Edmonton Real Estate Market Update November 2010

There are some positive signs out there. The number of sales for November are close to the average, and the number of new listings are low versus previous Novembers. Meanwhile, the inventory continues to come down. The only negative is prices have slipped, although that is fairly common in the fall.

SALES:
Nov 2010 1120 solds
Nov 2009 1261 solds
Nov 2008 891 solds (Financial crisis period)
Nov 2007 1223 solds
The sales were 1120 sales. Comparing that to other Novembers in previous years we are right on the average of the previous 3 years of 1125 sales. The sales were actually higher in November than in October. That is another positive sign.

NEW LISTINGS:
Nov 2010 1860 new listings
Nov 2009 1894 new listings
Nov 2008 2036 new listings
Nov 2007 2729 new listings

The new listings for the month are lower than the previous 3 year average of 2220 new listings.

INVENTORY:

November inventory is now sitting at 6982, down from October's 7698.

At the current rate that inventory has been falling, and looking at what normally happens in December, I am predicting our inventory should be at 5250 to begin 2011. See the supply vs demand graph. We started 2008 with 6316 inventory (prices fell 8% in 2008) We started 2009 with 4037 inventory (prices rose 4% in 2009) So, if we end up at 5250, we will be in between. If we don't see a rapid buildup in inventory in the spring (which occured in 2008 and 2010), then I would expect prices should be stable in 2011.

NOVEMBER PRICES:

Single Family $362,656 down 0.8%
Duplex/Rowhouse $318,604 up 9% (this is a small segment of our market and therefore is volatile)
Condos $229,603 down 2.7%

Have a great December!

Edmonton real estate market official stats October 2010

Well the stats are out. The sales were 1077 for October of 2010. Comparing that to other Octobers in previous years we are a little lower than the previous 3 year average of 1312 sales.

October 2010 1077 solds
October 2009 1529 solds
October 2008 1195 solds
October 2007 1214 solds

The new listings for the month are starting to taper off finally. 2269 listings in the month of October is actually lower than the previous 3 year average of 2795 listings.

October 2010 2269 new listings
October 2009 2109 new listings
October 2008 2938 new listings
October 2007 3340 new listings

Inventory of properties for sale has dropped to 7698 from 8602 in September. That is a big drop and mainly the result of properties failing to sell and coming off the market, plus the lower number of new listings helped. If you look at the inventory level today (November 2nd, 2010) we are actually even lower at 7131 properties. Our stats are using the 31st of October as an inventory level, and there are over 500 homes that expire traditionally at the end of the month. So, the inventory is starting to correct itself.

I've also increased some price graphs.

Edmonton Real Estate Market October 2010 unofficial stats

October finished stronger than it started. We sold 1077 homes and listed 2269. The inventory came down to 7689, this is mainly due to the homes that failed to sell (in the 1700 range) as the new listings greatly outnumbered the sales this month.

Here is where average prices ended up:

Single Family $365,691
Duplex/Rowhouse $292,214
Condos $235,893
I will update the numbers once we receive the official stats from The REALTORS® Association of Edmonton.

Edmonton Real Estate update October 22, 2010

This week the market has continued to improve. As of yesterday we have sold 727 homes this month. Based on that pace, the projected month end number of sales would be 1073. This is far higher than the pace we are on in the first week of October (projecting only 943 sales).

The number of new listings coming on the market have slowed considerably as well. We've listed 1,670 homes so far this month, at that pace the projected month end number of new listings would be 2465 (vs 2800 projection based on the first week of October's pace).

Inventory is slowly coming down. We now have 7970 homes for sale versus 8035 last week. I did another search to see how many homes are failing to sell and coming off the market for the last few months.
August: 1791 homes failed to sell
September: 1777 homes failed to sell
October (up to 22nd): 787 homes failed to sell
October's numbers will rise much higher than the 787, as there are normally many homes that come off the market close to the end of the month.

So, overall the market is improving. We certainly aren't booming, but the inventory should start dropping this month. I predict we will see an inventory level in the 7000 range in the first week of November. Have a great weekend, and enjoy our unusually warm temperatures!

Edmonton Real Estate Update Mid October 2010

Well things are getting a bit better. The sales pace is picking up a little bit. Last week we were on pace to sell only 943 homes, now we are on pace to sell 1000 (there were 452 sales in the last 14 days in the Metro Edmonton area). Another positive development is that the new listings pace has slowed. We were on pace last week to list 2800 homes this month, this week we are on pace to only list 2480 (1120 listings in the last 14 days). This is still a high number of new listings, but hopefully the slowdown continues. There are 8035 properties for sale as of October 14, 2010. 60% of this inventory is single family, 30% are condos, and the balance is made up of duplexes and other (mobiles, rowhouses etc).
I have noticed more offers coming in on my listings in the past 7 days, and it definitely "feels" busier out there. Have a great weekend!

October 7th 2010 Edmonton Real Estate update

As of yesterday, we have listed 635 homes in the Metro Edmonton area so far in October. That puts us on pace to list over 2800 this month. The high new listing pace of August and September looks to be continuing into October.
As for sales, we have sold 213 homes in the Metro Edmonton area. That puts us on pace to sell 943 this month. Traditionally we sell 1200+ in October. So, sales continue to be lower than the last few years' average.
Have a great Thanksgiving! Living in this country, we all have much to be grateful for.

September 2010 Edmonton Real Estate Market Update

Well September wasn't much different then August. We saw 1187 sales in September (1285 in August) and there were 2668 new listings in September (2708 in August). So the supply continues to outpace the demand. Our listing inventory actually did fall in September from 8822 to 8607 properties for sale. That certainly wasn't due to sales, it was due to sellers taking their homes off the market. I hear a lot of people saying that they will take their home off now, and then put it back on in the spring of 2011. The only problem with this theory, is that was what everybody did in the fall/winter of 2007. Our inventory built up in the spring of 2008 to a peak of 11,006 homes for sale. It is hard to predict what is going to happen at any time, but I'm pretty confident that prices will continue to soften this fall due to higher inventory levels. I have to temper this with the increased job prospects and increased immigration into Alberta that was recently announced. These are both very positive developments. So, this increased inventory should be reduced in the coming months and strengthen home prices in the long term.

How about prices? September saw single family detached homes staying stable at $370,654 versus $370,181 in August. Condos were up a little from $236684 in August to $238822 in September. If you look at the price per square foot graph it paints a different picture. The price per square foot for single family detached in Edmonton is starting to move down, ie)you are getting more house for your money in the market.

August 2010 Edmonton Real Estate Update

Well high inventory levels continue to be the story the latter half of this year. We are now at 8822 homes for sale in the Metro Edmonton market. This is down only marginally from July's 8892. Normally we see the inventory fall as we go into the fall. This year things are different. So what is going on?
It is actually a combination of two things. The sales were very low, we only saw 1195 homes sold in August. In the last 4 years, we've averaged 1635 sales for August. The other stat that jumps out is the increase in new listings in August. Normally we see about 1582 new listings (average of previous 4 years for August), in August this year we saw 2700 new listings. That is why our inventory has crested but not started to fall.
How is this impacting prices? Well they are starting to fall. Single family homes are down almost 2% from July and Condos are down 3.4%.

Edmonton housing bubble?

There is a recent study from Canadian Centre for Policy Alternatives that suggests that Edmonton is in a housing bubble. The article states that our prices should be a lot lower based on an inflation adjustment from the prices housing here in the period of 1980 to 2000. Here are my 2 cents on the issue.
The main flaw in this study is that it bases todays values on housing values from the 80's and 90's. In the 80's and 90's Edmonton real estate was severely depressed in relation to the rest of Canada. Edmonton was hit by two shocks. The National Energy Policy of the early 80's and then Premier Klein's cutbacks in the early 1990's (which I believe was necessary to get our debt and deficit problems under control). These political changes caused a severe negative reaction in the housing market. So, extrapolating numbers today from depressed values in the 80's/90's is one problem.
The other problem is that when you look at incomes in Edmonton, our prices are not in bubble territory. The most recent stat I could find on average household income in Edmonton was from 2007. In 2007, the average household income in Edmonton was $87,300. The Metro Edmonton August 2010 average home price (including condos, duplexes and single family) from the RAE (REALTOR'S Association of Edmonton) is $325,588. If you divide $325,588 by $87,300 that is a ratio of 3.7 times income. The "experts" say that housing should be 3 times household income to make it affordable. So, 3.7 is not really bubble territory in my opinion. The other factor that isn't included in this 3 times income figure is the tax structure of the area. Alberta has the lowest tax rate in Canada. These gross income figures don't factor in the net income to a household after taxes are paid, it only looks at gross. So, I would expect Alberta's cities to be a little higher than other provinces and states due to our lower tax structure. I'm always surprised when people criticize Alberta's housing values, and downplay Toronto and Vancouver values. Alberta is where the jobs are, taxes are low, and many people immigrate into this province for that very reason.
Do I think that our market has some room to fall when it comes to prices? Yes, I do in the short term. We have an oversupply of homes for sale now in relation to our sales. That normally causes prices too fall. A 40% drop? I don't think so. Our last price adjustment was 18% (from spring of 2007 to Feb 2009), and much of that was caused by speculation in the housing market. Many single family homes were built in order to flip or built on speculation by the home builders. That clearly hasn't happened since the market corrected. The oversupply we are seeing today in our market is in apartment style condos. These were overbuilt in response to the 2006-2007 boom and are all finally coming on stream now as these projects often take much longer to complete than a house.
Lastly, I would like to say that in my 17 years of selling real estate in the Edmonton area, I have heard many predictions. I remember people complaining that we were overvalued in the late 90's and the market was going to crash. Our average price was in the $110,000 range at that time. These people were going to rent until the prices came down. I guess they are still renting.

July 2010 Edmonton real estate update

The stats are out. And, July was a slower month. That is to be expected with summer holidays, but our sales were lower than normal. We had 1294 sales in July and that is off our normal range of 1500-1800. It is way off July of 2009's numbers of 2223, but last year was an exception. 2009 started with record low sale numbers due to the financial crisis and then turned sharply up with pent up demand that came through in the spring. The inventory has finally crested at 8892 homes and condos for sale in the metro Edmonton area. The inventory should continue to fall as homes sell and come off the market. I've attached a graph showing the inventory and sales levels to put it into perspective.

June 2010 Edmonton Real Estate Market Update

We are entering the summer doldrums. Prices have flattened out this month. We've actually seen a fall in prices in the condo and duplex market.
SFD $391,497 Up 0.4% from last month
CONDO $242,644 Down 2.4% from last month
DUPLEX/ROWHOUSE $306,905 Down 4.5% from last month.
The big news is the inventory has risen. We are up to 9406 properties for sale, combine that with 1539 sales last month and that translates into a 6.1 month supply of inventory. 6 months is the borderline between a buyers and a sellers market. So, officially we are dipping into a buyer's market. I expect to see our prices stabilizing and softening as we go into the fall. This is a normal annual occurence, but the excess inventory may add to the softening.
The good news is that the inventory appears to be peaking out, July's inventory level should be similar to the end of June. So, the buildup in the number of listings for sale appears to be ending.

May 2010 Edmonton Real Estate Update

The official stats are out for May. The market is moving more and more into a balanced market. Prices have still climbed for single family houses (1% increase over April), but condos and duplexes fell (both by 2%). Our inventory level has increased to 8780 properties which is higher than our peak last year. Buyers are finding that they have a little more time to look, the average days on market is sitting at 44. The sales were off last years torrid pace of over 2200. We were just shy of 1700 sales this month (1682).
The slowdown in sales could be attributed to the tightening of mortgage requirements that came in mid April. I've attached some price graphs for different property classes to show you the trends since early 2007.

January 2010 Edmonton real estate update

Well 2010 started out soft, it definitely didn't start with a bang. The sales were just above last years' numbers. The major points are here:
1) JANUARY sales were low (884). We did exceed the 730 sold in January 2009.
2) The listing Inventory level is much lower than last year. Our current inventory is 4864 properties, in Jan 2009 the level was 6573.
3) Months of inventory has moved up to 5.5 (still a sellers market, as it is under 6)
4) SFD Prices Flat, CONDOS prices are falling
5) Days on market average was 57, up from 50 in December 2009. But, much better than Jan 2009 (68 days on market).
I've attached a graph showing the price of a single family dwelling in the metro Edmonton area over the last 2 years. As you can see, we bounced up from the bottom in Feb 2009, and have basically been moving sideways over the last few months.