Here is our update on the Edmonton real estate market. (Previous week’s numbers are in brackets). For the past 7 days:
New listings: 558 (686, 627, 757)
# Sales: 321 (310, 257, 280)
Ratio: 58% (45%, 41%, 37%)
# Price changes: 563 (693, 628, 617)
# Expired Listings: 72 (74, 202, 625)
# Canceled/withdrawn/terminated listings: 163 (290, 62, 62)
Net loss/gain in listings this week: 2 (12, 106, -210)
Active listings for single family homes: 4457 (4415, 4382, 4287)
Active listings for condos: 3094 (3111, 3105, 3061)
Chalk this one up as the best week Edmonton home sellers have seen all year! The most sales and the fewest listings in a week in 2008 adds up to a sales to new listings ratio of 58% which could be the only seller’s market we see this year. The question is, is this a blip or has the market pendulum started to swing the other direction? Personally, I think we’ll see lower sales next week with the kiddies out of school and summer vacations on the brain. In fact, I think this week could have been the peak for the year.
The average sale price is holding pretty steady – we’re at $344,368 so far for the month – and the average price per square foot is also holding ($279 SFH and $259 Condo).
Have a Happy Canada Day Weekend and enjoy the amazing weather and activities Edmonton has in store for us for us.
Let me the first one to say thank you Sara and Sheldon for pulling out these stats (weekly update!)
Gr8 Work
Obviously it’s a blip. Anyone know anything about time series analysis??? Probably not, since most people think linear trendlines are accurate to this type of data… amateurs!
Seriously Sara and Sheldon, pull the trendlines, they’re ridiculous. For example, according to your trendline listings are going up faster than sales at an astounding pace, but that is clearly not the case.
***Actually, new listings are seriously outpacing sales….even this week when we saw the most sales we’ve seen all year there were still almost twice as many new listings. Sara.***
What is this guys problem? Relax Xyloph, they’re just giving basic info. ok champ!
Xyloph , what’s wrong? afraid the boat is going to miss you again? do not worry, mommy’s basement is always there for you.
Xyloph,
The trend lines represent a “historical trend.”
In the last 6 months “listings are going up faster than sales at an astounding pace” was the case and therefore implies trend.
You can disagree all you want but perhaps instead be thankful for the info. A blog wont change the prevailing market anyways.
Looking at findcalgary.ca, it looks like Calgary market is turning back towards a seller market again. Got a friend who sold her house last week with no issue in Calgary.
Buffy:
Using a trendline drawn over the last two years shows prices are still going up at 40%. Maybe we should all buy again? Point is, linear regression should NOT be applied to cyclical data before being seasonally adjusted.
Sara:
Think about what would happen if you continued this graph two years into the future. Could you make any reasonable conclusion about what is happening in a give month based on this sort of trendline? Do you see what I am saying?
***But this graph is not continued over 2 years, and it is not charting prices. If the market shifts I’ll addjust the graph an remove the trendlines, but the same thing has been happening for over a year now – new listings drastically outpacing sales. Sara.***
Sam:
What kind of comment is that? Clearly the least intelligent of the four.
Fred:
I’m just trying to spark some debate. It’s all good.
Be positive. At least Xyloph did spark some debates, even I don’t think he understands what historical trendline is. It would be great if Xyloph can design a better stats or more representable curve. Can he? I am doubt about it.
I would still be interested in seeing a breakdown of sales by Condo versus single-family home. Based on my own stats, the inventory for detached homes is at an all-time high in Edmonton, 11.3% above the highest peak in 2007.
In the range above 600K, we are now at 15% above last year’s peak, and sales seem to be very sluggish (although it looks like Sheldon had some success there, recently).
It will be interesting to see how many listings have sold above 500K, when the Real Estate Board publishes the next quarterly stats.
JP:
I can and I have, but seeing how difficult a task this seems to be for most people I’ve chosen to keep it to myself.
Sara:
Actually it looks like inventory and new listings were in a downtrend last fall, but maybe I’m wrong. Kinda looks like new listings right now are beginning to form a downtrend too, and inventory should follow. I fail to see how ONE linear trend can represent these distinctions.
Someone please make this clear to me because apparently I am oblivious…
Oh and JP, did you know that quants model equity and currency markets with very high level mathematics fairly accurately and these are tremendously more complex than local real estate markets? Just FYI.
Xyloph:
It sounds you are a very talent man. I am sorry about under-estimated you. The thing wonders me that you complain about Sara’s linear trend does not make any reasonable conclusion about what is happening in a give month. As butler said ” The trend lines represent a “historical trend.” Do you get it? I hope it will clarify your confusions.
Since you have your own curves, why not share with us? If you think people in this blog is too damn to understand your curves, then I think you are in the wrong blog.
By the way, don’t use those fancy mathematic terms here to show off. There are a lot of people in this blog who are mcuh smarter than you think.
JP,
There’s smart people in Edmonton? I thought it was just all baseball caps and pickup trucks. lol
Jen:
Calgary is turning back into a sellers market?? Based on what, prices falling like a rock and 10,000 homes still on the market?! Because that’s what I see on findcalgary.ca.
A friend of mine listed his house two weeks ago for $50,000 less than the house next door sold for last year. His realtor has shown the house once in two weeks. If your friend sold her house in a week with no problems (which does happen), she sold it for a hell of a lot less than she could have got in 2007 (or maybe even 2006). That’s not a sellers market.
No, it is definetely not a sellers market, as it has been in the past years. But thats the thing about a free market. You can only guess when it starts moving again. I mean, yes there are anlyses and you can be sure that they are pretty well worked out, but in the end it is mostly a surprise for the majority of people.
You will never have a problem selling your house even is a Buyers Market. Just list it 20% to 25% below the rest of the heap and you can move it.
Brent:
And pocket a 100k loss?
JP, you were right. There are really smart people on here!
It’s funny to hear some of you talk, like the world is caving in. The market has cycles, it’s going to go up and go down, what you guys (bubble bursters and those who think renting is smarter than buying) forget and don’t consider is that even in the cycles the market is still always climbing upward. Do you know that in the last 44 years, during which – was an oil bust, crazy interest rates in the 70s, recession, etc… that house prices in Edmonton doubled 4 times. Not a bad investment I think. Just a little different perspective.
I am trying to understand why prices are relatively stable despite the high inventories. Can someone help me? I wonder if the run up in prices a couple of years ago has produced a lot of unmotivated sellers, willing to sell for a price but not desperate enough to sell at less than they could have got at the peak. Maybe Sheldon or Sara can share their thoughts from what they have seen recently.
Investorguy wrote:
“Do you know that in the last 44 years…that house prices in Edmonton doubled 4 times”
For an “investorguy”, you don’t seem to understand what “inflation” is.
The price of a bottle of coke has probably went up about 15 fold in 44 years. Do you think buying bottle of Coca-Cola is a good “investment”, lol?
http://www.slate.com/id/2165787/
If you want to compare our Edmonton trends with those in Toronto, take a look at this website http://www.randi-emmott.com/market.htm#monthly%20sales.
Year-to-date sales volume for single-family homes in Toronto is down 13% compared to May 2007. However, the average price is 4% higher than a year ago.
Hey Charlie, if you have an unopened bottle of Coke from 44 years ago. You would make a small fortune on ebay with it so, yes, a bottle of Coke just might be a good investment. However, you can’t live in a bottle of Coke can you. So, I will stick to investing in real estate. In the long run there is no better way to make money. Good luck with your system of avoiding the real estate market.
“In the long run there is no better way to make money. Good luck with your system of avoiding the real estate market. ”
No better way other than stocks which have historically blown the doors off of RE – that’s what you mean, right? I believe the rate since WWII is somewhere around 5 to 1? Plus dividends, etc. Go ahead and google it, I remember CNN Money had an article about it a couple years ago. No you can’t live in a stock portfolio, but you’re talking about “investing”.
And I’m not avoiding the real estate market. I’m avoiding buying at the peak. Well, actually I’ve already avoided that and saved about $50,000 compared to buying last year. Silly me!
I wouldn’t buy a blue chip-ish, mature stock if it was trading at 400x P/E. Why would I buy RE when it’s not following any logical economic measure either?
Actually, if Xyloph was as smart as he makes himself out to be, he would probably be keeping his “complex” models to himself. While the rest of us are being fooled by Sara’s long-term trends, Xyloph sees the truth and is surely buying as many properties as he can get his hands on.
Xyloph: remember, if you leak this out to too many people, prices will shoot up 25-30% and you’ll miss the opportunity to buy up today’s cheap properties.
…and you don’t want that to happen, right? …right?
The stats may show stability but the boots on the ground know that since January of this year that asking prices are down by $15,000+. No individual who purchased a property in Edmonton since December 2006 would likely see a cent in profit if they sold today. After commissions, legal fees, moving expenses, interest penalties, etc. a seller would be lucky to come out even.
I have friends who moved to the coast in 2007 and they’re lauging. They sold here at the peak and their Vancouver condo has appreciated another 50K since then! The unfortunate reality is that if you bought in Edmonton and area since the fall of 2006 you’re likely going to take a loss on your property. The favourite water cooler topic used to be “how much I’ve made on my house” but it’s definitely not the topic for 2008!
These numbers are huge for sellers, you cant really have a strongers sellers market then this. Here in Tucson Arizona (About an hour south of Phoenix, and Arizona’s second largest city.) we had a very strong sellers market in 2004-2005 but it was never this strong, and you guys have the oil sands money and development that will only strengthen your real estate market for years to come.
Hey Charlie, how many people do you know that have 400k invested in blue chip stocks? what an ignorant comment. I’ll take a 10% return on a 400k RE investment any day vs teh avg return on the avg size stock portfolio…
My $.02 on this conversation about prices remaining steady even though volume is at all time highs – I think it has become the “new reality” for Edmonton. If you want a home you will have to pay an average of $400k. After the correction of last summer to the end of 2007 – it looks as though these prices are here to stay – now in 6 months time things might look different but for the time being I’m still glad I bought a second property in Dec. 07. I haven’t “made” any money – nor lost. Still beats renting….
As gas and food prices rise, more value will be placed on homes and condos that are close to people’s place of work – i.e. downtown. Or along major routes of transportation – LRT and the Henday. However, your outlying areas I feel will not grow in market value as strongly in comparison.
Again my $.02 only….
While a bank would never put up 75% of the cost for an investment in stocks, bonds or mutual funds, a bank will provide 75% of the cost for an investment property, or even 85% if it is CMHC insured. Banks do not like to take risks, hence they consider a leveraged stock investment to be risky.
Well-researched leveraged real estate investments, on the other hand, are not considered to be as risky because they are secured by real property – hence the name “real” estate – unlike stocks which often use factors like P/E ratios or projected future earnings to arrive at some share price. Remember ENRON ? They hid details about their debts in so called SPEs (Special Purpose Entity) to show higher profit.
An investment in stocks, bonds or mutual funds will buy the equivalent amount of equities. In other words, $50,000 buys $50,000 of equities.
A leveraged real estate investment buys real estate worth many times the down payment. A property worth $100,000 can be purchased with $25,000 down – or less if it is CMHC insured.
You benefit from growth of the property total value, not just the original investment, which multiplies your returns. The principal of the mortgage is paid down by your tenant who essentially buys the investment for you.
***Comment edited. Offensive. See code of conduct.***
***Comment deleted. Personal attack. See code of conduct.***
But Mommy, I wanna look at the monkeys!!!
This is such a zoo…
Hey Charlie, how many people do you know that have 400k invested in blue chip stocks? what an ignorant comment. I’ll take a ’10% return on a 400k RE investment any day’ vs teh avg return on the avg size stock portfolio…”
Wow! I’m not even going to go there. This is the type of logic that’s got Canadian RE primed for a crash.
Interesting to see what the market is doing in your area. Nice read…