Edmonton Real Estate Market August 2009

Well it looks like we are back to a balanced market. No record breaking sales this month. The number of sales for August are back to a more normal range (1673). Prices actually have flattened and dipped a little. The inventory is continuing to fall which is good news. We are now at 6445 homes for sale (down from 6592 in July). One thing that is interesting is the over $400,000 price segment has went up in the last month (from 19% to 22%) but the under $300,00 is also increasing (up from 47% to 48%). So, therefore the middle $300,000-$400,000 range is actually shrinking a bit. I will post these charts in the next post.
What this all means (in my opinion) is that the market is balancing out. The predictions that we were going to shoot through the roof with prices earlier in the year have not been realized. The prices have stopped their freefall and climbed a little, but it looks like we are now moving into a stable balanced market.

July 2009 Edmonton Single Family Detached Average Price

I've put together a graph showing the average price for Single Family Detached homes. Our prices have moved back up to mid 2008 numbers. Way off from the 2007 peak, but we are moving in the right direction.

Edmonton Real Estate July 2009 Market Stats

July has been similar to June, very strong and recordbreaking. 2277 sales in the month of July, beating July of 2006 (1953 solds) by a wide margin. On the listing supply side we are now sitting at 6592 properties for sale which is down from June's 6785. What have prices done during this strong market? Not too much. We have seen an increase for Single Family dwellings to $369,859 which is just under 1% increase from June 2009. The overall average price (including condos and duplexes) actually dropped one percent to $324,847.

What does this all mean? Well the market is definitely trying to find itself. The demand is very strong, but the listing inventory has been keeping up with the demand. The resulting situation is becoming more of a balanced market in my opinion. I don't thing the sales will be recordbreaking as we go into the fall (I have been wrong before), so I actually forsee a situation where our inventory climbs a little. Not a dramatic increase, but enough to stall any further price increases. We did have the one month of 5% price increase this year, but the rest of the months are up 1% or down 1%. Overall we will probably see an average price increase of 7% total for the whole year of 2009.

This is good, not great. It reminds me of the 1996 market in Edmonton. In 1996, we had a tremendous influx of Armed Forces personnel moving into Edmonton from other Bases. This increase in demand did not effect prices dramatically (prices went up 4% for the year), but what it did do was "sop up" the excess listing inventory we had from the 1993-1995 recession/cutbacks that were going on in the City when Premier Klein came to power. Basically, the increase in buyers helped cure the supply problem, stopped the freefall in prices, and we went on our merry way of price increases in the 5-10% range in the following years. I see a similar situation here. We don't have military moving in, but we do have first time buyers, renters and relocations coming into the market. These people were frozen out of the market for the last few years because of the higher interest rates and the higher prices.

Edmonton real estate market stats for June 2009

Well as we expected, June was a record breaking month for sales. Over 2400 sales this month, more sales than May (2161 sales). The other big story is how many listings are out there. Our inventory has dropped down to the 6500 range. That is much lower than last June (2008) when we had 10,817 homes for sale. Prices for both condos and single family both went up just under 1% for the month. Not as high of an increase as May (4% increase). This could be something to watch. The high sales volume units wise is not translating into a manic price increase (like 2006). In fact the percentage of the total sales are very similar to January 2009 numbers. We have been hovering around 50% of the market in that $300,000 or less price point. So the market has been very strong, but the prices have not gone crazy. A 5% increase in two months is still very substantial. I've attached some graphs that might be of interest. Happy Canada Day everyone!

Corporate Relocations: Relocating your family to Edmonton Part 2

I've included some more question and answers relocation related.
Question: What if my employer doesn't pay for the move, are there any savings I can receive?
Answer: This is a question you should ask your accountant. If you are relocating a certain distance for work reasons Canada Customs and Revenue Agency could allow you to claim expenses such as flights, moving vans, hotel stays, meals, inspection costs, etc. Again I am not an accountant, but check with your accountant to see if these expenses can be claimed by you.
Question: I don't know much about the area I am moving to, how do I know what is good or a bad area?
Answer: The short answer here is find a good REALTOR®. A good REALTOR® will advise you on average sale prices in the area, crime concerns, commuting distances etc. A good rule of thumb is, the higher the average price of a neighbourhood, the better the neighbourhood. If it looks like it is a great deal, there is probably a location issue with the home. Your REALTOR® can help advise you on what the best area will be for your price range.
Question: What is the market like? I know where I am living everything is selling slowly.
Answer: Again a good REALTOR® will make you aware of what the average days on market is, how much the sellers are coming down in price etc. Really market education is the key.
Question: How should I pick a REALTOR®?
Answer: Referrals from a REALTOR® you know in your current area is one great way. That is how I am connected to most of my relocating clients. Also, talk to friends or family members that may know someone. Some companies have a relocation program that assign you a REALTOR® as well. Be sure to check out the steps involved if you are part of a relocation program. For example, I know with the Canadian Forces you can not list your home before you have your posting message. If you don't follow the right steps, your relocation company may not pay for some of your moving expenses. The internet is also a good way to find a REALTOR®, you can create dialogue through emails and by the phone. Don't be afraid to ask questions!
Questions: When choosing a REALTOR® what questions should I ask?
Answer: I would ask how many relocations they deal with per year. How experienced they are (important for neighbourhood knowledge). Do they personally work with you or do they put you in touch with a buyer's agent. If it is a buyers agent, how experienced is that agent.

Corporate Relocations: Relocating your family to Edmonton Part 1

Each year I work with 10 or more families relocating from other cities and regions of Canada into the Metro Edmonton area. I've put together a few questions and answers that might be of help should you be relocating.
Question: Should I have my home sold first?
Answer: This is a big one. I highly recommend you sell your current home first. Even if you can financially swing buying before you sell, it converts you from a want to seller to a have to seller. Your negotiating power on the selling of your home is definitely weakened when you have the added pressure of paying for two households. The other problem is if you do have to sell your current home in order to buy the new home, the seller will most likely put on a 24/48/72 hour clause condition, which means your offer can be bumped at anytime by another buyer. This is a very emotionally draining position for a family to be in. You think you have your dream home tied up and it is pulled out from under you. Not a positive experience.
Question: How many homes should I be looking at?
Answer: The average number of homes a local buyer will physically look at when they are utilizing the internet in their search is 8. I find that my buyers that are from out of the area normally look at double that number (15 or so). That does not mean everyone looks at that amount, as it depends on how many homes are for sale in your price range and area, but it is a fairly accurate average.
Question: I have a week to find a home. Is a week enough time?
Answer: Surprisingly yes! I have actually found that 2 or 3 days of power shopping (looking at 8 or more homes per day) normally is enough time to pick your new home. That still gives you time to line up a building inspection and be present at the inspection before you have to return to your current home. In fact, I do not ever remember having a client not being able to find a home in the week they were given.

Stay tuned for part 2....

Edmonton mortgage defaults June 2009 and media sensationalism

I just came across a "news" article in the Edmonton Journal today. The title is Mortgage Defaults Soar!!!! http://www.edmontonjournal.com/Business/Mortgage+defaults+soar/1723557/story.html Now, I like to present facts and stats, but I really had to laugh at some of the points the article brought up. One "stat" that really stood out was, and I quote "ForeclosuresCanada.com,which tracks Alberta court filings for property investors--but doesn't provide data with the same level of detail as the province--listed two-and-a-half times more Edmonton foreclosures between this January and early May than in the same period two years ago." Now, anybody that had a remote involvement in Edmonton real estate in early 2007 knows that this was the hottest period of sales we have ever had. In fact, the most homes we ever sold in one month was in May 2007 (2839 sales). Sale prices were climbing 5% per MONTH in early 2007. To see a home go into foreclosure in early 2007 was a complete oddity. So, any market would have more foreclosures than that time, I am actually surprised there were only 2.5 times as many. To be fair, I also know that Real Estate Boards tend to put a positive spin on everything. I'm not defending that either. But, this headline is just sensationalism. I guess it gets attention, kind of like Elvis is Alive, or I am Bigfoot's love child.