Here is our update on the Edmonton real estate market. (Previous week’s numbers are in brackets). For the past 7 days:
New listings: 467 (367, 567, 479)
# Sales: 177 (211, 237, 255)
Ratio: 38% (57%, 42%, 53%)
# Price changes: 471 (326, 429, 457)
# Expired Listings: 166 (223, 211, 699)
# Canceled/withdrawn/terminated listings: 47 (38, 36, 68)
Net loss/gain in listings this week: 77 (-105, 36, -543)
Active listings for single family homes: 3436 (3390, 3433, 3382)
Active listings for condos: 2299 (2251, 2275, 2200)
Those cool fall breezes may be cooling off more than just the temperature in Edmonton. So far there have been 990 sales this month, which should still put us around 1300 sales for the month. The average price is sitting at $314 (up slightly from last week but still down from $324 for September), single family home average is $359 (also up slightly from last week and down from $362 for September), condo is $234 (also up slightly from last week but down from $252 for September).
All in all it’s that time of year, sales and prices are cooling off as they normally do – I don’t think there is anything to get too excited about here.
Last year at this time was the first time we published weekly stats…check out these numbers:
# New listings: 662
# Sales: 202
Ratio: 31
# Price changes: 603
# Expired Listings: 134
# Canceled, withdrawn and terminated listings: 247
Net loss/gain in listings this week: +79
Active listings for single family homes: 3930
Active listings for condos: 3002
Looks pretty familiar eh? Pretty surprising considering the stock market fluctuations. More on that later.
Just wanting to mention one happy little spin on the cool off in the realestate market. If you were planning to build a home yourself this is much better timing than last year or the year before. Trades are sitting, they’re hungry for work, prices have dropped about a %25 or more for some trades. Lumber, drywall, and other building materials have also dropped in price due to less demand. There’s also no waiting for overbooked trades and supplies. Remember the concrete shortage in the city a couple of years ago? Just thought I’d be a ray of sunshine amongst some of you rain clouds!
Have you noticed what is going on in equity markets, credit markets, and commodities? Why build now, it’s going to get way cheaper – trades, will be scrambling to find work in another 6-12 months.
Looks pretty familiar eh?
Except for average price is sinking, lending more stringent, zero/40yr mortgages cancelled, oils decline of 60% YoY, and global market instability. Other than that, it does look familiar eh?
I also noticed that there is a 15% decline in sales from year to year.
Roadrunner,
Trades are already sitting. My husband is a custom framer, all the other guys building cookie cutters in the city are laid off already. They’ve been sitting for a while and rates were already cut 25% last year. Yes it will continue to get worse, but most of the crews from back east have gone home or to Saskatchewan. It’s not going to get too much cheaper.
Years ago, when I did not yet look at real estate as an investment, a home was something I needed for my family, and I never gave price much thought, other than to look at what kind of house I could afford given my budget and income.
I bought a house when I needed one, and I sold and bought when I needed to move for job or personal reasons.
Some of these houses were bought when prices were up, others when prices were down, but in every case, we came out flat or better.
So, if you do need a family home now, if you can afford it, and if it looks like you will stay in the home for quite some time, go and buy one.
Compared to the double-digit mortgage rates in the late 80s, rates are pretty good, now.
And there is certainly a lot of choice and some very motivated sellers.
Buying a home in Edmonton now is a realy bad idea, lay offs are happening big time in construction and people are leaving, Edmonton is a nice city but not that nice, can you swallow these losses of $64,000
http://www.canadian-housing-price-charts.235.ca/
Sheldon and Sara run a good blog
but honestly Edmonton homes are bleeding cash in a big way.
You would have to be out of your mind to buy now.
Hey Jo,
All I can say is “you ain’t seen nothing yet”. Just wait and see. If you’re happy buying now, then go right ahead – that’s your decision. Just watch what happens when commercial construction collapses also. It will be next.
As anytime, sideways moves are good, even better now I suppose, with all the choices. It is also a good time to get a tradesman in and renovate the basement. No need to refinance to do that, just take your time. Cash will get you better prices too.
As far as Canada’s economy do not worry, the way things are swinging lately, it is just a matter of time before things settle down. Keep contributing to your RRSP; compare it to buying items that are on sale. USA is the first to have troubles and will be the first to recover. I have a good feeling about Obama. If he looses though, be prepared for an influx of sad Democrats moving north.
Have a good weekend and stop reading the paper, get a good book.
Mike,
You have obviously been drinking the cool-aid that the politicians want you to swallow in order to cover over their failings. Its like saying, ‘its a good thing to put your hand on a red hot stove, in order to feel sooooo good when you take it off.’
Some good/interesting comments about the trades. We are building an addition (extra room/garage bay) on our house. Started getting things together in the spring. Back a few months ago we could not get people in to quote let alone commit to the work. Its turned a 180 degrees. I have people calling back that from that I contacted in the spring who did not have time to even quote tell me they are available to start work immediately if need be. We also have had cutome truses etc. build the supplier has most items ready within a day or two and they are the first to admit that a year ago it would of been a 6 month wait.
In my mind/world, things are getting better not worse (still have to swallow my decline in wealth, but…).
Its a shame Alberta put so much effort in becoming a one trick pony, because that horse is starting to go lame.
Not much talk on the new royalty scheme thats coming into place shortly…
Best of luck to all.
Here’s the real weekly update:
http://www.reuters.com/article/marketsNews/idCAN2453486720081024?rpc=44
The affect on edmonton real estate still to come!
Not everybody bases their decision to buy real estate based on the stock market.
To believe some of these posters here the world is ending and it is most certainly not. It is definitely going through some significant shifts and in many peoples opinion’s this has created opportunities in both real estate and the stock market that they could only dream about.
It has also removed opportunities for some. As to whether now is a good time to buy depends on what the buyers needs are. My experience is that most people do not buy a home solely based on financial information. However many of the first time buyers who contacted us this week are looking at getting out of the rental market because the cost is comparable to owning.
In my opinion the best for Edmonton is yet to come. It may not be today but today’s problems shall pass just as the overheated markets have passed.
Widespread bloodbath for home owners, eh?
One of my friends, who has owned her Edmonton home for about 25 years, was not very interested to hear in 2006 that her equity had gone up significantly. She never thought of taking out a home equity line of credit, and is planning to stay in her house for another 10 years, at least. The fact that house prices are dropping, this year, just does not keep her up at night.
My in-laws bought their house 50 years ago, for $11,000. They didn’t sell when it could have gone for 500k. To them, it’s not primarily an investment, but a place to enjoy for as long as they can. I doubt it will be a bloodbath for us when we inherit the house and have to sell it for less.
There might be tears and some blood-letting for some:
Anybody who bought to “flip” and can’t get rid of their property should have realized that prices in Edmonton never came close to those in California, where flipping seemed to work well for a while, (if we believe the shows we see on HGTV)
Anybody who bought in the hope of selling as soon as prices had increased enough should also have known better. A city like Edmonton can only support a certain price level, based on income. And not everybody works in a high-paying job, here.
Anybody who thought prices were value-driven when houses sold quickly, no matter how lousy they were, and for the same price as a much better properties, was fooled.
Anybody who used their house as collateral for depreciating assets or “stuff” was simply careless.
I am not sure that declining house prices are what will do us in. I would think it will rather be that many Edmontonians have been living above their means.
They weren’t really richer than they thought (as ScotiaBank told them). They just acted as if they were, and that will take time to recover from.
I apologize for the recent editing of a certain commentor’s comments. Squidly has been repeatedly impersonating a number of people including the author of the bubble blog and others. He has shown a constant disregard for the rules, and has been banned from this blog.
How about comparing to other cities? Take a 2 storey 2200sqft house brand new. Doesn’t seem so bad here looking at other centers, saskatoon, regina. Then compare salaries. Look outside the window instead of comparing to what Edmonton used to be. Maybe Sheldon and Sara can make an article comparing different centers, salaries, and comparing house for house instead of the average house, since average houses can be greater or lesser quality in different centers??? Would keep things in perspective.
jd brings up a good point about comparing house for house, rather than averages. This has been mentioned here before, houses in the high end (600K+) have been taking the biggest equity hits, that haven’t been seen as much in the middle (300 – 500K). I don’t think that I have lost as much equity in my starter (paid 330K end May) as the weekly stats would lead me to believe.
This might be asking for too much, but could the weekly updates be separated into price ranges, as well?(100 or 200K increments).
I move to Brampton as soon as i get sell my home in Bellerive. My brother can get me a bigger home there for half price.
I had to reduce price twice since june. First it was $415900 asking then $399500 and now $379900. I hope I sell soon and very happy I did not buy in last year.
Driving taxi in edmonton broke me. no more 80 hour weeks to pay $2600 mortgage.
Business not good any longer in Alberta.
Good bye edmonton.
All the best to you in Ontario Ahmad!
If you find the problems of Brampton greater than the problems of Edmonton – you are more than welcome to return.
Some advise I would leave is if you are waiting to sell here before moving – I would take that time to seek a few job options in your new city.
Cheers!
With prices of building material and skilled labor going down, this winter would be a good time to renovate or add an addition to your property. I have a feeling we will see a bounce in residential construction by next spring or summer as more people move to this city for jobs and inventory reaches a new low. With the economy going sour in Ontario and Quebec, where do you think these people will go? They will come to Saskatchewan and Alberta. I read an article on a moving company based in Ontario and they said their seeing a pickup in traffic going to Edmonton. These are quality movers who move people that go to Edmonton to stay and raise families, not your typical renters.
Ahmad,
Good luck to you in Brampton.
I have friends there, they have been living there for 25 years on Wright Street, in the same house, they never moved.
Be prepared to pay the same much for a house as in Edmonton and jobs not that easy to find.
But you always can go to Toronto to look for a job,too.
Pay is a bit lower than here, this friend of mine is a painter, but I don’t know much about cab drivers.
Take care!
Jeremy,
when you say “inventory is reaching a new low”, what do you mean?
According to the weekly stats, we are sitting at 5735 residential properties, this week, up 2.7% from the beginning of October.
Compare that to the “low” point of January 1, with 4401 listings, which was huge, compared to March 2007, when we had 2574 listings!
Yes, there is a drop, but much of that comes from people who simply give up and take their properties off the market until times get better.
In terms of new construction, there seems to be a lot of unabsorbed inventory out there. I would not predict a massive construction boom, in the next months.
This goes out to all the would be Nostrodomas’s on this site: How much will a 400k new house be worth by next summer?
This goes out to all the would be Nostrodomas’s on this site: How much will a 400k new house be worth by next summer?
I am watching the Edmonton real estate market from the U.K.as a year ago I was thinking of buying in Edmonton.Good thing I didnt.
However the market is much worse in England.Here property appears to be crashing and nobody can sell anything Why buy now when it will be cheaper next month.I thought that oil might protect the Edmonton market but with the price of oil dropping well!!!!
I’m going to see 2 houses tomorrow..
I’m hoping to give an offer but.. oh man.. every time I look at the market.. it just doesn’t look good.
worries me…
Comment deleted. ***Comment edited. marcel is having a coversation with himself – marvinmee***
***Comment edited. Marvinmee is having a coversation with himself – marcel…must be his alter ego.***
It is not surprising that as soon as there is a little correction all the looser come out to gloat, If the prices go down more due to recession, these people with negative outlook will have no jobs, at that time their focus would be on a loaf of bread rather than on a house. I just rented my house for 2550 a month and people were fighting over it.
Here is the positives.
Alberta population grew by 35k last quarter, all these people need houses.
Building permits are down and inventory is decreasing.
The increase in public works and infrastructure will more than compensate for the slow down in residential construction.
Alberta oil is crucial for the north american economy and wont be allowed to go down beyond a certain point.
Opec is cutting production and oil supply will diminish and prices will go up.
Canadian dollar has declined 25 percent from the peak, this will be a big stimulus for exports.
Alberta economy is still slated for growth despite talk about a shallow recession in Canada.
Interest rates will fall dramatically in the near term. making housing more affordable.
Call me Nostrodamas….Edmonton prices for a current $400,000 home will be $300,000 in 12 months. In 18 months $275,000 and 2 years they will be $200,000.
Of course I am talking in 2008 dollars. With the rate of M-3 expansion, that is the unbridalded printing of money to try and sustain the credit bubble, we will soon see inflation or even worse stagflation.
***It is not surprising that as soon as there is a little correction all the looser come out to gloat, If the prices go down more due to recession, these people with negative outlook will have no jobs, at that time their focus would be on a loaf of bread rather than on a house. I just rented my house for 2550 a month and people were fighting over it.***
And as soon as there is alittle boost the same thing happens on the other side, just look at September and first 2 weeks of October, everyone was claiming the whole ship did a 180. Not last week we actually digressed back to the bitter renter comments, gah I miss those days.
***Here is the positives.
Alberta population grew by 35k last quarter, all these people need houses.***
Far more than that in the last 12 months but housing still declined in price… so did all those people just not buy and move away?
***Alberta oil is crucial for the north american economy and wont be allowed to go down beyond a certain point.***
Really? Because that point by many econimists hopes was $80, and this morning its what $64?
***Opec is cutting production and oil supply will diminish and prices will go up.***
I’m not sure you read the news daily, but OPEC did cut production, US poll returned drivers driving an average 1.5 billion miles less a month, oil dropped $3… guess the cuts don’t have that much affect short term, but perhaps long term if people start buying SUV’s again. The demand destruction created by resource speculation will linger for some time yet, hopefully not for long though given a numbers of individuals who rely on those numbers being a bit higher then they are currently.
***Canadian dollar has declined 25 percent from the peak, this will be a big stimulus for exports.***
So true, but to little to late unfortunately, many of the plants that this would have benefitted have been shutdown.
***Alberta economy is still slated for growth despite talk about a shallow recession in Canada.***
Very debatable given our cuts in forestry, NG (slight slowdown), and mining, Oil is our sacred cow, and its losing its shine.
***Interest rates will fall dramatically in the near term. making housing more affordable.***
Just because the bank cuts prime doesn’t necessarily translate into cheaper housing rates. Banks have lost a crap load of cash, yes even the Canadian banks, and in order to recover it, they’ll keep rates higher then they should in order to recoup those loses. History actually shows the opposite of what your saying, and the BoC will raise rates to help stave off run away inflation which usually follows rate cuts and the falling CAD.
0.02
Nice reply Sabb. I was going to respond to Shawns somewhat optimistic post but you summed it up eloquently.
Demand destruction for oil is happening – it’s a reality. “China needs the oil. USA needs our oil” is very 2-dimensional thinking about now. Also, with credit constriction combined with the lower oil price, the “oil giants” in Oilberta are scaling back their planned expansions by quite significant numbers – 30 to 50% in some cases which translates into billions in cutbacks. And this is only the first wave of cuts – if oil prices stay low, further cuts will follow. $64 oil was NOT used to tabulate the economic feasibility of many of these new ventures, especially upgraders.
The wave of the financial tsunami has not reached our shores yet. Until this happens, I think it’s a little premature to claim we will weather this storm unscathed.
Cheers,
E-town
E-town,
I agree we won’t come out unscathed. “When the US gets a cold, the rest of the world get influenza”
It would be silly to think that we are immune to the ongoings outside of Alberta….
However, we can remain upbeat that we should weather this storm much better than most other areas. There are still many “for hire” signs as you drive around town, companies are still backlogged with work – maybe not as much as before, but they are still behind. Many commercial/city projects are yet to be started or are far from being completed (Epcor Tower, NW Henday, 23 ave Interchange, LRT, etc…) Overall there seems to be some indicators that Edmonton/Alberta will move along at a reasonable (bareable) pace – low taxes, no provicial debt, relatively affordable housing, still a strong job market etc.
Connan,
As for your offers – put in a offer that you are reasonable with (maybe 10-15% less than asking price) – if you can pull the seller off by 10% or so you should be able to weather any further dips that might occur in the near future.
Remember, this is hopefully a home that you are planning on keeping for a number of years. It is not a casino where you can put it all on red and win big instantly (or lose big).
What’s this crap about affordable housing ? Affordable for who ? Doctors, lawyers, lottery winners ? the average person can’t afford to buy anything other than an ancient shack somewhere off of 118 ave or a one bedroom condo. My wife and I have a combined income of 110K and I can’t see us buying in the near future unless prices come down significantly.
Jerry – your words explain exactly why you are where you are – you can’t see yourself owning a home.
Some say “seeing is believing” – I say “believing is seeing”.
At $110k your take home should be about $65-75k so say $6500 per month. At 300k a mortgage payment will be about $2100, add property taxes and you are all in for $2250. Even add some condo fees if you feel you can only afford a condo. This still leaves about $4k for living expenses – do you eat steak and crab every night? Do you always have to have the newest leased car in your car port? Is it is necessary to have the designer clothes ALL the time?
As for what you can get for that $300k? Modern 2 bedroom, 1000+ sq.ft condos in and around downtown (and better than Boyle Street areas) usually includes underground parking etc…
Think possibility and the way reveals itself!
But what do I know – my girl’s and my combined income is only $125k – I guess that $15000 is the difference between average and the ultrarich….
Hey Rhettro. I drive a beater, a rusty 91′ Jeep. My wife drives a 97 Neon, and I haven’t bought new clothes in months. Don’t be so quick to judge. We both have student loans. Excuse me If I don’t say Wow!! when I see condos have gone down to $300k. Mabey I’m crazy to think that people should be able to buy a house in a decent neighborhood for that price. I would rather not be stuck in a condo ( apartment ) for the next 30 years. Wages have’t gone up on par with housing prices. I’m just hoping that things will swing in the favour of people like you and me and not the greedy real estate agents and house flippers out there. I guess in the end I’m frustrated. Just bitchin’.
Sabb
***Alberta oil is crucial for the north american economy and wont be allowed to go down beyond a certain point.***
Really? Because that point by many econimists hopes was $80, and this morning its what $64?
You know that it an average for the whole year, the $80 dollar number they’re quoting. Not a week or even a couple of months but the whole year. So if it’s $64 for 6 months and then $96 for the next 6 months that makes an average of $80. That’s where these economist’s get their numbers.
Rhettro:
You have a point.
$6500 should be enough. But if you look at some of what we consider to be “standard equipment” for living these days…
-Eat out for breakfast, lunch, dinner
-Crack-berries and mobile internet
-HD cable and ultraspeed internet
-Clubs and bars
-Casinos and VLTs
-Cigarettes
-Alcohol
-Travel to sunny places
-Designer labels (Diesel, DKNY, Louie Voitton)
-Posh vehicles (Lexus, Mercedes, BMW)
-Trendy furnishings and decor
-Luxury appliances (bread makers, chicken cookers, cappuccino makers)
Sure, everyone wants to enjoy life – but since when can working class people afford “all of the above”? They can’t. If they rent, they’ll always rent. If they own, they’ll be bankrupt and lose posession.
Unless you’re pulling down $150-200K per year you can’t have “all of the above” – you need to budget and pick and choose which luxuy items you need NOW and which you need to save up for and buy later. Now, with easy credit and HELOCs so many people seem to get it all now. (Maybe they knew they were running on borrowed time and needed to stock up while credit was being given away.)
I know friends who live a lifestyle that eats up $6500/mo and leaves barely enough to cover RENT with NOTHING saved or invested. Just one stupid luxury item after the other.
I also know friends that own homes on less. Some are doing okay with a frugal lifestyle while others cannot even afford coffee. It depends on how much “less” we’re talking about.
THe $70K median wage earners? If they bought recently, they’re house poor in my estimation. $70K just does not cut the mustard as it did before the run up.
It’s a new game now. People have to change their idea about what the lifestyle of the working class should be. My friends call me “super frugal” but I have a really fun, full and busy life without blowing all of my money on a stupid “image”.
Then again, for some folks image is everything I guess.
Cheers,
E-town.
LOL E-Town!
You are bang on about the whole “keeping up with the Joneses” mentality – it is a sad reality. People need to prioritize and think what is best for them and not their image.
Jerry,
I was over exagerating on the condos – at $300k you are talking higher end condos – I have one in Oliver where other units are currently selling around $275k (’07 peak was 330k) – 1075 sq. ft 2 bed/2 bath, 1994 build, underground parking, grassed courtyard etc…
Also I know you can go a lot cheaper – I have a rental property off Victoria Trail and 139 ave. – townhouse, 1979 build, 1080 sq. ft 3 bed/1.5bath, carport, small backyard, etc… units in that area are listing at $225k (peak was $275k)
Both are clean, in somewhat quiet neighbourhoods (where isn’t there crime these days?), well managed places.
I understand your frustration – but I hope you can see that you can become a homeowner if you prioritize it!
Rhettro:
Jerry offering his gross income is of little value for anyone trying to appraise his situation. Although we can speculate about the amount he’s dishing out for those student loans, I find there are drastic differences in monthly expenditures that have a lot to do with lifestyle choices and spending habits.
This is why it’s SO dangerous to base house affordability on gross income alone. Some people cannot “afford” a home at $6500 gross/mo. Others are in homes and make far less, and are managing to save money too.
Affordability has little to do with gross income but more to do with money management, spending habits, debt load and how much one wants to spend as a percentage of their net income. A thumb rule is that housing costs can be around 1/3 of your gross. Okay – for some this is no problem and they may even want to push it closer to 40% or more. But for others, if they were to do that the lifestyle changes would be too much for them to handle. They may only want to “afford” 25% of their gross towards housing.
Everyone is different, but we all seem to look at gross income as the key indicator. This is one possible explanation why some make it and some do not, even though their household incomes may be comparable.
Cheers,
E-town
Good thoughts E-town.
It is like the old expression – it’s not what you make – it’s what you keep!
