Here is our update on the Edmonton real estate market. (Previous week’s numbers are in brackets). For the past 7 days:
New listings: 617 (550, 558, 686)
# Sales: 254 (273, 321, 310)
Ratio: 41% (50%, 58%, 45%)
# Price changes: 511 (522, 563, 693)
# Expired Listings: 261 (787, 72, 74)
# Canceled/withdrawn/terminated listings: 55 (158, 163, 290)
Net loss/gain in listings this week: 47 (-668, 2, 12)
Active listings for single family homes: 4242 (4183, 4457, 4415)
Active listings for condos: 2901 (2882, 3094, 3111)
Fun times out here right now… we went from dead calm on the long weekend to chaos right after the long weekend and now it’s reasonably calm again. At least that’s how it’s going at our office. All in all I’d call this a pretty average week (compared to the last few months anyway).
The Realtor’s association is reporting the average sale price for July so far is $340,214 which is right about where we ended off in June. There have been 523 sales so far this month, which suggests we’ll hit about 1620 sales by the end of the month, which is pretty typical for July, but would put us ahead of last year for the first time this year. Our prediction is that sales will fall more in line with last years pattern, with the exception sof September which always seems a bit soft, we expect it to be significantly stronger then last year. If that does happen, there is the potential that we will end out this year with as much inventory as we ended off with last year. Of course, that all depends on how many new listings come on the market, and a few other factors.
Have a great weekend!
By the way congratulations to Gord McCallum of First Foundation Residential Mortgages who was voted one of the top 50 mortgage brokers in Canada. (#16 I think). Great job Gord!
Thanks Sara and Sheldon for the Stats & weekly update.
I think still this is the right time to buy or own a house.
Certainly, we’ll see inventory is filling up until end of 2009.
Today’s report in Edmonton Journal Builders are building more houses than required.
Good Luck
Anyone read the news lately?
Being that the media is usually overly-optimistic when it comes to RE, I guess something must be going on with RE now that the papers are unable to spin it in any positive light.
The conversations that I was listening to 9 months ago from people who own multiple properties have gone from “house prices won’t fall” to “I’ll probably lose some money on my place when I sell it” – now. Hmmm…if they sell it?
I have even heard of a radio show where the guest was offering advice to listeners. He told them something along the lines that You really don’t want to be the low-ball guy on the block…wtf?
Ok. So you really don’t want to low-ball your competition because it will increase your odds of selling while forcing your competition to compete…with lower prices.
What a self-serving bit of advice; sad and pointless attempt to talk the market into stability.
With Ottawa tightening mortgage rules now to limit Amortizations to 35 years and down-payments to 5% …. sounds to me Ottawa sees the writing on the wall and just wants to appear like they weren’t involved when the stuff hits the fan.
And it will it ever…
Chatted with our real estate lawyer today about the upcoming mortgage changes (no more 0 down & 40 years. He told us that he welcomes the changes.
Apparently, he processed a number of real estate transactions, last year, where he was astounded that his clients had actually qualified for mortgages that looked way out of their league, by conventional standards.
His words were “I was scared for them…..”
It will be interesting to see whether any “fence sitters” will jump into the market before the rules tighten, in October.
I think it would be very wise for fence-sitters to let the effects of the tightening and other factors to sink a while in before they buy.
As an opposite of the last few years perspective that you can’t afford to wait for a home purchase, now you can’t afford to buy and lose your down-payment or worse.
Looking at it like saving $50k so far on some of the homes available…just imagine what kind of discount may be ahead
Prices won’t come rocketing back up any time soon…years will be the units of measure when we talk about this unwinding of RE.
Pay off some debt. That is the only way to guarantee returns on your $ and it will only free up cash for the future opportunities and ultimately lower you stress levels.
Several banks are already dumping 40/0 down mortgages.
http://www.reportonbusiness.com/servlet/story/RTGAM.20080711.wbmo0711/BNStory/Business/home
Looks like the “rush” of people to get their hands on a 40 year purchase will be a short one.
I have to agree with you Michael. When house prices finally stop falling, there not going to bounce right back up again. I think it’s going to flat for quite a while. What could possibly make Alberta housing go up again, besides eating through the endless glut of inventory.
The way the national economy is going – which is down – and knowing that Alberta is the canadian economic powerhouse and should be shouldering the load and supporting to whole country while attracting new in-migration folks from Ontario…, why can’t Edmonton move their 10000+ overpriced listings?
I really like to jump to the market right now because need the house for my wife, but with the potential of pricing drop further I guess better to wait next couple months. What do you think?
I’m waiting JH. Might jump in next spring/summer depending on how the market fairs through the winter this year.
Save another 10-20k for your down payment or pay off all your debts. I won’t be suprised if another 40,000-50,000 is shaved off of the average price by next year (see 2007 to now).
A lot of people that bought last year from may-july almost lost an entire years wage on their homes so far.
my two cents, if you are ready to buy, both financially and mentally, then is it worth waiting. You are buying a home for your family, not speculating a market for financial gains. If you are intended to stay in the house for a few years, then likely market fluctuations (up & down) will even out and you will see respectable long term equity growth.
Wait and see vs. buying now is like the old phrase – a bird in the hand is worth 2 in the bush…
I remember talking with people in early 2006, not long after I bought my first property – I told them to “get in the game” – and quick! But no “the market is going to come crashing down” and “I don’t want to have a house worth less than my mortgage” etc…
Well some of these people finally bought last year, and some of them still haven’t bought – I don’t think we need to go on about their situations.
We know now – at this precise time that Edmonton has an abundance of supply. We know now Edmonton’s market has gone through a correction and that the last 6 months have had stablity in the pricing. We know now that people have properties that they have had on the market for over 3 months and are “bleeding” on two mortgages (or more). These facts put buyers in a good position…
Now I’m not predicting great increases or anything like that – but I, like everyone else, cannot predict the future. We don’t know what will happen a year from now – we can speculate, but the future of the edmonton real estate market is out of your control as an individual.
If you are in the position financially, and if the right place comes along at the right price – my opinion is to buy now and not risk waiting…
“Good things come to those who wait – but better things come to those that hustle!”
“He who hesitates is lost”
My positive sayings for the day!
Forgot to mention that interest rates are still relatively low – and the word on the street is the cuts have stopped and we are more than likely looking at increases..
I’s like to extend a little advice (for what its worth) to those of you tempted to jump in the market now. I think I can humbly speak with a bit of experience as someone who bought into a prebuilt condo just a year and a couple months ago with 10% down ($35,200). The cost of the condo was $352,900. In my naivity,I figured all would keep rising and I would make a profit. Similar condos (actually slightly bigger and better) by the same builder recently have been selling for $275K-$279K. Mine will be ready in the fall, but given the 77K depreciation, my lawyer has gotten me out of the contract, but I had to forfeit my 35K deposit. (yes,I feel foolish) The states is collapsing,the world markets are correcting both in stocks and housing,the oil prices are skyrocketing, They can’t sell trucks and Rv’s, and the mideast is a ticking timebomb. Major banks and morgage companies are tetering on bankrupcy in the US. Here at home the warning bells are ringing loud and clear. Don’t make my mistake (or anything close to it) Things, sadly, are going to get much, much worse. Theres narey an economic mind out there who isn’t sounding the warning sirens. Wait until spring and see where we’re at. Be prudent and do your due diligence. By the way, I had a gut feeling when I signed that deposit cheque that said NO, STOP. But I didn’t listen. For what its worth I have that same gut feeling now. Blessings to you all.
I’m in the same boat, I have a place that will be ready this fall and it has also gone down in value huge. I am really thinking of walking away, how can I even get a mortgage on something that is now 40,000 less? Does anyone know or have had any experience in doing this? I know my deposit will be gone, but is that all?
I am sorry to hear these and thank you for sharing it, will be an invaluable insight for me before making decision as a first time buyer. Yes I agree, I will not jump to the market right now, but wait and see what happen in next couple months. Thanks and blessings.
just my 2 cents for people who may have bought a pre-sale home at the peak and it’s getting closer to the completion date..
I think that most builders in this current slow market would rather renegotiate and still make a profit instead of losing the entire sale from an approved buyer.
I would have a friend go to the show home, get a current price in writing on the same home, and then armed with that quote, I would approach the builder and state my case.
It can’t hurt and in theory, if you paid a 5% deposit, the most you would pay when you renegotiate is current market value pus your 5% deposit, which is better than taking a 10-15% haircut on the entire contract.
On another note, the once “invincible” Vancouver market is starting to show some cracks. Listings are way up, sales are down, DOM are up, and prices are holding steady.. All the signs of a price correction coming soon. The months ahead will be interesting for RE across the country..
Vancouverite
I read your comment , i feel it is not worth renegotiating for 10-15 % to builders, when RE market will be down to 30-35 % further by next June.
Thanks “Nate” for frank opinoon, i will wait further 6 months. i dont want to loose 1 entire year salary in next 6 months.
Thats true also. I don’t even mind losing my deposit, but is that all that will happen? COuld they sue me or I get bad credit?
B – speak to your lawyer.
The market sentiment has sure changed in 2008. There’s a few perma bulls left, but their really few.
Some good points meggie, and my sympathies for your loss (as I mentioned I have friends in a similar boat).
It is always easy to focus on the negative side of every story, not that I ignore them. But, even in recessions people make money. For my part I’m not predicting crazy price increases in our market – just normal.
I suppose in about a year one of us will be right.
To B
As one that lost 35K I did do my due diligence before proceeding. If you just walk away from your deposit, the builder can sue you for either the amount remaining owed to him or resell at a lower price to a new buyer and sue you for the difference betwwen what he got and what he would have got had you kept your contract (minus your deposit,of course) Also, your credit will tank. Go see your lawyer asap and see if hecan either negotiate a quick release with the builde, forfeiting your deposit, or renegotiate a new contract price. In my case, the builder was adamate about treating all his customers the same so no special pricing for me. Thats not to say all builders react the same way. At least,even though I am out $35K, by going through your lawyer, you won’t be sued and your credit is left intact. What a horribly exspensive lesson to learn. I hope you all avoid my naive speculation and loss.
Vancouverite
“I read your comment , i feel it is not worth renegotiating for 10-15 % to builders, when RE market will be down to 30-35 % further by next June.
Thanks “Nate” for frank opinoon, i will wait further 6 months. i dont want to loose 1 entire year salary in next 6 months.”
I mean come on, even in the States, the market has not crashed that much (this year correction + the 35% you predicted)… However, I do not mind to see some speculatord loosing money because they invested in something that they thought would consistently go up…! I mean some people “invested” only because of peer pressure and they did not realize of much of a risk RE can be on a SHORT TERM basis.
Real Estate is likely to be a secure investment on the long run, but as some of you know and are experiencing, it is not always a good idea to speculate with the hope to make a quick $50,000 after a year!
Some wanna be RE speculators should review their ECONOMICS notes!
P.S.: This message was not really directed to you but to all the wannabe speculators of this world.
Carllecat,
Prices on condo’s have dropped by 30-50% in a lot of US markets. With the thousands of units being built in Vancouver right now, I wouldn’t be suprised if we see a Miammi style bust with the condo market in that city.
“Carllecat,
Prices on condo’s have dropped by 30-50% in a lot of US markets. With the thousands of units being built in Vancouver right now, I wouldn’t be suprised if we see a Miammi style bust with the condo market in that city.”
I do not think the market in Edmonton will go through a 50% correction like some cities in the States… mainly because Edmonton is not a resort city like Miami, San Diego, Scottsdale and so on… Vancouver might be, but not Edmonton. Thusm Edmonton and Vancouver are two really different markets my friend!
I understand the market will still be correcting throughout the year, but 50% sounds a bit ridiculopus to me!
Just found an old box with stuff that needed to be filed, from before we moved, last year. In it, two Open House printouts from February 2007, Both houses are still on the market today !!!
The first one started out at 818K and is now asking 608K, the other one started at 755K and is now asking 635K.
They seemed overpriced then, despite the fact that inventory in that price range was not even 29% of what it is today. Now they seem to have similar chances to those of an ice cube in hell…..
However, despite those specific examples, I would not expect house prices to implode as they are doing in some areas of the US.
Edmonton real estate started out relatively cheap compared to other metropolitan areas, and we certainly have more population and stronger employment now than we used to have when prices were really low.
We may just have overbuilt, in response to what seemed like solid in-migration, but in reality had a strong speculative component.
The question is how to get rid of the excessive inventory without price drops to a level that would be reasonably in line with “normal” price growth over the past couple of years, to take care of the affordibility factor.
I am a buyer about to enter the market I would say that i would be considered a novice at the real estate market but I know that it has been extremely difficult to enter this market with long term sensibility in mind. Prices were origionally driven by supply and demand but this then became feulled by builders, buyers, agents and investors. The market bacame clouded and with rising costs the govt institutes 40 year mortgages so a person can overpay for hyped up real estate. After the Governmnet announcement to eliminate 40 year mortgages in order to save people from defaulting on loans I ask why did they put them in origionally this type of ignorant legislation will lead to more problems but I guess this is what the Govt wants,people enslaved to their mortgages so they have to work until there 70 I say shame on the govt for taking this course of action and setting up many hard working Canadians for financial turmoil. I know that people will have difficulty selling their homes at the prices they have paid in the last 2 years but if they hang tight I hope they find away to avoid this mess that was created by this legislation. Thanks for creating this site for people to have a forum and hopefully it will help people know the truth about what is going on.
“He who hesitates is lost”
Thanks for the laugh Rhettro. I nearly snorted my coffee reading that last line. I’m sure whoever took your suggestion last year is now calling to thank you for the “advise”.
It’s good to see some sanity returning into real estate markets here as well as in the US. With the elimination of assumables last year and the new max 35 amortization, the qualification criterias got a lot tougher.
Unfortunately there will always be some who will get hurt. Those who took on too much debt ( mostly under funded small speculators) and those who bought beyond their means.
Anyone else notice that bench ads no longer have all the realtors advertising?
QUOTE:
the Govt wants,people enslaved to their mortgages so they have to work until there 70 I say shame on the govt for taking
ENDQUOTE
This kind of statement always bothers me. Is no one, 25 year, 40 year or otherwise, going to increase their payments as their wages and such go up?
I had family that in 97 was on the last year of their mortgage – a whopping $108/month from when they got it 25 years ago. Probably broke the bank when they got it, but in 1997, they could certainly have afforded to even quadruple their payments, directly affecting the life of their mortgage.
I’m not saying everyone should run out and get the longest term mortgage they can, but surely, it’s not going to be “handed down to their children” or “paid into the old folks home”. If it is, then those people had financial issues and bad habits in the first place, that long term mortgages were NOT the source of.
“He who hesitates is lost”
Thanks for the laugh Rhettro. I nearly snorted my coffee reading that last line. I’m sure whoever took your suggestion last year is now calling to thank you for the “advise”.
It’s good to see some sanity returning into real estate markets here as well as in the US. With the elimination of assumables last year and the new max 35 amortization, the qualification criterias got a lot tougher.
Unfortunately there will always be some who will get hurt. Those who took on too much debt ( mostly under funded small speculators) and those who bought beyond their means.
Anyone else notice that bench ads no longer have all the realtors advertising?
Carllecat,
Why couldn’t prices drop 50% ?
They increased 100% in two short years which was absolutely ludicrous.
Glad to give you something to smile about Frank – twice!
I’m sure those who were thinking about buying a place 2+ years ago would agree with me – including Brent.
A few months ago, I recall reading Canadian articles about how our real-estate market is much more robust that the United States. A commonly used argument was that Canada did not have the same lending practices their neighbors to the South.
I personally believe that argument to be a fallacy. I have met a couple of people now who have admitted to having mortgage brokers who lied for them on their mortgage applications to help them get approved. Huge exaggerations about income and assets.
Combine this behavior with 40 year mortgages (extremely common last year) and 0% down and I think we are much more like our neighbors than we may think.
Many of the big problems that exist in the US now is due to no-document loans and crazy mortgage terms. Once the snowball of falling prices gets rolling, more and more people will begin to walk away from their places.
I believe that we will see increases in personal bankruptcies and arson just like in the US.
If you don’t believe that it is possible for Canada to experience a similar trend as the US, think back 14 months ago when many people though home prices would never go down…
Think back when SUV’s and Big pickups were flying off the lots, now they are barely selling; Toyota planning on halting construction of some large vehicles for months just to catch up to inventory.
The United States housing market peaked in 2005, and they are STILL experiencing double-digit price declines … 3 years later! Yet people here foolishly think that we will be out of this situation soon.
The changes we are witnessing today are extraordinarily rapid. We are truly living in a historic period of time in the global economic landscape.
I have a question that is somewhat off topic. I have a buddy who is trying to get his mortgage (on a multiunit investment property) moved from one of those fly by night high intrest lenders to one of the chartered banks. I think the investment was (and is) a poor one, but I would like to help a buddy out if I can. He has asked me to co-sign. As it stands now, he has reduced the outstanding debt on this property to around 50% of what he paid for it…so he has equity (even if things go really south). What sort’s of things do I need to be concerned aobut or ask about up front before agreeing to do this? Any input appreciated.
Thanks
When prices shot up 50%, that was ok but a 50% correction to the downside seems ridiculous?
It can happen. Especially in Edmonton.
Everybody from the east coast that I talk with is going back home when Alberta busts. They aren’t buying cars or homes here… just making money and buying property back home.
I have some good advice for you Matty.s – don’t even think about co-signing.
In response to netwise comments to my earlier post i appreciate your point of view and down the road their mortgages might look a whole lot better in 2048 but my problem with this argument is that the govt institutes 40 year mortgages which helps escelate the real estate market and pumps prices through the roof then consumers are led to believe that the only way they can afford these new prices are through 40 year plans and then less then two years later they say this will cause problems so they eliminate it. I dont know about anyone else but this sure smells funny. Driving up prices and then telling people that they can no longer sell homes to others at a 40 year mortgagage will definately cause problems short term for anyone that wants to sell back into the market. I know my earlier post may have been a little over the top but for so called experts to create this situation for Canadian families is brutal.
Co-signing is a risky thing, just watch “Judge Judy”. And that’s only Small Claims court, where the stakes are a lot lower !
Let’s assume your buddy is a stand-up guy and will make good on his financial obligations, so that you’ll never have to pay out a penny.
It still means that you will be burdened with that mortgage for years, just as if it were yours, until it gets paid off.
This might impact your ability to get a mortgage of your own, or a car loan, etc.
If your buddy walks away, you’ll actually have to pay off his mortgage – and if you are not on the title of the property, you’ll have nothing to show for your kindless.
My advice would be: Don’t do it, unless you can afford to lose the full amount you are co-signing for.
mcc,
You are right.
Our government noticed a stalling-out of real estate activity and decided to keep the ponzi-scheme going with 40 year mortgages, etc.
It is rather disgusting to see government intervene like that and then pull out and take no blame when things start going badly.
Why would anyone be surprised at this behavior … these are people who’s main goal is keeping votes at the expense of long-term responsibility.
I think they forget that they have to live in the same society that they create as well … although at much higher incomes and reliable pensions than most.
I’ve always enjoyed reading this blog over the last year or so. I have gone through the ups and downs in my short realestate experience.
For the past 3 weeks I have sold a house, rented out a downtown apt, and hopefully have my financing go through on a house. In the next month or 2 I will sell another house and buy a couple of condos…
The market from my perspective…
1. Sheldon is right 70% of listings are either garbage, marginal or completely overpriced.
I have seen well priced, new houses with well over 30 viewings, but no one buys them partly because of the terrible design, paint or overall feel of the house.
2. Good listings DO NOT last long, in fact they will have multiple offers. Their key is a combination of price and presentation.
i have put down 3 offers all around list price in the 420k range, all were sold within a week. In fact, all the “desirable” places I wanted to see were pending when I called. And all this was done in 2 very different communities.
It seems a lot of ppl are in the market for yr 2000+, 1800sq+ 2ST or 1500 BiLevel house with attached garage.
BTW for those looking, Brintnell is the best deal in the city, hands down. You have over 90 listings to choose from and most of them are priced to sell.
And no I do not own anything there, I use to but not anymore.
If you are buying in Brintnell pull a title to See what they paid a speculators paradise. I would wait until at least January when the specs are desperate.
As for cosigning you need to think about your upside read Ozzy Jurock book before you do this silly thing. If you think it is a bad investment now wait till you own the whole thing and have fun with the tenants. I have learned that tenants are not that much fun even though they pay for the mortgage
“When prices shot up 50%, that was ok but a 50% correction to the downside seems ridiculous?”
Yes, it does seem ridiculous. For a 200K home before the boom, if it went up 50%, it’d would have been worth 300K at the peak. A 50% drop would put it at 150K…less than before the boom.
“Why couldn’t prices drop 50% ?
They increased 100% in two short years which was absolutely ludicrous.”
Yes, it was ludicrous, but a 50% drop would wipe out all the gains from the 100% runup (200K before, 400K at peak, 200K after bust). Are you saying that the economic situation and wages haven’t changed just a wee bit in that time period?
I could see a 20% drop from peak. We’ve already had over 10%, so we’ve got a ways to go yet.
«”When prices shot up 50%, that was ok but a 50% correction to the downside seems ridiculous?”
Yes, it does seem ridiculous. For a 200K home before the boom, if it went up 50%, it’d would have been worth 300K at the peak. A 50% drop would put it at 150K…less than before the boom.
“Why couldn’t prices drop 50% ?
They increased 100% in two short years which was absolutely ludicrous.”
Yes, it was ludicrous, but a 50% drop would wipe out all the gains from the 100% runup (200K before, 400K at peak, 200K after bust). Are you saying that the economic situation and wages haven’t changed just a wee bit in that time period?
I could see a 20% drop from peak. We’ve already had over 10%, so we’ve got a ways to go yet.»
AMEN!
take it for what it is worth, but only 3 houses sold yesterday…
i wonder if i should cancel my offer for the house
Edmonton Real Estate prices are going to keep falling? Maybe a little more but not as much as everyone thinks. By next summer inventory will be normal again and we will be in a solid balanced market. My advice is buy any deal you can find between now and then if you want a home your going to live in because after 2009 prices are going to rise again. If the Carbon Tax or Green Shift as the Liberals are calling it (Ha Ha that’s almost to obvious more like the money shift) gets any traction then all bets are off. I am a very very strong believer in the Western economy and the Green Shift is the ONLY thing that could really hurt the West. If the Federal Liberals do get into power then sadly I must admit Alberta Real Estate may be toast. If you are caught holding investment property when/if this happens then you may as well be prepared for a world of financial pain. We can only hope Ontario voters are not suckered into voting Liberal the next time around (don’t bet on it I suspect they will). The West is keeping Central Canada alive. De-Rail the West and the entire Country will be in serious trouble. Hmmm the Liberals keep saying this is not like the NEP? Why do they have to keep saying that? Obviously many people are very scared of this. Oh lets believe them this time they have never lied to us? Well all parties lie but the Liberals gotta have some sort of record?
Real Estate will hold its value in the west UNLESS the Liberals Green Shift goes throough. If so be prepared very tough times right across this Country. I do know someone well who owns hundreds of Millions in properties in Western Canada. Yes a lot of property. For Example he owns apartment buildings in Ft McMurray. He is so concerned with the Green Shift or a carbon Tax he is liquidating ALL of his holdings. Hey I still don’t agree with him but then again I’m not nearly as well off as he is! So when I see very smart and very wealthy investors getting this concerned over the Green Shift type ideas I do open my eyes.
Anon,
The fundamentals that you and many others use as an argument to defend never-ending appreciation have not changed from a year ago.
What has changed is the supply of credit and the market mentality that is now rooted in the general publics mind; prices have stalled and now are falling here and globally.
National papers and news agencies are releasing news stating those facts…albeit a bit late.
Take away the misconceptions like “RE will go up forever” and “if you don’t buy now you will be priced out forever” … add a touch of Credit Contraction and a dash of inflation and your recipe is complete for further declines.
I admit…the Oil-sands continue their strong march ahead, but there are bigger things at play than that. Even if there are people making lots of $ able to afford to buy…the smart ones won’t want to leap in now while prices are skiing down the other side of the mountain, with only a view of vaporizing equity.
Smart being the keyword of course.
As for a fast recovery … I’ll put my money on the fact that this situation gets worse than it is now. The US is in its 3rd year of correction and the pace is accelerating. We Canadians have only just begun our descent.
Michael, there are a few reasons to be pesimistic and a few to be optomistic. The negative nellies have beat the U.S. Re market is crashing so we should as well to death. Well U.S. banks are going bankrupt, so using that logic, you better go get your money out of the Canadian banks and stuff it in your mattress! Since the negative news has been well advertised here, let me give you a few good news stories.
1: The last employment report showed a loss of 5500 jobs in Canada, but job growth in Alberta, giving us the highest job participation rate in Alberta’s history.
2. The highest wage growth in Canada
3. The population of Alberta grew by about 12,500 people in the first quarter. More importantly the last 2 quarters of net out migration reversed itself….albeit a paltry number but reversed none the less.
4. May07-May-08 bankruptcies in Alberta were down another 1.1%, and they were already historically low. 5.Housing inventory reached its peak in May/June this year as opposed to Sept/Oct last year….a more normal time to peak during the higher sales period.
5. Prices have been stable for months, as opposed to the skiing down the other side of the mountain comment you made. Do you have the stats to back your assertion up or just hairs on the back of your neck?
The reason there has been a correction is twofold. People heading out of the province to capitalize on the rapid equity appreciation in their homes at the same time as rampant investor activity in new homes and expanding homebuilder spec programs was bringing huge new home inventory without actual tenants onto the market,all happening at a time of historically weaker sales. People are not leaving in droves anymore…a poor eastern economy and Sask/B.C. housing that is no bargain anymore compared to ours has pared that down. Investor’s left the province in droves by May last year,and the builders drastically cut back on their spec programs soon after, effectively ending the massive build-up of new homes coming on the market. It’s not a coincidence that inventory peaked 1 year later as that is about the time it takes to complete a new home.
Having said that, there may well be the oportunity for another small correction this fall as inventory is still high and historically sales should be decreasing. However once January roles around we should be in better shape inventory wise than we were last year.
It may well be that for people who are actually wanting to buy a home, we’re coming to a point where it’s going to be a decision based on the potential for another drop in price this fall vs. decreasing choice. As inventory decreases it will always be the best deals/location/homes that will go first.
My only piece of advice. If you’re buying a home and going to live in it for the next decade, fill your boots, go beat the bushes for a really good deal, because they are out there, and don’t bite off more house than you can afford. If you’re buying to turn around and maybe sell in a year or 2, then you bring in much higher risk, of short term market variations.
Anon,
your acquaintance who holds millions of dollars of investment in Western Canada and is pulling out of Fort McMurray may do so for a variety of reasons. From that, I would not draw the conclusion that everybody with money invested in Edmonton real estate should pull out now. The economic fundamentals in both cities are certainly different.
Good discussion and thanks for sharing your experiences.
Instead of paying rent I am considering purcahsing a condo in the downtown area, for my two kids attending university of alberta. I am thinking in a market downturn, the downtown condos will hold prices better than other areas. Does anyone know what the downtown condo prices have done in the last 3 to 6 months and where are they forecasted to go in the next 6 months to a year?
Appreciate any reports I can refer to