Edmonton Real Estate Market Update
Here is our update on the Edmonton real estate market. (Previous week’s numbers are in brackets). For the past 7 days:
New listings: 486 (483, 351, 450)
# Sales: 231 (256, 184, 202)
Ratio: 48% (53%, 52%, 45%)
# Price changes: 192 (186, 146, 163)
# Expired/Off Market Listings: 102 (216, 70, 119)
Net loss/gain in listings this week: 153 (11, 97, 129)
Active single family home listings: 2371 (2279, 2244, 2207)
Active condo listings: 1525 (1430, 1422, 1388)
Homes 4-week running average: $377k ($374k, $371k, $368k)
Condos 4-week running average: $234k ($228k, $225k, $219k)
Reading The Edmonton Journal on my ipad this morning there were no fewer than 16 articles about our warming economy and expected labour shortages. I don't know if all those articles were in the print edition, but there is certainly a feeling that we are going to buck the international trend for the next while. There is always a lag between job growth and real estate market growth, so it may take awhile to see any affects on our real estate market. In addition, numbers released yesterday by CMHC show home builders in the greater Edmonton area are quite busy adding new inventory which will further increase housing supply.
Edmonton real estate listings and sales
Edmonton real estate prices
Have a great weekend!
About Sara MacLennan
Sara MacLennan is the Director of Marketing at Liv Real Estate and a licensed Real Estate Associate. The bulk of Sara’s experience and wealth of expertise lies in on-line technology and marketing both for agents and consumers. Sara is the former National Director for Interactive Marketing for Coldwell Banker Canada where she was responsible for an extensive training program traveling to offices across the country training agents and brokers on marketing and technology. Find Sara on Twitter @edmontonblogger.
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I’ve bearish on real estate in a lot of parts of the country, but it should be pretty obvious now that Alberta is its own economy, with unemployment below 5%, and the average house very affordable for the average income.
Yes, low interest rates help, but low interest rates aren’t going up anytime soon, especially as the real estate meltdown in BC and Toronto picks up speed.
Plus, in a city like Edmonton, Buying is MUCH cheaper than renting…I think Alberta real estate, and Edmonton in particular, will decouple strongly from the trend in other parts of the country.
Location, location, location.
The new builds should really keep resale prices in check. The builders can do it cheap or cheaper than a few years ago and still make money.
I also personally know six people holding real estate they want to get rid of because they feel their house is worth more than the offers they are getting. Lots of shadow inventory in this city.
No housing crash, no boom, same old same old as far add the eye can see. If interest rates rise a couple percent all bets are off.
Inspector this isnt the case for the builders I’m working with. Many of their material, development and labour costs are actually significantly higher than a couple of years ago. However I certainly hope there is no boom. slow and steady would be my preference.
Does anyone know a typical profit margin on a house?
Depends on the builder and a large number of factors including their business model. Some actually dont make much of a profit after carrying costs but if i was to ballpark an estimare it would be 4-12 percent more or less.
I looked into building duplex’s after doing several fix and flips and just with that I was doing 4 to 10% profit. That why I looked into building duplex because when you build you should be doing at least 12% but even that is low. You should be looking at profiting at least $90 000 to $130 000
You are wrong. Try to get some quotes from trades and you’ll see the numbers have gone up. I have a family friend who is private builder and he tells me the numbers. Framers are charging 9-10/sqf whereas you could frame 7/sqf a couple of years ago. Same with other numbers.
The avg prices are now about 4% higher than last year this time. I won’t be surprised if we have a y/y gain of 10+%.
BTW, today is March 9, 2012, Sara
omg this pregnancy brain is no joke. Thanks for letting me know about the date I’ve changed it.
Not talking labor costs directly but being able to make money big picture. The big builders can lower their gross margin to move units.
Are overall costs lower or higher than during the boom? That is the number I am interested in. Many who bought at the peak are just finishing their five year terms. Time for them to weigh bailing versus renewing.
I should have been more clear I guess on the time frame. Is cost to buy land and build at record levels? Honest question.
Land costs are lower generally. Development costs especially in newer areas are up. Labour costs are roughly the same. Some trades are lower and some are higher from 2007.
Do housing starts include redevelopment, or only new development?
I ask because while new developments increase the quantity of housing supply, redevelopments should improve quantity and quality.
When the cost of the average home goes up it is good for the seller, and bad for the buyer, but when the quality of the average home goes up, thats good news for everyone.
Its too bad there’s no easy way to chart quality. (Square footage? Proximity to downtown? net density?)
Aside, I don’t think its correct to say that it is much cheaper to buy than to rent. In some cases it might be true, but not by a huge margin, and not for all people.
That is a very good question… I honestly don’t know the answer and couldn’t find anything on the CMHC web site to clarify. I assume it only includes new developments but I’m not sure. The assumption that redevelopment improves quality is not necessarily true, I’ve seen some pretty bare bones multi-plexes replace nice old bungalows.
As for charting quality… I guess comparing price/square foot could accomplish that but quality is really in the eye of the beholder.
I would guess that starts would have to include redevelopment as they also require permits. I’m not sure if it factors in demolished units. Thanks for looking it up anyway.
It was a pretty general statement that redevelopment improves quality, and I’d maintain that it is mostly true. I think it’s a pretty foolish developer who throws away quality for quantity, as he has an upper limit for quantity, but can improve his margin through quality.
Price/square foot would be a good place to start, but I think any really useful chart on quality would be pretty complex, and it would have to account for location, which is by far the biggest factor in prices.
Just to add some examples, I think Centenial Park created a definite improvement in the quality of units in the City. Same with the newer, current and proposed developments in the Downtown and Airport areas. Any of the major redevs have been pretty positive for the housing stock in the City.
“Plus, in a city like Edmonton, Buying is MUCH cheaper than renting…”
Ha! You kidding! My wife and I are renting a condo for a fraction of the cost of owning it! When we moved here we were looking at buying in the same building. When we were done factoring in property tax and condo fees, it was a no brainer.
Don’t get me wrong, owning your own home can be great (owned a place out east), but would never buy a condo in this city. The ceiling in our spare bedroom has water damage from the crappy pipes they used in this place! What a joke!
So going back to the phase chart you posted last year, would you say we are in Phase 1. Sales are up year over year as of February 2012 and average prices are up from March of last year.
Banks are starting another mortgage war. I would have to think that anyone looking to buy and have some stability, a 3.99% ten year mortgage would look very attractive. Of course they have some stipulations around that mortgage so would probably only work for people buying a home and planning to stay in it for that many years. However, there is always the 2.99%, five year mortgage which is also very attractive.
Yes we are definitely in phase 1, we’ve actually been there since September:
Sales Avg. Price
Sep +20.72% +2.65%
Oct +16.25% +0.81%
Nov +1.16% +0.52%
Dec +11.99% +2.57%
Jan +16.83% +2.34%
Feb +13.08% +5.46%
This post from last year explains the sales cycle chart: link to edmontonrealestateblog.com
We have to remember that variable mortgages have been available with much lower rates than these for years. All the while prices have been down or stagnant.
With money being close to free, all the in migration and nothing but sunshine on the Edmonton economic front (at least according to much of the media) you would think the market would be on fire this spring.
Somehow I don’t think it will be….
Inspector, I suggest you seek out some people who are currently looking to buy. You’ll find they are getting frustrated because houses are selling very fast right now.
I’m seeing this especially in Calgary right now. Edmonton is not far behind.
The sales and price statistics will tell the story for me, not anecdotes.
Well if the sales and price statistics will tell you the story then a seven week 24000.00 price increase for homes running average should give you an idea.
Ya Tonto, but dont get out the pom poms yet. Let’s see if it is not just seasonal and sustained.
Hope the median is following.
Great website here. I currently own 17 properties and a real estate investor.
All my propertied are rented, except for 2 under construction.
This month I had one property go vacant, I showed it to about 8 poeple and everyone was deciding whether to buy or rent.
I had several people offer to purchase. I was tempted, but in the end rented out to a nice professional couple. They had given up on their search.
This is just one story, but I feel strongly on that good properties are limited, inventory is ACTUALLY much smaller than posted. People told me repeatedly how very few good properties are for sale. I would say 50% of the homes listed are either in very poor condition or unrealistic sellers testing the market.
Take a look at the listings on MLS, its quite pathetic how many bad properties that are available. People are picky and rightfully so at these prices.
Oh I also had 2 agents approach me asking if I was interested in listing because they had people interested in units in my building. There are none for sale.
17prop , can you give us an example of what you consider a good property at the right price?
Hi bubu,
I firmly believe that you should buy base on fundamentals, not emotions.
If you like a house, make sure to ask yourself this: “what would it rent for?”
If the mortgage payments PLUS carrying costs including tax, condo fees AND your interest lost on your deposit is less than what the market rent is, its probably a good buy at that time.
Do the math and you’ll find that no detached home in Vancouver comes close to this. In Edmonton there are still opportunities. I’ll do a search of some examples and post what I think is reasonable.
Went to look at a few places this weekend and 2 out of 3 in one area were rented out already and they weren’t interested in showing it any more. Makes it kinda frustrating that their listed in the MLS for sale but not selling now, makes me wonder how many places are listed like that.
I guess that is a good question, questions for Sara and Sheldon. If a property is sold, or they are no longer interested in selling it so refusing to show it but it is still on MLS, are there any rules around how long a property can be on MLS after it is sold, or if listed on MLS and not allowing it to be shown, how long it can remain on there.
I know of a few properties in my area that have sold signs on them for at least a week and are still on MLS. Let’s not forget about all the pending units as well, that are still on there. Not a huge number, but if it happens in enough areas, it really skus the available inventory.
More RE agent tricks, I imagine. Anything to get another client.
I saw one agent just last week in Calgary changed his listing to PRICE REDUCED!!!
I knew what it was selling for before the change. It turns out he reduced the price by $100. Just trying to get his listing noticed I guess.
Yes there are rules about this. The listing brokerage has 2 business days from the time all conditions are removed to mark a property sold. Failure to do so results in fines. Of course the Association has to be made aware of the fact that a home has sold and hasn’t been reported, which becomes an issue when you have a “mere posting” and there was no listing or buying agent involved in the sale. If a home can’t be shown for a certain length of time, the listing brokerage has to withdraw the listing. Pending sales do not have to be reported, it is up to the seller whether or not they want the home marked pending.
I had an agent put a flyer in my mailbox claiming he had clients frustrated and ready to buy in our area just last year.
Sensing a rat I called him up and invited him to come have a look. He came over…..needless to say the clients were fictional. Even looked down and to the left while saying they had just bought in a nearby area but he would love to list our house for us.
If it smells like rat….
If the clients were so desparate to buy in your area, why didn’t they knock on your door themselves and save the commission?
If things are heating up how close are we to the prak pricing in March:april of 2007? Would you say we are within 10 percent
I can’t speak for the buyers, but we have a few rental properites. We were currently looking for tenants in a new construction 3 bed/2.5 bath double garage townhouse and we have been overwhelmed by interest. We stopped showing it to individuals and had an open house, because there was so much interest. We had people sending us completed applications without seeing the property.
6 months ago we only showed it 3 times and only had 1 couple fill out an application for an identical property, same location, same rent.
YEG would you mind sharing the value of the property and the rental income? That is super valuable information….
Yes, The property value is currently around 277,000 and we’ve been renting it for $1500.00 (No Utilities included) – New Community in SE Edmonton.
My properties are city assessed at 345,000.00. They have up and down suites. They rent for 2000.00 or a little more in some cases.
YEG,,
Is that with 25% down and a mortgage?
Thanks for sharing
The townhouse was purchase with 20% down and a mortgage, we recieved a decend purchase price because we were one of the first to buy in a new project, so prices have increase a fair bit in a short time (Aprox. $15,000 in 6 months). Most builders discount the first units and steadily increase prices as the project draws closer to completion.
Based on my calc, at $277,000 that’s borderline carrying. You should be looking at $1700, so your renters are getting a good deal at $1500, which is why you’re getting such great response.
You did manage to to gain $15K, which I think is very reasonable for a new construction 3 bed/2.5 bath double garage townhouse. Congrats. In this case, both the renter and investor wins.
Toronto is getting crazier then Van now, issue is the money is coming in from out of country as well, guess as long as the wealthy want to keep coming to Canada they will keep spending the big bucks.
Check this out, bungalow sold 421K over asking price!
link to theglobeandmail.com