It seemed like March was off to fairly slow start for sales in Edmonton, but things definitely picked up as the month went on; there were 1625* residential MLS® sales in the Greater Edmonton Area in March according to numbers released by the REALTORS® Association of Edmonton today. That number is up from 1605 last March and 1318 last month.
Looking at the chart you'll see sales for the past 4 years have been extremely consistent in the first 3 months of the year. April seems to be a pivotal month with sales in Edmonton peaking in April 2010 while 2009 saw sales unexpectedly sky rocket and peak in June. We are definitely not expecting a path similar to 2009 sales, but we do expect a to see a small bump in sales aound the time the majority of rate guarantees at 2.99% expire. On a side note some of those 2.99% rates are not such a good deal especially if you MUST renew with that lender 5 years from now and you can't negotiate the rate. More on that later.
Edmonton real estate sales
The average residential sale price in Edmonton was was $335,187 in March, up from $327,725 last year and $329,911 last month. The median sale price in Edmonton was $320,500 in March up from $311,000 last year and $317,00 last month. So far the gradual increase is following a typical pattern seasonal pattern. April will tell us how much confidence there is in the market.
Edmonton real estate prices
The end of month inventory of homes for sale in Edmonton fell right in line with the last two years and sits at 6,851:
Edmonton real estate inventory
The number of new listings shot up to 1625 in March - higher than last year but much lower than 2010 and 2008:
Edmonton real estate listings
*We adjust the residential sales total for the current month to account for unreported sales. Every month 6% of sales on average are not reported to the Association in time for the monthly report. The following month the numbers are updated to reflect the total sales during the previous month. That means the current month always looks worse compared to previous months. So far our adjusted numbers have been far closer to the actual numbers than those reported by the Association each month (so far on average I am off by 4 sales whereas the association is under reporting by 73 sales on average each month).
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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If there are very few changes in the Edmonton market this spring, this means stability. Perhaps no spring rush but this could be indicative that prices will remain very normal, with little seasonal variables such as prices down a bit in winter and up a bit in summer. Resale prices need to stay put for a few years then rise at inflation levels. There should be no bubble. Any thought?
Our bubble has already deflated almost 14%…most bubbly talk is about Van and T.
High debt levels could still be a problem everywhere if interest rates rise or borrowing rules change drastically.
Still a 15% chance of a nationwide meltdown in my opinion…..
15%?
Why not 20%?
I was wrong when I predicted a further 10% or more in resale price drop in Edmonton. I thought so in the past 30 months. Now we see the blue print for normalcy unless interest rates go up drastically in the next 24 months.
I realize that folks must start to pay cash and to live within their means.
If mortgage rates start going up – which should only occur by mid-2014, then demand will/could sink.
15%?
Why not 50%?
Why not 75%?
Come on folks. Try to think without your biased hats on.
High job creation, high in-migration, population growth, low house prices relative to the rest of Canada…
Why would house prices drop from here?
We are going up folks. Slowly and surely.
Those of you still hoping (praying?) for a drop are going to be disappointed once again.
Don’t be so condescending GM, this is just a discussion.
Debt is a wildcard and none of us know how much or how little there really is.
I don’t rule out a major correction for this reason alone.
Just for fun I put my personal situation in to the TD mortgage affordability calculator.
All I can say is wow. If even a small percentage are maxing out it could be a problem for us all.
It said we could afford a 1.4 million dollar house with 100 000k down.
That blows my mind to a caution of at least the 15% chance debt will causea nasty correction….even here.
A 1.4 million dollar house would require a down payment of $280,000 if you’re going to meet the 20% requirement.
No bank would give you that kind of a mortgage with a $100,000 down payment.
Just as a personal comment, it would be nice if the EREB could update their website to look a little more like the CREB. They have up to date stats on a daily basis and a much nicer looking website. The only time the EREB updates is at the end of the month. It would be nice if Edmonton didn’t always look like the ugly step sister to Calgary.
GM, as a principal residence and only mortgage they would happily do 5% down.
Not talking about skipping cmhc or a second property…
Oh. I thought they were doing away with the 5% down allowances. I guess I got it wrong.
But they’re doing away with the 0% down allowances, right?
One more year of earnings and houses keeping their respective trajectories and we will be at the same price/earnings ratio we had in 2005. Which means Edmonton will have successfully pulled off the ‘soft landing’. Yay us!
So no harm no foul, except for those who have paid thousands more in interest than they would have otherwise paid had prices simply followed wages all along.
The way I see it, in the US at least, is this:
If the economy actually recovers, then there will be inflation. At least some amount of inflation.
If the economy sinks again or doesn’t recover, then money printing will be called on to save the day once again. This has to result in inflation some time.
So either way, inflation will come and lift house prices up. Maybe not rapidly, but they will rise eventually.
Comments?
Facts are facts.
Home prices shot up way too fast, shortage of supply or not. I remain a bit baffled that Edmonton resale prices only went down 12% from the peak almost 5 years ago. A bit perplexed that priced leveled down in the past 2 years, albeit seasonably adjusted.
Again, facts are facts and speak for themselves: as prices have stayed the course, without hikes, perhaps we can expect normalcy and stability which will certainly bring interest in Edmonton.
Zero down mortgages are gone technically but CIBC still offers cash back versions so it is still going on. Right now 5% is the minimum. The recent history of minimums changes is a roller coaster of policy by the Harper government.
Houses in my opinion will appreciate along with wage inflation only as that is the real ability of people to pay.
Right now a great deal of affordability is being helped by cheap easy credit.
Was it not the Cretien government that increased allowable mortgages to 35 or 40 years? And then rolled them back again?
No. Flaherty. 2006.
“Houses in my opinion will appreciate along with wage inflation only as that is the real ability of people to pay.”
That, I agree. However, there is one thing you need to keep in mind. As already shown in the B.R.I.C. countries, you don’t need the entire population’s income to go up to trigger a real estate bull market. As long as a certain fraction of the population have the money, the price will go up. With the billions of dollars printed in both the US and Canada, the money will eventually flow into house buying families. It could be 10,000,000 families; but it could also be 10,000 families. The result is the same, full recovery of American real estate and a new boom/bubble.
Pretty damn sure the ride out and back again has been under the Cons…
I will double check but I think Flaherty has enacted all the changes we are referring to.
Good discussion this week!
link to calgarysun.com
Great graphs and analysis.