Are those massive gusts of wind we’ve been feeling in Edmonton yesterday and today the air blowing out of the Vancouver real estate market? As we’ve been expecting for quite some time, sales in Vancouver dropped significantly (over 30%) in September on a year over year basis. Meanwhile in the Greater Edmonton Area, sales also dropped – there were 1344* sales in September, compared to 1442 last year and 1533 last month.
Edmonton MLS® Sales
September’s sales weren’t that far off the prediction we made at the beginning of the year, but they are trending down a bit faster than we had anticipated.
Edmonton sales prediction
The average residential sale price dropped below last year’s average for the first time this year. It’s actually the lowest September average we’ve seen in five years at $323,388 compared to $333k last year and $334k last month. The median price was $315k in September compared to $321,500 last year and $318,500 last month.
Average MLS® sale price
Inventory is trending downwards as expected and is lower than it has been for the past two years:
MLS® Inventory
September is the most unpredictable month of the year when it comes to the real estate market in Edmonton. A lot of people say the mortgage rule changes a few months ago are now being felt, but that doesn’t seem to be a significant factor with our clients.
*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 month. Our adjusted numbers are far closer to the actual numbers than those reported by the Association each month (so far on average I am under reporting by 22 sales whereas the association is under reporting by 106 sales 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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I think in time that the job market in Alberta will even things out, but right now it is fall going into winter plus the federal government has tightened the mortgage rules yet again this year. I do not think that any further tightening is necessary, 25 years seems quite normal to me for a maximum mortgage length. I think housing is overpriced anyway, and I say this even though I’ve owned my current condo for a couple of years now.
My birds are telling me tightening HELOC’s regulations is the next thing to come; from 80% (or 85%) down to something around 60% perhaps even making it more like a mortgage (instead of interest only payments).
That should dampen a lot of out of wack borrowing but I don’t expect that to affect buying/selling of houses.
“even making it more like a mortgage (instead of interest only payments)”
Will there a limit on the number of HLOC draws then? If not, this will be the most stupid suggestion in a while, since the home owner can simply draw out what’s been put in.
I don’t know the details really (or if they are decided on or not); I’m passing on what I’ve heard is being cooked in the pot right now.
Rumor of a rumor.
link to canadianmortgagetrends.com
link to fcac-acfc.gc.ca
The rules are being effective as of end of this month (some banks started applying this earlier).
there you go!!