Well, this month’s stats show just how unusual last month’s numbers really were. In fact, if you took last month out of the picture October would look downright normal, just as we had expected it would look since late spring. However, when you compare this month to last it looks downright rotten – beware of the headlines when the board releases their month report sometime next week, my guess is there will be some pretty negative press.
So lets have a look at the numbers. First off: sales. They’re certainly lower than last month, and a little lower than is typical for October:
As for prices, they’ve dropped just over 2% from last month, mostly on the condo side of things. Sales and prices do tend to fall in the fall (no pun intended), but this drop is a little more than just seasonal.
At the end of last month, the average sale price for a single family home was $362,908 and is now $361,172 – a 0.5% drop. Condos on the other hand dropped almost 6% after a strong month in September and now sit at $237,388. You can find out more about condo prices at our new Edmonton Condo Blog.
FYI, since we get asked this a lot, the average sale price in Edmonton has dropped 11% since the peak.
Looking at it from price per square foot basis, you can see condos took a bit of a hit this month:
One thing I didn’t expect this month was high the number of new listings – as you can see the number of new listings tends to drop in the fall:
Since the number of new listings it remained high, and the sales dropped, October was another (technical) buyer’s market after months of edging towards a seller’s market.
As always, we’ll have more information later this week when the board releases their monthly report. Stay tuned!
1. Prices fell in October…again.
2. Higher listings=trying to get “last calls” of $0 down/40 year sales?
3. Less sales=reality of no more $0 down/40 year?
4. November’s stats shall be critical as an indicator so we can see what should happen next as a new trends… I call fewer sales by another 10-15% and further falling prices by 5% in light of slowing economy, no more $0 downs, lower oil prices, little in-migration, etc.
5. It is now a wait and see for me. I am nor buying until the bottom has been reached.
2010?
Stopped by a few showhomes today. Jayman and a couple other new home builders *just* released their 2009 builder specs with new lower prices.
Could definitely smell the desperation in those sales offices.
Richard,
Right now the trend is your friend. There’s no reason why this market will turn on a dime and start going up again. Sure there might be the odd up month here or there. Ride the trend, just like everyone did on the way up – it works both ways.
The Edmonton and area death spiral… as Oil Sands upgrading gets shipped from McMurray right past Edmonton to Texas. Say good-bye to the $120Billion in Upgrader Alley investment, that all those real estate speculators and over building developers were counting on, all they can do now is dump their spec. property as fast as they can as property values in Edmonton continue to tank down the toilet (or should I say down to the Gulf Coast of Texas).
FINANCIAL POST November, 1.
“There was this whole debate about whether it’s better to refine the oil in Canada where it exists, or is it better to bring the oil to where the refineries already are set up to process this kind of oil. We believe it’s most cost-effective to ship it down by pipeline, to where refineries are already in place,” Mr. Day added.
He was referring to the Alberta government’s preference that more upgrading be done in province to capture greater economic benefits from the development of the oil sands. However, that strategy is losing traction as weaker oil prices and high construction costs in the province make upgrading in Alberta uneconomic.
Already, EnCana Corp. has linked up with ConocoPhillips, Husky Energy Inc. with BP PLC. Petro-Canada and Suncor Energy Inc. indicated last week they would look for refineries in the United States rather than upgrade in the province.
The higher number of listings in October was probably not so much caused by sellers trying to catch the “last call” of 0%/40 years. The 10/15 deadline for completing a transaction probably meant you had to close the deal sometime around the end of September.
Much more likely, sellers took notice when the EREB announced that “the Edmonton resale housing market sizzled in the 3rd quarter”. I saw a lot of listings come back in October that had expired much earlier in the year.
If the news from the EREB is not so good, for October, maybe we’ll see a larger than usual number of listing cancellations, leading into the winter months. This will then increase the already substantial latent inventory I believe is out there, and potentially influence prices in 2009.
Hopefully, 2009 the sellers/builders will significantly drop the price.
It’s still way to expensive out there.
This game is far from over. The 20% shave so far is just the 1st period.
Thanks for starting the Condo Blog. I only have time to focus my own research on single-family homes. I expect your blog will improve my insight into the condo market.
There was a time when a Bear said something on this blog…everyone bashed him even the blog owners took the liberty to make fun of him…. and now only Bears are ruling…Certainly it is a big change…
The state of the economy, as bad as it is, hasn’t seen the effects of unemployment yet. This will kick in around xmas when companies start laying off human resources slated to work on projects that are no longer going ahead. It will then about another 6 months for the effects of unemployment to hit the bottom line of the retail sector, cars etc. Point is things are going to get worse before they get better. There will be more ‘stress sales’ in the housing market. Prices will come off further. sit in the wings with your cash and jump in late next year.
John,
Bears are currently having their day. I guess you haven’t noticed the extraordinary amount of Bear shit on this blog. So I don’t think you can really accuse us of being bear bashers. However Bulls will run again and then so will the bears. And so it will go.
There might be a lot of bear shit in the comments right now, but I’m glad I didn’t jump in the market 12 months ago when the bulls were calling anyone who hesitated at the prices out there a chicken-little if not outright chicken-shit. The comments were a lot like Kramer screaming at everyone that “Bear Stearns is fine! Don’t sell Bear!”
Now that I’ve waited I’ve got a MUCH nicer selection and SFH homes have dropped into my price range.
We are all watching the real estate market with anticipation.
The Toronto market has quieted down in the last two weeks on the heels of the stock market news.
Regardless of the interest rates, buyers will continue to be cautious if they lack confidence.
David Pylyp
Looks like $50 dollar oil is coming….
http://biz.yahoo.com/rb/081103/business_us_markets_oil.html
lol I don’t even know what to say anymore. I guess I can just sit in my popsicle stick condo and watch the money fly out the windows.
Sheldon,
I do not feel like arguing with you…I respect you for all the work which you have done….I was a very determined buyer in early 2007 and got turned into a bear reading your blog.
Cooming back to your answer
“I guess you haven’t noticed the extraordinary amount of Bear shit on this blog. So I don’t think you can really accuse us of being bear bashers”
Now there is only bear traffic at your site, just read the above 10 posts…You cant find a bull now. You bash bears and you will be having nobody here.
I am not seeing bulls anywhere. Alberta Advantage, AlBundy ..where are these guys.
Thanks and no bad taste intended..
***Its mostly because the bears seem to have more time to post non stop comments. The number of people who call me and say I read your blog but some of those people are “a little over the top” to be honest. Besides there is nothing to argue about. Its all about perspective.
Those big oil companies had made so much money in the past few years, that $ 50 oil or even $ 30 oil would not hurt them for a good while.
And they know, prices will go back up again, soon and sharply.
In the 1980s, in India and China
they used bycicle as a mean of transportation, now they own cars,
motorbikes and they have fast growing economies.
U.S is not the only big player anymore.
And if house prices will fall any further in Edmonton, even Brent and Picasso is going to buy one.
He-he-he
Karl
“For the first time in the 30 years since China began its capitalist transformation, there is a perception that the economy is in real trouble.”
SHENZHEN, China
So much for China coming to the rescue Karl. We’re on the economic death spiral, nothing to do but sit back and be afraid, be very, very afraid…
We keep forgetting that these guys have 30% of the homes listed for sale on the market.
http://edmonton.comfree.ca/search.html?PHPSESSID=f1dea57cb41582757442dc874c9a618b
***That is what they say, among other things. How about those sale there though. A 15 month absorption based on their stats the last time I looked.
Sheldon
Did you people hear that?
“However Bulls will run again and then so will the bears. And so it will go.”
Sheldon is ABSOLUTELY correct. Most people mad at people like Sheldon are probably jealous he is aware of this and can make money in a market going in either direction. Selling properties like hotcakes in the price runs and buying them up as investments when there is blood running in the streets. C’mon people. This is BASIC investment 101 for ANY commodity. And homes are now just that. A commodity. Like rice and corn… and WATER will be. And in addition to housing crisis we will have FOOD crisis and starvation in developing nations while capitalist fat cats say “Oh well, they should have seen this coming and stocked up on their rice!”
The problem with Capitlist ultra-conservative Alberta Joe-Six Pack is that he thinks unbridled capitalism and unregulated speculation is a GOOD THING. When he’s swimming in it of course, and black gunk is overpriced. But how quiet the streets get when GREED time turns to FEAR time and all of the false paper wealth burns to ash and blows away in the wind.
Sheldon is right. And so it will go.
The question is: Why are we so quick to adapt this boom/bust mentality? Why not some sustainable growth? Why always shoot for the stars then crash to the ground?
Answer: Greed
We suffer at our own hands here in Bustberta.
Just something to think about.
Cheers,
E-town
I do not worry, laid off Ontario auto workers are moving to our province and will buy up our inventory.
I think for more than a year I have been talking about how a slow down is good for us – and I will continue to say it.
The bears can say all they want – the bulls are seeing this as a buying time. Fill your bucket of equities – they are on sale (I’ve INCREASED my monthly investment payment).
If you are looking to buy a home – now is a great time to be in the market (a small regret is that I waited, just not long enough. Still happy with the deal I made 10 months ago, but compared to current prices at my home I could have saved about $10k – but I would’ve paid that in rent anyways so its not all bad…)
So for these claims that the bulls are hiding – we’re still active – we’re just letting our actions speak louder than words.
Well said karl – and you are right!
The ‘have-nots’ of the east will look to the west as the place to be for continued prosperity in uncertain economic times!
Karl:
You mean the guy who puts the vehicle description sticker on the inside of the car windows as they go by on the assembly line?
Yeah. He can build an upgrader. He can put stickers on stuff.
People coming here need the skills to do the work here. Those who lack the skills (and psychological fortitude) to work in Fort McMoney end up in one of two places: back home, or on a mattress outside the mens shelter (work boots and all) looking for their next meal – or next fix.
Working in an auto plant does not a tarstruction worker make!
By the way, did you notice that the Bulls here cite net Alberta migration figures and allude to the idea that every single one of them are going to buy a house in Edmonton? I think they’re making an assumption about where folks are moving to.
I was unfortunate enough to have to drive to the “Hamptons” west of Anthony Henday to see a large number of half-finished naked clapboard homes among rows of duplexes where construction seemed to stop suddenly like an air-raid siren went off and guys dropped their hammers and ran away.
Rows of half-duplex homes (aka a nice sized house with a fire-wall right down the middle) going for $305K and nobody is biting. Plus you get to live in a construction site for the next few years and pay for fencing and landscaping.
I wonder what the percentage of “investors” is in those half-built MacEwan style condo ant-hills? I wonder how many people are going to just walk away once these are (finally) built?
Builders seem to have gotten drawn into the false demand created by speculation during the run. Can’t blame em. But can’t exactly bleed for them either…
To infinity and beyond.
Cheers,
E-town
Just a couple of
points.
First on inventory. E-town makes the point that everyone coming to Alberta is not going to buy a house. That of course is completely true….however I have to assume they are going to live somewhere. So either they rent or buy, either way it means more occupied inventory.
Speculation on the SFH side of the market has been over for 15 or so months….Condos have as well but since the projects take longer to build, it would be safe to assume that the pool of spec/investor condos is much much higher. Brent says we are forgetting that comfree has 30 percent of the inventory. Well I’m not but you also have to know that comfree’s inventory has fallen from 3423 Sept/07 to 2274 Sept/08.
Add that to Bob Trumans numbers for mls and you come up with:
Sept 07 11,627
Sept 08 9,348
With a big resurgence of people coming to Alberta, and a lack of a large pool of spec/investor homes coming on in the spring, any person with an idea of how we managed to get to such high inventory levels would have to be more optomistic now than this time last year. The trend for inventory is down.
My final point is this…and thankyou John for pointing it out. When a market….and I mean any market gets to a point where you can’t find a bear in a bull market or a bull in a bear market….the worm is about to turn.
Have you noticed on the way to work that about 70 % or more of the vehicles on the road are imported? Honda, Toyota, VW, Audi,
BMW, Mercedes, Infinity, Mazda, Volvo etc. American carmakers are finished.
GM, one big looser wants to merge with DODGE, an even bigger looser.
So the two money loosing company will make one winner, right??
Dream on. Never in our lifetime.
They are done. My point is, that those autoworkers will move here and stay here and buy houses.
There is no hope to go back home, because the job just isn’t gonna be there.
This time, it is not temporary, it’s final.
Karl do your homework:
Both Honda and Toyota’s are built in Canadian and American plants. Furthermore, Volvo is owned by Ford and many of their components are manufactured in American plants. Ford also owns a substantial portion of Mazda and supplies a variety of parts for Mazda cars and light SUVs. BMW also manufactures cars in the United States. Ironically, many of the “American/Domestic” cars you see on the road are re-badged Korean made vehicles (The Chevy Aveo for example).
People sure love to bash Edmonton.
It must be based on the haves and have nots mentality. Edmonton, and Alberta are where it’s at…that’s a fact. Oil may have a few blips along the way but it’s always going to be in demand. There are no signs of a recession in Alberta — only fearmongering newspaper reports. The media love to sensationalize anything…we all know that. It’s irresponsible and, if anything, it could have a negative impact on the economy. Alberta will survive better than any other place in North America. Let me see…no dept…A heritage fund…signs everywhere posted looking for qualified workers. We have room to fall…no worries here. The best city in the best province in the best country in the world.
All the attacks on Edmonton/Alberta are strictly based on jealousy. They want to see us fall…yet we don’t care about them enough to discuss them. Them being (easterners who so much want to get a hold of this provinces resourses). Come to Alberta and forget your polluted smog-filled cities with no employment or prospects for the future. Maybe build a few hundred more nuclear reactors in your back yard and pretend everything is fine.
“The best city in the best province in the best country in the world.”
Yeah. We’ve heard it all before. You’re In Oil Country. Red Necks Git Her Done. Blah Blah Blah.
Let’s look at the flip side of that coin shall we? Housing costs for anyone not in “tarstruction” jobs has put them out of the market – for now. The environment up north is being devastated – the dam they built to hold the sea of sludgy tailings back is leaking. This is no joke. Conventional oil and gas, once the pride of our province, has seen major slowdowns due to exhorbitant costs (that means crazy expensive) of servicing wells. Everyone is charging top dollar for labor and materials so they can get ahead or just afford to live here. Upgraders are being scrapped ($120 billion worth delayed or scrapped in Upgrader Alley) for the same reason: 250% increase in construction costs. Taxpayers are getting nailed by slimey construction companies in civil infrastruction as well – look at the 23rd avenue interchange. An embarrassment also at 250% over budget. (Our concellors never did know how to run a city and maintain it’s infrastructure, then again Klein made sure of that with budget cuts across the board to stockpile money in a surplus that should have been spent on the education, health care and civil nfrastructure he TOTALLY neglected when in power.) Not everyone who has come here is doing well either. Some are barely getting by despite working very hard – their hard earned money is going bye bye towards higher living costs, food costs, gas costs, service costs… And how about the drug trade, violent crime, and murder rate? Ah, all alive and well in oil-town. Organized crime can’t even keep up with the DEMAND for meth, cocaine, pot and other drugs.
Dude, we got problems here. Voting PC year after year is not solving them. We’re still a boom-bust one-trick pony. Your civic pride is commendable but rather one-sided and definately not enough to mitigate the serious problems facing our local economy if we don’t wake up and educate ourselves further than “USA needs our oil”.
If – I mean when – Obama wins this election, he has VOWED to lower his country’s dependency on the most environmentally destructive oil on the planet – our beloved Tar Sands Oil. Three times the carbon footprint. More water and gas to produce, upgrade and refine than conventional oil.
Dude, save the “We’re #1″ chant for the uninitiated. Sure we got (dirty) oil here. But we got a tonne of problems that go along with it. And cheering for E-town and voting PC year after year is not going change ANYTHING.
I used to LOVE this city. Back when it was a NICE city. How long have YOU been here? I’ve been here almost 40 years. And it was nicer before the tarsands and the provincial Klein government took over the show. A lot nicer.
Cheers,
E-town
Oh please !!!
So where is this bumper to bumper traffic from Windsor to Edmonton to fill all these Help Wanted $16 an hour grunt labor jobs that you see advertised?
Even if a couple Windsorites can sell their houses in Windsor and decide to come out west, you think their going to buy an Edmonton shoebox at twice the price?
Quit dreaming…
I keep a “bullish” rating on Alberta. The Bottom line for Alberta is the Oil Price. The Barrel of Oil is currently trading at $70 (a lot of bears were dying to see the oil going to $50 – which by the way would still be profitable for Alberta Oil Sands Developers). The Oil Price hit record high $147 back in July and now is trading at $70, bears say “Oil went down from $140 to $70” and that sounds really scary, the truth is that Oil should have never gone that high, so the Oil Price didn’t actually go down, it was never worth $147 per barrel, that’s why today is trading $70, because $70 is a fair market value, the oil traded around the $140’s for no more than 3 days, that means that it was not the true value of oil, it was not a sustainable price, otherwise you would have to pay almost $200 every week at the gas station to fill up the gas tank of your car, which would not make any sense, that’s why the Price of the Barrel of Oil went back down, but that doesn’t mean Oil companies are in the verge of bankruptcy, on the contrary, they actually made some good extra money thanks to the speculators that drove the oil price up for no reason, now oil price is back to normal and companies like Suncor, Imperial Oil, Petro-Canada, Syncrude, CNRL, Exxon Mobile, Chevron are still making good money and they will continue to have good profits. So it is not that Oil Price is going down, it should have never gone that high. If the Oil Price Increase Rate for the past 12 month was real that would mean that the price of gasoline for you vehicle would be $15 per litre by 2012 (that’s $600 every time to fill-up the tank) what happened to the Oil Price the last 3 months was not real, was mixture of declining US Dollar, Investors in Panic and Speculator or Opportunists, nothing else. The demand for oil is still there, and it will grow at a normal and sustainable rate for our country from now. Same thing happened to the housing market in Alberta, was affected by speculators, Housing Market went down, well it didn’t actually go down, it should have never gone that high “that fast”. Prices will stabilize and steadily start to go back up with a moderate rate of course. The high prices you saw last year you will see them again, of course, not this year neither in 2009, but watch for 2012.
The one guy that has a proven method to generate wealth, and which also happens to be the richest person in the whole world was on TV two weeks ago, saying nothing but good things about the economy and talking about what a great opportunity this is to invest and create solid wealth over the long term… and yet people prefer to listen to what a business news reporter from a newspaper has to say as if he o she would actually know what’s going on.
Bad news sell more, Bad News is a business, scarring people with alarming reports and numbers will make people to watch more TV and buy more garbage. The richest person in the world is actually happy like a kid and investing like never before, but nobody pays attention to he has to say, people prefer the “un-real” bad news told by ordinary people. What can we do?? It’s human nature!
We are going to be okay
You Go Alberta! You Go Canada! I believe in you!
Brent, I do not say $16 per hour is a lots of money in Alberta, because it is not, but here comes the sad part: other provinces, for the same job pay only half as much,
more like $8-$9 per hour.
Even if one can find somewhat cheaper RE prices (in other provinces) than Alberta’s, but the wages are not there to support, even those lower prices.
DS,
You are right, I did not do any homework and I know they build Hondas and Toyotas here in Canada but they are not in trouble so those workers will obviously stay there and hold on to their factory jobs.
But one still can safely say:
American caremakers are the only ones dying right now, any other companies would survive on their own, without GM or FORD part ownership.