Weekly Update on the Edmonton Real Estate Market

Here is our weekly update on the Edmonton real estate market. (Previous week's numbers are in brackets). For the past 7 days:

New listings: 566 (823, 869, 780)
# Sales: 293 (336, 272, 284)
Ratio: 52% (41%, 31%, 36%, 41%)
# Price changes: 493 (679,567, 550, 450)
# Expired Listings: 115 (181, 125, 408)
# Canceled/withdrawn/terminated listings: 39 (65, 65, 60, 39)
Net loss/gain in listings this week: 119 (241, 407, 28, 217)
Active listings for single family homes: 4088 (4063, 3888, 3694)
Active listings for condos: 2969 (2921, 2851, 2692)

Sheldon had some thoughts to share this week:

Positive changes this week for sure. The average residential selling price so far for this month is $335,683 which is up slightly from last week but still down from March, as is price per square foot. Inventory is at 10,737 and sales at 1,311. Projected out that should put us just over 1500 for the month. As you can see, new listings are definitely on the decline:

Comments

[Fred]

One week of lower listings that are still twice the number of sales does not turn the tide.

Thank you for posting the stats so early today.

Have a great weekend.

[Sara MacLennan]

I don't recall saying anything about "turning the tide". I assume you mean pricing though.

I do believe that we are coming to the peak of the inventory cycle. May, possibly as far out as June.

As for sales they have been very steady for the year. Albeit it much lower than previous years.

[Xyloph]

"Sales are lower than previous years."

This is only true if you compare to 2006 and 2007 which were complete anomalies in comparision to years prior. Year to date, sales this year are significantly higher than anything pre-2006. So compared to previous 'balanced' markets, sales in and of themselves are quite healthy. Inventory of course is another issue...

[ray]

We see a pattern for home re-sales in Edmonton since November.

1. Prices have leveled out.
2. Sales are at a steady number.
3. High inventory.
4. New home starts have bottomed out.

Recently, markets have been alarmists. High prices for oil, food, etc. Recession in the USA and Ontario.
"Help Wanted" signs everywhere in alberta. Layoffs galore in Ontario.
I see more stability for Edmonton.

[sea thing]

1.. prices are down $60,000 but holding..for now

2...sales are off 40% but holding..for now

3...inventories are..well never mind

4...new home starts have stopped..oht oh.. what about the job losses...never mind

Ontario is in a recession..maybe they will come west and fill all those min wage jobs

LOL folks..this is just a blog

[Xyloph]

"New home starts have stopped... what about job losses?"

March 2007
22,200 full time jobs created in Alberta, 7800 of which were in construction and 4500 in oil and gas.

http://www.finance.gov.ab.ca/aboutalberta/labour_force/2008/2008_03_developments.pdf

Here's an idea... let's base opinions on emotions and the uneducated buzz on the street rather than actual published statistic! Just a thought.

[sea thing]

Edmonton's a great city..the river valley is gorgeous...but under used...your summers are wonderful, you have many enjoyable summer festivals, i could go on and on.
sadly you have priced out the young families of your city. and that is your achilles heel, a correction is needed and its coming. spec-buyers will lose money,and lots of it, but that's a small price to pay, your young families are your greatest asset...remember that.

squid

i have never posted here to be disrespectful, some have used my squidly77 log-in, cant help that
any opinions i have are posted on the bubbleblog

[sea thing]

is it so harmful if .5% of your population lose money to benefit the other 99.5%, after all most of those people were just gambling, hoping to score easy money, while the rest of the people are working hard and just want a decent place to live, stop promoting the .5% and try representing the other 99.5% of the people, with in a year or two things will return to normal,and that's good for Edmonton, is it not

[ray]

squiddly77... why do you post here? No more traffic at the bubble blog?
No crash, so no traffic there?

[Gordon]

I would suggest that the number of sales will increase notably in the coming week. The last week's sales were surely atypical due to the snowstorms. While I did buy a house last weekend (I had to as I came from out-of-town for that purpose) I was often the only person at open houses at the height of the storm.

[Carllecat]

"is it so harmful if .5% of your population lose money to benefit the other 99.5%, after all most of those people were just gambling, hoping to score easy money, while the rest of the people are working hard and just want a decent place to live, stop promoting the .5% and try representing the other 99.5% of the people, with in a year or two things will return to normal,and that's good for Edmonton, is it not"

Posted by: sea thing | April 25, 2008 at 09:33 PM

I am not the one hoping for a crash... but I think the point in this message is representative of the situation. Many young families that were not in the oil/gas industry left Alberta because they knew they could make the same salary elsewhere... and they could afford a nice house for a lower price.

I do not mind investors to take over the market... but when young families are priced out of the market, it shows how bad the problem is getting.

Cheers!

[ray]

The families that left Alberta because of affordability or whatever went where? BC? Saskatchewan? As expensive.
Manitoba? Ontario? Good luck if they moved anywhere east of Winnipeg. Ontario's in recession, etc.
There are also folks here that laugh because we are down YOY... I say to those: get your heads fixed up.
You can't compare a crazy situation as last year, deem it normal and then compare to a normal year.

[Mel]

Hi!

We are one of those young family, it is really sad that we cannot get a home. We bring in 96k a year but have bad credit so we only can get 300k, so we etheir buy a townhouse or a deplux. Because house prices are way to high. And we have to pay really high mortgage payments. I know our bad credit is our own problem but come on even with good credit we would only get 350k. Anyway I just think it is time the price of a houses went down so more people can buy a home. This Market is really getting out of control.

Tks for listening

[Carllecat]

"The families that left Alberta because of affordability or whatever went where? BC? Saskatchewan? As expensive.
Manitoba? Ontario? Good luck if they moved anywhere east of Winnipeg. Ontario's in recession, etc.
There are also folks here that laugh because we are down YOY... I say to those: get your heads fixed up.
You can't compare a crazy situation as last year, deem it normal and then compare to a normal year."

Posted by: ray | April 26, 2008 at 08:21 AM

Ray I truly respect your opinion. However, even if there is a recession, the Maritimes, QC and Ontario still need School Teachers, Nurses and so on.... people that is a normal situation would have stayed here and that is what I think is unfortunate. Recession is not a big monster that chases everyone out of a province, but affordability is and that is my point.

Cheers!

[TWZ]

What ever happened to people having to get NOT what they wanted or something that didn't fit all their needs as their first house???!!! I remember my first home...NOT what I wanted, but I tolerated it because it got my foot into the door and I moved on after a few years. What's wrong with a duplex/townhouse as your first home, Mel? Don't put the cart before the horse.

[TWZ]

Carllecat...I think Winnepeg is going to be the next affordability shift. Last major city in Canada that's ridiculously cheap. When the jig is up in Saskatoon, it's going to be Winnepeg, but you have to know when pull the plug and get out.

Just finished taking conditions off of 4 bare acres in Winnepeg.

[Mel]

Hey TWZ!

We live in a townhouse renting, we have no yard for our kids and we are growing out of it really fast. I do not see the point in moving from a townhouse where we pay $845 rent to paying $2000-2600 to pay for a monthy payment. I know alot of my friends that can not even get 200k for a mortage. I just think that it is out of alot of people reach to get a house and rent is just going up and up. Why throw your money away like that.

Anyway just my thoughts.

[TWZ]

Can I make a suggestions than?

There's a lot of enrty level homes in a subdivison called "Sherwood" in the Westend. Large 50x150 lots and there's a large park there. It's where I got my first house in 1999 and they're under the 300's. Some of the homes are in need of a little repair, some a lot...but it's a decent area.

Do a search:

http://www.mls.ca/PropertySearch.aspx?AreaID=6649&MapURL=%3fAreaID%3d6398

[Mike]

Nicholas Armour - Consul General in Canada & Director of Trade & Investment - talking about impact of Oil Sands in Calgary where there are big investments by Shell & BP. Nick describes Canada as "Engergy Super Power" and seemed quite passionate about getting it especially as The North Sea Oil has peaked and production is dwindling.
The essence is, it is naïve to predict a real-estate price crash in a prosperous economy as ours especially that prosperity is of long term nature. I think that the price is taking a breather as flippers are out of the market, but this lull won’t last for long. Bear in mind, that most of the mega projects has not started yet, not sure what would happen when the capital starts to pour-in. Please see the updated sheet for the heartland projects as of March 2008. The sheet has also the expected work force, capital, etc.
http://tinyurl.com/4d3ac6

[Mike]

Forget to post the link for Nick's talk:
http://www.youtube.com/watch?v=lB6_BnmRkJA

[Ken]

Next weeks update could be very interesting..
This market could turn on a dime. A metropolitan area of 1M+ with full employment and a herd of buyers waiting for the buy signal.
That's the coffee shop talk.. The market is slow, so I'm going to wait for a good deal, etc. etc.
The herd mentality prevails in this day and age. We may be 60 grand off the peak, however if the pendulum swings and momentum shifts, there are plenty of credit worthy, employed, motivated buyers ready to pounce, which will pull prices up quickly.
The fact that the average in Saskatoon is 20G higher than Edmonton should be a clue that we're now undervalued.
Renters who are sitting in those 30 year old crappy townhouses with no garage, yard, and lousy soundproofing, will eventually go stir crazy and want to get out of there. Trust me, I've been there myself and very glad I bought when I did. For a second property, I closed a deal in January on one of those 300K 3bdrm/2.5bath/single garage duplexes through Greenborough homes as an investment to either flip or rent out. It will be ready in about 10 months..... it's a bit of a roll of the dice, but life is all about taking chances..

[Steve]

I could not agree with you more. I personally have 5 rental properties in the Edmonton area. I credit-check every tenant as well as employment income verification. I can tell you that 4 out of my 5 tenants are very qualified to buy their own homes within the 350-500K range. They all mentioned that they were waiting for the right opportunity to buy. I can also tell you that the rent I charge is not cheap and very comparable to mortgage payment.
BTW, I'm not a flipper, I'm a long term investment to secure my retirement 15 years down the road.

[ben]

It is not just about house prices.
One might want to wait for the banks to pass on the BoC decrease in interest rates. The prime rate might go down a bit more.
Then young families can also worry about inflation/food crisis/commodity crisis, and wait a bit for the storm to show which direction it is heading, before jumping in for a big mortgage.
Banks tend to tighten their landing standards: they are not as found of risk as they used to be.
Buyers' psychology is also a strong unpredictable element.
This is a "problem" with many parameters, and that's why it is so hard to predict the near future. We do not even know if the US is in recession, and if so, how deep the recession is. So I tend to take all simplistic bull/bear arguments with caution.

[Andrew]

Check out my summer house! I don't beleive I'm asking to much! What do you guys think?

Copy the link.

http://www.mls.ca/PropertyDetails.aspx?vd=&SearchURL=%3fPage%3d3%26Mode%3d0%26vs%3dResidential%26ret%3d300%26sts%3d0-0%26beds%3d0-0%26baths%3d0-0%26aid%3d1048%26MapURL%3d%253fAreaID%253d1048%26mp%3d10000000-0-0%26mrt%3d0-0-4%26trt%3d2%26of%3d1%26ps%3d10%26o%3dA&Mode=0&PropertyID=6691106

[Frnk]

Alberta housing is not affordable for new AB home owners.

I'm referring to new college graduates and those planning to move into AB now. I'm not referring to AB residents who bought their homes before 2005. For those who purchased before 2005, life is good. For long term AB home owners, short of winning the mega-lotto, things couldn't be better.

Regardless of inventory, price will keep on deflating to reflect the current reality of affordability crisis.

Speculators are having difficulty getting mortgages on additional property (a very good thing). The biggest source for artificial price inflation is now out of the market.

With the excessive taxes and levies on wages and high cost of living, new college graduate couples with children, earning 90K ( take home around 60K) in house hold income are barely squeaking by.

As for new immigrants and blue collar workers moving in from other provinces, they'll need to work 80+ hours a week in a hourly job just to be able to breathe in AB air.

Well paid "oil sands" workers make up a fraction of the AB work force. And they usually will buy one family house. So who is left to buy the rest of the inventory?