Edmonton Real Estate Blog

Well, it looks like we are going to have an early spring this year and the real estate market is reacting accordingly coming on strong early as well.

As of the morning there were 1,727 actives single family dwellings on the market in Edmonton proper on MLS, which is a slight increase from last week’s number of 1,669.  More and more people are putting their homes on the market on a daily basis.  This gives buyers more selection, but I am concerned that the increase in supply will start to surpass the demand at which point that will negatively affect valuations.

At this moment we are just fine.  The sales are increasing at a faster rate than the supply.  In the last 30 days there were 584 single family dwellings sold in Edmonton proper – an increase from last week’s number of 517.  More importantly, the listings to sales ratio is now below 3:1 at 2.96:1.  With that kind of ratio I expect to see valuations to start to increase immediately.  That is bad news for buyers and they will need to buy right away before prices rise again.

Please call me if you have any questions about this, or anything else related to Real Estate. I would love to help you out. (780) 634-8151

Serge Bourgoin founding and managing partner of Team Leading Edge at RE/MAX Elite

Team Leading Edge… Leading the way with extraordinary service

Edmonton’s ever improving economy continues to bolster residential real estate activity in the city. The number of homes sold in Edmonton is up 21 per cent to 884 units, while average price has largely stabilized at $314,783. Balanced market conditions have, for the most part, re-emerged in 2010. Values, still off peak 2007 levels, have hit a plateau, as buyers take advantage of opportunities at all price points.

The oversupply of listings available for sale throughout 2008 and 2009 has largely been absorbed, with inventory returning to more normal levels. Active listings now hover at 4,864, a decrease of 26 per cent from one year ago. While new listings have fallen off, the supply of homes listed for sale is adequate in most price ranges and neighbourhoods. First-time homebuyers continue to represent the lion’s share of activity in the marketplace, driving sales of homes priced from $300,000 to $350,000. Multiple offers are starting to occur, but they are the exception, rather than the rule. Move-up buyers have ramped up activity as well, spurred by exceptionally low interest rates. Condominiums have been moving steadily in recent months, but supply still exceeds demand.

A strong spring market is forecast for 2010, supported by a serious upswing in consumer confidence levels. Recent announcements regarding major investments in the oil sands have tremendous potential for Edmonton’s economic future. The provincial government is also co-operating with the major players in the oil industry to create a positive business climate and is expected to return to surplus budgets within three years. While there may be some skeptics in the audience, it’s hard to ignore the city’s growing optimism.

Active listings down in 81 per cent of markets in January

Lack of inventory will be the greatest challenge facing housing markets across the country this Spring, according to a report released by RE/MAX.

The RE/MAX Market Trends Report 2010, which examined real estate trends and developments in 16markets across the country, found that unusually strong activity during one of the traditionally quietest months of the year has led to a sharp decline in active listings in 81 per cent of markets surveyed. The threat of higher interest rates, tighter lending criteria, and in British Columbia and Ontario, the introduction of the new Harmonized Sales Tax (HST) have clearly served to kick-start real estate activity from coast-to-coast, prompting an unprecedented influx of purchasers. As a result, 87.5 per cent of markets posted an increase in sales in January. Average price appreciated in 81 per cent of markets surveyed.

Affordability is the catalyst for the vast majority of purchasers in today’s housing market. While homeownership is still within reach in many major centres, levels are slipping. There is a growing sense, on both sides of the fence, that the time to act is now.

Markets experiencing the tightest inventory levels include Toronto (- 41 per cent); Kitchener-Waterloo (-33 per cent); Ottawa (- 30 per cent); Victoria (- 30 per cent); Greater Vancouver (- 27 per cent); Halifax- Dartmouth (- 19 per cent); London-St. Thomas (- 18 per cent); Regina (- 16 per cent); and Winnipeg (- 13 per cent). Conditions were still balanced, but starting to tighten in Calgary, Edmonton and Saskatoon, particularly in the single-family detached category.

The highest year-over-year sales gains were reported in Greater Vancouver (152 per cent), Kelowna (121 per cent), Greater Toronto (87 per cent), Victoria (69 per cent), Hamilton-Burlington (58 per cent), London-St. Thomas (55 per cent) and Calgary (47 per cent). Western Canadian cities dominated the list of centres with the highest increases in price appreciation. These included Victoria at 25.5 per cent, Kelowna at 22 per cent, Greater Vancouver at 19.5 per cent, and Winnipeg at 17 per cent. St. John’s (23 per cent) and Toronto (19 per cent) were also among the frontrunners for price growth.

There have never been so many motivating factors in play at once. We’re in for a heated Spring market that will, in all probability, spill over into the summer months as the window of opportunity draws to a close. The supply of homes listed for sale has been drastically reduced, housing values are once again on the upswing, and banks and governments are moving in unison toward stricter lending policies.

While buyers are taking advantage of favourable conditions, sellers too are reaping the rewards. Competing bids are a factor in the marketplace once again, with well-priced listings-especially at the entry-level price point-experiencing multiple offers. Properties priced at fair-market value will likely sell quickly for top dollar. The overall pressure on sales and price is significant across the board – and it’s not likely to subside unless more inventory comes on-stream.

The level of frustration is growing, as pent-up demand builds. For every successful offer, there are those that will walk away empty-handed. They’re thrust back into the buyer pool and the process starts all over again. Some buyers are upping the ante, while others are considering alternate housing options. Still, purchasers remain cautious in their bids, with most careful not to max out debt service ratios.

Recent revisions to lending criteria will add fuel to the fire in the short term. Buyers considering a variable rate mortgage will step up their plans for homeownership in the next month or so just to get in under the wire. In the longer term, buyers will adjust, but move forward. Compromise has long been a reality-particularly in the larger centres. This simply means they may go smaller or further in their pursuits.

It’s been a 180 degree turnaround from this time last year. It’s clear that real estate from coast to coast has roared back to life and markets are once again firing on all cylinders. The vast majority of markets are now recovered and fully-evolved, with all segments working in tandem. At the luxury price point, activity was brisk in seventy-three per cent of centres surveyed, with momentum ramping up in the remainder. Opportunity exists in some areas, but the question is for how much longer?

Source: RE/MAX Market Trends 2010

Well we are off to another good week in the Edmonton real estate market, as the market is getting stronger every day.

As of this morning there were 1.669 single family dwellings for sale in Edmonton proper.  That is a slight increase from last weeks inventory level of 1,607.  I expect the inventory to continue to increase as we get closer to spring time.

In the last 30 days there were 517 single family dwellings sold in Edmonton proper.  That also is a slight increase from last weeks level of 478.

To most important and relevant part is our listing to sales ratio… they are dropping.  This week’s ratio is 3.23:1 in comparison to last week’s ratio of 3.36:1.  So two things here are important.  Number one is the fact that the ratio is dropping and showing us a trend.  Number two the ratio is below the 4:1 that we need for a stable or neutral market.

So expect valuations to start rising.  If you are a first time buyer don’t wait call your realtor now and see what your options might be even if you don’t have your down payment.  Also if you are thinking of moving to a bigger or more expensive home again the sooner you make your move the further ahead financially you will be.

Please call me if you have any questions about this, or anything else related to Real Estate. I would love to help you out. (780) 634-8151

Serge Bourgoin founding and managing partner of Team Leading Edge at RE/MAX Elite

Team Leading Edge… Leading the way with extraordinary service

Hello and happy Family Day.  I hope that yesterday you also got to celebrate either Valentine’s Day or the Chinese New Year or both.

I was at the Western Canada Re/Max Conference last week.  It was great as I met some very interesting people from all over western Canada.  On individual was from Fort McMurray, and was told that things are starting to turn around in Fort McMurray,  people are working again, and projects that were put on hold are starting up again.

This supports the other rumours that I have been hearing that the oil patch in general was picking for 2010.  Now that is good news for Edmonton, as a large part of Edmonton’s population relies in one way or another from the Alberta oil and gas industry.

As of this morning there were 1,607 single family dwellings listed for sale in Edmonton proper.  In the last 30 days there has also been 478 single family dwellings sold in Edmonton proper.  This would give us a listing to sales ratio of 3.36:1, which is similar to what we had last week but below the 4:1 that is required for a neutral or balanced market.

With this kind of ratio I expect that there will be upward pressure on valuations.  Also as the rumours keep increasing that we will see some kind of interest rate hike sometime this year we can expect some of the buyers sitting on the fence will start to come out and start buying again.

Well the market is not improving if you are a buyer, and good news if you’re a seller.  As of this morning there are 1,523 single family homes for sale in Edmonton proper.  In the last 30 days there was 460 single family dwellings sold.  That would give us a listing to sales ratio of 3.31:1 which is lower than last week.

A ratio below 4:1 always indicates that there is an increase on upward pressure on the valuations of homes.  This is the second week in a row that this ratio has been below the ration of 4:1 – as a matter of fact the ratio this week is even lower than last week.

This means you should expect valuations to rise.  If you are a buyer it is time to “get off the fence” and start looking now before you have to pay more for the same home you want to buy.

Please call me if you have any questions about this, or anything else related to Real Estate – I would love to help you out. (780) 634-8151

Team Leading Edge… Leading the way with extraordinary service

Early signs indicate that Canada’s hot real estate market surged again in January. Among the cities to report data, sales rose an average of more than 60 per cent, and prices more than 14 per cent, from a year earlier in Toronto, Calgary, Edmonton and Ottawa, BMO Nesbitt Burns said. In Toronto, sales jumped 87 per cent and prices 19 per cent. Earlier this week, the Real Estate Board of Greater Vancouver reported that, excluding apartment properties, sales rose 141 per cent in January from a year earlier, and prices 19.5 per cent.

www.TheGlobeandMail.com

Edmonton, February 2, 2010: Single family homes sold through the Edmonton Multiple Listing Service® System sold on average for the same amount in January as at year-end while condominium prices dipped 2%. Month-to-month sales slowed by 6.8% as compared to December but the number of new listings in January doubled the December numbers. 

The average* residential price was $314,783 for January, down 1.4% from last month and down just 0.7% from a year ago. Single family home prices on average were stable increasing minutely from $366,761 in December to $367,747 in January. Condominium prices dipped just 2% in the month from $244,174 to $239,006. Duplex and rowhouse prices were up 1.5% to $300,563.

“There will be month-to-month fluctuations in prices for all types of properties,” said Larry Westergard, president of the REALTORS® Association of Edmonton. “We expect that the local market will continue to be robust and prices will trend upwards through the year.”

Compared to December, housing sales were down in January with 524 single family sales and 288 condominium sales. Total residential sales were 884 units – 154 ahead of last January. There were 2,199 residential listings added during January resulting in a 40% sales-to-listing ratio and a month-end inventory of 4,864 homes. The average days-on-market was 57 days. Total sales (including residential, commercial and rural properties) in January were valued at $315 million (up 19% from last year).

“While the low prices may have motivated some buyers, the continuing low interest rates are probably a bigger factor for first time and repeat buyers,” said Westergard. “The inventory increase shows that current owners are poised to enter the market and to offer their homes for sale. Buyers and sellers should consult their REALTOR® to work out an appropriate strategy for their situation.”

-30-

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

It is interesting what people know – ‘inside people’ that is.  This weekend I started working with a buyer that I had not worked with before.  During the time we spent together I asked her why she was looking to buy a home at this time.  Basically what she said to me was because of working at Alberta Treasury Branch she is aware what is going to be happening to interst rates and their forecast of rising prices this year.  She felt that she needs to buy now before prices and interest rates go up.

As of this morning there are 1,419 active single family dwellings for sale in Edmonton proper.  In the last 30 days we have had only 380 sales.  Again the sales were slow but expected to have a seasonal slow down in January.  However that give us a listing to sales ration of 3.73:1, which is a drop from last weeks number of 4:32:1, and below the 4:1 ratio that we need for a neutral market.

This ratio would support the fact that we are going to start seeing upward pressure on valuations as long as that ratio stays below that 4:1 ratio.

So if you are a first time buyer please don’t wait, we know that valuations are going to go up and that interest rates are going to go up.  Also, if you are thinking about moving to a larger and more expensive home you want to sell and buy right away before valuations go up.  The reason for that can best be explained in this example:  Let’s just assume that your current home is worth $300,000 and the next home you will buy will be valued at $500,000.  If the market were to rise 10% then your home would go up $30,000, but the home you would be buying will have gone up $50,000.  Waiting to get a higher selling price will actually cost you $20,000.  So make the move now before valuations go up, and now while there is limited competition to sell your home.

Please call me if you have any questions about this, or anything else related to Real Estate – I would love to help you out. (780) 634-8151

Team Leading Edge… Leading the way with extraordinary service

LAS VEGAS, Jan. 19 – A survey of consumers and builders, conducted in 2009 by the National Association of Home Builders (NAHB) and the MetLife Mature Market Institute, has yielded a new round of data revealing the housing preferences of the 55+ consumer. This analysis of data – the third in a series – compared the preferences of the 55-to-64 year old age group to those of the 65+ group.

The data uncovered a strong similarity in housing preferences between the two groups, with a few exceptions. The younger age group showed more interest in technology-heavy features, while the older group expressed a stronger preference for a single-story floor plan or one with a first-floor master bedroom, and a variety of universal design features.

One striking difference, according to John Migliaccio, director of research at MetLife’s Mature Market Institute, related to the desire for home services and community services.

“Very telling, said Migliaccio, “is that the younger group of mature consumers reported enthusiastically that they want services like home maintenance and repair as part of their next home purchase, along with services typically connected to older homeowners, such as housekeeping, onsite health care and transportation,” noted Migliaccio.

According to Migliaccio, all of the aforementioned were ranked higher than the desire for organized social activities – a surprise, inasmuch as social activities and amenities have been thought to be valued quite highly by this group. This finding, he said, supports an emerging trend among builders to look for ways to partner with providers of such services to the residents of their active adult/lifestyle communities.

According to Mike McGowan, a 50+ builder from Binghamton, N.Y. and chair of NAHB’s 50+ Housing Council, “Most buyers in this market are looking for an easy-living lifestyle. They would like access to services that will free up their time from maintenance both inside and outside their homes. This data tells builders that the homes we build for older active adults will remain attractive to the consumers who will be entering that market for the foreseeable future.”

Paul Emrath, NAHB’s vice president for survey and housing policy research, pointed out that the share of households that will want lower-maintenance housing is large, and growing larger as Baby Boomers age into that segment of the market. He cautioned that the current financial situation has led to sharply decreased construction of communities that serve the mature market. Without a change in the availability of capital for development and construction, there could well be a shortage of such housing when it is most needed.

For more information on the MetLife/NAHB research, including the first two reports on the age group and consumer preferences, visit: nahb.org.

Source: HGTVpro.com