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 2023 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 who want to and 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 pushed prices upward. Again, good for sellers but not as good for buyers.
Earlier this year it looked as though inventory might increase a bit at the start of the spring market but it didn’t happen. And since then, week after week we’re seeing a listing deficit.
Interest rates are even a little higher now and we might start to see sales slow. It will also help as more and more mortgages mature. However, there is still pent-up buyer demand and migration into Alberta that may keep inventory levels low and prices climbing for some time now.
Check back at iOnRealEstate.ca to keep you finger on the pulse of the Red Deer and Central Alberta real estate markets.
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