Here is our weekly update on the Edmonton real estate market. (Last week’s numbers are in brackets.)
For the past 7 days:
# New listings: 342 (406)
# Sales: 215 (279)
Ratio: 63 (69)
# Price changes: 285 (323)
# Expired Listings: 132 (208)
# Canceled, withdrawn and terminated listings: 153 (144)
Net loss/gain in listings this week: -158 (-225)
Active listings for single family homes: 3576 (3674)
Active listings for condos: 2368 (2400)
Looks like we’re continuing to chip away at the inventory although things are a little slower this week on all fronts. Newlistings should continue to drop as we get closer to the holidayseason, and sales should slow as well. As we said last week, Sheldon and I expect to see mostof those expired, canceled and terminated listings come back on themarket starting in mid-January.
Last week there was also some questioning of the numbers… the reason you can’t take last week’s totals for active listings, and add and subtract new listings and those that came off the market, and end up with this week’s numbers is that pending listings are not included in the overall numbers. I don’t include pending listings, because many pending listings aren’t marked as such, and many pending listings end up back on the market – they are sort of in limbo, not really on the market, not really off the market, so they’re not included.
Our Experiences This Month
11 offers 1 deal…am I really this bad or are we that good atcounseling our buyers? Mark Harvey from CBC radio asked me a question for a report he’s doing for CBC radio on Monday morning on the state ofreal estate in Edmonton. He asked if the current market conditionsare harder on REALTORS. (For those that don’t know the term REALTOR is a trademark and describes someone who is a member of the Canadian Real Estate Association through this membership they are able to markettheir listings through the Multiple Listing Service or MLS). Anyway, the answer is no.
Today there are a numberof sellers under emotional duress that we and others are working with. However,6 months ago it was the buyers’ stress we were dealing with.
Mark also mentioned that we must be driving around showing moreproperties now that we were last year. This is true. But if you look at November (and this isjust for me) I wrote 11 offers for buyers. For one set we wrote 3offers but that’s besides the point. Only one of the 11 went together. February of this year I remember writing 5 offers for one buyer. Althoughwe had to show them fewer properties we had to move much much faster in orderto be successful. Now the process is taking a bit longer, which I think is more positive since the buyers have anopportunity to better discover what it is they are buying.
Back to my 11 offers that I wrote that went no where.Out of that 11, 4 were sold to other people. 1 is still in the back and forthstage and the others we were just too far apart. We were successful onone. Several of our listings have sold,and we are running with very thin inventory for ourselves . One thing forcertain is that there does not appear to be a buyer for every listing, and consideringthe seemingly large inventory 9000+ listings, some areas seem very thin onquality properties at certain price ranges while other areas arebulging.
This has definitely been my busiest November in 20 yearsregardless of what the market stats indicate. Quite a contrast towhat some people have been predicting – that this market was going to whimper into the newyear. On a side note, and this is only a personal and observationnothing scientific: I have often found that November is mirrorsFebruary. If I’m extremely busy in one I’m extremely busy in the otherand vice versa. So we shall see. I’ll have to make a note to myself andwatch.
My friend who is a mortgage associate said things are very busy right now, not only for her but for the whole branch she is working in. could it be like cool summer and hot winter in real estate.
Sheldon you dont even know how much i appreciate the blog….seriosuly its the only place which updates me on the situation in edmonton…..
GREG
Sheldon I hear you are a good guy.
Whats your take on the Edmonton Market as a whole?
Do you honestly beleive the 50% gain in the average price of real estate is sustainable? What the heck happened to bring it to that? Was it a market correction?
When you compare Edmonton to other Canadian cities that aren’t islands and have an abundance of land, we are way overpriced (including Calgary).
I mean look at the prices in Ottawa, Saskatoon, Winnepeg, Montreal.
How can Edmonton prices supercede this? I understand there is something called ‘supply and demand’, but I’m afraid to buy right now because I dont beleive im getting my $300,000′s worth of value in a 2 bedroom 2 bathroom condo!!!
I beleive the lack of supply is not developable land, but rather labor, and once that supply problem is fixed, new home builders (who I beleive along with speculators have driven up the prices) can cut their costs significantly and keep their margins while at the same time offering a more affordable product.
I beleive these 40 yr amortization mortgages are irresponsible as well and beleive new lending practices have artificially driven up prices, as people who shouldnt be able to afford a house are getting approval.
What are your thoughts?
Good numbers once again… Not as good as last week’s but a good median none the less.
We can speculate all we want. Prices too high, market bubble bursting, fear mongering, crazy maybes, etc.
Facts and figures for the past while tell a revealing story. Things are looking good. Nay sayers will be proven wrong because Edmonton and Alberta are vibrant and VIABLE. Prices went up 19% this year to bottom out by 8% which means home owners still have a healthy 11% appreciation this year. Doesn’t speak much about all the tinkering out there that somehow makes sense of investing at 4% while renting on fear that the housing sky is falling. Take the 40 year mortgage, you still gonna win. Think APPRECIATION.
If you don’t make a move and buy on fear of this or on fear of that because of this or I heard that… You’re gonna be priced out for ever.
I like the stats myself and it’s all confidence driven. If Venezuela stops deliveries to the USA or some other oil producing country goes unstable, Alberta will always be there for the emerging market’s thirst for oil. Let’s face it: hybrids are not here yet.
One of the reasons for the rapid price acceleration of housing is the ridiculousness of wages in the Fort McMurray region. My brother-in-law earned over 50K this summer as a summer student in Fort Mac. That’s 50K in 4 months doing nothing but filing paper and a few Excel spreadsheets. A few summers doing that and you can see why he can shell out 300k for a condo. He received an offer to quit school and work full-time for a 6 figure salary.
At a large utility company here in Edmonton, some workers were receiving wages of $32 an hour just 2 years fresh out of NAIT. These workers have no problem paying for a high-end condo. The previous condo owners, in turn, move up to more expensive homes, thus triggering price increases across the board.
John,
“Do you honestly beleive the 50% gain in the average price of real estate is sustainable? What the heck happened to bring it to that? Was it a market correction?”
Prices before 2003 were generally lower in Edmonton and Calgary than most other large cities in Canada.
“I mean look at the prices in Ottawa, Saskatoon, Winnepeg, Montreal.
How can Edmonton prices supercede this? I understand there is something called ‘supply and demand’, but I’m afraid to buy right now because I dont beleive im getting my $300,000′s worth of value in a 2 bedroom 2 bathroom condo!”
Answer is Jobs JOBS JOBS!! Sure you can go live in Saskatoon or Winnipeg (Saskatoon isn’t very cheap anymore either btw) but in Edmonton it is easy to find a job making 60k a year without any education alone let alone people with skills, trades and education. People will pay a premium to be close to where they work, Edmonton has lots of places to work. As far as getting value for your $300k, that is up to you. You have to look at what you pay in rent vs what your mortgage will be and what you think prices will do.
“I beleive the lack of supply is not developable land, but rather labor, and once that supply problem is fixed, new home builders (who I beleive along with speculators have driven up the prices) can cut their costs significantly and keep their margins while at the same time offering a more affordable product.”
There seems to be ample supply right now, there are far more listings than normal however the prices aren’t “falling”. This is most likely because people aren’t desperate to sell as they either are only willing to leave Edmonton if they can get a certain price or are speculators with healthy incomes and willing to rent/sit on their investments.
As for builders being able to come down in prices in awhile, there is about $150 billion dollars in the Alberta pipeline for construction which means high demand for construction workers and labor. I wouldn’t expect it happening any time soon. Add in the fact that allot of the trades are part of uninions with contracts for their wages and you find that their pay increases ALLOT easier than it falls. Try telling employees to take a 35% paycut. Doesn’t really work.
I think 40 year mortgages are stupid too. The monthly payment you make over 40 years is $1686.36(6.25% interest) and for a 25 yr $1964.22. So for a 14.15% decrease in monthly payment amounts you increase your term by 37.5%. For the general Canadian this is a bad thing because he/she will waste all the $300 in savings. However, if a person was smart and disciplined and invested wisely they could make probably 8% on that extra savings and therefore come out ahead on the deal. Not to mention “if” your property is appreciating as well your effective interest rate is lower.
I hope that helps.
I live on a fixed income so I can not afford the inflation that is occcurring in Alberta. I am moving next spring as the cost of living is much less and I can sell my house for substantially more than I paid for it. It is sad to leave my hometown.
Can you throw in a free car with that house?????
http://www.teamfisher.com/blogs/norm_fisher/default.aspx
john,
I agree the wages are stratoshere up there in Fort Mac ($20 an hour to work at McDonalds) but so are their expenses stratosphere. I don’t think their putting huge amounts of $ in their pocket at the end of the day.
I find many of the comments on this blog hilarious. So many people are trying to use their “experience” to weigh in on the current housing market situation – at a time when the “rules” of seasonality and strength of the local economy do not apply. The last six months have clearly demonstrated that seasonality currently has very little impact and the “strong” Alberta economy has only served to keep price decreases slow. So throw away what you’ve learned in the last 5 to 10 years and concentrate on the CURRENT situation. If experience serves any purpose, it’s to demonstrate how different 2008 will be from the past.
I would like to talk fundamentals… there is a massive over-supply of houses right now and banks are quickly pulling back on the credit they hand out (including higher interest rates). The smart speculators have already left town for Saskatoon, Regina and the east coast. The recent declines in inventory are due to expired or cancelled listings – not because more people are buying. I often become very frustrated when I open the newspaper and read an interview with a real estate agent. In the face of all of these obvious signals, these biased individuals always put an optimistic spin on the situation. Allow me to speculate here: these “optimistic” agents only serve to postpone the massive price decreases we will see when thousands of new listings are put on the market this spring. There will be thousands of people disappointed when the higher prices they’ve been promised do not materialize. Prices will drop as long as there are more than 4,000 properties for sale. My assessment of current fundamentals: I expect to see SFH’s dropping at least another 10% by June (thank goodness the economy is strong or this number would be higher). Renters should keep renting for at least another 10 months. Watch for a big drop in February when we cross a psychological barrier – average prices in February 2007 will be less than they were in February 2006.
Travis,
I was offering reasons on why it could be a good reason to buy and how the prices could stay high. I didn’t recommend to buy but stated it is something for each person to evaluate. You however seem to think your “opinion” is fact and that everyone else is stupid. In one breath you are knocking generalizations and then in the very next breath you are spewing them out as facts.
I disagree Travis. In my opinion, the trend is always your friend. With that being said, typically (for the past 20 years), the trend in the spring is always up. My prediction is prices will spike in Feb and March (total 5%), and then fall into a more balanced market for the rest of 08. Overall +7% for 2008.
Travis, isn’t it realistic to assume that all the speculators have both of their properties for sale until one sells. At that point the other property will most likely be taken off the market as everyone needs a place to live. This alone could remove alot of product from the market place. By the way, why is it considered so “smart” to move to Regina or Saskatoon? If the boom is over in Alberta, it will probably be over in Saskatchewan soon after, right?
Red,
it’s not 7.0132% overall?
Travis,
you think Saskatoon will go up and Edmonton will go down, what makes you think that, if Saskatoon goes up then the chances are slimmer that Edmonton will come down, which part of the country will be “affordable” then, which promises as much money as people are making here as well?
Travis – No, you forgot to round to the nearest whole number. Typical mistake.
Cheers
sorry, that was for dawson.
Thanks for the comments everyone – I appreciate the opportunity to debate this. I realize I have spouted my opinions as though they are facts – but please only take them as opinions. The point I was trying to make is that seasonality will have very little influence compared to the past. In spite of fundamentals, I am the first to admit that house prices are based on price expectations even more than fundamentals. With that in mind, I am placing my bets that there are many sellers EXPECTING prices to go up in the spring and so they are waiting before they put their house on the market. The market is flooded now, but just wait until this spring – the traditional seasonal effects will be turned upside-down.
Could one of the “optimists” on this blog please provide a reasonable explanation as to how prices can go up when there are so many more houses for sale than there are buyers?
As far as moving to Saskatchewan goes – I would never endorse that
But from the speculator’s point of view…. buy-low, sell-high, artificially inflate the market and move on to the next “underpriced” town… right?
I’m surprised that nobody corrected my first blog – I meant to say “average prices in February 2008 will be lower than prices were in February 2007″. Whoops
Good luck to everybody here!
I will list in April ’cause I just learnt that I will go to Ottawa.
Travis,
Although I personally think prices will stay relatively neutral. There is a flaw in your argument. I of course agree with the laws of supply and demand and I don’t think many people on this site will try and say that in a buyers market prices will boom. However, saying that the market will be flooded with houses is an assumption. Most of the optimists feel that when springs comes the market will not be flooded with new listings but instead buyer confidence (and need) will increase thereby increasing demand while supply stays roughly the same.
Average SFH price in Edmonton is now $392,000
Median SFH price in Edmonton is now $365,000
http://tinyurl.com/2uxwcz
Average condo price in Edmonton is now $240,000
Median condo price in Edmonton is now $240,000
http://tinyurl.com/2wwzxa
You make an excellent point Jesse – demand will probably go up in the spring too. So, just to avoid any future confusion: “My opinion is/I assume that/I would speculate/it is my best estimate” that demand will go up in the spring, but supply will still exceed demand and go even higher.
When estimating this spring’s demand consider that interest rates are higher and banks are not lending as generously after this worldwide credit crunch. Wages are up and unemployment is down in most of the other provinces (which reduces the number of new people who migrate to Alberta). Alberta has not received national media attention as “the place to move to” in a very long time. I would also speculate that since this market has gone up so fast and now plateaud, the speculators have taken their profits and will not be investing in Edmonton in the near future. Not when there are other markets that are “now on the verge of jumping” (like St. John’s) – no Jesse, don’t misunderstand me, I am not recommending you move to NFLD.
Points well taken Travis,
I agree with you in general. Althought I do speculate that we will see the bottom of this market in February.
Something I might mention is that Canadian banks lending standards were never as loose as the US and they will likely remain virtually the same as they didn’t expose themselves very greatly and won’t in the future. But since they didn’t in the first place we should be ok. In addition to that, comments given by Bank of Canada (David Dodge) have leaned towards rate cuts in 2008. Most analysts are projecting between 0.5% and 1% rate cut throughout 2008 which would also help further stimulate the market.
You’re probably right that interest rates will be lowered at some point next year – I guess we will have to wait and see what the final effect will be. David Dodge is mostly motivated to do this because of the high dollar’s effect on eastern Canada. Can you send a link to the information about the analysts who are predicting a 1% reduction? As far as the sub-prime situation goes – Canada is far from immune. Even though the write-downs by Canadian banks were relatively low, banks around the world have been shaken and this includes Canadian banks. Canadian banks have already reduced the figures they are willing to lend. Since it is reported that the sub-prime situation is only getting started, I doubt Canadian banks will be willing to widely open their pockets for a while. It’s not a matter of whether the banks “have money or not” – it’s about how much risk-exposure they’re willing to take on.
Jesse, I would appreciate it if we can agree to disagree here. But before I sign-off on this week’s blog – please provide a strong argument, without referencing to the seasonality seen in previous years, as to why prices will start going up in February.
So St. John’s is having a good time now?
There’s a lot of Newfies in Alberta itching for a reason to return home.
Travis,
I don’t think they are going to skyrocket, I think they will hit a low and maybe start gradually edging at a 5% rate or so.
My argument for this remains the $150 billion in the Alberta pipeline. I fundamentally think that people still want to move to Edmonton and will continue to do so as there is plenty of work. In addition the oddly low number of sales which transpired in the previous few months has likely built a backlog of people who would like to buy. I for one am one of them. Prices are coming down and when they come down enough (which I am randomly predicting is February) people will come out to buy the homes they want to live in again. It just couples with the fact of seasonal increases.
I am starting to see decent houses for sale for $400k. I mean built within the last 2-4 years with finished basements and multiple bathrooms and 4 bedrooms. The mortgage on this is what $1800/month? I know you can’t rent a nice house for that anymore. Rents have caught up, prices have come down and it is starting to make sense to rent. I can’t site all the references but I know quite a few renters and have checked into the rental market. You can’t rent nice SFH for less than your mortgage very soon.
Travis,
As for your answer. I can no more provide concrete evidence for why I think real estate will start back on an upward trend than you can why it will stay on its downward. I’m afraid that is the nature of speculating about an elusive concept of consumer confidence. Nobody can predict how it will be.
The best I got is this. Check this page out
http://www.rentedmonton.com/select.aspx?area=0400
This lists rental houses and prices in Edmonton South West.
Then check this out.
http://www.mls.ca/PropertyResults.aspx?Mode=0&Page=1&vs=Residential&ret=300&sts=0-0&beds=0-0&baths=0-0&bt=1&aid=6397&MapURL=%3fAreaID%3d6397&mp=0-500000-0&mrt=0-0-4&trt=2&of=1&ps=10&o=A
Now try and compare similar houses and see what the rent asks vs the monthly mortgage on the buy asks are. I think you will find in general it costs less to buy. Add in the fact that you actually own when buying and that will lead to more people buying IMO. That’s the best I can do within the time I have available to me.
As for interest rates, I may have mispoken on some of my previous research. I regoogled expectations on rate cuts and it now seems people are leaning slightly towards a rate cut and allot on a rate hold. I still predict a small cut.
Jesse,
I think your numbers are off.
“I am starting to see decent houses for sale for $400k. I mean built within the last 2-4 years with finished basements and multiple bathrooms and 4 bedrooms. The mortgage on this is what $1800/month?”
Borrowing $300k at 6.25% (TD open rate) over 25 years is $1964/mon. I very much doubt that many first-time buyers have a $100k downpayment. While lower open rates may be available, most buyers have to contend with CMHC premiums.
“You can’t rent nice SFH for less than your mortgage very soon..”
craigslist.org suggests otherwise. There are plenty of homes with asking prices $1800/mo or lower. And remember mortgage payment is not total monthly cost of ownership. Don’t forget taxes and maintenance.
I agree RJ but one of the key things is “very soon”. As in prices are still falling and if they come down another 5% or so by February while at the same times rental prices seem to be rising we are going to be in that situation “very soon”.
RJ,
I think you also have to make sure you are looking at comparable prices too. If you look at the houses available for $1800/mo I imagine that they are probably of the same quality a home with a sale price tag of about $320ish would be at.
I have to make one more comment, and then I’m finished – I promise.
Jesse, you are absolutely right again. It is very difficult to know what homebuyers and homesellers will be thinking in the future. To predict the resulting prices of homes will be almost impossible, to say the least. But I have to dispute what you have said – over the past few blogs, I have given ten reasonable explanations as to why prices will go down. I admit that I cannot provide concrete evidence for some of the explanations – I can only assume that there are people waiting until spring to put their house on the market. In spite of this, Economics 101 – if supply exceeds demand, prices will come down. It may be difficult to define what “oversupply” means in the housing market – but it is not difficult to see we are in a SEVERE OVERSUPPLY situation right now. This situation will not go away within the next few months. Jesse, as long as there are over 10,000 homes for sale at the same time, prices cannot go up – no matter how much wishing you do.
RENTERS: Say you want to buy a $400,000 house. So you borrow $360,000 at 6%. For the next 35 years you will have a monthly mortgage payment of $2,034.91 (depressing, I know). In the early years, approximately $1,800 is only paying the interest. Tack on $200 in property taxes and another $300 in utilities and maintenance… let’s see here… 1800+200+300… your home will cost you $2,300 each month – money that does not go towards your equity. Only the remaining $234.91 actually goes towards paying down your mortgage. If you currently rent an apartment for $1,200 per month (after utilities), you save $1,300 each month which you will place in your savings for your down payment. If the $400,000 home didn’t go up by 3.3% over the year – you lost money. If your house is only worth what you paid for it – you lost money! Houses have gone down over 5% in the past month alone and over 13% in the past six months. Over the long-term, houses are usually a good investment – but right now prices are going down. Why on earth would you buy while prices are in the midst of a decline? If you don’t NEED a house right now, use this time to take a sigh of relief and build up your down payment so you can avoid the 35 or 40 yr mortgage. Take another look at the situation in six to ten months, I think we’ll be hitting the bottom then. Please disregard the person that says house prices are up 11% in the past twelve months – houses were up 24% November to May and have tumbled ever since. Let’s live in the present people!
REALTORS: Tell buyers the truth – In the short-term (next six to ten months), Edmonton is a crappy market to be buying into. I realize it will cut into your paycheque, but at least you can sleep at night.
Thanks for the discussion
Travis,
You cannot compare apples to oranges. If you are going to talk about the costs associated with purchasing a $400k home you can’t compare them with the costs of renting a $1300/month apartment. For this do a price breakdown on maybe a $260k mortgage at most.
You have to factor in that some people are moving here and have jobs they have accepted. These jobs pay $100k+ a year and have upward mobility, it is a great opportunity for these people. That being said if they move here with their 3 kids I don’t think they will find a $1300 apartment an option. They will have a lifestyle they are accustomed to and will want to live in something similar. Now I am saying that to rent a place that is for sale for $400k right now, they are asking for prices ranging from $1800 to $3000 a month.
I respect your opinion and thank you for the debate. Good luck.
Jesse,
I suggest you do your homework before making baseless comments.
What would you do buy for $369k?
http://tinyurl.com/2tulx3
mortage payment roughly 2,200 per month( 6%, 25 years 5% down) plus taxes ~ 2,400 total per month plus maintenance.
or rent for 1850?
http://edmonton.craigslist.ca/apa/491622794.html
Travis is correct. The housing market is not so rosy.
There have been a number of sales this November that were below the purchase price of 2006. Some are already beginning to feel the pain.
The housing market in AB is beginning to deflate slowly and the deflation should accelerate going into the 4th qtr of 2008.
Even if the Bank of Canada cuts the prime, I don’t see any data that shows it’ll be easier to buy a house. Mortgage lenders are becoming more stringent with qualifying buyers.
Other observations:
The numbers of houses that were previously conditionally sold being re-listed is suprisingly high.
Houses that are listed as seller occupied actually turn out to be vacant. There are more vacant houses for sale than what the data says.
There are a ton of condo projects that will start delivering at the end of 2008.
If you’re buying a house today, you’ll be paying today’s prices. Buy it to live in it for decades, not for speculating. You should prepare yourself psychologically for when the correction does come. If you plan to live in it for a long time, eventually inflation will bring the price back up above where you bought it.
if someone check craiglist please do not use it as they steal ads and put them at lower rate and there is something wrong with them, it might very well be spam.
Folks, the common conception is that lenders in Canada have not been as “loose” as those in the US. There also seems to be confusion about the reason why there have been so few sales in the last 3 months. Hrm..lemme see..what is the average household income in Edmonton? Around $80K (check 2006 census yourself)? What does the typical household have in terms of savings..hrm..Canada has an average of a negative savings rate..hrm..what kind of mortgage would a household income of $80k qualify for in May/June of this year? Somewhere above $400,000 with 0-5% down. What about today? Just above $250,000 with 10% down. There is no mystery here. Credit fueled this boom. Lack of credit will break it.
Gentlemen you are right…the end is near and prices on 370K homes are going down to 2004 levels – pretty much its going to be a 260K home….a drop of 30%….
Lets look at apples and oranges for a moment….lets compare Ottawa a great market to Edmonton…
National AVG 2008 Predicted -
321,000$
Ottawa Avg 2008 Predicted -
288,320$
Edmonton Avg 2008 Focasted – 335,000$
Wow….huge diffrence of 14%….its crazy…..this is exactly the proof we need that apocalypsy is here….ohh wait…what are you saying taxes…hehehehehe
Edmonton 1100 square apartmen tax is 1800$
Ottawa 1100 square aprtment tax is 2900$
You say – “so what??” – well hmm…..avg wages in Ottawa compared to Edmonton …. couple other points…
hehehe…..cost of living – 5% GST 2008 in Edmonton
13% GST/PST in Ottawa….but you will say its nothing – prices of land blah blah blah – increse of residential taxes in Ottawa is forcasted at 4% for 2008 fiscal year….beeeehhhhhhh…..well okey but they did not have a huge increas in prices and inventory indicating a bubble burst…..or a severe correction!!!…..
Ottawa had over 30% price increase between 2002 and 2007…..which might not be edmonton level…but hey its up there…..
Guys its GODDAM expensive to live in ottawa
)) …taxes are nuts…..and its getting more expensive…..
Will Edmonton correct – yes it will….will it drop by 10 – 20% – maybe maybe not….probably more like 10% or 15%……will it balance by end of 2008 …well i hope so…..will people who bought at beginign of 2005 lose their shirts…..This is me laughing my ass of ….bought a condo at 104K (NEW) even if price goes down 30% still make 100K….hahahaha……too funny……
Picasso, you stated that: “I would also speculate that since this market has gone up so fast and now plateaued, the speculators have taken their profits and will not be investing in Edmonton in the near future.” I would just about bet money that the speculators will be starting to buy properties soon. Bob Trumans blog point out that houses are up on average 11,000 on SFH in Calgary. When investors here those kinda stats they will be starting to invest heavily, because there are a lot of people who feel that if prices have gone higher before, and have now corrected, they will go up again. I went to rein conference, and they pointed out that historically Edmonton’s real estate market fallows what Calgary’s does. (Not always in my opinion) With many investors feeling this is the truth, they will anticipate prices going up in Edmonton in the spring, and they will (whether it is little or significant I dunno). The fear that prices have gone down is subsiding, investors are optimistic, and many will bank on prices going up. If you don’t believe me, go to a Rein quickstart meeting, because I bet you amount of sales are going to increase. One person on this blog pointed it out that there is a often a spike in Feb or March. If people are banking on a quickflip, then they will probably be buying soon. I have talked to a couple realtor’s, and they have said things are picking up in their offices. I think Sheldon even said something along that sort. I am in no way saying this is the truth, and really I am stating a lot of opinions, take it for what it is worth.
Yogi, I don’t know any investors buying in Calgary. Anyone who’s buying for a quick flip will be upside down after paying realtor fees, misc transaction costs and taxes. The premium is not there for a quick flip.
Almost all I know are planning to unload some inventory. I say “almost all” because a few are in the market for the long haul. With the current rental rates, they’re making excellent cash flow from properties they bought several years ago.
I do know of excellent opportunities for making a quick good % return in other parts of Canada. However I reserve that type of analysis for clients. It would not be fair to them to divulge that information in a public forum.
You want to know how over priced Edmonton is, take a look.
http://tinyurl.com/2jb6fw
http://tinyurl.com/2yfna2
I could 1000′s of SFH examples in that price range.
Edmonton isn’t any better, tar pit or no tar pit.
November’s month end stats, down again, 7 in a row now.
http://tinyurl.com/2uxwcz
I wonder how EREB will put their undoubtly positive spin on November’s numbers?
picasso 1881:
by attempting to compare USA homes to Edmonton homes you went out of your way to prove to other posters that you deliberately ignore economics or you are an envious renter that cannot qualify for a mortgage. Which are you?
People like you on this blog will not sleep at night until the market in Edmonton had crashed.
But once again, for the most part people that blog here are obviously not busy enough in real life other than playing “real estate Nostradamus”.
It is impossible for prices to go drastically down. The economics are predictable in Edmonton. It’s not gonna go down. So give you people a shake, get out of your fantasy edmonton housing bubble bursting world and get a life.
As for bob Truman’s stats he has a disclaimer for EREB figures.
However thanks for the laughs!!!
i guess ray been outta town recently. prices are off $60,000 in the past 4 months, that is down drastically, aqnother 60-120 grand could very easily be chopped off the prices, in fact when all is said and done, edm sfh prices will avg about $160,000 in a year or so, so sell em if you can, prices are tumbling
No, I don’t think ray has ever been anywhere outside Edmonton. That’s why he has no idea how totally absurd the prices are up there in igloo land. He’s never been anywhere else to compare it to. Wake up people, your paying through the nose for nothing.
picasso said: “That’s why he has no idea how totally absurd the prices are up there in igloo land. He’s never been anywhere else to compare it to. Wake up people, your paying through the nose for nothing.”
where are you from?
That’s the problem with blogs I guess: people from wherever stating whatever… could be anyone to say stuff like above. a 15 year old or a 40 year old living in his mom’s basement. Plus the negativity here thrives on the ridiculous. Obviously there is a mental disconnect in some people here. Time will only tell and some other prophets here like gregg and his further fantasy figures. Prices went down 8% since June which is at $40000 as a median not $60k like gregg says and another $60-$100k slump? Juvenile comments such as those will make them look like fools by this summer!!!
Dream on!!! Just make sure you pass your grade 12 this year and do not worry so much about your parents’ equity on their homes, picasso and gregg!!! LOL!!!
avg price #391,000 down from $451,000. if you dont like it, dont look. good luck ray. your gonna need it. lol
A 1480 ft bung in Dugan was sold 450k in April. A 1500 ft 2-story (single garage has been converted into a room and included in the total area) in royal garden was sold 430 k in Nov. From a buyer’s point, i did not see a price drop at all in the past 5 months. I mean i would like to buy the bung in April rather than this fake 2-story.
I assume most houses sold in the Low season are poor houses. An evidence is that million houses are mostly sold in the high season. This counts when people talk about price drop in low seasons. Seasonal change is not a big deal.
As more apartments are built, i would expect a price drop on the condo in 3 year window. SFH will stay stable or with reasonable increase because overtime people with more money will like to move up.
I could be wrong
would anybody call Fort Macmury a ridiculous place to buy anything, comparing to Taxas?
Too bad, people live in Fort Mac either can not find a good job in taxas, or they are not entitled to.
I had been thinking to buy something in Taxas too. But i can spend only 6 months per year. What a waste!
Sorry Jim,
I came across derogatory and it was un called for. It has been deleted and it should have been.
Cheers,
Piccaso
I don’t remember who, but someone on this blog mentioned this website (http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html) as a reference for statistics. Just be careful when using those numbers because they are not only for Edmonton as the owner of the site himself states (Includes Edmonton, St Albert, Sherwood Park, Spruce Grove, Stony Plain
Note: These areas do not coincide with the criteria used by the Edmonton Real Estate Board).
Wish you all a great week.
Fontes
I think he’s more accurate and indepth then EREB to tell you the truth. I like a chart vs EREB’s a paragraph version. I also think you should include St Albert, Sherwood Park, Spruce Grove, Stony Plain as it’s a more accurate picture of the Edmonton market.
http://ereb.com/
Just a quick question for all the “Bulls” out there. If this housing boom is the result of all these major projects that we have about to get under construction has anyone actually looked at the numbers? What were the projects on the books in 2005, 2006, 2007? What was the total value of projects in the same years? Has it gone up because of new projects? At all? Because of inflation and cost overruns? Has anyone honestly disected that report and overall number?
Just wonder since these are questions I have?
K
if you need a house buy one. If you cannot afford one think long and hard about what you’re wrong.
Just like a bunch of peasants that go nuts when progress and economic potential hits a region. Fear sets in. The real estate bogey man will destroy everything with a huge bubble bursting. Edmonton is thriving and supply and demand has now be met (since Sep)in a happy middle so expect housing prices from now on to go up at inflation rates. People are moving here from elsewhere – maybe at a lesser rate but still are. There’s not only the oil sands here any longer. The service sector is now huge.
The people here that are very focussed on seeing Edmonton crash, I demand to see what your references are and where you did your research.
http://www.dcnonl.com/article/id24254
WHY should Real Estate trade at a discount in the strongest economy in North America. Heck I think only China outperformed Alberta in the entire world? Yes so our market should be declining that makes sense! So the supply issue is there but probably half of that is junk that was or is or will be rental again. If I lived in Ontario I would be far more worried that Real Estate is going to drop. Ontario’s job growth is terrible and the risk of job losses increasing even further is much greater than Alberta!
A.A. that study was performed from 2002-2006. Come on it’s 2007 now!
Come on Radley we are now in 2007 AND ALBERTA IS STILL LEADING THE COUNTRY! How is that negative! No one is predicting any major changes to this trend either!
http://www.statcan.ca/english/Subjects/Labour/LFS/lfs-en.htm
Interesting to note that.
Alberta’s employment was little changed in October. However, the province continued to have the lowest unemployment rate in the country, at 3.4%, as well as Canada’s highest employment rate (71.5%).
AND
October’s employment growth in Ontario was mainly in public administration and “other services”. The growth in public administration was due, in part, to the provincial election, which coincided with the Labour Force Survey reference week.
AND
As well, public administration added an estimated 20,000 workers in October, all in Ontario.
AND
So far in 2007, employment in Ontario has risen an estimated 1.7%, still below the national average of 2.1%.
Ha Ha! How’s that for media putting a positive spin on things! So Ontario STILL rose below the national average and that’s with 20,000 Public Administration jobs that were created.
Give me a break. Ontario is even worse off this year! Without the 20,000 Public Admin jobs the growth rate is TERRIBLE and getting worse. It is the worst in the country for that month even with that little Public Admin boost. I don’t expect it to get any better for a few years either. Probably even worse in 2008 is more like it. Real Estate is rising there! Do you suppose that maybe Alberta is going to be getting a second look in the New Year? I think so but hey what do I know? Only all the facts point to Alberta as the economic leader of North America and that trend will not change overnight.
My mistake me thinks.
I said.
It was the worst in the country for that month even with that little Public Admin boost.
Ontario was not the worst in the country. Sorry. Got carried away with the Ontario thrashing!
Jim, your observation is wrong. I don’t intend to forecast. But as for the past 6 months, the price was down big time.
You should not just compare two absurd listings and say there was no change. You need to research more.
For instance, this brand new Riverbend 1812sqft house with double attached garage asks for $434,900. I have been there and can confirm that it’s not close to a noisy road. Link:
http://www.mls.ca/PropertyDetails.aspx?PropertyID=5912131
It may not be your dream home, but the fact is that it would have been sold for $490k in a week back in May. But it’s listed at $435k for a couple months now and still on the market. This drop coincides with the drop in the average/median prices.
We WON!!!
http://www.financialpost.com/story.html?id=141522
I think a lot of it is consumer confidence. In September and October, in the midst of all the confusion about what the government would do with oil and gas royalties, there were lots of people who were nervous about buying a home in Edmonton. The strong oil and gas industry is what’s driving our economy, and I think a number of potential buyers feared that if the government really smacked the companies, the economy might cool down really quickly and lead to lower prices.
Now that we’ve seen companies announce plans to invest more billions into more projects and upgraders, even in the face of higher royalties, there’s improved confidence that this strong economy isn’t going away any time soon. New investment = more jobs = demand for more workers = more people moving here = higher house demand = higher prices.
prices are high enough and inventory is huge, we will be lucky enough if we can at least have a owner for these properties.
I’ve noticed the Calgary Real Estate Board provides an excellent 10-page real estate report each month:
http://www.creb.com/media/stats_pdfs-graphs/res-stats-pdfs/2007/CREB®%20Stats%202007%20October.pdf
…and Bob Truman also puts out a great website with weekly stats updates and good information. Do we have anything like this in Edmonton (besides the Edmonton section of Bob’s website)? So far, all I’ve seen is the pathetic little table and biased blurb the EREB puts out each month.
There are just too many factors pointing to higher prices in Edmonton that I can’t see prices declining much more. Inventory is one factor working against this but it is not the big factor. The big factor is buyer psychology and that is slowly changing for the better.
The recent dip in Edmonton Real Estate combined with solid economics has put Edmonton in an even stronger position to attract more people than just a few months ago. With Real Estate rising almost everywhere else in Canada this is narrowing the Alberta affordability gap. While prices are falling wages are still increasing. Even in the face of low natural gas prices and a troubled forestry industry Alberta is still blowing away most of the Country! What happens in a year or 2 when these industries are on the mend? The Calgary factor is also helping push more people here as prices there are quite a bit higher and more people are turning their eyes to Edmonton. I know of some very big firms that are pushing more projects to Edmonton as Calgary is too overloaded to get the work done. Wage growth in Edmonton has also narrowed the lead that Calgary had last year. Psychological forces have had plenty to do with the recent decline in prices. I think in the New Year or shortly after prices are not going to be dropping in Edmonton anymore. I also strongly suspect the net migration to Edmonton in 2008 is going to be on the rise and will surpass any current estimates. The more prices decline the stronger the will to buy Edmonton will be. Soon enough the tide will be changing again. We will have gone from sellers market to buyers market to balanced market to a slight sellers market again all in an 18 month period. We shall see but I don’t get the doomsday argument in the face of such positive factors.
Alberta Advantage,
When I read your post on the outlook in Alberta, I just cringe because it’s obvious you have no grasp on the realities that are existing today in Alberta.
I honestly don’t know where you are getting the Kool Aid because where you are getting it I’ll need to go grab some.
Your post is completely emotional with no FACTUAL “economic fundamentals” (that you speak about) presented.
Let me let you in on some REALITY that is happening right now. You probably heard about the misfortunes this last week with CNRL. Well, I was not very lucky this last week and I received my “pink slip” from CNRL. Yes, you guess it, I was a highly paid professional laid off with no work.
I live in Calgary and I had purchased a house 5 yrs ago and another “investment property” in the last yr. And now my family has been put in an unfortunate situation where I have to sell both houses. Over the past week having many indepth discussions with family and freinds, we have(my wife, two teenage daughters and Tango the dog) decided that we are going to move back home to Halifax, NS at the end of the month once all the loose ends are tied up. It is just becoming too expensive to live in Alberta where back home the cost of living is much less. We have also put up our houses for rent but so far no biters. I hope that will change. So things are quite unstable for us this coming Christmas.
My wife who is a teacher cannot support the payments on both of our houses. Luckily she had been teaching in Halifax for 8 years prior to our move to Calgary and has landed a job with her original school that she started her teaching career with. I might have to look up my old employer as well to secure a job but I am confident that will be arranged.
I just wanted to share with everyone that not everything in Alberta is rosy as depicted by Alberta Advantage. Ask anyone working in Oil and Gas and there is tremendous uncertainty in the air.
People are worried, stressed and some of my closest friends are mortgaged to the extremes. You can see it in their faces. Rats in a rat race. To what end?
What will be coming up in the new year? I just hope that our family will come out of this financially ok.
Knock on wood.
Laid Off… thanks for giving many of us debaters a real life example of the pain caused by this BS housing market… on both the Bull and Bear side… personally I’m bearish… and I do think that Bulls have entered the arena of “promoters”… but I think the tail is in the tape… and it’ll play out in the cards… with, undoubtedly, people losing money in the transition back to “normal” housing market and level…
K
Just came across this article this evening:
“Petro-Canada exploration spending shifts from Alberta into U.S., Arctic.”
http://www.canadianbusiness.com/markets/headline_news/article.jsp?content=b1128149A
It’s this type of uncertainty that is now (or was for me) the average conversation at the daily watercooler.
Alberta Advantage – do you care to comment on the article?
I can comment. Inside that article there seems to be some reference still to cash they are spending in Alberta and cash flow that is going to be added by their projects. Granted some of the future projects are going to slow down but I think that is a good thing. Super heated economies are too much of a strain for everything. As for getting laid off, please sir. If you are a qualified professional in the oilsands there are plenty of jobs out there for you. Just go submit your resume to any number of the projects and you will be hired within a week. I know our company is screaming for people along with most of the other companies out at the Albian Sands expansion. Please don’t act like the job outlook in Fort McMurray is bleak because that is just absurd.
I just want to clarify that my position (opinion) about the housing outlook isn’t really bullish or bearish. I am relatively neutral but fail to see the catastrophic collapse allot of the people on here are calling for. That being said I still think we are in for some more downward correction followed by a return to regular inflationary increases.
I have just read Bank of Canada’s announcement to cut the interest rate to 4.25%. My question – will house prices (including Edmonton) increase in light of the rate cut?
laid off: Why are you still posting here?
We thought you were packing up for exciting Nova Scotia because you got laid off and the economy in Alberta seems to be crappy here ar 3,8% unemployment… Go back to Halifax at 10% unemployment added to 20% welfare and good luck competing with 20 other applicants to flip burgers at Burger King…
Laid Off
It is too bad CNRL is doing what they are. They have shot themselves in the foot. The Royalty Rates in Alberta are still very nice. Anyone claiming they are not should look around the world or go invest in some Country that will seize your assets once you build it all for them. How many times has that happened? If you have experience you should be able to find a decent job without much trouble.
The future will be what it is but I think it is going to be quite good. You can say what you want but unless something changes around here in a big way no one is going to convince me otherwise. Caution is always wise but how much better do you want it to get?
Low interest rates, strong economy, low taxes, highly skilled workforce, younger population, world class scientific research, world class medical facilities, largest river valley system in North America, largest oil reserves in the world(except maybe Saudi), forestry, agriculture, service industries, manufacturing, mining, education, and the other fifty things I’m forgetting.
“Home prices down in November”
http://tinyurl.com/26k9ks
(from the Edmonton Journal)
I am surprised laid off cannot find another job in Alberta when financial post says we are doing the best, how will he survive in halifax if he gets laid off there, it is reality of life, if you are competent, you will get another job, housing problem, I can understand, but job problem, there is none of people who know there job.
The guy who questioned Bob Truman’s number now seems very funny.
Actually,the numbers are a lot lower than Bob Truman’s so we are really doing BAD here.
change your perspective, from buyers’ perspective it is good.
Carolyn Pratt is “stretching the truth” once again. How can she honestly say we will see inventories reduce to normal levels by spring in the same sentence that she says inventories are dropping due to withdrawn listings?
Those listings will be back on the market in the spring – inventories are gonna jump (and Carolyn knows it).