Lethbridge, Alberta Real Estate State of the Union: Winter 2024-25
February 9, 2025
I normally do my year-end market updates closer to the New Year. However, I think we can all agree there is no 'normal' right now. I needed a moment to let recent events sink in and consider where this is all going ...
I can't believe I have to say his name in a blog post, but there's no dodging reality: President Trump has not only moved the chessboard; he's flipped it over. Last week, nice Canadians were, to put it mildly, caught off guard. And offended.
In the background of this continental, game-changing moment, we have no sitting parliament in Ottawa. While Prime Minister Trudeau appears to be saying and doing all the right things in the face of a trade war, Canadians of all political stripes are both worried and unimpressed.
When is the election? Will there even be one in 2025? Who is taking the wheel during this historic moment? No one knows what's next.
Uncertainty is not good for any economy. And today, economies across the Americas are in limbo. What does this all mean for your personal finances? And for your real estate plans? Let's dig in, starting with the broader economy and then drilling down to real estate specifics for Lethbridge...
Canada's economy has weakened in recent years, so we are not in great shape to absorb the impact of tariffs on Canadian exports. A full blown trade war will damage investment and increase costs for consumers on both sides of the border. Avoiding recession seems unlikely.
There are no winners here, so the best we can hope for is that this will be short term. Alberta is risk exposed, very much so on oil and gas, but also across various other sectors, as illustrated by ATB Economics below:
Trump has indicated a tariff 'concession' for petroleum imports at 10%, but 25% for all other sectors. The Trudeau government retaliated with proposed counter-tariffs. However, we're the little guy here economically, so it's hard to say how this will shake out. As of this writing, Canada has until March 1 to sort out a deal with the Americans.
According to ATB Economics, a protracted "10-25" scenario on tariffs will indeed contract economic growth in Alberta. We won't get through this unscathed. High levels of government employment do provide some economic cover to Lethbridge, versus the volatility seen in oil-charged Calgary. However, different governments--and levels of government--respond differently to recession. Some use stimulus spending while others cut.
A drill-down on the current Lethbridge, Alberta real estate state of union...
2024 average home price: $384,794 (+12% vs 2023)
Year over year sales: +7%
Months of supply: 1.93 (seller's market)
Year over year inventory: -22% vs 2023 (yikes!)
(Data: Alberta Real Estate Association, Dec/2024)
Little has changed since 2024 as we move toward the 2025 spring market. As of this writing, there are 262 residential listings in Lethbridge. That is low. I remember a time when 700+ listings was just another day in paradise. Seems that Canadian homebuyers have woken up to the frankly fabulous deal that is Lethbridge real estate.
Price point matters: If you're shopping over $500k, the market is softer and you should have more homes to choose from. Ranges above $600k are particularly soft, favouring buyers. Inventory across lower price points, however, is tight, and you'd better be on your toes when you find 'the one.' Competing offers are always possible. (Data: Lethbridge & District Association of REALTORS®, Dec/2024)
"According to Statistics Canada, Lethbridge was home to 111,400 residents as of July 1, 2024 - a 4.1% per cent increase from 2023" (CTV News, January 17, 2025).
Population growth increases housing demand, putting upward pressure on prices. But it's all relative. The Calgary Real Estate Board (CREB) benchmark price came in at $669,024 last year (creastats.CREA.ca). Lethbridge & District doesn't do benchmark pricing, but this gives you an idea of the spread in affordability, just a couple hours up the highway.
Interest rates: Canada Prime is at 5.20%. Another cut is widely expected at the Bank of Canada's next policy announcement on March 12th. The thing to know is that movement in Prime impacts variable rate mortgages. Fixed rate mortgages move in tandem with Canadian bond yields. In the wake of Trump's tariff threats last week, bond yields moved sharply downward, with 5-year insured mortgages rates now hovering around the 4% mark.
If you have a mortgage coming up for renewal, don't take what the bank offers! Push back. Shop. Call a mortgage broker.
If you're thinking of making a move: According to CMHC, the 2030 Canadian housing gap is 3.1 million units. Yet, less than 300,000 homes per year are being built (StatsCan). Some quick math tells us that, at the current pace, it will take more than 10 years (not five) to meet Canadian housing needs. Unless we start 3D-printing houses like flipping pancakes at Stampede, it's just not going to happen.
Indeed, Ottawa is slowing down immigration, but there remain far more Canadians who want homes than there are homes available. Which brings me back to Lethbridge real estate. A metric worth watching is rental prices and in the windy city, those are climbing rapidly.
"According to the [National Rent Report from Urbanation and Rentals.ca], from January 2024 to January 2025 the cost of a one-bedroom apartment in Lethbridge saw a 14.6 per cent increase from the previous year, averaging around $1,393 per month. While the cost of a two-bedroom apartment saw a 10.7 per cent increase, averaging around $1,559 a month" (My Lethbridge Now, February 7, 2025).
So the $384,794 question is: does it make more sense to rent or to buy? Studies show that ownership achieves a higher net worth than renting, over the long run.
Lots of math. Lots of unknowns for Canada. And perhaps a wee bit of grace for Alberta given we may 'only' see 10% tariffs on Canadian oil exports 😐
One thing I know for sure: the past is done. The future is unknown. The present is a gift. Buy a home when it makes sense for your finances and lifestyle. Same goes for selling a home. More than ever, the future remains uncertain. And if you think about it, it always has been. (Who could have predicted Covid? Or ... a second Trump presidency?)
As always, if you have questions about your personal real estate, get in touch. I'm here to help.
All information deemed reliable but not guaranteed.
