USA, while still living within close proximity to the beautiful, dynamic city of Calgary.
The shift in lifestyle expectations resulting from the global pandemic has been a boon to many real estate markets across Canada, which saw rising interest by those seeking to trade big city living for more square-footage, ample outdoor living space and perhaps a slight break in price. These factors have caused a shift in the Lethbridge housing market, from a buyer’s market just a few years ago, to a hot seller’s market over the last 20 months. Following a strong summer in 2021, Lethbridge finished the year strong, with high demand and rising prices across this local market.
Sales Ease and Inventory Can’t Keep Pace
Throughout this past summer, Lethbridge quickly became one of the hottest markets in Alberta. However, as summer eased into fall, sales in the city started to moderate, largely due to the shortage of listings available for sale. Low supply and high demand have been the story for most Canadian real estate markets. However, this trend has taken its toll on the local Lethbridge housing market, where the sales-to-new listings ratio pushed above 90 per cent and inventory fell to 482 units at the end of September 2021. This is the lowest inventory for the month of September since 2007.
Limited on the market have led to a decrease in transactions, with supply falling short of exceptionally high demand. These market conditions have had a strong hold over the Lethbridge housing market for most of the year. Year-to-date sales for the first nine months of 2021 set a new record, 50 per cent higher than the 10-year average for home sales, sitting at an impressive 1,857 units, according to the Lethbridge and District Association of REALTORS®. Unit sales for the month itself were up 3.4 per cent than September 2020, with 182 residential units changing hands.
As the last quarter of the year began, conditions in the Lethbridge real estate market were expected to remain fairly steady. Much of the same scenario from September caused the sales-to-new listings ratio in October to increase to 93 per cent which only added further strain to this already tight market.
Unit sales for the month of October totalled 180 transactions, which represents a 3.4-per-cent increase year-over-year, but a slight two-unit decrease month-over-month. The additional home sales in October pushed the year-to-date sales up to 2,035 units, marking a strong 42-per-cent increase year-to-date. Leading the charge in home sales were semi-detached units, which saw a year-over-year increase of 160 per cent, and apartments/condo units which increased 75 per cent over the same time frame.
Supply in the city has struggled to keep pace with the high demand, and it is putting upward pressure on prices. The average price across all property types in Lethbridge during the month of October was up 3.8 per cent compared to October 2020, at $317,971. Row houses saw the steepest incline, reaching $239,856 – up 7.5 per cent year-over-year and a two-per-cent increase month-over-month.
Over the month of October, there were 194 homes listed for sale, marking a 6.3-per-cent decrease year-over-year. With sales remaining fairly high, this pushed inventory levels into deeper territory, totalling 449 units – a notable 24.8-per-cent decrease year-over-year.
Will The Lethbridge Market Cool in the New Year?
Home sales across the Lethbridge housing market often experience a seasonal slow-down during the winter months. However, in order for price growth to moderate, there needs to be a consistent influx of new homes listed on the market. Unfortunately for hopeful side-lined buyers, it is expected that Lethbridge conditions will remain in tight, and in seller’s territory early in 2022. With that being said, if you are considering selling a home in Lethbridge, the market is ripe!
Sources: Lethbridge and District Association of Realtors