Weekly Update, Jan. 17/14

EdmontonRealEstateMarketUpdate
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: 307 (321, 103, 83)
# Sales: 129 (116, 96, 84)
Ratio: 42% (36%, 93%, 101%)
# Price Changes: 88 (84, 35, 30)
# Expired/Off Market Listings: 125 (91, 414, 114)
Net loss/gain in listings this week: 53 (114, -407, -115)
Active single family home listings: 1658 (1614, 1513, 1712)
Active condo listings: 1030 (990, 967, 1121)
Homes 4-week running average: $424k ($426k, $418k, $409k)
Condos 4-week running average: $234k ($232k, $233k, $242k)

Well, I honestly thought we would see a dip in prices in the first few weeks of January, just like last year. I guess I was wrong. I still don't expect prices to stay this far ahead of last year, so perhaps things will come down to a more normal level in the next few weeks. Sales and listings are both below last year's levels so far this month, inventory is also very low. We are not going to see sales increase if there isn't more inventory for buyers to choose from.

EdmontonHomePrices
Edmonton Home Prices
ListingsandSales
Listings and Sales
SFDInventory
Single Family Home Inventory

Have a great weekend!

About 

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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38 Responses to “Weekly Update, Jan. 17/14”

  1. Karl HungusNo Gravatar 17. Jan, 2014 at 2:21 pm #

    low supply, high demand = higher prices

  2. BOSSNo Gravatar 17. Jan, 2014 at 2:48 pm #

    Wow, great start to 2014! :)

  3. DougNo Gravatar 17. Jan, 2014 at 3:10 pm #

    Do you think it is a buyers or a sellers market right now?

    • wsnNo Gravatar 17. Jan, 2014 at 3:25 pm #

      It’s balanced, tipping to a seller’s market by just a tiny little bit.

      • Sara MacLennanNo Gravatar 19. Jan, 2014 at 7:51 pm #

        That’s correct. I expect to see it tip to a seller’s market by March, but you never really know!

  4. MattNo Gravatar 17. Jan, 2014 at 3:54 pm #

    Very strong market at this point. Up 13% year over year, but last year at this time it was unusually weak. I stand by my prediction that 2014 will see a gain of 3%, led by mature neighbourhoods that will become increasingly attractive. Traffic is getting worse and worse for people living the southeast suburbs, with no improvement in sight. Some co-workers who work downtown now take 75 minutes to get home from work, for a trip that should take no more than 25 minutes. My advice is to buy as close to downtown as you can to see the most price appreciation in the next five years. It’s supply and demand; more people want to live close to where the action is downtown, while supply is stagnant. Demand is also increasing in the suburbs, but there is basically unlimited room for sprawl so supply will also be increasing, leading to stagnant prices.

    • wsnNo Gravatar 17. Jan, 2014 at 4:27 pm #

      With all that (relative) cheap land from the city airport, be VERY careful about investing in the downtown area. Especially ones over $300k, and/or monthly fee over $300. In the next few years, there will be tons of new condos in the airport area selling for far less and with far cheaper monthly fee (because it’s new).

    • Sara MacLennanNo Gravatar 19. Jan, 2014 at 7:55 pm #

      The only problem with that argument is that our workforce is not centred in downtown to the same degree as most cities. The daily commute goes in every direction in Edmonton. Sure, there is a good percentage that heads for downtown, but even more people in other directions for work in this city.

  5. JohnNo Gravatar 17. Jan, 2014 at 5:44 pm #

    Wsn,

    It seems like you feel the market is overpriced, but what to do. I have lots of wealthy friends and they all have lots of real estate. They never timed the market, just kept buying when they could instead of buying new cars or going on vacations.
    I have rarely seen renters get rich, because all you are doing is making your landlord rich. Prices will always go up if you take a 15 year timeframe. Rome wasn’t built in one day, so in life have to be stick to your goals if you want to be wealthy. Unless you have a crystal ball, and can time the market, need to be in the game.

    • wsnNo Gravatar 17. Jan, 2014 at 11:37 pm #

      It seems that you mis-read my comments. I said existing downtown apartments will face stiff competition. That’s very far from saying the market is overpriced.

      It’s like to say: Apple i-phone faces stiff competition. Smart phones are not over-priced. See how it works?

    • AndrewNo Gravatar 18. Jan, 2014 at 9:26 pm #

      Topical realtor BS .

  6. JohnNo Gravatar 17. Jan, 2014 at 5:50 pm #

    Not sure why anyone thinks the land at the airport is going to be cheap, defintely going to be priced at least $175,000+ a lot. Can’t see developers selling that land cheap.

  7. MattNo Gravatar 17. Jan, 2014 at 9:34 pm #

    A agree completely John, $175,000 for a standard lot at the airport land will probably be about right. Assuming $200 a square foot to build a house in the coming years, which is about average now, means the total cost to build a 1500 square foot house plus land will be $475,000. A 2,000 square foot house will cost about $575k in total to build. Add in a profit margin, and you’re looking at around $500k and 600k for a house on that land. Take a look at Griesbach prices, that will be about what the cost of housing will be. There will be nothing below $450k in my opinion.

  8. MattNo Gravatar 17. Jan, 2014 at 9:44 pm #

    Most people will decide to not live in the airport development due to the high costs, and instead will live in other downtown areas, boosting the prices for Calder, Boyle, etc. Who would decide to live in a $500,000 house on former airport land, when you can live pretty much in the same region of the city, with more mature trees, for $150k less? If we assume this then bumps the value of these other neighbourhoods up, then this creates a domino effect for other, better neighbourhoods. For example, Forest Heights, where the average is $430,000 current, will also increase so to be above the inner city neighbourhoods, so $550K average in five years is not unreasonable. Westmount would probably also be a big beneficiary.

    These are just some thoughts, but there is no way you can build and then sell a detached house on airport land for under $450,000 based on today’s construction costs, and still make money.

    • Sara MacLennanNo Gravatar 19. Jan, 2014 at 8:02 pm #

      I don’t think they plan on building many, if any detached homes on the airport lands (it’s hard to tell on the city web site right now). Anyway, what they are planning there is completely different from anything we’ve seen in Edmonton. The surrounding areas should see some improvement in value once the parks and other amenities are in place, as it will be cheaper to live in the surrounding areas than in Blatchford (at least at the beginning), and you’ll be close enough to take advantage of those amenities..

      link to edmonton.ca

  9. JohnNo Gravatar 17. Jan, 2014 at 10:20 pm #

    I think there will be substantial demand for people because of the convenience of the airport lands to downtown. The biggest factor is how the developers are going to develop that land, if anything close to Summerside, very desirable.
    If people are paying over $500,000 for a new house in Griesbach, then the airport lands should command over that price.
    After the arena is built, 6-7 new towers, Alberta Museum, approval for the largest tower in Western Canada, downtown association is saying over 2 billion dollar spinoff. With that much jobs coming, people living in downtown, tourists, how can the proximity of property values near downtown not go up higher than the average?
    Finally Edmonton has a mayor that understands if they want a world class city, then downtown is the only way to go, not the suburbs.
    What major city around the world doesn’t have most of the action in downtown. The property values that are the highest is near downtown and the university. If anyone can discredit this, I would like to here from them.

  10. wsnNo Gravatar 17. Jan, 2014 at 11:43 pm #

    Did you guys even read news? Most, if not all, of the airport land will be for apartments. That’s a couple thousand units at least.

    Of course the land will be cheap. Chances are that the city will price them similarly to the Station Pointe lands. Maybe a little bit higher. That’s $2M per acre. $3M tops. 2~3 acres per parcel. Try to find that kind of lot in downtown (even bad areas). You simple can’t find such large whole lots to have any significant benefit of scale.

    • Sara MacLennanNo Gravatar 19. Jan, 2014 at 8:04 pm #

      I believe the city is the developer for the airport lands, so the math will probably be very different than in other areas.

  11. MattNo Gravatar 18. Jan, 2014 at 8:22 am #

    WSN, I agree, I wouldn’t be buying a condo downtown. There are simply too many detached houses for the exact same price just north of downtown. Since condos are generally less desirable than houses and appreciate much more slowly, generally the only people are people who are priced out of the housing market, and I don’t think we’re there yet considering the number of houses under a $350k price point in and around the arena district in the inner city neighbourhoods. Couple that with, as you mentioned, supply coming online at he airport land, and these people will see little appreciation for their purchase.

  12. PlasmaNo Gravatar 18. Jan, 2014 at 1:06 pm #

    Most of you are talking just about downtown or close to downtown. Are there no other places in Edmonton to discuss about? Many people live in the southwest or south Edmonton too! Edmonton downtown is nowhere close to a real downtown of any major city.

  13. MattNo Gravatar 18. Jan, 2014 at 2:43 pm #

    I agree Plasma, for too long downtown has been neglected, which has created this situation where Edmonton doesn’t have a ‘real’ downtown. But now with Mandel and now Iveson investing almost all of Edmonton’s new development money into downtown, we have a chance to build a real downtown like Toronto or Vancouver, which is the stated goal of Edmonton’s government now.

    You’re right, a lot of people live in the southwest and south, but there are so many developments in those suburbs being built, and congestion is quite bad and only going to get worse. Politicians have pretty much started ignoring these congestion problems in favour of building downtown. Yes, the southwest needs more roads, but that’s so expensive and not even on the radar of the city right now. There is so much more potential right now to make money buying in and around downtown currently, much greater than buying in a new suburb, in my opinion.

    Also, if you have anything to contribute, feel free to steer the conversation in another direction.

  14. jimNo Gravatar 18. Jan, 2014 at 6:11 pm #

    cant imagine what life feels like living in concrete boxes. esp there is no park trails around. not everyone can survive on the mars for the same reason. simply dont understand those unless they are students pressurized daily by exams.

  15. a common guyNo Gravatar 19. Jan, 2014 at 2:07 am #

    What a lot of those advocating revitalization of downtown are missing is the demographic of Edmonton: many young families with young children. Real downtowns (like those in Toronto) are mostly filled with singles or young couples without children, or those super wealthy. You’ll have a hard time finding many people who are willing to live in downtown (or north of it) here in Edmonton, that’s one of the reasons why I think there is way too much talk about downtown and how great it will be; it simply won’t be. Safety is another reason (just see where most of the crimes happen).

  16. MattNo Gravatar 19. Jan, 2014 at 4:30 am #

    A common guy,

    The fact that housing values are surging in and around downtown according to the latest property tax assessments counters your argument that no one wants to buy/live there.

    Also, I’m guessing you’re living in the suburbs if you think the demographic of Edmonton is young families. It’s not. It’s mostly single 20 somethings who left their home province for better opportunities here. Yes, the suburbs are full of young families, but in and around downtown where all the people are/high density population is, it’s all young single people. Downtown will always be where single young people want to be since they’re leaving from cities like Toronto and Vancouver where DT is ground zero for fun, and they’re bringing that attitude with them, hence the explosion of new bars/clubs downtown.

    Also, if its not young people, who else is creating all of the demand of $350,000 – $500,000 condos that are being built? If there wasn’t any demand and people didn’t want to live downtown, as you’re implying, the developers would never have gotten financing. It’s expected that downtown will add enough condos and development for an additional 10,000 people going forward. As in Toronto, these won’t be young families buying (as the units are way too small), it will be mostly young people who want to be where the action is, and the affluent who can afford them. Then once these young people want to start a family, they will buy a bigger place (house) as close to downtown as they can afford, as happens in Toronto and Vancouver. Edmonton is changing, its attitude towards where to live is changing as well.

    And you’re completely ignoring crime patterns, and the fact that once the arena and all the related development gets built, the high crime areas now will be pushed MUCH further north, as the police presence around the arena will be very high.

  17. a common guyNo Gravatar 19. Jan, 2014 at 6:24 am #

    Tax assessment isn’t a reliable source of real value.
    Your prediction about the crime rate (in the future, not now) is simply a prediction. We’ll see how well this plan works out and how many people actually move there. There are for sure many condo’s being built in and around downtown but there are multiple times more being built outside that core…

  18. a common guyNo Gravatar 19. Jan, 2014 at 6:26 am #

    forgot to add: as for demographic being mostly singles in the 20′s coming to the city: you are wrong; just look up the census results.

  19. MattNo Gravatar 19. Jan, 2014 at 9:30 am #

    A common guy,

    So basically your argument is that downtown is crime filled and unpopular now ( I agree), so there is no way that it will ever improve? That’s just speculation. The government is spending a lot of their cash from future general revenues, and most of the MSI spending for the arena, and borrowing money to improve the downtown through more LRT in and around there to revitalize downtown. Billions upon billions of dollars. That would be quite the devastating outcome for Edmonton financially if they didn’t succeed.

    I’m not disagreeing that the suburbs are also growing, but downtown is so terrible right now, as I’ve said any gains will disproportionately improve the attractiveness of downtown.

    The current municipal administration has decided that downtown in the future, and the suburbs will received little money from now on. With new infill rules in mature neighbourhoods and ensuring the gridlock in the southwest is not eased and will only get worse, the suburbs, at least in the next five years or so, has more drawbacks than benefits due to this administrations policies.

    By all means, bet against this by buying the sprawling suburbs. But Kerry isn’t mayor, Iveson is, and he’s pro-revitalization/pro-downtown spending. I’m not saying he will succeed, but just know you’re taking a risk by financially by betting against him.

    • a common guyNo Gravatar 24. Jan, 2014 at 7:37 am #

      Matt,

      I liked the previous mayor but the biggest beef I had/have is this arena deal. That’s another topic. I didn’t say there is no improvement in downtown, read my earlier post again and I do agree that downtown needs more attention. However, I think there is too much hope/hype in how much improvement will be and how many people will want to move to live in downtown (i.e condos) or the small infills around it.
      We will see how much return will be in these billions that are being poured in for the downtown. For the record, I do have money invested in real estate but I’m not in a rush to buy things in downtown or around it.

  20. 123kidNo Gravatar 19. Jan, 2014 at 9:47 am #

    closer to the central business district the better in any urban metro centre that matters…. more land the better (as close to the CBD as possible) since man made materials simply degrade in price over time and age.

    regardless of who’s coming and going from the YEG corridor. what matters is the rate of house hold formation is rising. This rise is contributing to Alberta as a whole having the characteristics of an emergent economy, with growth rates in the ages 20-44 behind that of some areas in india and previous china.

    We have had the biggest migration in Canada history into Alberta, and YEG is experiencing some of this as projection forecasts in some areas of the city having had to be rejigged (due to the fantasitc growth rates seen in areas like Rutherford, Windermere, Summerside)

    Once the arena project gains traction. you all just wait.

    I expect the same things to happen in the CBD YEG as it happened in CBD Vancouver-Yale Town-False Creek (just a shame we did not get Expo (86)

  21. 123kidNo Gravatar 19. Jan, 2014 at 9:57 am #

    Where are all the naysayers who were predicting a crash (or more weakly, a decrease in prices) in YEG proper….

    They have either had their jaws shut tight with wire or have changed their tone as they grab on to the handles of the bandwagon rise up.

    There is simply no point arm chair quarterbacking and predicting which parts of the city will do better than others and providing micro analytic looks. .

    . simply put, near all of YEG is slated for good times, (especially for those sitting on lots of land south of the city and close to the CBD and the university – even wsn knows this).

    • EdNo Gravatar 24. Jan, 2014 at 3:59 am #

      “Where are all the naysayers…”

      I can’t speak for the others, but I have been on holiday for the last week.

      Good luck to all those blog dogs who will be trying to cash in on the rising property prices in 2014. Let us know how it goes. I have decided to defer my purchase for another year.

  22. HarboursnugNo Gravatar 19. Jan, 2014 at 10:46 pm #

    The safest thing to do with bubbles is avoid investing in them.

  23. wsnNo Gravatar 20. Jan, 2014 at 11:22 am #

    The safest thing is to place your chips before the bubble starts.

  24. GMNo Gravatar 20. Jan, 2014 at 5:57 pm #

    Gonna be an interesting spring.

    Wonder when the bidding wars will begin…

  25. RippedNo Gravatar 20. Jan, 2014 at 10:12 pm #

    The safest thing is to cash out before the bubble pops.

  26. 123kidNo Gravatar 22. Jan, 2014 at 3:31 pm #

    Why cash in when most of us are sitting at the YEG table with a full house with the river card coming down ….. same arguments re: the emergence of a YVR bubble 20 years ago, yet …. no burst even in light of the 2008 market crash and also USA sub prime mortgage fiasco.

    The text books that you read from in the 80s/90s re economics/finance/real estate… throw em out cause they are now mostly meaningless.

    Welcome to the era of money printing. and the more these houses inflate the better.

    • JNo Gravatar 23. Jan, 2014 at 5:16 pm #

      comparing to calgary’s market, edmonton is boring. could it is be an opportunity for the shining bulbs here?

  27. wsnNo Gravatar 22. Jan, 2014 at 3:48 pm #

    Why cash in?
    So that we can buy cheaper.