The Alberta housing market has experienced a noticeable cooling phase as 2024 begins, driven in large part by rising interest rates. This shift is contributing to increased inventory levels and a softening of price growth, presenting both challenges and opportunities for buyers and sellers across the province.
Sales Dip, Listings Climb
In the past year, home sales across Alberta have seen a consistent downward trend, declining by approximately 10–35% depending on the region. This marks the fourth consecutive month where year-over-year sales have dropped. Conversely, new listings have jumped significantly, increasing by about 25–30%. This influx of listings is pushing the overall inventory to a 5–8-month supply, which is indicative of a more balanced market (a balanced market typically holds a 4–6-month supply).
Prices Largely Flat
The average selling price of homes in Alberta has stabilized, floating between $480,000–$500,000 in early 2024. These levels are largely unchanged from month to month, though they represent a 2–4% decline from the peak observed last spring. While detached homes continue to command the highest prices, condos and townhouses are experiencing steeper annual price declines.
Regional Variations
Regional dynamics exhibit significant variation across Alberta:
- Calgary’s average home price hovers around $580,000.
- Edmonton’s average home price is near $460,000.
- Smaller markets like Red Deer and Lethbridge have average prices ranging from $350,000 to $400,000.
The sales-to-new-listings ratios in these areas currently range from 35% to 45%, providing buyers with more negotiating power than they had a year ago.
Mortgage Rates and Affordability
The tightening of home affordability is largely attributed to elevated mortgage rates, which hover between 5% and 6% or higher. These increased borrowing costs, combined with stricter qualification rules, have tempered buyer demand, particularly affecting first-time and move-up purchasers who may find themselves squeezed financially.
Outlook
The Alberta housing market is expected to remain balanced throughout 2024, absent any major economic shocks or policy changes. Most analysts predict a modest rebound in late 2024 if interest rates ease, offering potential relief for both buyers and sellers. However, as of now, the market neither sharply favors buyers nor sellers.
In conclusion, while the current trends in the Alberta housing market could present hurdles for both buyers and sellers, the increase in inventory and moderation of prices can also provide opportunities—particularly for those who have been priced out in the past. By keeping a close eye on mortgage rates and economic indicators, market participants can better position themselves in this evolving landscape.
