Edmonton Monthly Real Estate Stats Update

So as I mentioned last week when I published the monthly stats, a number of sales would not yet have been reported and the final numbers would look a little different. So, inventory didn't end up over 11,000 but I'm certain it will this month (final number 10,606) and there were actually 1823 sales. As far as the charts are concerned they look pretty much the same so I'm not going to put them up again.

There was an interesting article in the Journal today, they interview three real estate "experts" on their thoughts on the market...worth a read.

The Realtor's Association of Edmonton press release mentioned that a "typical sale" is completed at 97% of list price, but many sellers have lowered their asking price. It would be interesting to see what the average sale price is compared to the original asking price, but the database won't allow me to crunch the numbers that way.

Comments

[mal pais]

I asked this question in a previous thread. My family is looking for a move up home in the 600-750k range and we have been watching a variety of homes in this range in central west edmonton. We have noticed that almost none of the highend properties have sold recent months. This brought us to a question of average sale price (SFH) versus average list price of all current actives listings (SFH) including those that have not sold, is there any significant difference in these averages. If you could run these numbers that would be great as it would be painful to do using the public mls system.

***Why don't you ask your Realtor to do it? It's something I'll consider when I have time, but now definitely isn't that time.***

[bunny]

---Selling a typical home these days? Chances are you'll wait, and wait, for 52 days before selling.---

Actually, chances are that the listing will expire after 90 days and gets listed again as a new listing.

The DOM is of zero credibility until the DOM number counts from the very first day of listing after the previous successful sale.

[Fred]

Great point Bunny about DOM being of zero credibility. Our realtor had to show us a new listing in the area we been shopping, just last night. New on the market. Got there, recognized the house immeditly, we had looked at it last summer and had been relisted again just a few days earlier with another agency.

The listing showed 3 days on the market, but the seller has been listing/re-listing for almost a year now.

To be polite we went in and looked, the seller was there and we both recognized each other, which we both felt a little silly over :)

Take care.

***Fred, that's not being polite, that is just wasting everyone's time. Your time, the seller's time and the Realtor's time. I do definitely agree with your about the DOM stat though.***

[Sally]

We have started looking as well. Just wondering Fred, why did not you buy since you've been looking since last summer?

[Fred]

Hi Sally. Been looking for a little more then a year now. We have a house but have been wanting to move up for a while and started to get caught up in the hype last year. It was pretty well text book, buy now or you will never be able to afford it. The selection was poor and you had to act "right now", which for good or bad I do not function well under. So we started dealing with builders which was even a worse experience, to say they milked the situation and that there was no honor amoungst theives is not far from the mark (lies and broken promises one after the other). Very bad experiences, plus the fear of the garbage they were mass producing. I had had enough and gave it up in the summer, just as the market started to turn. Went on holidays and then started doing some renovations in my existing house. Plus stopped worying about it and went back to enjoying life (golfing etc.).

As prices continued to drop over the fall and winter, we started revisiting houses that we had looked at and hadn't sold. Wouldn't you know it most of them are still listed even today.

Now there is so much on the market and I think more to come. The mid to higher end homes we were looking at some of them have dropped 100 or 150 thousand dollars since last summer and I feel they have a lot more drop to go.

There is such a huge amount of properties and both buyers and seller know, although some still won't accept it, there is no hurry to buy, the potential for more substantial drops in price is more feasible then prices going up any significant amounts.

So really now that the panic and "must buy now" mentality is out of the market, the buyer is in total control. We are not going to see a year like 2007 again no matter what some say.

Oil is no longer a big factor in the Edmonton housing market, the number of new "high paying" jobs in Edmonton will not be significant. More people will have less money in their pockets as the cost of living continues to rise.

So I'm kicking tires, enjoying being in the driving seat and bidding my time. I can know wait for the right property at the right price, and its coming this year or next...

Lastly. Once the hype is gone and you can look at things with calm eyes you realize that prices do not reflect value. Most of the homes are just not worth the money being asked even yet. Really not worth the money.

Thank you for asking, please excuse the spelling mistakes.

Take care.

[mdm]

Fred,

I couldn't have written your post better if I had tried! We seem to be in a similar position, with similar objectives.

When it comes to the chance for our high-priced residential inventory to vanish quickly without significant further price reductions, here are my thoughts:

I work in an industry where 60K is the entry-level wage and salaries go up very quickly from there. Many of my colleagues earn 100K+, and often have two incomes at that level per family.

However, few of the forty-somethings would consider taking on a mortgage of more than 350K. They want money left over for their kids' education and the higher costs of a busy lifestyle.

If they are not overextended on a home-equity line of credit(and a surprising number are), they might consider trading up, once their mortgage is substantially paid off, but they would need someone to buy the house they leave behind.

That brings me to my twenty- and thirty-something colleagues. For many of them, the problem is different. Student loans, car loans, and general consumer debt often don't leave enough room for the amount of mortgage needed for an entry-level house.

As I said, these are people with excellent jobs. Most young buyers looking for a starter home probably have only "ok" jobs.

Until we bring prices within reach for them, everybody else will find it difficult to trade up.

[buff_butler]

"average sale price is compared to the original asking price, but the database won't allow me to crunch the numbers that way"

lol... i bet they could make a whole TV show out of just that

"HE PAYED HOW MUCH!!!" :P

[Sally]

Thank you Fred.
100-150K discount, wow. Do you know which parts of Edmonton we could find such good deals? This is our first time to buy a house and want to get the best deal ever. Thank you in advance.

[mdm]

Sally,

"good deals" are available all over town :)

Here are some of the active listings that have reduced their asking price the most. I am not giving the addresses, in case this violates the code of ethics.

35% from 3,188,000 to 1,985,000
32% from 989,000 to 669,900
30% from 828,900 to 579,900
28% from 889,000 to 639,000
26% from 880,000 to 649,970
24% from 849,900 to 649,900
24% from 1,850,000 to 1,415,000
and on and on.....

And then there are sellers with a sense of humor:
0.02% from 599,900 to 559,800
You wonder what they would consider a "low ball offer" :)

[Sally]

Thanks mdm, the examples you provided are all in the high end range. We are looking in the 300-330K range. I understand the code of ethics, but may be you could point me to the neighbourhood if you know of good areas where I could find a bargain within our range and I'll do the rest of research. We liked a house last week in NE, but it was gone when we called the realtor back to put an offer 3 days later. Thank you again in advance.

[Brent]

Sally,

The N.E. hey? Your not looking at those chicken coups down in the ravine off yellowhead are you. The ones that are all painted the same color white with the same trim color of green. The ones that the builders are now offering cash backs. The ones that have the beautiful view of refinery row one way and the busiest railway line in Alberta the other way. The ones that look like rows of self storage containers?

[Brent]

How the real estate market went from boom to buyers market in a blink of an eye. Todays Edmonton Journal

http://tinyurl.com/4bkukr

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[Ken]

It looks like Saskatoon has peaked now too. I was looking at their April stats and analysis going into May. Inventory is creeping up, DOM up, average price is down slightly, and fewer bidding wars. That sounds like the Edmonton market in May 2007.
The media has really put a negative spin on the April stats here in Edmonton, however prices still appear to be holding up well. My area of wellington has mostly SFD in the 300-350 range, which appear to be selling within a month of listing. The houses without a basement seem to be the ones sitting on the market or seeing a price drop. I'm sensing that 300K is becoming the psychological threshold for first time buyers. I've noticed that properties in that range are selling.

[Fred]

Not being polite?

You (not sure who made that comment), have an odd sense of whats being polite or not. We were at the door, the people were expecting us. Took about 5 minutes. Did not realize it was the same place until we were there. Would of just been like hanging up on someone without saying hello when you miss dial.

Odd comment.

***Fred, when there are asterixes it means Sheldon or I have edited your comment. As a Realtor I can tell you it is way better just to tell us you've already seen the house and are not interested. Even if you haven't seen the house, when you drive up and know you can't live there then tell us. We want to make the best of your time and our time, if we have more time to spend in a home you are interested in because we didn't look at one you are not interested in that's a very good thing. So tell us if you don't want to look at the house, we'll talk to the seller's agent and cancel. Avoid those awkward moments of recognition with the seller and spend time looking at homes you might actually consider buying. Do you think the seller enjoyed having a bunch of people trapse through their house who had already seen it? Do you think maybe you got their hopes up, having a second look - which is usually a good thing?

The process of looking at homes is a process of elimination, if you can eliminate one without even going in it, you've given yourself more time to find reasons to eliminate others. Sara.***

[mdm]

Sally,
unfortunately, I can only keep a close eye on the 590 houses above 600K, which is the range I would like to buy in. It's impossibble to stay on top of the other 3200 single-family homes currently on MLS. Otherwise, my very manual approach would prevent me from doing my day job.

I am not sure that you would find the same "deals" in the 300-330K price range, unless a house is very visibly overpriced or needs a lot of work.

I would assume that it is still a bit of a sellers market in the 300-350K, which apparently had the highest number of sales of any price range, in the first quarter.

[BAD]

-
When the R/E prices were increasing at a rapid rate rising eyebrows of some, I’ve heard that we are just catching up to the world prices. How does the same argument work now?

“More to the point, with property prices dropping across the board, many first-time buyers will wonder what the point is in buying is at all, when they can secure the same property next year for less. This is the fear for developers like Bovis, who are likely to scale back on building projects, just as Britain’s biggest housebuilder Persimmon said it would do two weeks ago. Persimmon said that sales had dropped 24% in the first four months of 2008, meaning it would have to stop opening new sites for construction.”

http://www.moneyweek.com/file/46650/bad-news-for-home-builders.html

Are we going to be catching “down” to the world prices?
And I think to myself, it's a frothy world.
-

[BAD]

-
It seems the “catching up (down)” to the world argument works both ways.

“Alberta's construction miracle sputtered in March as new construction values plunged 33 per cent, dragging national figures to their lowest total in more than a year, Statistics Canada said Tuesday.

"All of the weakness was concentrated in Alberta," said Paul Ferley, assistant chief economist with RBC Financial Group, a unit of the Royal Bank of Canada.”

http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=646aaacc-2f6f-47f1-a2f5-76c6b7ca0869
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[Brent]

bad,

I liked your comment and so true...
"When the R/E prices were increasing at a rapid rate rising eyebrows of some, I’ve heard that we are just catching up to the world prices. How does the same argument work now?"

...I guess were just drifting down to what prices should be now. lol

[Neil]

Brent

It's called correcting to the market... Just to let you know it happens in all markets, not only real estate. If it didn't I would be a quadrillionaire ($1,000,000,000,000,000) by now.

[Ken]

I need to make a comment here as the bears have had their day today...

Based on my own experience, the going rate for trades is no less than the following..

Labourer 20.00/hr
Plumber 75.00/hr
Drywaller 50.00/hr
Electrician 75.00/hr
Concrete worker 50.00/hr
Landscaper 50.00/hr
A breathing human being 20.00/hr

So, can somebody explain to me, based on these labour costs how I'm going to buy that brand new 1400 square feet two story in Terwilleger Towne for 2005 prices again???

Everybody dreams about the one that got away. I would've bought 100 houses at 210K had I known in 2005 that the same house would be 400K only two years later.

The fact is that development, labour, materials, and other costs in home construction are not getting lower.

If I was renting right now at 1600/month I would be house hunting for something decent under 350K.

[Nate]

Hey Ken,

Competition goes both ways. A lot of trades guys have been able to screw over customers over the last couple years because there was no shortage of work for them. So you paid what they asked and they did the work when they wanted.

Watch what happens when there isn't enough work to go around, people will have to underbid.

"blah blah, jobs everywhere in alberta" - Tell those framers and carpenters to give up their trade and go work a rig. I know of at least two custom home builders that haven't had a sale in over 30 days.

[Mike]

Right on DREM. Brent is indeed a US bound. Similar motivations apply to the rest of the bubble blogger. One of them (Squidly77) made fun of the British Consular's comment that Canada is an Energy Super Power. I would love to debate with any of them in-person at the location of their choice in Edmonton, but I bet you they can't point Edmonton on the map.

[Mike]

Sara and Sheldon,
Thanks for the great blog. I'm quite concerned that your blog is being hijacked by the bubble bloggers who do not live in Canada and whose intentions and motivations are not clear. If you look up in this comments section, one of the bubble blogger started intimidating a potential first time home buyer and making fun of her dream home. The bubble bloggers build their strategy on manipulating people fears and extinguish their hopes. This fall under bullying and unacceptable blogging practices.
I do highly recommend that discussions be strictly limited to the subject and that any comment that does not objectively discuss the subject be removed immediately. Thank you.

[Brent]

Drem,

No buddy, I'm born and raised right here in ol Edmonhole. But your kind of close, I don't work here.

[george]

what trades people realy make
tinyurl.com/5vlg9m