Here 
is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:
New listings: 448 (483, 536, 516)
# Sales: 421 (441, 359, 377)
Ratio: 94% (91%, 68%, 73%)
# Price changes: 203 (233, 246, 207)
# Expired Listings: 69 (102, 112, 204)
# Withdrawn/terminated/etc. listings: 34 (46, 102, 29, 21)
Net loss/gain in listings this week: -76 (-60, 36, -86)
Active listings for single family homes: 2255 (2264, 2320, 2326)
Active listings for condos: 1908 (1934, 1969, 1935)
Wow the market is hot out there right now! Multiple offers all over the place… I've been expecting a slow down for a few weeks now and with the sales to new listings ratio at 94% it is hard to say things are slowing down. I still do expect that it will be Alberta's highways that are busy next week with vacationers, not the real estate market (but I have been wrong before!):
So far this month there have been 2194 residential sales reported by the REALTORS® Association of Edmonton. That is already more sales than we've seen in a full month of June in at least 10 years except for 2007 when there were 2203 sales which means this should be a record June for sales.
The average residential sale price currently sits at $327k, single family homes $370k (both down slightly for the past two weeks) and condos at $246k (up slightly for the past two weeks).
What can we say? There has definitely been a mood shift – from a buyers market to sellers market, from no confidence to lots of confidence. We talked a lot about people sitting on the fence last year, it must have been a really big fence.
While the market has changed, so has our little company. Sarah MacDonald has joined our company as our Client Services Manager, and Justin Tazi has come on board as our newest REALTOR®. Justin has been a REALTOR for over 5 years and we look forward to bringing additional members to our team. Welcome aboard Justin and Sarah! We know these changes will allow us to better serve the needs of our clients and we plan to continue to grow in the months and years ahead. If you're interested in starting a career in real estate, or growing your career with an innovative, successful brokerage contact us today.
Happy weekend!
What can I say…?
You can read everything here !
http://www.edmontonjournal.com/Business/Mortgage+defaults+soar/1723557/story.html
But the numbers in that report are nt that bad when you actually read it, its just a headline grabber – disaster the sky is falling etc etc yawn yawn …. its bad, but frankly having been through a few recessions in another land this is really pretty minor stuff (so far..). From that report
“Lenders began foreclosure proceedings against 1,571 Edmonton area homeowners in the 11 months ended February 2009, up from 1,013 in the previous 12 months, according to the most recent statistics available through Alberta Justice.”
So 500 or 600 more than last year, and the delinquency rate is 0.54% err this is vaguely bad, but hardly disaster, tumbleweeds going down whyte ave news… this isnt turning into a ghost town.
“The U. S. housing market has been hit with several times more foreclosures than Alberta is experiencing. The latest data suggests more than one in 12 U. S. mortgage holders is in arrears, compared to roughly one in 200 in Alberta.”
In other words its really bad in the US (sure glad I’m not there … Detroit cant be much fun at the moment) and we have a minor touch of their disease because we are close by. Those headline writers should be less dramatic. I’m bored with the disaster stuff, with interest rates so low I’ve never been so well off …. if this is what you guys call a recession then hey bring it on!
Is it really all about first time buyers & 3% mortgages?… Or add to that prices went down 22% from the peak?
Any thought?
About a month ago new listings were coming in at 10-15% below existing listings for comparable properties. That hasn’t been happening the last couple of weeks. Personally, I’d use the price changes as an indicator of seller resolve. Assuming most of the price changes are still down, a fall off in the number would indicate that sellers are willing to wait for the market to come to them.
I think it is about the 3% mortgages, early this month there was a huge backlog of approvals which indicated to me sales would be fairly high so this was completely predictable. The numbers aren’t telling me that first time buyers are driveing alot of the activity, as if there were a rash of first time buyers we’d see inventory fall off a bit more, but it’s moving up or down in the 1-22%range. Though the new house sales numbers could tell a different story if they are high (as many of the resulting resale listings would be in the MLS).
I do think the cheap money is dangerous in the long term, a look south shows us the mess we could be creating the 3% mortgages, the floating 2.2% mortgages are even more dangerous.
I don’t agree that it is simply 3% mortgages BUT it is a contributing factor. Mortgages are low, prices have come off their peaks by 20% AND now we are starting to hear that the economy may have hit its bottom and is recovering. It is natural that people look at those factors combined and think they may miss out on an opportunity if the economy recovers and prices go back up to their peak. Whether that scenario comes to fruition is anyones guess but I would bet that those people buying right now have come to their conclusion. They may or may not be right. Hopefully they like their new house and can afford it, then the timing of the recovery is less important.
The US tracks data on mortgage applications (not sure if Canada does as well), and of course the number of mortgage applications correlates to the number of sales in the resale. A chart of the mortgage appllcation index can be found here:
http://www.bloomberg.com/apps/quote?ticker=MBAVBASC%3AIND
It shows a rise or decrease of rates of 1% will increase or decrease the index by 33%-50%. So if you assumed an increase in Canada by one percent would have the same impact we’d be looking at sales numbers on par or lower then last year. I’ll disclaim this with saying the data would be more relevant if graphed against general season trends in the US, but I’ll save that for another time. Point being sure some people are buying because they aren’t impacted by the recession or are seeing value (just as people were last year) but what’s driving the increased activity is no doubt the rates. Without them I’m guessing we’d see 2008 or less numbers.
I agree this isn’t a huge number, and the main reason we are seeing this increase is because prices are down…while before 2007 houses could generally be sold and cover the outstanding mortgage, in the past couple of years houses have generally depreciated faster then equity has been gained through mortgage payments meaning more people face foreclosure as they can’t simply sell and pay the mortgage off.