Here 
is our update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:
New listings: 500 (499, 453, 448)
# Sales: 365 (337, 329, 421)
Ratio: 73% (68%, 73%, 94%)
# Price changes: 174 (191, 189, 203)
# Expired Listings: 98 (93, 308, 69)
# Withdrawn/terminated/etc. listings: 41 (26, 32, 34)
Net loss/gain in listings this week: -4 (43, -216, -76)
Active listings for single family homes: 2208 (2178, 2150, 2255)
Active listings for condos: 1808 (1828, 1797, 1908)
The REALTORS® Association of Edmonton is reporting 1156 sales so far for this month for the greater Edmonton area which is a much higher pace than we've seen in previous July's. We could be on the road to another record month for sales. Looking at prices, the average residential sale price is sitting at $326k (slightly down from last week and last month), single family homes at $373k (down from last week but up from last month), and condos at $244k (up from last week but down from last month).
Happy weekend!
“The REALTORS® Association of Edmonton is reporting 1156 sales so far for this month for the greater Edmonton area which is a much higher pace than we’ve seen in previous July’s. We could be on the road to another record month for sales.”
But how that can be?
Garth Tuner on his blog has been saying for months now that real estate is dead…
Not the even mention the creeps over at that bubble blog who hate anything real estate.
P.S. Good sales stats again.
Hear that splat? It’s called a dead cat bounce…..
Guys like you, Mike have been boasting “splat” for two years now.
Get over it, buds.
What’s next to save you, and your flock, Mike?
Hyper inflation?
25% mortgage rates?
Edmonton Expat.
Good comments. And I also have to wonder. Would a dead cat really bounce? Would it make a difference if rigor mortis has set in? And how high would you expect a dead cat to bounce, and how does that relate to the real estate market exactly?
Where’s the bounce? All I see are strong sales and flat prices.
Quite right. Dead cats have nothing to do with it. Call it the Mark Carney Money Giveaway Bounce.
PFFFFT….PFFFFT….RAWR…SPLAT! Poor Kitty kitty. All you suckers that bought 35/0 down are done for when interest rates start moving North. Especially all the condo owners who have paid $150-200+/sq. ft.
This “record month” in housing sales for Edmonton is only due to the artificially low interest rates. There have been no changes in the U.S. economy, the global unwinding of financial markets or anything in this province to justify the record sales – except for the last few lemmings throwing themselves off the cliff to follow the herd to their untimely demise.
Don’t worry though – I’ll sit and wait patiently and in a few years, pick up a nice beachfront property for 1/3 of what some of you paid.
I’m thinking mike that you’ll be waiting a long, long time for beachfront property in Edmonton…this is the Edmonton Real Estate blog, wheat-front property maybe but last I checked no beaches in Edmonton, I might have some oceanfront I could sell you on the outskirts of Phoenix, AZ though…cheap, sixty percent off, call me quick!
The point that Mike is missing is that the recent real estate purchasers have bought in for five years. Their rate is fixed at the current low levels. If Mike can see a few years down the road he has excelptional vision and even he cannot tell what the economy will be like in five years. All consumers have to face the uncertainty of their own finances and the state of the economy half a decade down the road.
Buyers should do the right thing and buy now while rates are low and prices are stable (but inching up).
You’re my kinda man Keith! It doesn’t take a genius to figure out that a 3.5% rate is less than half of what nominal rates normally sit at. By ‘NORMALLY’ I mean in a historical context and not in just the last 5 years. Pull out your online mortgage calculator and figure out the monthly payment on a $400,000 home at 4%. Then recalculate it at 8%.
Housing prices don’t go up in perpetuity and interet rates don’t stay low forever. Everything has a historical value and the current housing prices are so far beyond it it’s absurd.
What I can tell you about the economy in half a decade is that we will be in a full swing commodities boom – that gold, silver and oil will be driving the economy – not housing, car sales & consumer goods. Of course by then all you sheep will be on the “Edmonton Oil Boom Blog” telling everyone why the price of oil and gold will keep going higher. At that point, I will have already moved on to the next spec play – leaving the sheep to their herd mentality.
Have another margarita, kick back and buy another condo. The good times are here to stay!
Mike, Mr. So Called Prophet, if you’re really in such command of impecable vision and intuition, why oh why are on ranting to no end on a blog populated with men much less than yourself? Sounds to me like you’re a farce and the best you can do is talk and hope that one day the sound of your own voice will incite in you the confidence to pick up your own balls an go make a play in the real world. Hot air is cheap man…
Wow – so instead of making a rational argument as to why RE prices at current levels are both justified and sustainable Duke, you instead use Plan B by hurling insults. I guess in your case you would be a man far less than myself.
My posting on here isn’t to insult or belittle, rather to bring discussion to the forum and a different viewpoint. Apparently anyone with a differing viewpoint is seen as an outsider and thus a threat. How pathetic.
Clearly your anger is directed towards me, but rather at the fact you’re one of the one’s who bought in May ’07 with a 0/35 mortgage.
Actually mike you do come on this board and insult people. You refer to people who buy zero down with a thirty-five year mortgage as “suckers”. Anyone who buys as a lemming. And you referenced Duke as pathetic and a man far less than yourself. But Duke is right on, you are a so-called-prophet…guys like you come around all the time and smart people learn to block out your shrill little angry voices, and he doesn’t sound particularly angry, just exasperated and how do you know for a fact Duke indeed purchased in “May ’07 with a 0 down 35 year mortgage”? I think I’d take that bet, say your next paycheque against mine. As for rational arguments…you have none. Real estate purchases do not fall into nice little good for everyone/bad for everyone-one-size-fits-no-one categories. Duke is right, you sound like someone who got shut out of the real estate market.
As for your arguments, they are absurd. What you are trying to say is that 6 years from now (as if you could predict 6 years out, and if you could you certainly would be far too wealthy to be wasting your time here) there will be a commodities boom…and Canada is a commodities exporting country, and Alberta exports a lot of oil, which means there will be a lot of money in Alberta but real estate prices will go down? If I were to connect your dots, I would actually suggest that if in fact commodities are booming in 6 years, Alberta will have many high paying jobs to offer people who move here. And that these people will be able to pay higher mortgages. Alberta economy continues to grow by leaps and bounds, even during this recession the population of Edmonton has swelled another 30000 people. Scarcity ultimately drives up prices of everything including real estate. Busts are usually the result of over supply not higher interest rates. But your predictive powers favour an increasing population in the Edmonton region six years from now, not a shrinking one and this recent freefall in real estate prices will not likely be forgotten that soon, so I would say supply will likely be constrained by both increasingly onerous building requirements and reduced availability of trades and money to build new especially if money is expensive to borrow.
As for 400k homes the average is around 373k, average usually means mean but can also be median. In either case this what this means is that very few homes actually sell for 400k, far fewer than half the homes. If 373 is the median then half the homes sold for less than this. If 373 is the mean. The effect of a few home sales over one million would greatly exaggerate the “average price” (by the way Sheldon or Sara is the average you post mean or median?). SO those people who have purchased a 400K home today are likely high earning individuals and in your scenario six years from now will likely continue to be high earning individuals. They should likely be able to make their payments then just like now especially given that they will have had 6 years or roughly 1/6 of a 35 year mortgage behind them.
As for picking up beach front in Edmonton for a 1/3 the price of today…if prices fall that much, that means that this city will have depopulated significantly, likely as a result of tremendous job losses. You would likely be in that category…people who have lost their jobs, so while the price would be very low if interest rates are high and unemployment is high you will not likely qualify for a mortgage on one of these properties with a spectacular view of the beach in Edmonton.
So anyway, I just realized, why am I arguing with you, you seem like your here to tell us how it is, proselytize us to your religion of doom and gloom. Later mike, I think I’ll take my own advice and shut out your shrill, angry voice. Stick to the basics and my own program. Incidentally, I bought a townhouse in December 06 and a house in July 07 and I’m 34 and semi-retired.
Semi retired……lol. You sound like a stud Ian. 34 and semi – retired. Mike comes here to put people down and you come here to pat yourself on the back. What a stud!
ps. You are going to lose big time on both of those properties.
It took me amd ny wife 6 years to save up a 15% downpayment on a home, in between we had 2 children and rented, i have no respect for zero down buyers, sorry but none.
Owning a house is a privalidge and not a right, taxpayers have subsidized the zero down buyers and the results will be disaterous.
I think things are getting a little off topic.
If you dont like the what other users are posting based on their personal experiences / results in real estate, then just ignore them.
The point of this blog is to debate using facts and figures, not critiquing other people’s anecdotes and resorting to name calling.
Sheldon and Sara put alot of thought into this blog, lets ensure it doesnt become another bubble blog. It wastes my time reading empty fluff (name calling) in the comments section.
I want to see numbers and facts.
MY POINT, Spence, wasn’t to pat myself on the back but to point out that even buying at the top of the market isn’t a guarantee for financial ruin. We are in good financial shape today and I expect that will continue. The finances were good then and have remained so. And in spite of falling in value those two properties have phenomenal cashflow, If I could call myself the day before I bought those properties I’d definately tell myself don’t do it, but I didn’t have a crystal ball then and I don’t have one now. On that point neither do you. P.S. Envy and anger don’t look good on anyone.
I don’t know why my views are so despised. The only people who should hate what I have to say are the ones caught in the hype as opposed to common sense.
As far as your comments Ian – while we will have a commodities boom, the increase in interest rates, in inflation (mainly due to printing presses running overtime and easy credit) and the cost of living in general will offset the “Alberta Advantage” and most people will be struggling to make ends meet. As for me, I don’t have a large mortgage – renegotiated a closed 5 year term at 3.5% and plan on having it paid off before the end of term. Why? Because I bought before the boom. I’m also fortunate that my job is recession proof.
Sara & Sheldon have a lot of followers on this site and while the information on here is excellent, its also historical data and from a historical standpoint current RE prices are more than double what they have been over the past 30+ years. Those who think that current RE prices are justified need to be well informed and I haven’t heard ONE SINGLE rational argument as to why current prices are both reasonable and sustainable. I have provided several arguments as to why they’re not – but NO ONE here has given a rational reason why they are. There is currently both an oversupply of units and increasing interest rates and yet the good times will last forever? I highly doubt it. Interest rates alone have gone from an average of 4.5% to 5.85% for a 5year term in less than 6 weeks and that doesnt alarm anyone? The current near doubling of bankruptcies in Alberta is just a drop in the bucket. How many Edmonton businesses have closed their doors in the first half of 2009? Finesse & House of Tools just to name two.
I wouldn’t wish a foreclosure on bankruptcy on anyone and I certainly hope I’m wrong, but for me the writing is on the wall – its time to pay the piper.
It’s not worth my breath pal… and barely is this sentence.
Congratulations! I think your plan to pay of your mortgage is excellent and I am glad your job is recession proof. 3.5% is an excellent rate for 5 years. And if you bought before the boom then it is easily attainable. The sooner you stop paying interest and are able to lay up cash for your future the brighter your future will be. It is surprising to see that we pick up on similar indicators but interpret them differently. Interest rates are at a historical low, so low that it isn’t possible they could go lower, they can only go up. But the question of how far they will go up is impossible to predict. I read a lot and the one thing that has always gotten me is that the best say predicting interest rates is like predicting the weather three months from now. It can’t be done, there are lots of theories like bond spreads and such, but the fact is they don’t work. If they are this low then will they go to the opposite end of the spectrum? Human psychology has this way of thinking patterns exist where they don’t. And while it seems reasonable to think that in a half a decade the interest and bonds landscape will resemble the mid-eighties because the rates are so low, that to balance out they must skyrocket. If they do, good for anyone, like yourself, who has a good amount of cash socked away by then. T-bills and government bonds will be all you will need to live extremely comfortably. But while that seems for lack of a better word “fair” (high interest rates following historically low interest rates) it isn’t rational. There really isn’t a reason they couldn’t rise to a historical mean somewhere around 7 or 8 percent and fall back down, or remain steady. Bottom line is I really don’t think it can be predicted. As for a scenario where Alberta would be experiencing a commodities boom, high interest rates, debasement of currency (due to non-stop printing of currency) inflation, likely hyperinflation if the BOC wouldn’t shut of the presses, and easy credit…it doesn’t really seem possible. High interest rates cause the opposite of inflation, and when too high can cause deflation. And high interest rates make credit difficult to obtain since the income requirements to cover payments become onerous reducing the number of people who can qualify to make the payments. As well the unregulated printing of money by a government usually occurs during times of tremendous political instability such as Germany in the interwar years or the kleptocracy of Mugabe’s Zimbabwe. So while I won’t say the scenario is impossible, I would say that for the above scenario to occur people are going to be worrying about a lot more than mortgages…I would suspect there would have to be something very dire and far more sinister going on.
As for why RE prices in Edm are sustainable and reasonable…
-Employment is extremely high in this region…even during the global downturn.
-Mtg qualification is based on downpayment, interest rates, income (ability to pay) and the ratio of debt payments to monthly income ratio, debt servicing.
-my guess is that when all that is factored in, the people buying the houses now, are qualifying for mortgages because they have low debt servicing ratios, because they have high incomes in stable jobs, and the interest rates are low, as well they likely have relatively low personal debt, and are putting down money on these mortgages.
-The banks are coming off of a very, very bad cycle of delinquency south of the border, and they aren’t giving money to unqualified buyers right now.
-Oversupply? Not like 2 years ago, not even close…there is currently a good selection of properties and people have time to be choosy, but there are also a lot of buyers, and I would hazard a guess to say none are the speculators that got roasted when the market went south. Look around, when was the last time you ran into anyone on the street who was talking about their amazing RE investment? It used to be everyone and their dog was dabbling in some kind of prebuild they bought with a couple grand down and weren’t gonna ever make a payment before the flipped it and make obscene cash. That animal is extinct now.
And a furniture business and a tool company with highly uncompetitive prices going under doesn’t indicate the pulse of the economy just that they weren’t run properly. (though I will miss House of tools hitachi 3 1/4 paper strip nail, perfectly filled my Koki, but unfortunately far more expensive per 1000 versus Totem). They just couldn’t compete even during the boom.
Finally, (I am too verbose…my apologies to anyone who has made it this far), finally, I’m going to pick apart your first para…”I don’t know why my views are so despised. The only people who should hate what I have to say are the ones caught in the hype as opposed to common sense.”
Try it this way, I completely disagree with your forecast for Alberta…I also disagree with you that anyone buying now is wrong…some possibly but not all. I don’t despise your view, I’m exasperated with the polarization of it. An RE purchase is as individual as every person doing it. Reasons are different, circumstances are different…
As well think about what your are saying, people who hate (disagree with) what you say are caught in the hype as opposed to common sense. What you are saying is that anyone who disagrees with you is an idiot-an individual lacking common sense and who has been bamboozled by hype. But really when was the last time you saw any mainstream media, hyping real estate…there is no hype. In the last ten years buyers have never been less influenced by hype.
So if RE is going to be cheap, cheap, cheap in 6 years…shouldn’t you be considering selling the place you’er in now, while the price is too high, renting for a few years and having cash to loan when interest rates are through the roof, and you can pick up homes for dimes on the dollar?
Well said, Gordon.
$0 down is wrong. As in self gratification provided by the government.
Aaahh consumer spending….Spending the money one has not.
Saving to put at least the minimum down on a home purchase makes it all that much sweeter.
I believe it is a feeling that many do not know.
Buying at $0 down was like buying a consumer product, weird, but sad.
I used to work in the insurance industry (I am a teacher now), and I can remember being able to offer some customers protection against interest rates going up. For the company I worked for, we could only offer it to ‘premium’ clients (ie. clients who have had three years of consecutive home insurance with no claims). It didn’t seem to be common knowledge among clients that this was included as part of their policy. It was about 5-6 years ago that I was in the industry, so I’m not sure if things have changed since then, but it is definitely worth checking into for individuals who are concerned about interest rates going up. You would probably have to contact your insurance company to find out if you qualify for this kind of coverage and what restrictions there are, if any. I know that companies like Canadian Direct Insurance and Meloche Monnex used to offer it, but I’m not too sure if they still have it. It might be really good way to protect yourself if interest rates do end up going up by a lot.
If in 5 years interest rates are much higher…so what. If need be, you then renegotiate your mortgage over the longest term possible — thus bringing your payment to an acceptable level once again. There are always ways without the need for panic some potential event which may or may not happen. You can always make larger payments when extra money shows up. Take the longest mortgage you can at the lowest rate available and be disciplined in making extra payments whenever possible. If you can’t make extra payments, atleast you will be building equity for the future. Housing prices will always ebb, so be patient and the tide will come in again. Remember, you’ll always be better off than renting for numerous reasons.