The same story is being told and re-told within provincial housing markets across the country: urban homeowners are packing their bags, bidding farewell to the buzz and hype of big city living, and setting their sights upon destinations far beyond their pre-COVID commute boundary. And we don’t blame them.
Among the monumental shifts brought on by the coronavirus pandemic this past year, perhaps the most impactful change upon the nation’s housing market has been the transition to remote working. While businesses across the country shifted to work-from-home scenarios following the first lockdown in March of last year, now more than a year later, many organizations have stated that they have no intention of moving back to an in-office work environment. Untethered by need to limit their commute to the office, homeowners are taking advantage of the opportunity to live beyond the city limits, and secondary markets are attracting some serious real estate action!
While the growth in local housing markets across Alberta were less pronounced than in other areas of the country, the provincial real estate market still rose 7.5% in sales volume over 2020, and much of this growth happened in smaller centres. One of the municipalities to receive some renewed attention over the pandemic period was Lethbridge. And industry experts are claiming that Lethbridge will remain one of Alberta’s hottest markets, even in a post-pandemic world!
A Look Inside the Lethbridge Real Estate Market
According to the Lethbridge and District Association of REALTORS®, this local market remains significantly tighter than it was at the end of 2019. At the end of the fourth quarter of 2020, months of inventory of single detached homes (the number of months it would take to see current inventories based on the current rate of sales) was sitting at 3 – a huge change from the 7.7 months recorded at the close of 2019. In line with these levels, Lethbridge closed 2020 with 32.4% more residential property sales YOY, and an 8.8% increase YOY in the median sale prices of a single detached home, currently sitting at $315,000.
Sliding into 2021, Lethbridge has been able to maintain much of the momentum gained over 2020. Declining inventory, and strong demand and sales have firmly situated Lethbridge as a seller’s market. In fact, according to the latest RE/MAX Lethbridge Now Market Report, “Along with a 49% increase in sales, there was 25% less inventory available which pushed the “absorption rate” to 27% which is heavy Sellers Market territory”.
Key Drivers in the Heated Lethbridge Housing Market
Other than the flexibility to leave the city centre and work anywhere with a reliable internet connection, what else is drawing home owners away from the larger hubs of Calgary and Vancouver, to these smaller secondary markets?
Industry observers are confident that historically low interest rates are making it easier than ever to secure a sizable mortgage, and this helping to fuel the fierce growth in markets like Lethbridge. Further, with the average cost of a property in Lethbridge sitting under the $300,000 mark for the month of February 2021, homes here remain affordable to first time-home buyers; a segment of the market that are projected to lead real estate growth throughout 2021.
A Global News report from January of this year also discusses the increased comfort of homeowners investing in project-type homes, using the extra time spent at home to apply some elbow grease and remodel the space to meet their specifications. Kimberlee Davis, a financial advisor in Lethbridge, chose the pandemic period to do just that: “We knew we wanted to fix something up but we didn’t have the time, so what happened with COVID was that culmination of, jeez, now everything is crazy we are all crammed in this house and we have time on our hands to do renovations.”
Once Canada’s borders loosen up restrictions and immigration slowly returns to pre-pandemic levels, this will also further fuel demand within Alberta markets big and small! With declining or stagnant housing stocks a key concern within Lethbridge, as well as within many local markets across the province, without an infusion of inventory in the year ahead, conditions will only tighten within this heavy sellers market.
For now, Lethbridge’s red-hot market offers great opportunity for move-up buyers and first time-home buyers alike; but buyers beware, you’ll need the local market savvy of an experienced REALTOR® to help you navigate what is becoming a highly competitive market!