According to the Edmonton Real Estate Board’s (EREB) monthly press release, single family homes in Edmonton now average out at $357,325 – a 4.5% over December and 51.9% over last January!
The Edmonton Journal reports that economists are divided on whether there is a bubble in Edmonton. "Some people do think that those price gains are going to be unwound fairly quickly in the spring time," said Gregor Bush, an economist with the Bank of Montreal.
Others say the global glut in savings and liquidity will keep long-term interest rates low and act as a cushion for the housing market.
"We’re seeing a slow deceleration in housing activity, but still with activity at fairly high levels, and we expect that to continue through 2007 as starts come off their very robust pace of 2005 and 2006," Bush said.
Now, I don’t know anything about this Bush guy, but anyone who says things are decelerating in Edmonton, when home prices are up 4.5% in one month, and every record on the book has been broken….well…I’ll just keep my mouth shut there. I think the economist is talking about the national picture. However, the fact that he used the words "slow deceleration" indicates we are not looking at a bursting bubble, as that implies things explode and prices fall drastically. Slow deceleration means the rate that things are going up will slow down, as we’ve been saying here at the Edmonton real estate blog since we started blogging back in ’05.
Here is the rest of the release from EREB, followed by the stats. I’ll get some charts ready later today and post it here for a more in depth analysis at just what is going on with housing in Edmonton.
Edmonton, February 5, 2007: The year started quickly for REALTOR® members of the Edmonton Real Estate Board indicating that the housing market in Edmonton has not yet crested. A blistering year last year saw average single family and condo prices rise 52%.
“Sales are typically sluggish at the beginning of the year,” said Carolyn Pratt, president of the EREB. “But REALTORS® have been kept busy in January with increased sales and higher average prices.” Residential sales in January were up 32% from January 2006 and up 45% from December. There were 1,554 residential sales last month with 2,043 listings.
The average price* of a single family dwelling continued its steady climb. At $357,325, the average price was up 4.5% from December prices and up a remarkable 51.9% from last January. Condominium prices rose a more moderate 2.5% to $233,175; a 74.3% increase from January 2006 prices. Duplex and rowhouse prices went down just $1,030 from last month.
Total residential sales through the Edmonton Multiple Listing Service® in January were $472 million, double what they were at this time last year. Strong commercial and rural sales drove the total Board sales in January to exceed last year’s total sales by 107%.
Inventory increased slightly with a sales to listing ratio of 76%. There were 2,025 homes in inventory at the end of January, up just 13 units from the end of December. The average days on market was 33 up from 30 days in December.
“I cannot stress strongly enough how important it is to use a REALTOR® when you want to buy or sell a home in this unique market,” said Pratt. “Only a REALTOR® can give you the best advice on current market pricing and condition to enable you to get the best value for your home.”
| January 2007 activity |
Record for the month* |
% change from January 2006 |
| Total MLS® sales this month |
1,738* | 31.20% |
| Value of total MLS® sales – month |
$560 million* | 107.30% |
| Value of total MLS® sales – year |
$560 million* | 107.30% |
| Residential¹ sales this month |
1,554* | 32.30% |
| Residential average price |
$303,820* | 52.60% |
| SFD² average selling price – month |
$357,325* | 51.90% |
| SFD² median³ selling price |
$349,000* | 57.90% |
| Condo average selling price |
$233,175* | 74.30% |
Personally I think that we have not yet hit the roof.
What determines the price is the demand and supply situation. Maybe our realtor friends can shed some light on the demand and supply situation. How is it now? How do you forecast in 2007.
I still see lot of Ontario/ BC and other number plates in our city; which reflects net positive migration.
Also, people are upgrading their houses and moving to bigger places.
Finally, OIL rules! It’s the black gold –> critics go and ask the oil companies if they would stop oil exploration in Alberta, stop building 13 upgraders around Edmonton, and stop hiring! If you find all the answers, you would know if 2007 will bring boom or bust in real estate prices in Edmonton.
It’s a nightmare situation for young people moving here, but it’s a market economy and it will rebalance itself at some point. Also, anything can happen to a commodity on an open market. Real Estate Agents are pumping the hype right now, but carrying a $375,000 mortgage with no cash flow or money to live on is crazy.