Another report you won’t find anywhere but here, our "market trend report" breaks the statistics up in to different price ranges so you can better see what is happening in the market as it relates to your property (or property you may be interested in buying).
The first thing you’ll notice in the report is that the number of listings has risen dramatically since the last time I did a report. Do note, it’s not entirely a straight comparison because I had to modify the price ranges to even out the data a bit. BTW, I’ll be able to do these much more often now that I’ve figured out a way to do it that doesn’t take three hours!
Even though inventory has drastically risen, the absorption rate has either shortened or remained the same across the different price ranges. (Absorption rate is the number of months it will take to sell off the remaining inventory at current rates). Also interesting, is that the number of days on market has actually decreased across most price categories.
Why is this interesting? Well, typically when supply increases, so does the length of time on market, and the absorption rate lengthens. Typically when this happens sale prices will start to feel some downward pressure under increasing supply. We’ll have to wait until Monday or Tuesday when they board releases the complete stats to get more of the picture. But one thing to note is the lowest list to sale price ratio in May is 97% compared to 91% in February, while at the low end of the price ranges February had ratios over 100%.
So why did I post this today? Because when the stats do come out, and show that the number of listings are at their highest point since about Oct. ’05, and the media jumps on this, I hope you all keep in mind that May ’07 will have had the highest number of sales on record in Edmonton. Supply is increasing and demand is still very strong.
P.S. – the above chart only shows the numbers for Edmonton, not the entire board data so if you total up the numbers in the chart the won’t add up to what is released by the board.
First of all thanks for posting this so quickly.
Absorbsion rate has increased overall. In your last report 80% of the total sales were in the 2 lowest categories skewing the results. Taking total sales and listing of each report shows increasing absorbtion rate:
listings / sales = absorbtion rate
1515 / 1356 = 1.18 (April)
2867 / 1972 = 1.45 (May)
Similar thing with days on market. In your last report the +750K category had much higher days on market but only 15 sales. This stat also only includes properties that have sold and fails to capture the remaining inventory.
Repost:
Absorbtion rate 1.12 April compared to 1.45 May
That’s a pretty dramatic increase in volume. Do you think that this is a sign of people starting to cash out while speculators continue to flock here?
Every investment and finance site I visit seems to be full of out of town/offshore buyers looking to get a piece of the action in Alberta, and you know what they say when your shoe shine boy is giving you a stock tip.
Sheldon and I were just talking about that at lunch, and although I don’t know the exact reason we have a few ideas…
Inventory is still below what we’d call the normal levels for this time of year, as March-June are typically the months with the highest number of listings and sales.
At the same time, inventory is still steadily rising (our rough estimate is about 200 new listings a day).
It could be that people are starting to cash out, it could be that a lot of the people who bought new homes last year are now taking possession and selling their existing homes, it could just be seasonal.
Our thoughts are that the number of sales for this June will actually be higher than last year, because last year there was hardly anything to choose from, and this May had the highest number of sale in at least the last five years showing that demand is still strong.