Summer seems to have flown by and most of us are getting back to routine this week. We hope your summer was full of gatherings, adventures, and the making of great memories. We too have enjoyed the hot summer and are looking forward to a busy fall real estate market. This past month our team has been updating our website – check out our updated look at smithgriffith.com. Cassidy, our team’s assistant, is well into her job and has just past the 5-month mark. Her biggest job is keeping Rees and I on point and organized with all aspects of real estate. We are very grateful for Cassidy’s assistance and expertise as we start our sixth year together in Real Estate as the Smith & Griffith Team.
As we move into September, the fall real estate market is upon us. Sales have remained relatively strong, there continues to be an increase in migration to our province and excellent growth in our tech, agriculture, and energy industries. New listings continue to trend down and continued strong sales have prevented any real gain in property inventory for sale. While supply remains tight and the market remains slightly in favor of the Seller, we are moving towards a more balanced resale market. This may help improve affordability in some areas despite higher interest rates for new mortgages.
“While higher lending rates have slowed activity in the detached market, we are still seeing homebuyers shift to more affordable options which is keeping sales activity relatively strong” said CREB® Chief Economist Ann-Marie Lurie. “This makes Calgary different from some of the larger cities in the country which have recorded significant pullbacks in sales.”
Rising interest rates, inflation and talk of global recession continue to be hot topics in Canada. Yesterday, the Bank of Canada increased its overnight benchmark interest rate 75 basis points to 3.25%. The Bank stated it is not finished hiking its policy interest rate just yet and noted that central banks around the world also “continue to tighten monetary policy.”Although July inflation was down overall and GDP is on the decline, these top-level numbers are not telling the whole story. The only lever the BOC has in the battle on inflation is tightening monetary policy. The messaging is showing there is a clear focus on moving the inflation target to a range of 2% above all else. This latest change will have an impact on borrowing costs for variable and adjustable rate mortgages as well as HELOC loans. How much is this impacting borrowing costs? Payments will increase by $42/month for every $100,000 borrowed. For example, on a $500,000 mortgage, the monthly mortgage amount is now $210 more per month or $2,520 more per year. Thus, this latest change will impact potential buying power and pre-approval amounts. This is the fifth time this year that the Bank has tightened monetary policy as it battles record high inflation. The Bank expects the Canadian economy to “moderate” in the last half of 2022. The expectation is global monetary policies will bring supply and demand in line. However, the Bank is adamant that its policy interest rate will “need to rise further.” The Bank remains “resolute” in its commitment to price stability and will continue to take action as required to achieve a 2% inflation target.
As the lending market is transitioning to higher rates, it is extremely important for Buyers to make sure they have connected with their mortgage brokers and are accurately pre-qualified and the rate holds in place before they start searching for a new home. If Buyers have been pre-approved based on a variable rate mortgage, these numbers have now changed as the qualifying stress test will be increasing on variable rate mortgages. If you’re planning on BUYING, let’s set up an automatic MLS search email for your buying criteria and you will receive an email from us as soon as new listings hit the market or price changes are made.
Over the past couple of years, the pandemic years – the real estate market has been very busy. Recently, the market is transitioning towards a more traditional balanced market which gives Buyers time to weigh their individual financial situation, needs, wants, risk tolerance and decide what is right for them – buying first or selling first. We are getting back to a market where both Buyers and Sellers have advantages dependent on the segment of the market that they are in. Sellers must consider that Buyers have more time to make their decisions. Thus, it may take a little longer for homes to sell and pricing your home for today’s market is key. The necessity to really understand “the markets within the market” that applies directly to the Sellers property continues to be imperative. The Alberta market requires an understanding of how to position a property into the marketplace based on proper pricing and generating enough Buyer interest and activity to get it sold. Having a strategy, pricing the property correctly with a compelling price, and keeping the property in ideal condition for the pricing strategy are all key components for Sellers to sell in today’s markets.
The availability of farmland remains very limited with many eager Buyers and very few Sellers. The continued rise in farmland values reflects the sustained optimism and healthy growth outlook for the industry. Timed on-line auctions (one of our services) have been the sales method of choice during this high demand-low inventory period. The ability to bid anonymously from the privacy of the home office or tractor seat has brought record bids for land put up for auction. With an early harvest well underway in most areas and approaching completion in some parts of the province, the yields are looking good, and quality is high. A bountiful and profitable 2022 crop year is likely to keep demand on grain land especially high and likely to push prices to new record highs despite this increase in lending rates. Pastureland availability has also remained extremely tight with many renters forced to purchase land from landlords that chose to take advantage or record high land prices and sell last spring. This trend of forced purchases is likely to continue for the foreseeable future. While there are many factors to consider when deciding to sell land, this fall may be the perfect time to sell your farmland under these unprecedented demand conditions.
When you are looking for an honest conversation about the real estate market, our team is here to help. We work hard to give you our best interpretation of the current state of the real estate market. Combined with our years of expertise, market intuition and today’s most innovative marketing tools including full MLS listing and Timed Online Auctions, we can provide the most comprehensive evaluation/comparative market analysis of your property! For a Free Market Evaluation, give the Smith & Griffith Real Estate Team with CIR Realty a call – Rees at 403.350.7815 or Kari at 403.803.3299.
Fall is our favorite time of year, and we hope with this warm weather, the farmers have a quick and successful harvest season. Wishing you all a warm, colorful fall season.
Rees, Kari & Cassidy
“Opening Gates To The Country And Doors To The City”