Edmonton Real Estate Blog

While the newpapers are happy to announce that maybe the recession is over since we had economic growth in the 3rd quarter of this year, things here might be changing.

We also go a report last week that came out that indicated that the number of unemployment claims in Edmonton were rising, which would indicate a slow down for us here in Edmonton.

As of this morning there were 1,762 single family dwellings listed on MLS in Edmonton proper.  That is only a slight decrease over last weeks number1,781.  This would be a seasonal norm and not one that I would be concerned with.

The concerning part is the drop in the sales.  In the last 30 days there were 509 single family dwellings sold in Edmonton proper.  That is a drop from last weeks number of 545, but that also represents almost a 7% drop in sales in one week alone.

You compare that with only a 1% drop in the listing inventory that is a trend of concern.  The listings to sales ratio has also risen to 3.46:1 from last week’s ratio of 3.27:1.  If this trend continues we might see valuations drop slightly before we see them come back again in the spring marketplace.

Gross domestic product sees first gain in a year in Q3, signals recession’s end

OTTAWA – Canada’s real gross domestic product grew 0.1 per cent in the third quarter, the first quarterly gain since the third quarter of 2008 and a signal – if a feeble one – that the recession has ended.

Statistics Canada reported Monday that the economy expanded at an annualized rate of 0.4 per cent in the third quarter, compared with a 2.8 per cent increase for the U.S. economy.

The first overall economic growth in a year marks an end to the recession, which is defined as at least two back-to-back quarters of contraction.

While it is the first indication Canada’s economy is again beginning to grow after begin battered alongside the rest of the world during the economic meltdown that saw the failure of U.S. banks, ravaged corporate profits and lengthened unemployment lines, it is “not exactly a clanging endorsement of the ‘end of recession’ story,” said Douglas Porter, Bank of Montreal’s deputy economist.

“While the quarterly gain for the third quarter was a bit of a damp squib, this doesn’t alter the bigger picture that the Canadian economy is erratically grinding out of recession, led by broad-based gains in domestic spending,” Porter wrote in a note to clients.

“With the solid hand-off from the sturdy September result and mounting signs that the U.S. recovery is taking root, look for much more convincing evidence that the recession is over in fourth-quarter GDP results. Still, the broader picture of a relatively muted recovery remains the dominant theme.”

The agency says final domestic demand advanced 1.2 per cent, as capital investment and personal expenditures both increased.

Real GDP was up 0.4 per cent in September, as most major industrial sectors increased their production.

Final domestic demand was bolstered by a second consecutive quarterly gain in personal expenditures and the first expansion in business capital expenditure since the fourth quarter of 2007.

Export and import volumes both increased after many quarters of decline.

The output of services-producing industries increased 0.6 per cent, with the wholesale and retail trade sectors and real-estate agents and brokers leading the way.

Goods-producing industries slipped 1.4 per cent, continuing a downward trend that started in the third quarter of 2007.

Mining and oil-and-gas extraction contributed the most to the decrease as a result of temporary shutdowns.

Source: THE CANADIAN PRESS, cp.org, Updated: November 30, 2009 9:20 AM

Monthly MLS® home sales activity continues to run strong, with new monthly records set in July, September and October. This has prompted CREA to revise its MLS® home sales forecast for 2009 and 2010.

CREA now forecasts national activity will reach 460,200 units in 2009, up 6.6% from last year. The new sales forecast for 2009 puts activity about on par with annual activity in 2004, but below levels reported for the years 2005 through 2007. Alberta, Saskatchewan, Quebec and Prince Edward Island are also now forecast to post an annual increase in activity in 2009.

National MLS® home sales activity is forecast to rise 7% to 492,300 units in 2010. This would make 2010 the second highest year on record for sales, putting activity below the peak reached in 2007 and slightly above the 2005 and 2006 figures. The forecast increase in activity for 2010 reflects significant weakness in activity recorded in the first quarter of 2009. Monthly activity in 2010 is expected to trend downward from recent heights, but the sharp drop inactivity recorded in the in the first quarter of 2009 is not expected to repeat in 2010.

The national MLS® average home price is forecast to climb 4.2% in 2009, reaching a record $317,900. This is an upward revision from the 1.5% gain in CREA’s previous forecast and reflects the high degree to which the national average price was skewed downward last year by a significant decline in activity in Canada’s priciest markets, and then upward by the rebound in activity.

Alberta remains the only province with a forecast decline in average price in 2009 (-3.0%). Average prices are forecast to rise in all other provinces, with gains ranging from 1.5% in British Columbia to 13.1% in Newfoundland and Labrador.

Average prices are forecast to climb a further 4.7% in 2010. Much of the annual increase reflects weakness in the average price in first quarter of 2009, which is not expected to repeat in 2010. Average sale prices are forecast to rise in every province in 2010.

Source: CREA

OTTAWA – Canadian home resales improved 41.5 per cent year over year to 42,288 units in October, a record for the month, according to the Canadian Real Estate Association.

The national average price for homes listed on the Multiple Listing Service also reached a new high in October at $341,079. This was 20.7 per cent higher than the same month last year.

* Related: Canada’s hottest housing markets | Coolest markets

New sales records for the month were reported in one-fifth of local markets, including Toronto, Montreal and Ottawa.

On a seasonally adjusted basis, MLS home sales totalled 45,818 units in October, two per cent higher than the previous record set in May 2007 and 74 per cent above the recent low in January.

“Low interest rates and upbeat consumer confidence continue to release the pent-up demand that built late last year and earlier this year,” stated CREA president Dale Ripplinger.

“The release of that pent-up demand has boosted national sales activity to new heights and is drawing down inventories.”

* Tell us: Is Canada experiencing a housing bubble?

The sharp rise in demand for homes has shrunk inventories to 194,994 or a seasonally adjusted 4.1 months worth, the lowest level in more than two years and 20.8 per cent below the peak reached a year ago. This is the sixth month in a row in which inventories are down from year-ago levels.

Seasonally adjusted new listings on MLS were slightly higher in October compared to September at 65,148 units. New listings peaked in May 2008, then declined until March 2009, and have remained relatively steady since then.

“New listings are still expected to rise in the coming months in response to headline average price increases,” stated CREA chief economist Gregory Klump.

“New supply dropped dramatically in December last year and earlier this year in response to a difficult pricing environment. Sellers who moved to the sidelines should be drawn back to the market as prices rise further over the rest of the year and in early 2010.”

Source: The Canadian Press, cp.org, November 16, 2009

Edmonton, November 3, 2009: Resale housing sales continued their strong trend through October with sales of all housing types through the Multiple Listing Service® in October at the second highest level on record (after October 2006). There were 1,535 residential properties sold in October; up 23% from 2008 but down almost 10% from last month which follows the normal seasonal trend of month to month sales dropping through the fall.

“The housing market in Edmonton and area is still robust,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “Homebuyers are confident about their future prospects and keeping an eye on the possibility that mortgage rates will rise. They can lock-in their housing costs for five years while rates are at historic lows if they buy in this market.”

Residential housing prices remained stable within typical ranges for seasonal fluctuations. Prices for single family dwellings were down 2.2%, on average* from last month but up marginally (0.12%) from last year. Condominiums were priced down 3.2% from September but the same price ($11 difference) as a year ago. Overall, the average residential price in October was $318,969, down 2.5% from last month but up a third of a percent from 2008. Single family dwellings sold for $363,694 and condos sold, on average, for $237,601.

There were 2,205 homes listed on the MLS® System in October with 1,535 sales for a sales-to-listing ratio of 70%. The total value of residential sales in October was $490 million and total MLS® System sales (including rural and commercial properties) is up over last year for the year-to-date to over $6.18 billion. Total available inventory was 5,530 homes which is a typical 3.5 month supply. Homes sold on average in 47 days (44 in September but 58 in October 2008).

“Good looking homes in the average price range always sell quickly,” said Ponde. “Less desirable homes may take a little longer to find a buyer and home sales at the upper price ranges are steady. It is important to consult your REALTOR® to devise a strategy for buying or selling a home to ensure you get the latest market and neighbourhood information.”

Source: REALTORS® Association of Edmonton

There has been some strengthening in Alberta’s resale market, said Lai Sing Louie, regional economist for CMHC in Calgary. “We’re expecting that the second half (of the year) will be much stronger than the first half,” he said. Most markets in Alberta have turned into balanced ones, added Louie. In the first quarter, they were generally buyers’ markets. Louie said low mortgage rates have been a big factor in spurring residential sales. “Affordability has improved quite significantly,” he said. “We’ve also seen some government incentives to encourage first-time homebuyers and that’s helped. And I also believe that people who have been waiting to see how the markets move finally have the confidence now to go into the marketplace and buy.”
2010 average price forecast for Alberta $343,200.

Source: Calgary Herald – Friday, August, 28 2009

Sept. 01, 2009

Well the month of August was pretty similar to what we saw in the month of July.    As of this morning there were 2,069 single family dwellings listed with the Edmonton Realtors Association on MLS.   In the previous 30 days there were 712 single family dwellings that sold. That would give us a listing to sales ratio of 2.9:1 a slight increase from last month, but still well below the 4:1 listing to sales ratio we need for a balanced or neutral market. 

I am not concerned with the slight increase in the ratio as I mentioned it is still below the neutral point and we have to take into consideration that it was August which is typically a slower month as people try the get the last of the summer holiday fun in, and then start to get prepared to get the kids ready for school.

I am expecting to see the sales start to increase in the month of September and October as we get into our normal fall market. Home valuations like most things are dictated by the law of supply and demand.  And at this time the lower ratio indicates a fairly high demand.

I expect the balance of the year to continue to be strong, but I do expect that 2010 will be even stronger, and valuations to continue to increase.

So what does that mean to you?  Well if you are a first time buyer you are going to want to get into the market as soon as possible.   If you are looking at selling your current home to move to a bigger or more expensive home you are going to want to do it as soon as possible.  However, if you are downsizing, or moving to a lesser expensive home then you want to wait for market valuations to continue to rise before you make your move.

Please feel free to give me a call anytime on my cell 780-995-6520 should you ever be curious on the value of your home and would like a free no-obligation comparative market analysis of your home.

Well the numbers today start to show a slowdown in sales.  But that is normal this time of year.  Typically we see a slowdown in sales in July and August, a seasonal slowdown and sales pick up again in September.

 As of his morning there were 2,167 single family dwellings for sale in Edmonton proper which is fairly steady in comparison for the last few weeks.  What has dropped off was the number of sales at 752 which is lower than we have seen in the last few weeks.

However that still give us a listing to sales ratio of 2.88:1 well below the 4:1 that we need for a balance or neutral market.  With that kind of ratio I expect valuation to continue to rise.

The average home that is selling is 1,453 sq.ft,, avg. selling price was $370,970, taking 36 days to sell, and selling within 97% of the listing price.  Keep in mind that avg. selling price and valuations are two different things.

If you have been thinking about buying your first home or upgrading to a bigger and more expensive home the sooner you do it the better off you will be.

Source of listing and sales data provided by the Realtors Assc. of Edmonton

Source: Lee Politano, Mortgage Specialist (780) 264-1749    TD Bank Financial Group

HIGHLIGHTS OF THE WEEK

>>To view the full report click here<<

Source: Lee Politano, Mortgage Specialist (780) 264-1749    TD Bank Financial Group

HIGHLIGHTS OF THE WEEK

• Minutes of the FOMC reveal that the Fed has upgraded its economic growth forecasts. The central bank now expects a contraction of -1.5% to -1.0% in 2009 and growth of 2.1% to 3.3 in 2010%.
• U.S. retail sales recorded a better-than-expected +0.6% in June, led by auto and gasoline sales.
• Housing starts in the U.S. jumped up to 582,000 in June, marking the second straight month of gains.
• U.S. headline CPI advanced 0.7% in June, but remain down 1.4% Y/Y; core inflation was up 0.2% on the month and 1.7% above year-ago levels.
• Federal deficit hit $1.1 trillion during the first nine months of the fiscal year beginning in October.
• Canadian manufacturing sector continues to reel from outside pressures as the downward spiral in manufacturing shipments continued with a 6.0% decline in May
• The domestic economy looks set to recover as both auto and home sales improve.

>>To view the full report click here<<