Interest rates, prices, low inventory, decreasing prices, sales numbers
Higher interest rates
With the higher interest rates, everyone thought the biggest real estate conversation in lately would be lower prices. Why aren’t prices decreasing? The reason is low inventory. There are fewer buyers because of higher interest rates, but for the same reason, there are fewer sellers.
A homeowner wanting to sell will have to commit to a higher-interest mortgage. Many homeowners will stay put until their mortgage needs renewed.
And, with interest rates higher, a seller wanting to buy a larger home may not qualify right now. Buying a $400,000 home right now would incur a mortgage payment 47% higher than 18 months ago.
Red Deer – Low Inventory
Higher interest rates tend to slow buying activity but they can also slow selling activity. As I mentioned above, more homeowners are sitting tight and that’s limiting inventory.
The biggest problem the Red Deer real estate market is facing right now is low inventory. This is good for homeowners/sellers who are ready to sell but it’s not good for buyers. It’s a seller’s market and, not only are buyers having trouble finding the right home, but low inventory has pushed prices upward. Again, good for sellers but not good for buyers.
Market changes
In 2023 more sellers stayed put, home buyers raced against higher rates, the housing shortage encouraged more renters to buy, and the shortage of rental units encouraged more real estate investors to invest. These are a few reasons prices increased in 2023. Below is what I think will happen within our market in 2024.
- I predict in 2024 that more homes will be listed as more low-interest mortgages mature. Inventory rates will increase a little.
- I predict home sales numbers will be a little higher than in 2023 with more buyers and sellers comfortable with interest rates. With more homes on the market, we should see more sales.
- I predict builders will supply more homes to the market.
- I predict our local homes-for-sale inventory levels will move us closer to a balanced market. We might hit a “balanced market” after the 1st quarter.
- Prices will gradually increase during the first half of the year at approximately the same rate they did in 2023 but increases will slow in the second half of the year.
Check-in as often as you can to iOnRealEstate.ca to see what happens in out local market in 2024.
If you’re planning to sell this year here are some helpful tips – https://www.ionrealestate.ca/selling-your-home/
If you’re planning to buy and want to do your best plus save money, click here – https://kingblake.com/buying.html
