Strange things are happening in Alberta… real estate sales and prices are on the rise in October. This is uncharacteristic for our marketplace, as we typically see the market slow down in the fall.
Calgary’s luxury home sales have set a record this year, surpassing even the boom in 2007. We have seen an increase in luxury sales in Edmonton this year, but certainly haven’t set any records. So far this year there have been 213 luxury sales in Edmonton, compared to 169 in the first 10 months of last year and 253 in 2007. So what’s going on?
Bill Bhamra, one of the agents at our office says his buyer clients “are realizing the number of listings coming on the market will start to decrease over fall and winter and want to buy while there is still lots to choose from.” In addition, some of his clients “don’t want to wait till next spring because they feel the listings that come on the market in the spring are usually at a higher price. Even with more inventory in the spring, the buyers have access to fewer properties based on their budget.”
Tracy Vipond, another one of our agents says a few of her clients wanted to take advantage of cash back mortgages, which became extinct on Oct. 31.
Lastly, another one of our agents Bev Hasinoff, says there is definitely a sense of urgency from her buyer clients right now. They see a lot of over priced crap out there, and that makes the decent stuff look very attractive. She’s been in a couple of multiple offer situations this fall. The rental inventory is quite low and rents are on the rise, which encourages renters and investors to consider buying. Many of her clients are getting help from their families or taking money out of RRSPs in order to get into their own home. In addition, the spec home inventory under $400k from builders is currently quite low, and some builders can’t keep up with demand at the moment.
Edmonton home sales
1457* homes sold through the MLS system in Edmonton in October, up from 1265 last October and 1438 last month. When you look at the sales compared to the prediction I made at the beginning of the year, it really seems like October just made up for a slow September. Perhaps it’s as simple as having three more weekdays in October than in September.
Edmonton home sales prediction
The average residential sale price was $324,924 in October, up from $320 last October and $323k last month. The median sale price was $315,000, up from $313k last year and equal to last month.
Edmonton home prices
The inventory of homes on the market dropped to 6,406 in October from 6,956 in September – it is still well below the inventory of over 7000 listings last October.
Edmonton real estate listings
The number of new listings were right in line with previous Octobers:
New 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 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 27 sales whereas the association is under reporting by 111 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.
Client Testimonial for Nathan Mol 
Client Testimonial for Travis Dochuk
Client Testimonial for Beverley Hasinoff
Client Testimonial for Beverley Hasinoff
Client Testimonial for Richard Widynowski
Client Testimonial for Bill Bhamra
Client Testimonial for Mira Wannous
Client Testimonial for Beverley Hasinoff
Client Testimonial for Richard Widynowski
Client Testimonial for Justin Tazi
Client Testimonial for Sheldon Johnston
Client Testimonial for Bill Bhamra
Client Testimonial for Tracy Vipond
Client Testimonial for Justin Tazi
Client Testimonial for Nathan Mol 
Client Testimonial for Bill Bhamra
what is considered a luxury home?
Top10% of the market, which in Edmonton is approximately $750,000 and up.
Usually five million dollars and up or anything above 10,000 square feet.
Although I haven’t had any clients who have been trying to obtain cash-back mortgages I would agree strongly both with Bill and Bev.. although there are more properties available in the spring, the sellers and usually asking higher prices and negotiating tighter.
I’ve also noticed a significant number of the decent properties that are not selling are being rented, and therefor coming off the market.
There are still good deals to be found in the areas where I mostly work though, particularly Downtown and Oliver where there is roughly 5 months worth of inventory and in the last 30 days the last 30 days the Sales Price to List Price Ratio has been 94%.
Compare that to the South-east Central area encompassing Ritchie / Bonnie Doon / Ottewell / Capilano where the LP/SP Ratio has been 96% on average and there is less than 3 months of inventory. The tight inventory in this area should help sellers in their negotiations depending on the price, type, and condition of property.
The university area and the southwest seemed to fall in the middle with about 4 months of inventory available for sale.
For Bill’s every reasoning, like list price is higher in the spring and thus people want to buy in the fall blah blah, it’s applicable to every year. So, it’s logical, but it’s not an answer to the question. It doesn’t explain why we have this trend in 2012, but not in 2011.
For Tracy’s reasoning regarding cash back mortgages, I don’t know what is she talking about. Which bank sets the deadline? I have seen banks (especially CIBC) offering cash back mortgages 4 years ago. And they do that periodically well into the future.
The only credible explaination is the link about net population growth.
In addition, I have two observations that may be of value to you:
1) Square footages per person are increasing over the years. The population growth may be at 2%. But if we consider a 2% living area increase for every person per year, that will drive the total demand for new construction by 4%.
2) Most high end residential are in the form of new construction. The $750k+ listings recorded by the MLS office are very likely ones driven by sellers when their brand new $1.5M house is ready for move in. In the southwest, a lot of new home buyers in Windermere come from Riverbend.
Cash back mortgages are now history Canada wide as of October 31st this year.
Does this have anything to do with the future direction of real estate prices?
link to finance.alberta.ca
Absolutely!
You need more houses (buy or rent) to house these people. This only increases the demand for both (rentals as well as purchases); net effect is a push for both.
Perhaps it is as simple as there being many more jobs available in Alberta than in the rest of the country and thus people are moving here.
Stop making this more complicated than it needs to be.
Who’s making anything complicated?