Inventory continued its climb in Edmonton in June, reaching the second highest level for June on record. Last month we thought we were close to the peak of inventory, but we didn’t know sales would slow as much as they did this month. The REALTORS® Association of Edmonton released the June sales stats today calling the market "normal."
“External influences pulled sales activity into the first four months of the year which reduced the demand in May and June. Overall there were 680 less residential sales in the first half of the year as compared to 2009,” said Larry Westergard, president of the REALTORS® Association of Edmonton. “Consumers still seem interested in getting into the housing market or moving up but seem to be resting after a confusing period of uncertainty and change in the conditions that surround a property purchase.”
The number of new listings slowed substantially, almost back to normal levels:
So the jump in inventory is mostly due to low sales. Based on the sales reported each month, I was surprised to see that so far this year we are only 680 sales behind the same period last year. The numbers I have recorded from the monthly stats show we are 1141 sales behind last year which is a large discrepancy in my books. How can this be?
The association modified the way they report the stats at the beginning of this year in order to be more accurate. In the past, once the monthly numbers were reported they were final. The problem with this was that many sales are reported to the association after the end of the month (REALTORS have two business days to report a sale), so the final number was not a true representation of the market.
This year the association is updating the numbers as they go, so last month they reported 1682 sales for May and the reports now show 1799 sales, a discrepancy of 117 sales. Over the first six months of the year this has adds up to 520 sales. In the past, any late sales not included in one month’s report were added on to the next month’s report. In other words, since I am using the officially reported numbers on my chart, I actually don’t have 520 sales accounted for so far this year.
The issue with the new system as I see it, is that although it is more accurate, we are not comparing apples to apples. Based on the numbers so far this year, this month we will likely actually see somewhere around 1640 sales as opposed to the 1539 we are reporting right now. What’s not fair is comparing this month’s reported sales of 1539 to last month’s adjusted sales of 1799 (reported sales were 1682).
The other issue is that we also compare the current month’s reported sales to previous year’s sales. So earlier this year we were actually ahead of 2008 numbers, when I was reporting record low sales. Suggestions on how to deal with this are welcome. On the chart below I’ve plotted the adjusted sales in green, and the reported sales in red:
As for prices, we saw the average sale price dip in June from $340k in May to $335,937 but are still ahead of last June ($328k), the median sale price went from $321,500 to $315,000.
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