Here is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:
New listings: 444 (405, 432, 506)
# Sales: 202 (188, 197, 185)
Ratio: 45% (46%, 46%, 37%)
# Price changes: 275 (224, 216, 252)
# Expired Listings: 102 (131, 91, 388)
# Canceled/withdrawn/terminated listings: 31 (26, 30, 29)
Net loss/gain in listings this week: 109 (60, 114, -96)
Active listings for single family homes: 2555 (2500, 2498, 2412)
Active listings for condos: 1987 (1915, 1851, 1805)
Two days left to count before the month end numbers are up and there have been 1,019 sales this month, the average sale price sits at $309k (up from last week but down from the end of January), single family homes at $348k (also up from last week and down from last month) and condos at $226k (same as last week but down from last month).
Since we'll be posting the monthly results on Sunday I'm going to leave it at that for today. Here are a couple of articles/posts I've found this week of interest:
- "City of Opportunity" Consultant says Edmonton tops for real estate investment
- New schools being built in Edmonton to be completed by Sept. 2010
- Introducing "dEdmonton" Canada's new Halloween capital
- Edmonton Downtown Dining Week – March 6-15
- See you at winefest at the Shaw Conference Centre tomorrow!
- CMHC's Housing Starts Report for Edmonton came out today
Sheldon,Sara..
Your market though it seemed to have dipped looks fairly strong compared to other parts of North America (Reno included)
Having the 3 F’s in your city surely help (from the “city of opportunity” article).
Are your active listings in the market historically (the past 5-7 yers) down or up?
-Joe
http://RenoHomeBlog.com
It’s a great time to buy a house in Edmonton.
http://spreadsheets.google.com/pub?key=pKhf_Qhx1jfrbTbcuR-dHSw&gid=1
Prices are steal.
Interesting chart Robert. Does it take inflation into account? A house in 1962 at $12K equates to what in today’s dollars?
Robert, thanks for the saturday entertainment. It certainly is a little shocking when you see it in the right format. I don’t know if prices are a steal, but some people have certainly been getting robbed!
It’s not as dramatic as it looks on first glance! Consider two things:
1) Inflation is exponential. When you fit an exponential trend to this data the trend predicts today’s price to be about $275,000. Not too far below where we’re at now.
2) Look at the same graph running from 1962 to 1990. The boom in the 80′s looks just as dramatic as today’s! In absolute %increase terms, it was actually MORE dramatic, yet it only retraced about 20% or so in the ‘bust’. Granted it did take a while to pick up again, but it only ever pulled back to where the exponential trend predicted it should be.
This is a clear example of how linearly thinking people fail to grasp concepts that are not necessarily linear and thereby easily arrive at erroneous conclusions.
It’s supply vs demand, folks.
from 2002 until 2007 demand clearly outstripped supply in Edmonton. Buyers were offering above list price in order to secure their home. Nobody put a gun to their heads.
Of course, banks and the government were irresponsible to loosen credit and offer $0 down, 40 year terms.
A property is a privilege, not a right…
What is going on worldwide -the credit crunch and global recession – caught many by surprise. Builders over built in Edmonton and now buyers are waiting on the sidelines.
However, make no mistake: if you need a home, offer 10% under list. If you have an impeccable property for sale and it is prices favourably with the ongoing market conditions, you will sell.
I sold my north Edmonton home in 5 days back in April 2008: a similar home on my street sold in May after 10 months for $440K while my home was offered for $10K less, had granite counter tops and hard wood floors. was it worthwhile to wait 10 months more for a $10k extra? No.
Good point Jason – that’s what I was driving at. Simple charting of just the value without inflation is misleading while accounting for inflation would give a more accurate depiction of sales.
10% below list price is a good starting point. I put an offer for a house listed at 299,000 in January. My offer in February was 275,000, originally this house was listed at 260,000 July 2007. My offer was too late and I was prepared to go up to 280,000. The house was sold for the first offer at 280,000. This was a 2003 SFH 1359sqft, upgraded appliances, half finished basement landscaped, fence, and no garage. Had a fireplace and rounded corners. This house was located in Elerslie.
Today I put an offer on a house listed at 309,000 in Suder Greens, Lewis Estate. This house originally listed at 389000 in 2007. It has now come down to 309,000. My offer is considerably less. The owner has had this rented out since it first listed.
Prices are definitely coming down and we should look for a 10% decrease from today’s prices.
BTW there is a foreclosure that has an offer pending but the buyer has to sell his house first. This house is located in the Hamptons and is fairly new. The previous owners trashed the house and after estimating the cost to get this house back to tip top shape I would only pay 255000 to 260,000. This is a steal for a handyman.
I just had a brilliant idea. Every house on the MLS or MLX should be listed on a website with room for comments by the different viewers. They should also put their suggested price down. This would definitely help all buyers in the area. Actually how bout starting a website with paid membership. You pay for a well experienced critique that goes through all houses on the market and makes his honest opinion and estimates the real value.
Lol just a thought.
Mike,
If you want to consider inflation into the equation. I think a barrel of oil was under $40 back in the 80′s to.
The world has changed a lot since the 80′s in demand for oil, energy and food. The worlds oil reserves in the 80′s were deserving of $10/bbl. Today things are a lot different. In the 80′s Mexico had 5 oilfields with over 1 million barrels of reserve. Today they have one oilfield under 1 million bbls and will pump their LAST barrel of oil in 2011. The Saudi’s lie about how much they have.
Mexico provides 14% of the US oil. With that oil gone in 2 years time where will they get a secure source? The “dirty” oilsands will be front and center, despite what Obama says today. You won’t see oil at $40/bbl for much longer and the projects in Alberta that have been shelved will be back in play. This will put real estate back in play too, but probably not to the extreme we saw in 2006/2007. Don’t mistake the current pullback in commodities to be long lasting or you’re grossly misniformed.
Ryan, nice post.
Now the market can only down so much before it hits bottom. (I think Edmonton will hit bottom in summer 2010 then prices will go up at INFLATION LEVELS)
Will a $400K home at the peak almost 2 years ago be offered at $175K when the bottom hits? No – Unless you are Garth Turner… (Boy is he ever making an ass of himself on his site!)
Home prices are already down by 22% since the peak. Maybe another 10% in the next year is not impossible..
The way I see things happening is that the price decline should be limited at 1% monthly, some months less, some other months a bit more. A few months prices might even come up 1% or stay the same MOM.
You will definitely see that $400K home in May 2007 going for $300K in May 2010… and then at $310 in May 2011 and $325K in May 2012, etc.
BTW… For anyone here that thinks that oil will stay at the $40 level for years to come… Oil futures are at $80 a barrel for this summer. Oil sands investments will be back on again.
Any thoughts?
Mike,
Sorry bud, but your living in dreamland if you think Alberta real estate is coming back any where near 2007 prices in the next 10 years. First off, nobody even knows where the bottom is yet.
Go back in history and look at any mania, whether it be dot com, oil or real estate and when that bubble popped…….
I’m not a chart geek but draw a couple horizontal lines across the highs and lows on that chart so you can get a price channel and you will see where real estate is headed before it gets back in line with history. I see the average price possibly finding a bottom in the $220,000 range.
Of course all bets are off if the world economy continues to tank into oblivion.
From all my reading I think the best views are the moderate views. House prices are still coming down and a good estimate will be anywhere from 20-30% of peak prices. There are way too many bull and bear opinions and not to many opinions that sit in the middle.
I would like to suggest a couple things for February’s market analysis. I suggest doing a year over year graph for SFH and condos separately for these items. DOM, average selling price, inventory, and new construction starts. This will help us ignore the seasonal impact and will give us a clear picture of where we are headed. The graph should be set up from February 2007 to February 2008 and February 2008 to February 2009.
I know this might take some time but if you guys can do that I think it will help all the readers on your blog.
Thank you,
Ryan
I would put money on Edmonton Ex-Pat’s prediction.
That is a solid prediction.
I would use a starter home in Britnell as an example. During the peak a shoebox in that new development sold for atleast $415,000 and prices have dropped below $330,000 as it stands now. I expect the price of a home similar like that to bottom out at $285,000 and then rise at the level of inflation.
Peaks and valleys always come back in line with the normal price rise. That one and a half year rocket to the moon wasn’t sustainable even if oil was still $150 a barrel. Now that the whole world is in a deep recession and shows no signs of recovery it’s a lock that prices are dropping further.
Why would you draw HORIZONTAL lines?
Expat’s prediction is not unlike what some of the models my collegues and I have developed indicate as well. Though there are too many variables to be precise, I don’t think it would be surprising to see prices craddle themselve to a bottom as low as maybe $275 or so by this summer or next.
Lower inventory this year (relative to the last two years) will slow the rate of decrease. We already see this year the rate of inventory increase is about half what it was last year over the first two months.
The inevitable return of buyers waiting on the sidelines will eventually stabilize prices and lead to modest gains. WHEN this happens is hard to say, but there will be a subtle tipping point at some point.
Hopefully when this happens gains remain limited to near inflationary levels so we don’t end up in the same mess again 10 or 15 years from now.
Jason,
Do you have a website or is there a way I can view some of these models that you and your colleagues have developed?
I’d be interested in viewing them.
Julian
Robert – I never said prices would recover to where they were. I said you would see real estate back in play once the price of oil recovered, but probably not to the extent of 2006/2007.
As far as your statement that the world is in a deep recession – you may want to reconsider your statement seeing how China’s growth has pulled back from 10% last year to 6% this year so far. China outstrips the U.S. in auto sales, the burgeoning middle class who have been saving for generations now want luxury items and the need for infrastructure in China has huge demand for commodities.
Most people aren’t aware of how the Chinese do business (or have done up to now). They drove copper prices from $0.50/lb to $4/lb a couple of years ago because they bought 2 BILLION pounds of it at once. They haven’t bought on the open market since. Instead – they bought a copper mine in Peru and cut out the middleman.
If you think that the balance of world economics lies with the U.S. – you’re missing the boat entirely Robert. More than 1 billion people have a thirst for commodities and you’re living in one of the richest resource sectors in the world. You do the math.
Mike,
You speak as if you’re an economic guru. Everyone knows that China’s “numbers” are to be taken with a grain of salt. In the late 90′s they grossly overstated GDP. My gut tells me they are doing this all over again. How can they have a close to 7% GDP growth yet lose millions jobs. As they say if it sounds fishy…
http://www.ft.com/cms/s/0/19c25aea-f0f5-11dd-8790-0000779fd2ac.html
Bob Truman just posted stats for Edmonton SFH resales for February. Prices dropped 2% since January.
He does not use the same figures as EREB, but EREB will still show 1-1,5% lower than last month. SFH sales are looking actually good while condo resales are in the gutter…
http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html
We don’t really make details public but if you have any specific questions I’d be happy to tell you what I can.
I suggest doing a year over year graph for SFH and condos separately for these items. DOM, average selling price, inventory, and new construction starts. This will help us ignore the seasonal impact and will give us a clear picture of where we are headed.