Edmonton Real Estate Blog

The trend continue in the Edmonton real estate market with a strong market in at the entry level (under $350,000) demand.  This segment of the market is what is the driving force and ultimately will continue to drive valuations up.

As of this morning there were 2,250 single family homes listed in Edmonton proper.  In the previous 30 days there were 993 sales.  That would give us a listing to sales ratio of 2.27:1 well below the 4:1 ratio we need in Edmonton for a stable or neutral market.

With the trend being what it is I expect to see valuations to start to increase initially in the lower price ranges and eventually transfer to to higher price ranges as these people who sold in the lower price ranges start to look and buy in the higher price ranges.

New Home, Previously Owned or Build Your Own?

When thinking about the kind of home you want, the first thing you should consider is whether you want a previously owned home (often called a resale) or a new home. Here are some characteristics that may help you decide:

New Home

• Modern design. A new home has an up-to-date design that takes into account the latest trends, materials and features.
• Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.
• Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.
• Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty. You should still set aside money every year for future maintenance costs.
• Builder warranty. This is a warranty that may be provided by the builder of the home. Be sure to check all the conditions of the warranty. A homebuilder’s warranty can be important if a major system such as plumbing or heating breaks down.
• New Home Warranty programs. Generally new home warranty programs are provided by provincial and territorial governments, but there are private new home warranty programs. These warranty programs are not available in Nunavut and the Northwest Territories. Check with your real estate agent or lawyer/notary to find out what the new home warranty program in your province or territory covers.
• Neighbourhood amenities such as schools, shopping malls and other services may not be complete for years.
• Taxes such as the Goods and Services Tax (GST) (or, in certain provinces, the Harmonized Sales Tax (HST)) will apply. However, you may qualify for a rebate of part of the GST or HST on homes that cost less than $450,000. For more information about the GST New Housing Rebate program, visit the Canada Revenue Agency website at www.cra-arc.gc.ca
• Extra costs. You may have to pay extra if you want to add a fireplace, plant trees and sod, or pave your driveway. Make sure you know exactly what’s included in the price of your home.

Resale Home

• You can see what you are buying. Easy access to services. Probably established in a neighbourhood with schools, shopping malls and other services.
• Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces or finished basements or swimming pools.
• No GST/HST. You don’t have to pay the GST/HST unless the house has been renovated substantially, and then the taxes are applied as if it were a new house.
• Possible redecorating and renovations. You may need to redecorate, renovate or do major repairs such as replacing the furnace, roof, windows or doors.

Building Your Own Home

Some people prefer the challenge and flexibility of building their own home. On one hand, you make all the decisions about size, design, location, quality of material, level of energy-efficiency and so on. However, you should expect to invest lots of time and energy.

Article written by: Canada Mortgage and Housing Corporation

The Edmonton real estate market continues to improve.  Currently there are 2,017 single family homes listed on MLS in Edmonton proper.  That is a drop from last week and is supporting the fact that there is a shortage of good quality listings.

In the past 30 days there were 884 sales.  Not the 1,000 sales that I would be looking for to happen in a normal market but with current inventory level is still a good number.

With those numbers that gives us a listing to sales ratio of 2.28:1.  Again a drop in the listing to sales ratio indicating that we are going to see continued upward pressure on valuations.

Buyers beware waiting to buy, and get into the market before prices go up any further.

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It always amazes me how much difference a week can make.

As of this morning there were 2,081 single family homes listed on MLS in Edmonton proper which is a drop from last week.  I was really hoping to see an increase in the inventory available for the consumers out there.

The other interesting fact that surprised me was the number of sales in the last 30 days in single family homes in Edmonton with 840.  That was also a drop from lasts week when I was expecting it to increase which would have a been a healthy sign.

The only good news out there is the fact with those numbers we still have a listings to sales ratio of 2.48:1 which remains constant from the previous week.  For the market to really start to show it’s is on a healthy recovery we are going to need to see the number of listings and sales rise proportionally.

So lets all hope the numbers increase for next week.

Well you can’t say that I didn’t warn you.  The value of homes in Edmonton are on the rise, specially in the lower prices ranges.

As of this morning there were 2,337 single family homes listed as active in Edmonton proper.  In the previous 30 days there were 943 single family homes sold.  That would give us a listing to sales ratio of 2.48:1, which again is a lower ratio than the previous week. ( ratios taken on Monday morning have a tendency of being a little higer than those taken of Fridays.  Reason being with realtors now loading new listings into the system manually themselves can do so over the weekend but the sales that have occured over the weekend are not processed untill the business week.)

What that indicates to me is that if this trend continues the valuation recovery may happen quicker and be more pronounced than I originally had forcasted.

Should we be surprised??

Wow it is amazing how quickly the market can change.  Maybe we should not be so surprised, as I was astounded at how quickly the market changed back in May/June 2007.

In the recent weeks in working with buyers for homes under $350,000 it has been a real challenge.  If they were nice homes and priced well they were either sold or by the time we had a chance to write up an offer we were competing with other offers.  As usual, with multiple offers the homes end up selling for more than they were asking for originally.

At the time of my writing this article (June 03, 2009) in Edmonton proper there are 2,289 single family homes listed for sale.  In the past 30 days there has been 1,028 single family sold in Edmonton proper.  That would give us a listing to sales ratio of 2.23:1. 

In the last several weeks that ratio has dropped even further every week and is well below the 4:1 ratio we need in Edmonton for a balanced market.  So there is no doubt in my mind that valuations are rising and they are rising at a rate much higher than the average selling price is rising.  Remember there is a big difference between average selling price and valuations.

Average selling price reflects what the average individual is willing and capable of paying for a home.  Most people go to their bank or mortgage broker and find out how much of a mortgage they can qualify for and that is what they go out and buy.

However, valuation is a reflection of what you are getting for that dollar and that is what is really changing.  If you are thinking of buying and waiting then you are going to end up with a lesser home for the same amount of money.  So you better act now before prices go up higher. 

This is even more important for someone who is thinking of upgrading to a bigger or more expensive home.  Think of it this way: Your home is worth $300,000 and the home you are going to buy is worth $500,000.  Valuations rise by 10% which would mean your home went up $30,000 in value.  This sounds appealing but the home you were going to buy has now gone up $50,000.  Waiting ultimately cost you $20,000 on your mortgage.

Also it should be noted that right now the greatest increases in valuations are homes under the $350,000 price range as it represents 56.81% of all the single family homes sold.  The second highest group is the $350,000 – $450,000 price range representing 26.07% of the single family homes sold.  And finally the over $450,000 price range representing 18.68 %

Even though at the moment the greatest increases are the homes under $350K, we will soon see the valuations of the higher price ranges start to increase as the sellers of these homes under $350K are now in the market in the higher price ranges. 

For those of you who have been following my blog (http://Blog.FindMyHouse.ca) you should not be surprised at what is currently happening, as I have been forecasting this for weeks!

Ultimately what I am saying is stop waiting for the bottom as it’s already come and gone,  and get out and buy now.

And that is my two cents… Serge

The REALTORS® Association of Edmonton reports that the number of residential properties sold through the Multiple Listing Service® in Edmonton in May was up over 17% as compared to the previous month and up 18.7% over the same month last year. There were 3,180 residential properties listed with sales of 2,161. The sales-to-listing ratio was 68% as compared to 42% in May 2008.

“Sales continue to rise month-by-month,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “Listing activity, while not as frantic as last year, is still active so there continues to be a good supply and variety of homes available.”  

Prices in the local market also continued their slow, steady climb. Single family homes sold on average* for $367,672 in May; up 4% from last month but still 4% lower than a year ago. Condominiums sold for $244,734 on average which was 3.7% higher than April prices. Condos are still priced 6% lower than last year at this time. The average residential price was $326,332 up 4.6% from last month but down 4.2% from a year ago.

“Prices are still lower than last year but rising steadily,” said Ponde. “So house hunters should be making their buying decisions sooner rather than later to ensure that their buying power is not eroded by the rising prices.” He noted that some REALTORS® have been able to present multiple offers to their sellers.

At the end of May there were 7,435 homes available in the MLS® System inventory and homes sold, on average, in 52 days (as compared to 51 last month and 53 last May). At 3.4 months, there is a typical amount of inventory available at current sales volumes. Total MLS® System sales in May were 2,395 properties valued at $787 million. Year to date sales are valued at $2.5 billion. 

Highlights of MLS® activity

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual prices, which may vary.

Source: Realtors Association of Edmonton

I am amazed to see the listing to sales ratio continue to drop each week like we have seen in recent weeks.  There is no doubt in my mind that valuations specially in the under $350,000 is rising.  That is mainly due to the fact that the affordability and low interest rates has allowed the first time buyer to come back into the market.

As of this morning there were 2,289 single family homes listed for sale in Edmonton proper.  In the last 30 days 904 single family homes were sold.  That gives us a listing to sales ratio of 2.53:1 again a further drop from last week, and dropping us below the 4:1 benchmark needed for a balance market.

Eventually we should see the increased sales volume and valuation increases in the upper price ranges as the market continues to improve and we see the individuals who have sold their homes in  the lower prices purchase their new homes in the upper price ranges.

Let’s see what next weeks brings us…

MLS® Activity for April 2009

Source: Realtors Association of Edmonton