I was looking at the market stats today, and I noticed things seem to have slowed down a bit. We're almost half way through the month and sales of single family homes and condos are both less than half of the totals we reached for last month; we typically see increasing sales month over month until May or June each year.
So what's going on? It could be that I'm just looking at the stats too early, and can't make an accurate judgement on the month as a whole yet. The weekly sales are certainly ahead of last year, but as we saw on Friday the average price of single family homes declined.
I thought I'd take a look at absorption rates, and see how things are going in different price ranges. Overall, the absorption rate sites at 2.71, meaning there is less than three month's supply of listings in Edmonton (a.k.a. a seller's market). I did find some interesting nuggets, especially when I compared the numbers to what I found last time I checked absorption rates, in January.
Single Family Homes
First off, we are definitely in a seller's market for single family homes under $500,000, especially homes under $450,000 where we have less than 2 months supply of inventory. When we compare the current market with the snapshot I took in January (at the end of this post) there are some interesting differences. The biggest increases in active listings were under $300k and between $500k-$600k, while the biggest increase in sales was in the $350k-$400k range.
The biggest change in absorption rates were at the ends of the price ranges - both the high and low ends of the market saw large increases in the absorption rates, especially in the $600k-$750k range. We've noticed an increase in "move up" buyers at our brokerage and these stats support the theory that more people are selling homes in the starter price ranges and buying in the higher price ranges.
It looks like there could be a few too many mid-range condos out there, we've had a big jump in listings of condos between $200k-$250k since January. While sales are fairly strong in this price range, the absorption rate is higher than less expensive and more expensive condos. We saw large increases in the absorption rates of condos over $300k, with 3 months supply of condos between $300-$350k (a price range that has been a tougher sell in recent years). These stats support the theory that buyers priced out of the single family home market are looking to condos.
Even in the time I took to write this article, 27 single family home sales were reported in the MLS® database, making the sales projection for the month that much rosier. As always, we'll stay on top of it and let you know about anything that looks out of the ordinary.
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