Here is our update on the Edmonton real estate market. (Previous week’s numbers are in brackets). For the past 7 days:
New listings: 492 (455, 529, 475)
# Sales: 276 (228, 218, 204)
Ratio: 56% (50%, 41%, 43%)
# Price changes: 390 (363, 369, 353)
# Expired/Off Market Listings: 221 (226, 204, 420)
Net loss/gain in listings this week: -5 (1, 107, -149)
Active listings for single family homes: 3395 (3374, 3329, 3244)
Active listings for condos: 2232 (2209, 2217, 2166)
We had to go to extreme lengths to get this update online today…sorry it’s late. Sales have picked up a bit, must’ve been the articles on our blog this week about buying (just kidding). Seriously though, we haven’t seen that many sales in a week since mid-May.
The REALTORS® Association of Edmonton is reporting 1015 sales so far this month (below average). The average residential sale price sits at $330k (down $2k from last week), single family homes at $371k (down quite a bit from last month and about the same as last week) and condos at $245k (down slightly from last month and the same as last week).
Have a great Indy weekend!
Hmmmmm.
Resales seem steady.
Prices still down somewhat.
Any negative repercussions since:
a) 19 April
b) interest rates hike
However, sales to listing ratio steady at +/- 50% since the height of 80%
Probably a bunch of hucksters “advising” people that they’d better buy now, before the rate hike.
(cause hey, don’t worry about what rates are 5 years from now when you’ll have to renew, and your outstanding balance is 95% of what it is today).
LOCATION, LOCATION, LOCATION.
Buyers’d think location first and then price trend. 20~30% downward, needs more reasons instead of inventory/sales only.
I know the following is pretty much a repost from a comment I made earlier. However, I really am looking for people to suggest factors that I am missing (especially people who think prices will remain steady or rise) because I would like to track them.
I think it is telling if you look at the historical trends for each of the following factors. Each are availaible online and for free, but take some time to dig out.
Price of Oil (only because it is central to the Edmonton economy)
Price of Oil futures
Unemployment
Actual Size of the Labour Fource
Immigration Trends
House Price/Income Ratios
Total Household Debt
Interest Rates
Mortgage Rules for Lending
Housing Inventory
Housing Starts and Building Permits(i.e., future housing inventory)
Rental vacancy rates
Market Sentiment
Of all the factors listed above, only Interest Rates seem to be exerting upward preassure on prices compared to five years ago. To me, market sentiment appears to be evenly split bulls/bears/flatliners. All of the other factors seem to be exerting preassure downwards.
This list is just off the top of my head. Please point out any that I may have missed.
Look like you are a real professor. This detailed academic research needs some people to take time input some information. I try have some.
Price of Oil futures — very stable, see nymex.com
Immigration Trends — balanced between in&out
House Price/Income Ratios — 3.0 (averagePrice/houseHoldIncome), 3.5 (SFHprice/household).
Interest Rates — variable rate increasing, fix rate no change
Rental vacancy rates — have seen some news, 4, 5, 6, 8,; not sure which one correct!
Believe or not, ones could ask realtors, currently increasing buyers’ pool will make the market strongly upward.
Hey, facts are facts, 625 sales so far for July aren’t bad.
Aren’t great either but…
This decreasing trend, needs 8~10 years to get 20~30%. Even detroit has not been lasting that long time yet. Detroit has moved out about 40% population to get 50%+ RE price down. In that period, almost all senior executive officers in industries have changed. Edm’s house boom was directly impact from the oil sand investment arround 2005. If these money become real garbage, lots oil companies who decided put money here will have earthquack since they made wrong decision. Don’t forget AB has absorbed billion$. This money has been with people’s income already. 10 years ago, a senior engineer retired with just +-80K$ final salary. Now, this number is just for a university degree (engineering) holder with 3~5 years of experience. On the lower side, how many employers can/could only provide bottom hour salary to hire a labour worker now?
Another special in Edm., downtown area has lots (>1000 people??? not very sure, but quite lot) contract workers, electrician, etc. living under a bed (NOT one bedroom, it’s just a bed) shelter. Their families are still in other provinces due to their contract status. But their hour rate is between 45~85$, much higher than most of us in this blog. These high income “poor” people will gradually become locals when they have relative long (e.g. >2 years) experience here. Due to the economic reason, in 2009, some had returned their home provinces. But still lots of people in there. Lets see downtown areas in other cities. There are all low income people, even lots illegal immigrates in US majors.
I used to be a downturn-trend-person. But from Sara’s survey, plus current sale number, price should be in upward, not downward. 20~30% downward people if can provide some “micor-economic” information to support your opinion, that would be great. Simply supply/demand/sale number would be too weak to support “20~30%” prediction.
Some price decrease will be only happened in some no-good neighberhoods. If you want to buy in Windsor park, buy now. You can try negotiate some dollars off from their asking. don’t expect any big price down, especially don’t waite for the price down in these good areas. If you don’t know the prices are reasonable or not, go hire some expereinced agents. If not satisfied with the agent, change one.
Excuse me,but aren’t Edmonton home prices down $82,000 or 18% since 2007, I seem to recall that single family homes reached a peak of $451,000 during 2007,is the further 20% price discount based on 2007 prices or the depressed 2010 prices,thanks
Finally that someone is emphasizing this fact! My own townhouse has dropped from 2007 peak of $350-$360k (I bought it for $315), to $275 now, and this price has been sitting since then. It endured no recovery in 2009!, as MANY other neighborhoods in Edmonton didn’t. It’s almost 20% down, isn’t it? Counting on another 20% is unlikely in my opinion (would be good buying opportunity though), as most of the media info we were getting recently was about two overheated markets, Vancouver and Toronto, labeled “Canadian” bubble. Hey, markets are local in nature, aren’t they?
BTW, I am closing on new duplex in Windermere in September
But…………………………
What if i have to move back to E-Town?
I’m not gonna get that 2006 price again…….
So if I have to relocate there I have to make sure that i will be there for, like, 10 years. right?
That way if that $400K home I buy tomorrow which may be worth like $325K in 2 years should be back at $400K by 2020, right?
What’s wrong with 10 years of FREE RENT?
You are joking right?
If I put a minimal downpayment (5%) on that 400K house I am going to pay 2200 a month and about 125,000 in interest prior to getting my 400,000 back (in your example) and will have lost 20% of 400K to inflation (though in fairness if I rent inflation will drive rent up too, so if the average today is 1300 I’ll be paying 1600 or so by them).
Now let’s suppose I rented for 1300 dollars for those 10 years and ivested my downpayment money and the difference between rent and mortage in something that yields 6% (like say Tata’s latest debt issue or something similiarly relatively safe) I’d have nearly $200,000 in the bank after 10 years.
So with the mortgage in 10 years I’d still owe 280,000 (or have 120,000 equity), renting I’d have $200,000.
Now your numbers could be wrong and Edmonton could see another boom by then, but if your numbers were correct I would rent. Plus I didn’t even consider things like property taxes and home maintenace which renters don’t pay (property taxes will probably add up t0 at least 35K over that time).
You didn’t consider tax at all! No tax is paid on the capital growth of your home. Tax at your marginal rate will be paid on any investment you hold and that appreciate. Makes your arguement a little weaker.
Edmonton Expat
Can you verify if prices will drop an additional 20% from here,I am not privy to any historical information,thanks.
Be sure to put the lower prices this month in the context of what we saw in March this year, a 10% increase. Sure we’re down 3.5% since March, but we’re still up 6% from February and about 3% from last July.
Also, in regards to where we stand since the peak, average price is down about 9% and price per square foot is down about 15%. But most of that happened the latter half of ’07 and ’08, however, and we’ve generally been on an uptrend in both measures of price since the beginning of ’09… up 9% and 10% respectively since the bottom. Prices at the bottom (beginning ’09) were down 16% and 23% respectively. Not that a direct comparison to the 80′s is credible, but for what it’s worth prices dropped about 20% back then; today’s retracement is in the same neighborhood I think.
It’s also worth noting that the absorption rate over 2009 was down to between 2 and 4 months, numbers consistent with price increase and that is indeed what we saw. This year we started off in the 3′s and since sales have declined the last few months we’re now up in the 4 to 6 range. According to my own study, 4 to 6 is indicative of generally flat prices. I think that’s basically what we’ve seen over most of this year.
I’m not trying to sound like a bull here, but I’ve yet to hear a convincing argument that prices have another 20-30% to fall, especially when the past two years seemed to have formed a pretty clear trough. I won’t deny the possibility of a double dip recovery, or stagnant prices for a while, but 20-30% seems a little exaggerated.
Susan
Your using EREB current numbers and Bob Trumans Edmonton which only include Edmonton, St Albert, Sherwood Park, Spruce Grove, Stony Plain. You are comparing Apples and Oranges.
Using EREB numbers. http://www.ereb.com/pdf/QuarterlyStats.pdf
Highest EREB average SFH average price $424,400 May 2007.
Current EREB aveage SFH, as per this comment, $371,000.
Works out to a 12.5% drop from the peak.
Using Bob Trumans numbers. http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html
Highest Edmonton (BT) SFH average price $451,596 May 2007.
Current Edmonton (BT) SFH average price $396,005 .July 14.
Works out to a 12.3% drop from the peak.
Hope this helps.
Calgary:
Worker exodus from city sees vacancy rates rise
Inner city hit hardest
http://www.calgaryherald.com/business/Worker+exodus+from+city+sees+vacancy+rates+rise/3318203/story.html
Some 17,000 dwellings sit empty — including apartments, condos, homes and duplexes — according to the 2010 civic census.
For the first time since 1992, more people moved out of the city than arrived here. That’s helped push Calgary’s overall vacancy rate to almost four per cent, up from just over three per cent in 2009.
In some inner-city neighbourhoods, more than 10 per cent of dwellings are unoccupied, including Sunalta and Bankview, which both lost several hundred residents between this April and last April, the census says.
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Okanagan real estate market feeling the strain
http://canadabubble.com/bubble-article-list/1158-okanagan-real-estate-market-feeling-the-strain.html
The real estate boom in the Okanagan has gone bust. Developers in the area have been slashing prices on new housing developments and prices are now sharply lower from just a couple of years ago.
Advertised prices on many new developments are down between 20 and 30 per cent, six-figure savings in some cases. And if you really hunt, developer Matthew Hay says deeper discounts can be had.
^I would agree, a 20-30% reduction would only be possible if we see a cataclysmic drop in oil prices enough to cease investment in the O&G sector, which would impact provincial revenues requiring massive budget cut backs and layoffs, coupled with an over abundance of housing supply (both new and resale). Could this happen, sure, anything is possible, but the probability of this happening, extremely minimal.
Put it this way, given how balanced the market seems to be from an inventory and price perspective, it’s a good time to be looking.
I’ve been thinking about the polls last week on the blog and I think the most alarming number is that 39% of readers think real estate will be down or flat over the next year and a half (and apparently lots until 2014)
We have no baseline to compare to, or to understand how blog readers (poll responders) compare to the regular population but that seems like a large percentage of people that don’t have confidence in the market. Much more then I thought.
Also just because it was dropped some since 2007 doesn’t mean it can’t drop more. “don’t try to catch a falling knife” comes to mind.
I’m not sure how all the land development works but I think builders and large land owners could be the cause of driving prices down for the next 5 years, Also with the anthony henday bringing the city closer together which could really grow north edmonton over the next little while (where i see the most potential for housing price drops).
With Jayman you can build a brand new home for 307k (+landscaping +add-ons) right now in North Edmonton and you know they can go lower if buying slows.
I may highlight one stakeholders point of view more so in one post; but I will also be sure to address the other party’s concerns in another post. Hopefully this seems fair. Thanks for reading by the way, and your comments.
@steven – one of the reasons why were are seeing lower prices for new homes is directly related to the type of housing product that is being built. The product that is moving/selling is the smaller product ~ +/-1800sf singles w/ attached or detached garages, semi-detached and row housing. Simply put, housing sizes are smaller and therefore prices are lower. The ‘move-up’ product (priced between $475-650k) are selling at a much slower pace as there is less demand for this type of product (primarily due to price). I believe we’ll continue to see this trend for quite some time as a result of the shift in demographics that is currently happening.
The Boomers who are just starting to retire will be downsizing their homes. Many of them own ‘move-up’ houses that are priced around $475-650k. The next demographic wave that are entering their home buying years are in their early 20′s and simply cannot afford these move up prices. This cohort are driving the demand for smaller housing product. The number of households behind the Boomers (Generation X) are much smaller in numbers and simply won’t be able to fill the void. So what do you think will happen over the next number of years as more Boomers decide to sell their ‘move-up’ homes? Something to ponder.
My prediction is that smaller entry-level/moderately priced homes will be in demand for the foreseeable future in our major markets. There will be good ‘deals’ in move up product.