Good News, Bad News….Feels normal to me
The Realtor’s Association of Edmonton posted the monthly results for August this afternoon, before their press release which I assume will come out tomorrow. Needless to say we got the stats here for you as quickly as we could, we’ll post more analysis and the press release from the board tomorrow.
Market stats for August are a mixed bag. Average sales price was down a notch – I don’t think we’re done there yet, but it definitely was better than what many market detractors were predicting.
New listings to sales ratio is down to 30%. That’s low even if you take into account the practice of re-listing (the Association is looking into changes to curb that practice). It becomes difficult though if you have clients like I had in July who listed their property and days later had a baby and we basically had to terminate the property and bring it back on when things were more settled for them. Once the particulars are worked out we’ll see a more accurate figure there – hopefully.
Sales were low, even if seasonal factors are considered they were low compared to previous years. However the last 4 days of August and the first four days of September seem to be busier than all of August (based on calls about, traffic to and offers on listings, as well as conversations with other Realtors).
Multiple offers are by no means done but are definitely the exception not the norm. Offers that do come in tend to be below list and with conditions. There is really a mixed bag of stuff going on – some areas have 20 months of supply, some have 2 months supply. Some of our listings have flown off the shelves with multiple offers and some are just sitting (depending on price range and type of product). Lots of properties are pending, subject to the sale of another property. This feels like a normal market except for the high inventory.
Some will say more inventory is coming, yet the total today is already down from the end of August (today’s estimate is down to 8700 on MLS). Are we going to see tons of expired listings? Likely fairly soon we’ll start to see a lot more listings not selling during the term of their MLS listing contract (a normal market occurrence).
It is clear from what I’ve seen that the rate of new listings coming on the market has abated significantly. That doesn’t mean it can’t surge or won’t grow. It simply means it has slowed down.
I think the chart below helps put things into perspective a little bit. Maybe you won’t get now what you could have in May or June, but you can still get significantly more than last year.
Blanket predictions are almost impossible now on the entire market. Somy recommendation is: get professional advice for your specific circumstance whether you are buying or selling.
The graphs are PHENOMENAL how much inventory is on the market. A housing correction is in order.
Sheldon and Sara, i will request that you guyz please stop posting such kind of data on the website. The market is bad and your postings will completely make the buyers gun shy. Media is very powerful….I am no investor I got stuck with a house few months back and now there is no one to buy it.
The actual inventory is at 9185.
Tom – this information is going to be all over the media tomorrow, at least when we post it we don’t sensationalize the facts, we provide in depth analysis that you can’t get anywhere else. If your house is priced right, and marketed right there will be a buyer for it. We’ve probably said this a hundred times in the past month: while you may not got the price today that you could have a few months ago, you can still get an awful lot more than you would have a year ago.
Tom,
Are you serious?
Maybe you could send me the information you would like me to post.
Sheldon and Sara, unlike Tom I totally support that you post these types of articles on your blog. This information is invaluable to both buyers and sellers. As an investor knowledge is power. For stocks and mutual funds there is never been any issue with full disclosure of all available information. In fact suppressing information by insiders is a crime. I don’t see why real estate should be any different. Keep up the good work!
@Tom…LOL, they are posting reality, not creating it.
I was going to say that in this ultra wired world we live in, and it’s great to see you guys embracing it, I would expect this data to be available in real time. Can you imagine the stock market publishing trading data once a month? Seems silly that you have to rely on personal hunches and word of mouth to gage a topic which affects so many people.
I enjoy reading your posts a lot.
Jon
ha! ha! ha! Some posters here are definitely not house owners. And… are not used to the new economic order of Canada and North America. Alberta Rules North America. Please get used to it!!!
The old practice that America (USA) rules is almost over. Soon aspiring superpowers such as India or China will change the world. They total 2,5 billion inhabitants!!! They are emerging global forces. They are getting more educated. They are getting into consumerism. They want more. They want cars. They want status. They need gas. Alberta has oil. Alberta can feed their oil needs.
All you Ontarians can stay on welfare or join the future which is in Alberta. Stay in Oshawa on EI or move to Alberta.
well world oil consumption is 94,000,000 barrels a day ,Alberta produces about 600,000 barrels a day ,you are really insulting to Ontarians ,why is that ,i can work here and be flown home by my employers weekly ,so why would i buy a crap box here ,and why do you insult 7,000,000 people from Ontario ,we pay one third of all taxes ,you must be uneducated i guess
andy,
Have a very humble life in Ontario
Sheldon and Sara,
Although our opinions are radically different, in all fairness…..
I start drooling on about the 28th of each month for the month end stats. I am happy to have them even 12 hrs early.
Your posts and blog are very informative. I enjoy the blogs of reasonable people.
Even though we have hurled insults back and forth, as I said from one of my first blogs, I direct people to your site regularly. (of course I also give them my opinions)
I think you have always misunderstood my opinions on realtors. It’s not the realtor that upsets me, it’s the realtors fees. Of this, you won’t change my mind.
I don’t think the market is in any way bad, just healthy. To me this post is encouraging. I appreciate how you fill in the gaps of EREB monthly reports. Other than the most important #’s, they tell us NOTHING.
Tom…….Are you serious????
Tom,
you are correct about one thing, the media is powerful.See recent blogs for my opinion on the media, if you care to.
@Ray; I think you should be more humble.
Even with all the oil revenue, Alberta’s GDP is $215 billion dollars. To give you some perspective that is about the same as states like Missouri and Connecticut. Now how can you really make a statement that “Alberta Rules North America”….
Oil is just a business, and a growing one in Alberta. But its not the only way to make money. Sure people want to live in a province with economic growth but keep some perspective. Oil is not going to cause a poorly built house in the middle of some muddy field appreciate by 50% every two years.
Ray,
Growing up post NEP. I like many others learned to scorn “the center of the Universe” as we westerners affectionately refer to it. Thankfully I have travelled considerably throughout Canada.
Canada is a whole. Like a body. Alberta maybe the heart of the economic engine but it will cost Alberta dearly if Ontario goes through extended hardship it will affect us to. We’re all in this poop together. I’m proud to be Canadian and my Canada includes Ontario.
I think your just trying to say Alberta is the power house and that there is a possibility with economy in Ontario as soft as it is right now that some people from Ontario will look to Alberta. I agree.
Thanks Steve for bringing me back down to earth!!!
However according to the U.S. census bureau, Missouri has a population (as of 2006) of roughly 5,9 million inhabitants and a GDP of $226 billion. Connecticut is 3,6 million and $193 Billion. Alberta is at slightly over $250 Billion for GDP which represents 17% of Canada’s GDP for only 10% of the country’s populations
(http://www.finance.gov.ab.ca/publications/budget/budget2007/eco.html) In comparision, Unionized-socialistic Quebec’s GDP is at $235 billiuon for double Alberta’s population… so I beg a question: what is your point Steve?
Alberta ships most of the USA’s daily needs for oil and is ranked second in the world after Saudi Arabia in proven oil reserves.(http://en.wikipedia.org/wiki/Oil_reserves)
Oil may not “cause a poorly built house in the middle of some muddy field appreciate by 50% every two years” like you state but it is a very fair gamble to state that homes will appreciate at an inflationary rate for YEARS to come.
What’s my point? As Ontario’s manufacturing sector – which used to lead Canada’s economy – dissapears, Alberta is stepping up. Ottawa transfers billions in oil revenue to Ottawa each year… Quebec receives obscene amounts of those moneys in transfer payments. Alberta rules Canada. Alberta will rule North America. We have north America’s best performing labour market anyway.
1 barrel of Saudi oil is not equal to 1 barrel of Alberta oil. Of conventional oil (the easy money), it has been declining since the 70′s in Alberta. Of Alberta’s 180 billion, only 4 billion is conventional. That means, only a small percentage of our oil is as economic as Saudi oil. Heavy oil takes 4 barrels of water converted to steam to produce 1 barrel of oil. That is very expensive! Also, unconventional heavy oil is not worth as much money as light oil. In fact, West Texas Industrial is selling at approximately $72/bbl compared to $45/bbl for Hardisty Heavy.
Seriously Tom, what kind of ethics would obscuring the truth be??? While we are at it, why don’t we deny the Holocaust?
Obviously Tom, after your statement – “I am no investor I got stuck with a house few months back and now there is no one to buy it” – YOU sure sound a lot like an investor, unless you like living in houses for only a few months at a time and have a thirst for moving frequently!!!
Lets just fire up the bailouts now…then it will be less of a shock when they are really crying.
Sheldon & Sara, do you happen to know how many of those listings are condo conversions? I am seeing a lot of those old beaten up apartments turned into individual condo units for sale, and wonder is there enough of those to make an impact on the inventory listing?
Sara and Sheldon,
I’ve been following your blog for some months now as I’m looking to get into the market myself in the next year or two, and I thank you for your balanced, responsible opinions of the market. To say that it’s not a buyer’s market right now and hide the truth would be frankly irresponsible; and inevitably would cause even MORE long-term problems for some short-sighted commenters (read: sellers) on this discussion board.
Thanks again.
Liza,
that is a very valid point, I was thinking about it too, if we subtract that number, won’t it be interesting to see, how many people really have good properties to sell.
It is what it is. People have to decide for themselves and their circumstances what’s best for them.
To those wanting to know the proportion of condos in August listings go here: ereb.com/z_stats/MonthlyStats.pdf
Number of SFD listed in Aug: 2,505
Number of Condos listed in Aug: 1,489
Number of Duplexes listed in Aug: 193
Just to clarify, there were 1489 condos listed in August, but there is no way to know how many of those were condo conversions. Don’t forget, while many condo conversions may match the rather negative stereotype, some are very well done and offer an affordable first time home. If you’re working with a knowledgeable professional they will be able to help identify which conversions are worth considering.
An interesting set of numbers:
Comfree market share based on August sales: 14%
Comfree market share based on inventory: 24%
EREB days on Market August: 36
Comfree days on Market August: 45
Yet to get number on sales/list ratios.
From the other numbers, can one suppose more and more sellers will start turning to realtors?
fencesitter,
9 more days….and $$$$$$$ saved. I’ll wait 9, 18, 27 whatever to save $12000 plus. If you don’t at least explore this option of FSBO you are not taking the best care of your property value.
Tom thinks:
Sara and Sheldon = god
Please tell that the ave price would drop to $1 in next month.
I am planning to buy 10 houses in next month.
Thank you!
Tom is not the only one.
One of my friends told me to stop saying “the price will drop”.
I tried to tell myself “I will be rich” for 32 years. But, I am still poor.
The comfree/EREB comparison is interesting, but it seems the comfree people aren’t doing all that badly with the numbers given above.
I think comfree is a response to increasiong real estate comissions. These have remained the same, percentage-wise, while selling prices have increased dramatically- resulting in much higher commissions. In a hot market with high prices, 15 or 20 grand to advertise a house which will sell itself in a week or two seems a bit steep, when only a few years ago the commission paid would have been half what it is now. I doubt that business expenses for the realty industry have increased in the same proportion, which means that realtors who continue to sell at the same rate as in years past are reaping a windfall.
Perhaps consumers want some of this back. Lower percentage commissions are in order.
Affordability for first time buyers or newcomers without sufficient equity is a huge problem. The topic of conversation at work is very often real estate. Most people say that they could not afford to buy their present home in todays market. That likely means that some people who recently bought homes are in a tight spot. I read today’s EREB press release. It was very carefully worded and not the usual bullish message. Along with the usual spin on how your realtor is your most trusted best friend, the EREB really played down the record inventory and low August sales. My take on the press release is that they have no idea how the next few months will unfold. My prediction is a fall back to late 2006 prices by year end.. but there are lots of people on the sidelines who may all jump in at once and support current price levels. Either way, it will be exciting to watch the market over this next few months..
To say that the current marketplace is a buyers market is misleading, because very few people are actually buying. To say that the average price is holding up is misleading as well, because there are so few sales. The precursor to a serious correction is a fall in the NUMBER OF TRANSACTIONS !!! When the guy on the corner, who has been unable to sell for 3 months, gets desperate, he will knock a 100 grand off his price just to get out. When enough potential buyers think that waiting will save them money, the correction is just around the corner…just wait for the winter data! I’ll bet it gets much worse.
My thoughts are September will be a better month for the housing market, as sales and demand are already looking stronger (even though its early). I predict the average price will flat line until the end of 07, then go back to a “normal” 5-10% increase for 2008.
Will the last one out please turn off the lights.
Sheldon Johnston wrote:
“Alberta ships most of the USA’s daily needs for oil and is ranked second in the world after Saudi Arabia in proven oil reserves.”
Lol, wow buddy…thanks for the laugh. Well, since the U.S. imports slightly over 13 million bpd of oil…and Alberta produces a whopping 1.75-ish million bpd…I think that you have no idea what you’re talking about. 13% is not “most of” their daily need. And Alberta has actually passed it’s oil production peak…what we’re extracting now is bitumen. As Ray explained, it’s not the same thing, but I wouldn’t expect you to understand. Talk to someone who works in the industry please.
Sheldon also wrote:
“Oil may not “cause a poorly built house in the middle of some muddy field appreciate by 50% every two years” like you state but it is a very fair gamble to state that homes will appreciate at an inflationary rate for YEARS to come.”
Actually, it’s a pretty safe gamble that housing, like any other bubble asset over history, will revert in value back towards the long term mean. Do any bulls actually pay attention to what’s happening in the states, lol?
So…ummm…what’s your point Sheldon?? But funny comments man, keep it up, you make me chuckle!!
Uhh Orson? Did you notice that your name is on the BOTTOM of your post?
Sheldon did not post the comment you have (correct) issues with. If you are going to attack someone at least take the time to correctly identify the person.
LOL! Thanks Woody, I was wondering when Sheldon said that!
Whoops, sorry Sheldon!! My (very stupid) mistake. Talk about starting off on the wrong foot…
Ray…read previous comment and insert your name in where I (stupidly) put Sheldon’s. And the credit for trying to explain why a barrel of Alberta bitumen does not equal a barrel of WTI apparantly now goes to…anonymous.
Now that I know the name goes at the bottom (sorry again, it’s been a long day)…Sheldon wrote:
“I’m proud to be Canadian and my Canada includes Ontario.”
Much better comment than I mistakingly attributed to you before.