Buyers Take Advantage of Lower Prices in Edmonton

The REALTORS® Association of Edmonton released the November sales stats for Edmonton earlier today saying:

“Softening prices, a dip in interest rates, increasing sales nationally and excess local inventory all contributed to a month-over-month sales bump,” said Larry Westergard, president of the REALTORS® Association of Edmonton. “Housing affordability in Edmonton is lower than the national average and economic growth in Alberta is expected to exceed other parts of the country...All the indicators suggest that an increase in real estate sales is right around the corner.”

The residential median sale price stayed the same as October at $308,000 while the average increased slightly from $317k to $$319,479 in November. The average price of a single family detached home fell to $362,657, which was half a percent lower in than October and 2.5% lower than last November. Condo prices also took one of the biggest drops this year with the average price down 2% to $229,603 month-over-month and just under 3% year-over-year. An increase in other property types, such as duplexes and townhomes accounted for the overall increase.

The absorption rate dropped from 7.15 to 6.23 in November (the absorption rate tells us how many months it would take to sell the current inventory at the current rate of sales). There has been much debate about the absorption rate on this blog in the past, which is why I stopped posting it, but I decided to bring it back this month. The debate stemmed around what rate is considered a buyer's market, and what is considered a seller's market so I kept it as an approximate range this time around. Hopefully this will allow us to focus on the trend rather than definitions - the absorption rate has been generally increasing since May of 2009 and now appears to be on the decline.

Inventory is also dropping, which is quite normal for this time of year. The inventory is still above the normal range and will likely start at a higher point in 2011 than it did in 2010. The average inventory so far this year is 7666 and well ahead of last year, it is second only to 2008 when it was over 9000 listings (I will include the annual average in our yearly report that will go out to subscribers in the new year).

New listings in November were right in the normal range, and once again shows that the higher than normal inventory is due more to lower sales than higher listings.

All in all it is an interesting time in Edmonton and it makes it extremely hard to predict what is coming. We actually attended a stats course at the board this morning and got some great ideas for new ways to look at the market that we will share with you soon.