The preliminary monthly numbers show that prices held steady in November, while sales fell below the norm. As always, the numbers I report today will be verified with the monthly press release that the Realtors Association of Edmonton will release later this week.
While the overall average sale price remained steady, taking a closer look at things you can see that buyers are definitely getting more for their money. As you can see, the sale price per square foot continues its downward trend:
In other words, if you’re currently trying to sell, or thinking of selling your home, and you see the average prices holding steady, that does not mean that the value of your home has held. Every neighbourhood and style of home is doing something different, so it is very important to have up to date information on sales comparable to your home. We update our clients on the 1st and 15th of each month with all the listings and sales in their area comparable to their own home. If you’re interested in knowing what’s going on in your neighbourhood, fill out this form, and one of our agents will set you up too – just be sure to indicate what type of home you have.
The real story this month seems to be sales:
This is where the economic uncertainty seems to be affecting Edmonton real estate the most – there were only 891 sales in November. The average for the past 5 years is 1293, making this November’s sales look more like December. Perhaps the monthly press release will show a few more sales, but it appears to have been a pretty slow month from a sales perspective.
Sheldon,
The price per sq ft charts starts from 2007…do you have the data available for 2006. Thanks
I agree with John. Price per sq ft chart from 2006 would be very nice to see.
Well, with the BIG unexpected sales surge in October, and now the BIG sales drop off in November, I think that pretty much debunks the naysayers who denied that the October surge wasn’t because of a rush to get in on 0 and 40 before the expiration date endline. That sucked the demand out of November sales I would say…
Josh,
0/40 was the reason behind the surge in September sales indeed. However it doesn’t explain such a drop in November sales. Personally I was considering buying something decent in November-December and prepared several lowball offers. And now it doesn’t look like a good idea to buy at all, so I rent a new 1500 sqft house for $1200 which is even less than the interest I’d pay if I bought the same house. And with GICs at 4.3% now it only makes sense to rent a house
On the other hand banks got pickier and require 20% down these days which all but makes the first timers life not that simple. More to go.
I CAME TO EDM IN SEPT 2006 AND BOY AM I GLAD I WAITED.
The $/sq.ft indicates that the same house is back at Sept. 2006 level now. It is sure to go further down. I am hoping to snap something up at, say March 2006 levels which is where we will be by Jan 2009.
This price would be in line with long term trends + some $$ (say $10K on an average house) for resource rich economy. This is where it should be. Really, that’s a the fair market price.
I’ll work on the price per square foot going further back but it is going to take some time. Sara.
So what about ft. mac. Now double the price for the same house, if not more.. They pay more, but not double. What is going to happen up there? Triple the value of an Edmonton home? I’m in engineering and my ft mac counterpart only makes 15% more. Others I have talked to say between 10 to 30%. Is ft. Mac going to crash like Edmonton? What about Saskatoon, my house now costs more in Saskatoon and Regina for pete sake. What is up with this city?
jd,
SPECULATORS building properties like there was no tomorrow, now they’re trying to dump everything and thus the glut of unsold inventory and dropping prices. Also, now with Oil below $50 and multi-billion dollar upgraders being cancelled left and right buyers are hunkering down to weather the storm while speculator continue to dump property before prices drop even more… It will only end when Oil goes back to $100 or more for a sustained period and the new jobs the require in-migration sucks up the excess inventory… At least two years from now, at least….
We were at $50 a barrel when the “boom” started? granted there is some inflation that should be accounted for, but aren’t things getting blown way out of whack? Nobody was hired or layed off for the upgraders? Should this even matter? There is still plenty going on? Ft. Mac seems to be doing just fine? Shouldn’t oil prices affect them more since they are 100% relient, yet we are more diverse?
As for speculators, yes we have a larger than normal inventory, but face it, for the past 6 years normal here has been really low. 5 to 6 months in peak season should be normal, not 1 or 2 months. There is also a lot of crap lisitngs, and homes listed on mls by builders who used to never list their “spec” homes on mls. Plus false listings. How many people do you know bought a house not as a flip but to move into counting on selling their own house, now have both up for sale and whichever one sells first, they keep the other. The true inventory is still high, but US housing high. no. Should it have dropped 25% house for house, no, 10% maybe. Over reaction, heard mentality. Just wait until the herd say buy.. yikes.. bidding wars over crappy homes again.
Josh, are you impling Edmonton is underpriced then if you are fine with Ft. Mac, Sask etc.?
There is a huge credit contraction globally that is bringing so much deflation that governments around the world are unable to inflate or stimulate themselves out of with low interest rates or even handing out money via “stimulus packages”.
Just wait until the scary unemployment numbers start rolling out…then you will see deflation. People without jobs, or even those who are worried about keeping their jobs will pull back so hard on discretionary spending…we are seeing the start of that now; houses, new vehicles, etc.
There are figures supporting real US unemployment beyond 10% currently while the government figures only point to 6.5%. 10% unemployment is the realm of Depression.
Regardless of the ‘D’ word, us poor, naive Canucks are in for a painfully similar dose of re-adjustment as our neighbors to the South. Anyone who thinks that we are much different here should write down their thoughts now and reflect upon them in 2009, 2010.
How do people react when their homes, stocks, pensions, and vehicles are all losing value while the debt behind them remains?
The US is almost in their 4th year of a RE crash, and it could be several more years before a bottom occurs. Canada is basically in year 1 of X.
Who is prepared for this? I suspect once this coalition gov’t (if successful) will try the same fruitless attempts at stimulus as our neighbors South. Unfortunately the only result will be a more drawn-out (more painful) event with the same conclusion, only our dollar will be much lower and our national debt much higher.
Prepare your piggy bank for your families sake.
jd,
Oil is currently trading at a hair over $45. We have a solid chance of seeing it break below $40 by the new year. I am confident that we will see it break below, if only for part of a day. The psychology of these prices alone carries so much weight for consumers here and abroad.
All of the excesses that came about in the last couple of years were unsustainable even at the pace of commerce that was occuring in 2006/07.
Now lets throw in a housing correction which is causing half or fewer homes being built and the spin-offs of construction like materials (commodities), trades (self-employed), land-sales, etc.
RE sales are in the toilet, so the economic spinoffs from that are damaged; Realtors, Mortgage Brokers, Inspectors, home-furnishings (we’ll see a lot of those wiped out), renovations.
Auto-sales are in the toilet too, and many who made big commissions before will see those dwindle.
Oil and Gas uncertainty is affecting hiring, expansions, and there are so many spinoff’s from this too … Atco laying off 400 in Calgary due to Fort Hills cancellation.
So many people own second+ properties, and when things get tough, they probably will try to unload…even at a loss. But to do so, you need buyers, and they are busy sitting on the fence.
Take all of this, and the fact that credit is contracting making loans more difficult to find and requiring larger down-payments and we have a nasty recipe.
If 40year/0-down mortgages were so popular the last 2 years, then where do you think all of these new buyers with down-payments are going to come from?
The 40year/0-down was the “shoe-horn” to get the last of the available pool of over-extended buyers into real estate after we exhausted the pool of legitimate buyers with savings, and now were are here.
Near-record low sales, and many hoping an invisible pool of buyers will appear in the spring. All of those easterners who are supposed to come out west and buy up all of our extra homes won’t have many opportunities with oil in the $40′s, and project cancellations.
Even if oil goes back up to $100/bbl next year, there are no guarantees that credit will be available, nor will the bitter taste of deflation be gone from the mouths of the masses.
I have to agree with all the doom and gloom on here. My family has experienced many layoffs in the building/construction sector already. My friend will be laid off next month because the small business he works for in a shopping mall is going under. My friend in the Oil sector is saying things are showing all the signs of slowing down and has had almost a month off from work.
And of all the people I know, I’m probably in the best position to buy. But hey, I still need a bigger wallet or some prices seriously need to come down to Earth. This fence is getting smaller and I am starting to get more and more nervous about my own job as time presses on.