Here is our weekly update on the Edmonton real estate market. (Last week’s numbers are in brackets, and the week before after that). For the past 7 days:
New listings: 869 (780, 574, 669)
# Sales: 272 (284, 235, 263)
Ratio: 31% (36%, 41%, 39%)
# Price changes: 567 (550, 450, 465)
# Expired Listings: 125 (408, 83, 152)
# Canceled, withdrawn and terminated listings: 65 (60, 39, 66)
Net loss/gain in listings this week: 407 (28, 217, 188)
Active listings for single family homes: 3888 (3694, 3649, 3496)
Active listings for condos: 2851 (2692, 2669, 2608)
Wow that’s a lot of new listings! That’s all I have to say about that 
The average residential sale price for April so ar is $333,030, down from March’s average of $343,760. Price per square foot also took a hit for single family homes, but increased slightly for condos:
Happy weekend – enjoy Sunny Edmonton!
Can you check the numbers for Expired and Cancelled listings? They look like the ones from last week.
***Yep, you’re right. Sorry I fixed it
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Rolling the bubble:
“”Clearly Saskatchewan is the new Alberta, with economic growth there being driven by the commodity price boom.” said Jacqui Douglas, economics strategist at TD Securities.
Strong demand continued for new houses in Saskatchewan on the back of a healthy natural resource sector as well as the push to encourage migrants to the province in an attempt to alleviate the labour shortage, said the federal agency.
The rate of year-on-year growth of new housing prices in Edmonton slowed to 14.8% in February – the seventh consecutive deceleration in growth.
Prices in Calgary increased 5.2% in February 2008 compared to a year earlier. This was a slight decrease on the 5.6% yearly rise reported by Statistics Canada in January.
The federal agency said that the departure of some migrants from Alberta meant that there were more resale houses on the market contributing to slower sales in the new housing sector. Both Calgary and Edmonton saw a decline month-on-month with prices falling 0.3% and 0.9%, respectively.”
http://www.financialpost.com/money/story.html?id=439018
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Was this the spring rush that everyone was expecting? I don’t know if it’s a rush for the door or if this is all to be blamed on getting just a fraction of the immigrants that we had before.
New listings appear high this week. Is it because it is the start of a new month? How about de-lists that re-listed?
I hate to say it ….and I am an optimist…but the numbers are bad….the real estae agents must be busy with so many listings…..
similar situation happening in vancouver. listings and prices are up but sales are down. in fact, listings now exceed the level of one year ago. however, given the hot sellers market we’ve had from 2003-2007 it is hardly surprising that sellers are taking some profit and thereby increasing listings. last year some buyers thought prices would soften, so they sat it out, instead prices climbed 12%..ouch! we are now moving back to what i consider a normal market.
Agree… numbers are high. Got to wonder though as well, how many are taking off Comfree and listing on MLS. I see alot less Comfree signs and in some places where I saw Comfree signs I now see actual realtor signs. This is one of those factors that is hard to measure. Still optomistic, I have begun to notice many more out of province license plates as well. Seeing alot more Quebec and Ontario plates these last two weeks. Is it me, or anybody else notice these things?
I hope, those people coming from other provinces (Ontario, Quebec)
will be able to buy some RE over here, but remember, they are going through an economic low time of all times( whereas, we are going through an economic high time of all times ) and most of them may just lost a $20+ /hr. job and may not have a lots of savings or flat broke, so don’t bet on that.
it’s better to buy in Edmonton than in Calgary…look at this: http://video.aol.com/video-detail/calgary-april-10-2008-part-one/4274234026
ups… in Edmonton can happen in May the same…
Sara, thanks for the weekly statistics. I was wondering, can you include the total active listings each week? The numbers obviously do not include townhouses and I think a picture of total inventory would be useful.
Also, I know that you have been asked to show average sale price each week and I know you have hesitated because the small sample size would create fairly strange numbers. Have you considered a four-week or eight-week rolling average? Each week you can provide an update and the larger sample should provide a more meaningful comparison.
***Hi Travis, you’re very welcome. The numbers do include townhouses (they are included with condos), it’s just that I’m only counting Edmonton. The stats that come through the board include a much larger area. If you look closely, you’ll see I have posted the average price for April so far. I’d love to do a rolling average but it would be very time consuming to calculate.
KARL:
Those folks from Ont. & PQ that have been laid off from GM, etc had homes… They sell and buy here where they find jobs. I sure wouldn’t stay on UI over there, would you?
It’s better out here.
It’s nice for me a buyer to see the number of listings go up.
It’s great to see you posting the weekly numbers, but it’s sometimes seeing the trees and missing the forest.
Karl and Ray,
You are expecting that the new commers will buy this inventory …a realistic assumption..however ..have you thought why Albertans are selling their homes …are they running out of the province or
Just checked Comfree (Magee had mentioned it earlier), the trend seems to be much the same. They have posted monthly stats.
For March 3196 (no break down) 574 new listings (for March) and 201 sales.
Comfree still seems to be doing very well listing wise. Which as we see means a lot more homes for sale then just listed on MLS.
Enjoy the warm weather.
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“Bank of Canada is forecast to gradually tighten rates by late 2009 and leading into 2010.
But rising rates, Alexander warns, could “create significant challenges for urban centres where affordability is stretched for cities where speculation has remained strong.”
Real estate conditions would have likely cooled sooner if not for new financing products such as extended 40-year mortgages, which has delayed the impact, the bank’s report says. The mortgages, preferred by some first-time buyers, have been criticized for adding massive debt to consumers who may never pay off their homes.
One concern remaining is over condominium building – Toronto is North America’s largest site for this type of product. But TD said it’s impossible to figure out how many speculators are in the market to make an accurate forecast.
“The main concern on the condo front is the extent to which purchases are being made for speculative purposes which would make them more vulnerable to price swings,” Alexander said.”
http://www.thestar.com/Business/article/413459
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Was out looking at showhomes in the south end today. Every cluster of showhomes is surrounded by brand new empty homes with “open house” and “for sale” signs out front. One of the new home sellers said that lot prices are coming down when I told him that we’re waiting to see which way the market is going to go.
Picked up the new comfree book too, 229 pages about about 10% more listings than the one that I grabbed 2 or 3 weeks ago.
I too noticed a lot more Ontario and Quebec license plates, and I notice less B.C and Saskatchewan plates.
I hope we do get more people from the east, we could use more skilled labor and people willing to move and make Alberta their permanent home.
I read that Alberta is going to bring in 40,000 more temporary laborers in the next few months….which is the last thing we need, because they don’t buy houses. But their good for the rental market I suppose.
So SFD’s are up and Condos are down in April.
What does this mean? Do you think the price trend for condos is lagging behind SFD’s and there is potential for condos to go back up shortly?
DREM
I just read a paper saying that condos are overbuilt in Edmonton, considering the population increase.
May be that’s why.
Another possible reason: when real estate prices go down, it usually starts with condos before SFH. The sequence is usually: recreational properties, then condos, then SFH.
Come on guys, even though Quebec and Ontario might be in entering in a recession, it does not mean its inhabitants will sell their bungalow for less than $200,000 and move in Edmonton where they will have to pay $350,000 for the same type of bungalow here… I am from Quebec and back 5 years ago, at the beginning of the boom in Edmonton and Calgary, many people were asking me questions about Alberta because they were interested in moving here, back then it was a good idea to consider moving here since the real estate market was affordable and the wages were higher than normal… Nowadays, these people heard about the housing market, the cost of living… and they know it is not worth the effort!
For these families, is it better to make a $5 extra an hour and have to pay an extra $150,000 on a mortgage? I don’t think so… Some people seems to think that if GM shuts down it’s factory in Boisbriand (PQ), everyone will go nuts and move in Alberta.
I am afaraid these people seriously missed the wave!
Cheers!
Folks, let’s look at the big picture: Alberta has 1.6 Trillion Barrels of oil in the oil sands alone in addition to the conventional oil, gas and coal. The big fuzz this week in the USA news was about 3.4 billion barrels in the bakkens basin which is in north dakota, montana and Saskatchewan (see http://energy.usgs.gov ). So Alberta’s oil sand has 500 times the Oil in the sands than the whole Bakken basin. Prices would have to go up and will stay up. The current plateau will end sooner or later. People cannot have it both ways, if young welders are making $80 per hour then houses can go for 500K, no problem.
To add to the above, I know at least a dozen people with families from work that earn at least 120K per year, currently renting, wanting to buy but waiting to see how the market would turn. Everywhere you turn around, people are just waiting to see if the prices go down. If a fraction of these families decide to buy, the current inventory will evaporate in no time. Guys and Gals, the actual capital spending has not started yet by the big oil. Wait and see how this province will look like in 7 – 10 years which its oil production triples.
Mike,
Your general idea is right. I work in the oilsand and most people make over 100k/year. I gotta mention though that Alberta oilsands don’t have 1.6 trillion in recoverable reserves(more like 1.7 trillion total and 350 billion recoverable at most presently) and the buzz about the Bakken formation is that the US geological Association has revised its estimate on the recoverable reserves up to around 3-4 billion from its previous estimate of 151 million. The Bakken isn’t paltry. It is quite a chunk but Alberta has 100 times more.
“People cannot have it both ways, if young welders are making $80 per hour then houses can go for 500K, no problem.”
Unfortunately, Alberta is not only inhabited by welders. This example seems to be slightly exagerated since not every welder makes a gross income of $166,400 ($80/hour x 40 hours/week x 52 weeks in a year).
Cheers!
“The Bakken isn’t paltry. It is quite a chunk but Alberta has 100 times more.”
Thanks Jesse. Since you are in the oil business, you would know that in order to produce 250,000 bbl from the Bakken (similar to Suncor in Fort Mac), you need to drill 1000-3000 very expensive deep wells. The Bakken play is not cheap by any mean.
“Unfortunately, Alberta is not only inhabited by welders”
Thanks Carllecat. Check out Stats Canada for last year average house hold income. I guess that it was in the high 80K’s in Calgary and high 70K’s in Edmonton. This is the average income including seniors, single parent households, new immigrants, and does not include unreported cash income. So I guess 500K home is affordable after all. Please do your research from reliable data.
Mike, your comments are a little confusing. Can the average Albertan afford a 500k mortgage or not? A welder making $160,000 a year can afford that mortgage, but the statistics you provided say he is making more than double the average. Carllecat simply made an observation that everyone in Alberta is not a welder. Shame on you Carllecat for making that assumption without doing your research first.
Mike, you rich welder you… I have a bungalow with your name on it.
And ten thousand other sellers are waiting in line.
Mike,
Buy a few houses and flip it in the next year…let me know if you need any help in buying …there are a lot of speculators (Donald Trumps….crying out here)
“Unfortunately, Alberta is not only inhabited by welders”
Thanks Carllecat. Check out Stats Canada for last year average house hold income. I guess that it was in the high 80K’s in Calgary and high 70K’s in Edmonton. This is the average income including seniors, single parent households, new immigrants, and does not include unreported cash income. So I guess 500K home is affordable after all. Please do your research from reliable data.”
Mike, when you mentionned “please do your research from a reliable data”, I seriously hope you were kidding! There is a huge difference between a $160,000 gross income and the 70K’s household income you stated after…
Now, let’s say the average income excluding seniors, single parent households, new immigrants, and unreported cash income is around $100,000 per household. I am afraid this is not enough yet to afford a $500,000 mortgage unless you do not have any debts at all and you can give a higher than normal cash down… and at the end you might end up with the now so popular 35-40 years mortgage!
Cheers!
Thanks for everyone’s comments.
No kidding, but if I had the money for long term real estate investment, I would jump on some properties. I still stand behind my statements that Alberta is the best land for the future and that real estate will go one way due to the strong economical foundation. I have not seen any good argument to the contrary.
I lived in Ontario and used to make $17 per hour and paid $1000 per month for a 2 bedroom to rent. I moved to Alberta, took training and now I make 4 times what I used to make in Ontario and pay $2200 per month in mortgage for my own home. I’m quite happy and glad I have my own home. have way more disposable income and the future is brighter than if I stayed back in Ontario.
Single parents and seniors are not making 70 G’s to 80 G’s a year average household income. Nice try.
Only DINKS are making that household income.
(Dual Income No Kids)
http://tinyurl.com/3zsdmc
This is a 2 part story about fraud and criminal corruption in the TV.
****Comment edited. The clip is only showing an unlicensed scam artist.
and the tar sands/oil worker/pipe fitter/welder guy that makes $160,000 is only taking home half that because he’s paying 50% tax. Isn’t Canada great.
brent,
“and the tar sands/oil worker/pipe fitter/welder guy that makes $160,000 is only taking home half that because he’s paying 50% tax”
Wrong. Why would you post something that is trivial to disprove?
I’m maybe off a percent or two but I’m real close. When the 70,000 a year guy is paying 36% tax, the 160,000 a year guys is paying real close to 50% tax. But that’s only in Canada.
1. Tar sands/oil worker/pipe fitter/welder making $160, 000 probably doesn’t have the best quality of life because he spends most of his time away from his family. Not good for the worker and not good for the family.
2. Not everyone in AB is working in the oil industry and unfortunately some really important jobs aren’t paid nearly enough to make a decent living in this province. I really hope I’m not here when those who we rely on take off because they can’t afford it here. I’d like to see this society function without firefighters, police officers, paramedics, nurses, teachers and even Dr’s (you don’t make the big bucks right away).
3. A lot of people coming here from the east coast really don’t plan on staying. Almost every maritimer that I’ve met plans on going home. God help AB if Newfoundland ever gets their oil industry going. A transient population doesn’t make strong communities or a strong society.
4. The housing market can not keep defying the most basic economic principles.
This province has always been my home. I look forward to a time when we’re back in balance.
Brent,
The top federal tax bracket is 29%. Alberta provincial tax is 10%. Someone making $160K/year in Alberta pays roughly a third in taxes (and perhaps less, depending on deductions).
http://www.cra-arc.gc.ca/tax/individuals/faq/taxrates-e.html
39% tax is not a third and don’t forget the other 12 deductions on his pay stub for dental this, alberta health care that, cpp this, old age that, etc this, etc that…and he’s at 50% take home.
Give it a rest dude, years ago when I worked as an employee and made a measley $45,000 a year I was lucky if I was taking home $27,000. But that’s only in Canada.
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Again, here are the average hourly wages in Alberta:
http://www40.statcan.ca/l01/cst01/labr69j.htm
Also after quite a long time foreclosures are starting to show on MLS:
http://www.mls.ca/PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3dResidential%26ret%3d300%26sts%3d0-0%26beds%3d0-0%26baths%3d0-0%26bt%3d1%26atsg%3d3%26aid%3d6265%26MapURL%3d%253fAreaID%253d8688%26mp%3d300000-325000-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d50%26o%3dA&Mode=0&PropertyID=6802339
http://www.mls.ca/PropertyDetails.aspx?vd=&SearchURL=%3fMode%3d0%26Page%3d1%26vs%3dResidential%26ret%3d300%26sts%3d0-0%26beds%3d0-0%26baths%3d0-0%26aid%3d5807%26mp%3d0-0-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d10%26o%3dA&Mode=0&PropertyID=6772679
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Here is the salary information for welders in Alberta:
http://www.alis.gov.ab.ca/wageinfo/Content/RequestAction.asp?aspAction=GetWageDetail&format=html&RegionID=20&NOC=7265
The listed maximum is $48.08 in Oil & Gas Extraction industry a far cry from the discussed $80.
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Brent,
You obviously don’t understand how a progressive tax system works. The 39% only applies to the amount of income above the top threshold. Income below that threshold is taxed at lower rates. Read the link I posted.
Single person Alberta health care is about $500/yr, or less than <0.5% of $160k (at that salary level, it would almost certainly be paid by the employer anway). “Dental this”, CPP and the “other deductions” aren’t taxes. I suppose it could be argued that EI is a “tax” for the highly employable, but the max payable per year is ~$2000, 1.25% of $160k.
What you paid in taxes and deductions that you conflate with taxes years ago is irrelevant – its obvious that things have changed since then. Your assertion that someone making 160k is “paying 50% tax” is wrong, and not by a little bit.
Glad you like working in the US so much, but I’m not sure why you feel you have to make up stuff about Canada.
Sorry, the EI max is actually ~$700/year. Its the CPP max that is $2000/year.
(Apologies to Sara and Sheldon, this has gone far off topic)
Brent, your 50% tax assertion on 160k/year pay is off by more than 15% or around 20k. Which would cover a 300k mortgage. Roughly what a guy would need if he sold his place in Ontario for 200k and bought a 500k house here.
Not that it really matters, less than 2% of Alberta’s population are making that much.
BAD
Don’t forget overtime. The average welder probably puts in at least 20 hrs a week.
Here is the average Salary from an Oil/Gas Extraction welder ($111,720).
http://www.alis.gov.ab.ca/wageinfo/Content/RequestAction.asp?aspAction=GetWageIndustryWage&format=html&NocCode=7265&IndustryCode=3
And don’t forget this is just the Average.
$111,720/(365/7*40hr/week)=$53.56 hr. This isn’t the same as the $48.08 the same site came up with. Don’t know where or how they calculate those figures. Also this doesn’t take into account vacation pay/time.
Plus most welder in oil/gas have at least B-Pressure. They are paid a premium for specialized tickets.
The average welder in Alberta would have no problem buying the average home in Edmonton ($387,632 SF).
For those debating Canada Income Tax go here.
http://www.cra-arc.gc.ca/eservices/tax/business/pdoc-e.html
It’s an the Government of Canada Online Tax Calculator. You can also download the Java version TOD for your desktop.
All these talks about fundamentals and salaries would make sense only if there were no speculation in the housing market. But can we really deny that there is speculation in Edmonton?
A teacher makes $60,000. Let’s say he is male and has 2 little kids, meaning either his wife stays home, or they need to pay $1500/month for daycare. Assume they have been very conservative (repaid their student loans, car loan, have no credit card). How much can they afford?
According to the RBC mortgage calculator: $194,000 over 25 years or $226,000 over 40 years.
Now you might say: “one should not buy a house before the kids are grown ups”. The average age for the first kid is 32 for a man. When the second kid is 7, that teacher is likely to be around 40. He now makes $70,000 and his wife goes back to work for $30,000.They managed not to accumulate any debt when feeding a family of 4 on one income (!). They can now only go for a 25 yr mortgage (yes, they intend to retire at 65 debt free). How much can they afford? $356,000.
In a desirable place like Vancouver where rich foreigners want to own a condo to spend the summer months, young teachers, nurses and policemen can only do one thing: leave.
Edmonton is unlikely to become a resort city. If the average worker is to live in Edmonton, then the average house is overpriced, unless families are ready to live in small condos.
Well I guess we should all become welders then!
Seriously though, just look at the average wages in Alberta, if you were making $25 an hr, you would only be able to afford 168,000 mortgage and not all couples make $25 an hr each, maybe the significant other makes $12 an hr working at a grocery store or one of the many service outlets that are begging for low wage workers.
So if the average household in Edmonton makes 70 g a year, then the most they can afford is a dwelling going for 260 g.
The average house should realistically be in that range or even less, depending on the market. Otherwise, people are taking on more debt than they can afford…and when more money is going into servicing your debt, less money is going into the local economy and thats bad for everyone.
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Neil,
The difference between the average annual salary and average hourly wages is due to the things you’ve listed, like vacation pay, shift bonus, premiums for specialized tickets and similar.
The average hourly wages are listed at $38.41 with 40 hours worked per week on average. That gives about $80,000 per year in hourly wages. The remaining $30,000 or so is the extra pay due to the items listed above.
This is still far cry from $80 an hour and $160,000 a year for welders discussed here along with $500,000 houses that they are supposed to be able to afford. And this is the top dollar trade in the top dollar industry in Alberta that not everyone is working in. See the average hourly wages in Alberta.
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I think what is a little more important than these Average Incomes in Alberta is the Average Debt per household.
A lot of these folks making the $160,000/yr incomes spend it.
Sure they have the cash for the mortgage, 1-ton lifted diesel, snowmobiles, other habits and recreation, but a most of them (not all) are NOT SAVING.
There is a reason why Canadians have a negative savings rate; we spend like Americans and love to be in debt!
Who in their right mind loads up on Consumer Debt to the max based on their highest possible earnings (incl’ OT)?? A lot of foolish people.
I know several who earn far into the 6-figures, spend hard and actually cannot afford to take time off because they won’t get the OT they need to cover their monthly living.
Credit will not be such an easy facility in the coming years. This will not only affect how people spend, but it will have direct effects on the price of Assets, namely Real Estate.
We have consumed so excessively for the last several years that it has created an artificial demand on everything thanks to and including easy credit.
Unfortunately for many, that is currently in the process of changing.
People were alright with paying $500,000 for a small bungalow because they figured they would be $100,000 richer in equity within a year.
Now that game is over, do you think people are still going to be as willing to load up to the eye-balls in debt?
Trends my friends; up and down. Last summer was the top of the mountain, now we’re hiking back down.
Taxes: Albertans pay more than 50% of their income in taxes after taking into account all types of taxes. Not sure why we would even argue this. Ontarians pay even more.
ON/QC move: Yes, they will move more here but their houses are worth 200/sq.ft. at best. The houses here are simply out of reach. Thier living standards will plumment.
Welders: Their pay is obvisuoly around $110K/yr. They are at the top end of skilled workers so I am not sure why we would discuss a minute population base to make arguments.
Average Albertan’s Household income is $80K and this is what counts.
Inventory is rocketting to sky high numbers. They must fall.
Micheal
I would say most likely just a slow gradual stroll down to the next highland plateau, not back to the bottom of the mountain were we once started. From there we will walk along the highland plateau until we catch our breath and then the next mountain face comes along. But this time the next mountain face won’t be as steep and we won’t run out of breath climbing it. Well like we did on the last one anyway.
This little rest break is just the balance that Alberta needs. Don’t forget there are mountains growing all around us were there once was valleys (ie. Sask, BC).
Your comment.
“Sure they have the cash for the mortgage, 1-ton lifted diesel, snowmobiles, other habits and recreation, but a most of them (not all) are NOT SAVING.”
This means these people are having fun and living life, not sitting at home waiting for the next collapse of civilization. When people live like this it means they see a bright future and unlimited opportunities ahead in this great Province of Alberta. Also to these type of people it’s only money and they know if you’re willing to sacrifice a little you can make buckets of cash here in Alberta.
PS: Do I agree with spending money like this, NO!!! I don’t, but these people do. Also from personnel experience “people that owe are more reliable and willing to work than people that don’t owe”.
Your other comment
“Credit will not be such an easy facility in the coming years. This will not only affect how people spend, but it will have direct effects on the price of Assets, namely Real Estate.”
Yes credit will and is still avaliable to people who have jobs and can pay their bills. Kinda like it has always been in Canada. Sure you can get easy credit in Canada, but it’s definitely not going to be cheap. Easy credit in Canada is nothing like the cheap easy credit that was available to US citizens the last couple of years. That kind of cheap easy credit that the US enjoyed is not and has not been ever been available in Canada. And I hope it never will be.
It’s amazing what you can afford when you actually have a job. Hate to be an Eastern’r right now where you don’t have the opportunities we have here.
Think about this, “credit as become so entrenched in our society that it has become part of our fundamental economy.” If you actually take a close look at credit growth in the last 30 years you would see this. So credit growth in Canada is not going to decrease or disappear any time soon. Also interest rates in Canada in the future will be low by historical standards. Why? Because with the amount of credit out there they have to be. If the Central Banks raises them to much, people would have less money to spend, so that would mean less growth, so that would mean less jobs, which would lead to a recession and after that a depression and a complete collapse of the entire financial system. So I don’t think Central Banks are going to be raising interest rates by that much in the future.
We are living in an entirely different world than we were in the past.
People working in Fort McMurray are making more than what you guys state or the government tracks.
For example.
I get paid $4000/mo cash non-taxable for whats called a “Living out allowance”. I am transient in Fort McMurray so I rent a room for $800/month, spend about $400 on food and pocket the remaining $2800. So that adds an additional 2.8*12=33.6k onto my salary. Factor in that it is tax free and it ends up being equivalent to a 50k pay increase.
I also drive to and from Edmonton on every two weeks and I get paid $500 every two weeks for this. It costs me about $150 for gas and maintenance so that is $350*26=$9100/yr tax free in my pocket. Count in if it was taxed and there is another 12k.
So as you can see, ASIDE from my salary. I get a 62k/yr paying job before I even show up. Now imagine adding in a high paying salary with uplift, benefits and RRSP contributions. Plus yes they pay alberta health and all that junk and life insurance blah blah. Basically anyone in construction industry in Fort McMurray has this deal or a similar one. Some are better too.
Sorry I’ve lost the track of why Fr. McMurray workers are so important at this time Edmonton housing prices?
How many houses can each of them buy
Unless they are going to buy up the thousands on currently listed and the hundreds being added weekly, who cares what they make.
Small percentage of the people in Edmonton and not much of a factor today (assume most of them have houses).
Immigration is 1/10th of what it was at the peek, inventory is at almost record highs an sales are down. If you want to drive from Edmonton to Ft. Mac for work and then put in numerous hours a week overtime, I think your not getting paid nearly enough to waste your life like that.
Enjoy the day.
“I think your not getting paid nearly enough to waste your life like that.”
Agreed.
“Taxes: Albertans pay more than 50% of their income in taxes after taking into account all types of taxes. Not sure why we would even argue this.”
Well, who can argue with that proof? Vern says it is, therefore it must be.
jesse,
That’s incredible money man! Your living like a peasant as well. You must be sleeping in a closet for $800 a month in Fort Mac. When mobile homes are being listed for $430,000. But hey who needs a decent place when your working 12 hours a day, seven days a week. I’ll you need is a caught and sleeping bag for 6 hours and then back at it making more coin.
Neil,
Just out of curiosity, what do you do for a living? You have a lot of interesting advice that defies most of what I learned studying economics and finance. I must have gone to the wrong school.
Travis
Economics is not a disipline, it’s a practice. You must have went to the wrong school.
I read everypost and the strong economic fundementals still prevail:
- Alberta has huge resources, at least 100 times more than Saskatchewan, may be 500 times.
- Investment in Alberta will continue to pour-in. Where can Shell product 500,000 bbl per day.
- If you have a trade or a profession, then you are well in the 6 figures income, either in Edmonton or Fort Mac. I’m one of these people and there are many of us.
- The current lull in real-estate is caused by people hesitating to buy thinking that prices may go down as well as mom/dad speculators panicking. This would end sooner or later.
To all the pessimists out there, Alberta has good days ahead of it, take adavantage and be thankful. If you get into a good job or a trade, the 500K mortgage is nothing. You would have lots of money to spend around and the 2200 a month mortage would be minimal.
Good luck to all.
Thanks for the great weekly info Sarah .
I live in Vancouver, and I own 3 condos in Edmonton (trying to sell 2) and it’s a little scary reading the news and hearing how the market is over there. It’s hard to know what the real facts are when there is so much emotion (fear)in the headlines.
Mike,
It’s not about the economy anymore. It’s about Alberta real estate esclating to unaffordable and unstainable levels.
Look at home prices in Houston which has a red hot oil based economy that dwarfs Edmonton or Calgarys and the real estate prices are a third of what they are here.
Alberta real estate was driven to astromical levels by 80% speculation and 20% economy.
The pyramid game is over, the quick easy spec money has been made.
Mike,
Your comment “If you get into a good job or a trade, the 500K mortgage is nothing” is absurd.
Ya, if you want a 40 or 50 year mortgage after putting down 25%. If you even have the 25% deposit.
The only people that could remotely afford that are people that already own real estate and are looking to move up. They are now faced with trying to sell their existing home in a market where sales continue to fall and the glut of inventory keeps rising.
I wouldn’t touch real estate in Alberta with a 10 foot pole right now. This market is only headed in one direction and that’s down until it get’s back to being a realistic affordable level. It’s economics 101 !
Thanks Brent, but I respectfully disagree. You cannot compare Houston with Alberta, and this has been discussed quite few times. There are too many differences to mention. It is your choice not to believe the fundmentals. The Calgary-Edmonton-Fort Mac corridor is heading towards the highest income per capita in the world. It is your choice to stay out of the market and pay rent. With all due respect, people cannot stay in low paying jobs and then complain about housing prices. Look to the future and do not complain about “who moved your cheese”. All luck to you.
Simple facts are.
Alberta now has the highest incomes in Canada.
Last year Alberta created jobs at 2 1/2 times the national average(WOW!)
Alberta has one of best all round economies in the world.
Alberta still has jobs galore.
Alberta Real Estate is not the most expensive in Canada.
Alberta has the lowest taxes for personal and business in Canada.
Alberta has better weather than out East. Look at how hammered they get every year now in Winter. At least Alberta is consistent.
The facts dictate that Alberta should have the most expensive Real Estate in Canada based on our economy. Why are you so surprised and denying reality?
Trying to paint Alberta as overpriced? When Ontario had higher incomes for 10 years and Real Estate that was way higher priced than Alberta I did not see the prices crash or this much whining by everyone about how expensive Ontario was?
Face the facts people. Economic power is shifting West big time and sooner or later the people are going to follow. Alberta is just getting started.
You sound awfully foolish Mike.
You’re working 20 hours of overtime a week in order to be able to afford a 500k home with a 40 year mortgage?
How does it feel to have a nice salary yet have very little disposable income and spend almost all of your time on the job staring at your torch?
You could be working almost anywhere else in north america for half the cost of living here and with a much higher quality of life on 60 or 70k/year.
There is no longer an Alberta Advantage. Cost of living has almost completely eroded the extra pay you receive working in this province and to top it all off, you’re living in second class cities with horrible climates. At least Calgary has the mountains.
Income is completely unrelated to real estate in this province.
Why does everyone completely ignore what happened in 2006 when demand spiked? The builders at the time couldn’t keep up with demand, so the prices went up and as a result, speculators and investors saw a place to make money and what you see as a result is oversupply.
We won’t see any major spikes in prices anymore, as builders are more than ready to meet demand and there is plenty of existing homes available.
Those wishing for a major crash and those wishing for return to high prices are both WRONG.
Prices will fall moderately as a result of oversupply and then will lift a little bit as people get back into the market but we won’t see any major rise, just more reasonable real estate prices reflecting the general growth in this province.
Mike, maybe you should also do your research from reliable data. Stats canada has no newer info about alberta that what was done in the 2006 census…and the income figures for that are not released until May 1/08. I cant find for the life of me where you found the figures for last years income on the stats canada site. Didnt you check that one out before refering to it? From what I can find in other sources Edmontons average HOUSEHOLD (not personal)income is closer to 64K, not high-70K. If you take into consideration that the average household also has 2.5 people in Edmonton, well you do the math…. The average Edmonton wage earner brings home a lot less than $60 hour. Half a million for a home affordable? Yeah, Not quite…
All I hear on this posting is folks complaining about $500K mortgages along with a 40 year term… Do you really know what you are talking about? Just ranting? Why do you deem that is it necessary to own a $500K+ home? Or is it a comparison figure?
A $500K home is Edmonton is quite huge at 3000 sq.ft. Are you sure you want to clean a big house?
Here’s a quick debunk:
MLS®: E3137638
This is a huge home at $540K…unless you are an executive, or have a combined income of $150K,
Who wants to buy that?
The average family income in Edmonton is at $90K.
This is better:
MLS®: E3135245
This is a newer duplex at $320K. I would offer $300K. Anybody has $5 to $10K to put down so you finance the rest for 30 years. This works out at $430 a week at 6.0%. The MLS affordability calculator tells me that at $90K a year, I can afford a $315K mortgage, while paying $200 a month on taxes, paying $150 for heat and carrying $900 a month on credit card and car payments.
What is the problem with affordability?
Somebody prove me wrong!!!
All you need is the average $70K a year profession and for your wife to work retail, etc at the standard $14 an hour…
andrea: go to rbc site, search for income by provinces. there’s a breakdown by metro areas. edmonton stands at $90k.
With a 50% divorce rate in this province. Average household income is not 90K a year.
I came to this province in 1990
and back than we had average SFH prices of less than $100,000
and condo is around $40-50,000, but you could buy a nice one for as little as $ 20,000.
And some poeple said, it’s way too expensive and kept renting and never bought anything.
Can you imagine, what do those same people say now?
Yes and it took 15 years for that condo to make it’s first double and two years for it to more then double the second time. Big difference.
Just look at a real estate chart and it’s straight up the last 3 years. Unsustainable and charts like that don’t stop and level off up there. They usually retract half the gain before resuming.
Brent…
Over at the bubble blog you can post whatever you want, without any substantiation. No proof and no one there will ever challenge you. Not even that failed bank teller turned used car salesman, Carioca canuck.
Hell you guys over there even make up your own stories to boost each other up…
However here things are a bit more serious.
Where is the figure that supports your claim that:
“With a 50% divorce rate in this province. Average household income is not 90K a year.”
Brent…
Where did you find that statistic? Can you show us to see how credible you are?
Did you make it up like the other stuff you post at the bubble blog?
Does it make you happy and all fuzzy in the inside to make up stuff to have the last word?
Tell us your story.
“You sound awfully foolish Mike.
You’re working 20 hours of overtime a week in order to be able to afford a 500k home with a 40 year mortgage?”
Thanks for the compliment Nate, the days would tell who was the smart guy. I saw the light and got a good job that pays good and I only work 40 hours per week. I hope that you are enjoying your $50K truck and 20K snowmobile while you rant about real estate. Just curious, do you live here in Alberta?
Born and raised in Calgary. Saw a few family friends get crushed in 82.
Buy at the peak everyone. Looking forward to seeing the door hit people on the way out if there is a down swing. Seems like every generation needs this financial lesson.
ray,
Do a simple google search.
Alberta is actually at 45%
It is 41,9% and includes common law for marriages and includes separations for divorces.
you are off, hence not credible.
http://www40.statcan.ca/l01/cst01/famil04.htm
http://www40.statcan.ca/l01/cst01/famil02.htm
I see no divorce percentage on your 5 year old stats.
Your not credible. lol
Divide divorces/separations by marriages/common law numbers…
***Commment truncated, offensive to other commenters.
Whatever, you can have your 42% 5 year old divorce stat. I did a search and got a pdf file for 2005 and it was at 45%.
Bottom line Alberta’s average household income is not at $90,000 a year.
Maybe we should be looking at Alberta’s median household income?
lol
Actually, divorces help our situation of high inventories…..
because after a divorce, they have to buy 2 houses now, one for the husband and one for wife…
he-he-hahaha..
So those of you, who plan to stay together….shame on you!
You are not helping chewing up the inventory.
heh-heh-hah-hah….
(just kidding)
No way, the house always goes to the wife and the unlucky husband is forced to rent a sleezy apartment in downtown, heh.
I think the last comments are out of topic, aren’t they?
What do you think of that graph?
http://cuer.sauder.ubc.ca/cma/data/Housing%20Prices/housing-pri-edmonton.pdf
You can also find it here:
http://tinyurl.com/5j5e7e
Sheldon & Sara: Whatever you do, don’t delete any of Brent’s comments. He’s the Bubble blog’s designated poster and represents the best and brightest of them all. Unsubstantiated claims, poor grammar, bad spelling, and a resident of the USA. He is a good reminder of why I don’t waste my time over there anymore.
More seriously, here is a good article:
http://www.canadianbusiness.com/managing/strategy/article.jsp?content=20080428_198713_198713
I think a lot of this has to do with what someone is willing to spend their money on. One can spend money on useless things that never amount to anything (I won’t say what these things are). While others can ensure they spend carefully and allow themselves to be able to afford a nice home.
I have come to realize that most of the comments here are from bitter people who are wishing to see the real estate market in Edmonton take a substantial tumble (more than it already has). The way I see it is this. Buy what you can afford to buy.
I feel that right now people are sitting on the sidelines scared of what is going to happen to the real estate market. I suggest that the correction has already taken place and don’t see prices falling much more. But, who am I to have the answer. My opinion is as good as anyone else’s on this blog.
All I know is that some people here are doing a great job at scaring people sh*t~less. I am hoping that the only people looking at this are those replying to this blog!
Anyways~ I can’t wait to see what happens to the market in the near future! It definitely will be shocking either way! Don’t cry when prices start to rise again and you missed the boat a second time! haha
Good luck with whatever you are all doing here!
“Seems like every generation needs this financial lesson.”
>Nate
Well said. A lot can be learned from historical information. Though im young im a big fan of the “history repeats.” Same reason why we repeat wars….
Also Ben’s i think graph speeks quite loudly to the fact that we are overvalued if you compare the real prices on both peeks.
Between 1979 and 1981 though the prices rose the value decreased meaning localised inflation ran rampid which is what we are experiencing now.
The only problem i see is the policy causing the market failure wasn’t passed until 1981 when prices started to decline. Therefore perhaps a true example of a market that was burned from being overvalued is Vancouver. I’m a little confused by this graph because both declined at the same time. Ideas anyone?
http://cuer.sauder.ubc.ca/cma/data/Housing%20Prices/housing-pri-vancouver.pdf
It would be really useful to have historical inventory stats as well but i can’t find that anywhere.
I found this:
U.S. recession won’t hurt city’s real estate: Expert
By Ryan Smith
April 16, 2008 01:01
An “unprecedented recession” in the U.S. housing market will not dent home prices in Edmonton, says a leading international economist. The Canadian real estate market — and the Alberta and Edmonton markets in particular — are not nearly as “risky” as the U.S. market for a number of reasons, said Benjamin Tal, senior economist, CIBC World Markets.
For one, subprime mortgages accounted for just five per cent of mortgages underwritten in Canada in 2006 compared to 22 per cent of mortgages in the U.S. for the same period. Also, the boom in commodity prices, particularly the price of oil, will continue to boost the Canadian economy. “The rising cost of oil is not the result of a geopolitical storm,” Tal said. “It’s the result of a fundamental disequilibrium between supply and demand, and prices will continue to rise despite a recession in the U. S. economy, because clearly it’s China and the emerging markets that are driving the bus here.”Tal added that by 2009 the oilsands will comprise the largest new source of global oil supply, and people will continue to stream into Alberta from across Canada and the U.S. However, the population and economic growth will not be as frantic as it has been in the recent past.“It would be really risky to take what happened in 2006 and 2007 and apply it to 2008 and 2009,” he said. “Alberta will slow down, but you will slow down from an extremely high level, and you will continue to lead the nation in terms of economic growth, and Edmonton will do particularly well.”
This is the source:
http://pricedoutinedmonton.blogspot.com/
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Stating the obvious?
“A tone of economic uncertainty was set early at the Edmonton Real Estate Forum Tuesday when a fiscal analyst warned that the Alberta Advantage is becoming the British Columbia and Saskatchewan Advantage.
(…)
B.C. and Saskatchewan are targeting Alberta workers and creating better business climates over the past eight years, he said.
“Alberta is slowly losing its advantage in terms of having the lowest business taxes, having the lowest personal taxes, having the best set of regulations and being the most attractive province to invest.”
(…)
Greg Christenson, president of Christenson Developments, predicted a short-term housing glut as projects under construction are finished, adding to an inventory of empty single-family houses that aren’t moving.
“I think you’ll see some prices drop,” he said. “You’re going to see some rentals take place, corporate company rentals, all sorts of things. Definitely, in the short run, there’s going to be a problem.”
Investors who bought spec homes “are going to get their clocks cleaned,” he said.”
http://www.canada.com/edmontonjournal/news/business/story.html?id=146bd004-bd97-4d5f-b1e6-e69305f8a679
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“”Anyways~ I can’t wait to see what happens to the market in the near future! It definitely will be shocking either way! Don’t cry when prices start to rise again and you missed the boat a second time! haha
Good luck with whatever you are all doing here!
Posted by: Tim | April 15, 2008 at 11:58 PM “”
I wouldn’t mind prices increasing if it were sustainable. I’m looking to buy right now and can afford a nice SFH in Edmonton. But we’ve obviously had a huge price run and are still near peak level prices. I can’t help but think that buying now is like getting into google when it was $700 a share.
I’ve been waiting to buy for a year now and it has definitely worked out in my favor. Prices on the homes that I’m looking at are down 2-3x the amount of rent that I’ve paid in the last year. And I’m no longer facing insane bidding wars on a small selection of homes on the market. There are a lot of nicer homes out there now with motivated sellers that you can underbid on.
Thanks Nate!
So you are saying that you would like to wait a little longer to see what happens with prices to see if you can save anymore before buying? Or are you buying houses now?
The only thing I am concerned about is the fact that you never really know when things will take a turn. Look at how people kept buying and buying. It is kind of stupidity to think prices can go up infinitely in the short run. I’ve heard it said in the long run house prices almost always go up. What I am getting at is the opposite. House prices can’t fall to nothing, and just as people speculated house pricing to be high(or over valuing them) they are starting to undervalue them. There will be a point where people have to realize it is okay to start buying again. I do agree that there is a lot of selection, and thinking economics, this is the time to be buying. If you want to get something really great, buy now while you have selection and the power to negotiate!
What do you think Nate?
I’m seeing the stagnation on the Condo market and thinking that the entry level housing is set to fall a bit more. Especially as some of the new developments come on line.
Real estate prices are almost always driven from the bottom up. So I think that waiting up to one more year is a safe gamble for me. I really wouldn’t be startled if another 30k was trimmed from the average as inventory is nibbled away.
If prices start going up again once summer hits, I won’t be too worried. My investments are doing well despite market turmoil, so my down payment will most likely stay ahead of any RE growth. I would also feel much better about buying while prices are growing rather than halfway down in a correction. I need to be mobile in my line of work, so selling for a loss is less preferable to renting (which makes moving incredibly easy).
BAD, thank you for that link to todays Edmonton Journal article.
Don’t think I’ve ever read a quote like that from someone in the industry (a developer).
“Investors who bought spec homes “are going to get their clocks cleaned,” he said.”
Wow.
Okay, I see what you are saying Nate. You would like to wait and see what is actually happening in the market than assume what might be happening. You would like to wait for an upturn in the market before you buy so that you can ensure that you are on the upswing, especially in case you need to sell and get out of town. Haha.
My wife and I bought a house recently, our first purchase! It is really exciting. We plan on living here for a long time and we just wanted a place of our own. I might consider buying another property in the future once it is easier to determine what is going on.
And…. Our mortgage payment is similar to what rent would be in a house like ours. And…. we did a 25 year amortization. I understand that there are other cost which we have figured out and determined are reasonable for us to afford.
Good luck Nate! It is nice to see someone who is kind responding to my post!
Thanks
“I’ve heard it said in the long run house prices almost always go up”
In the long run, the price of nearly everything goes up (due to inflation). From the evidence I’ve seen, real (ie inflation-adjusted) home prices stay constant over the long term (although one would presume that interest rates can cause significant fluctuations).
“House prices can’t fall to nothing, and just as people speculated house pricing to be high(or over valuing them) they are starting to undervalue them.”
I can’t see any evidence that housing is close to being fundamentally undervalued. There’s no money to be made in the rental business at current housing prices. Rapid (and unsustainable) asset appreciation rather than rental yields drove prices to the current levels. Now that the promise of rapid appreciation appears to be gone, where’s the investment incentive to buy at these levels? Rents have got to increase, or prices have to come down – and with the now record number of properties on the market, I’d bet on the latter.
I like Nate’s line of thinking…
I’m OK losing on one investment if another is doing good. That’s gold.
Please quote me where I said that DREM.
Sounds like you’re trying to manipulate what I was saying.
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DREM,
It is worse when you have “all eggs in one basket”.
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