Edmonton Real Estate Blog

EDMONTON – More houses and condos will be built, more existing homes sold and it will be a little harder to find an apartment to rent next year.

And existing homes and rents are expected to cost more in 2010, a comprehensive new report on Edmonton’s housing market said Monday.

This strong rebound predicted for 2010 comes after housing starts in the Edmonton area hit bottom this year — the third straight year of decline, the Canada Mortgage and Housing Corp. said Monday.

Builders are on pace to begin construction on 5,000 homes, 24 per cent fewer than the year before, said the national housing agency’s Fall 2009 Housing Market Outlook for the Edmonton census metropolitan area.

It is the lowest level of activity for the region’s homebuilders since 1997, said the report, and follows a 56-per-cent decline in total housing starts in 2008.

“While single-detached construction has staged a modest recovery since the summer, a continued downturn in the multi-family sector will hold down this year’s numbers,” the report said.

For 2010, the agency expects continued growth in single-family detached homes and a moderate rebound in multiples, boosting total starts by 29 per cent to 6,450 units. While that would be a considerable improvement over this year, it compares with an average of more than 10,600 units started every year from 1999 to 2008.

For 2009, a new single-detached home in Edmonton will be an average of $535,000, up 4.5 per cent over 2008.

Still, the CMHC predicts the average price will soften in 2010 by 2.8 per cent to$520,000 because of a “lagged effect” of when homes are priced and when they are completed.

On the other hand, the agency forecasts pressure for higher negotiated selling prices in 2010 from builders who had cut their margins over the past year to clear inventory. “With better economic times ahead, land and labour costs as well as material prices such as lumber and concrete are expected to increase.”

In the resale market, the CMHC predicts residential Multiple Listing Service sales will increase this year by eight per cent to 18,750 units. Last year was the slowest for Realtors since 2003, with saw sales falling 15 per cent to 17,369 homes.

“Provided the economy and interest rates perform as expected, CMHC looks for the upward trend to remain in place during 2010,” the agency said. Total MLS sales are forecast to rise another 9.3 per cent to 20,500 homes in 2010, which would approach the level in 2007, which was the second-best year on record.

The average residential MLS price will end 2009 close to $322,000, down 3.3 per cent from the 2008 average.

A balanced market in 2010 is expected to translate into modest price gains all year, with the average resale price rising 3.4 per cent to about $333,000, CMHC said.

Home-ownership costs will likely rise in 2010 as mortgage rates are at rock bottom and prices set to increase, the agency added.

In rentals, apartment vacancy rates across Greater Edmonton will continue to trend up this year. “But landlords should see a turnaround in 2010, provided economic conditions improve,” the report said.

The vacancy rate for October was an estimated four per cent, compared to 2.4 per cent a year earlier. It was the highest fall vacancy rate since 2005.

Factors in dampening demand for rental apartments were rising unemployment, more demand for home ownership and a steady influx of condominium units.

The agency sees the rental vacancy rate falling to 3.5 per cent amid fewer new apartments and strengthening demand.

CMHC expects its fall survey to show rents largely unchanged from October 2008. “With vacancy rates starting to subside in 2010, property owners will be looking to raise rents to offset rising operating costs, in particular utilities and property taxes,” the report said.

A typical two-bedroom apartment will rent for nearly $1,070 by October 2010, up about $35 a month on average compared with October 2009.

By Bill Mah, edmontonjournal.com

Well we may just have seen a reversal of the trend that we have been experiencing over the last few weeks where we saw the listings to sales ratio rise to a more neutral market.

As of this moring there are 1,500 single family dwellings in Edmonton proper listed on MLS.  That is a significant drop from last week in which we had 1,649 homes listed on MLS.

Also as of this morning there were 568 sales of single family dwellings in Edmonton proper that were listed on MLS.  That is an increas from last week’s number of 494.

This would give us a listing to sales ration of 2.64:1 down from last week’s ratio of 3.33:1.  Last week’s ratio was indicating that we were arriving to a neutral and balanced market.  But with this week’s number dropping to 2.64:1 that will put upward pressure on valuations.’

The next 4 weeks will be interesting to watch as historically is our slowest time of the year.

OTTAWA – Canadian home sales jumped 73 per cent in November from a year earlier as the real estate market continued to recover from the economic downturn.

The Canadian Real Estate Association said Tuesday that 36,383 residential properties were sold last month, with Ontario and Quebec setting sales records for November.

“The current strength of housing demand stands in sharp contrast to weak activity recorded one year ago,” CREA said in its report, adding that activity was just 4/10 of a per cent below the highest level for the month recorded in November 2007.

“National home sales activity last month shows how strongly the housing market has rebounded since the beginning of the year,” said CREA president Dale Ripplinger. “As we predicted last April, the rebound in resale housing activity led the overall Canadian economy out of recession.”

The national residential average price was $337,231 in November, up 19 per cent from a year earlier.

Financial Post

 People walk past new homes that are for sale in Oakville, Ont. New house prices went up for the fourth straight month in October but are still down from last year, Statistics Canada said Friday.

New house prices higher in October

Statistics Canada says housing prices were on the rise in October.

The agency’s New Housing Price Index rose 0.3 per cent in October, its fourth straight monthly increase. The index rose by 0.5 per cent in September.

Prices increased the most in Quebec City, where they were up 1.1 per cent, followed by Vancouver, at 0.7 per cent. Hamilton, Sudbury and Thunder Bay, Ont., all registered 0.5 per cent increases.

Prices went up in Quebec City in part due to a scarcity of land and increased building costs, the agency noted.

Two cities recorded monthly decreases in new housing prices – Charlottetown, with a 0.7 per cent drop, and Edmonton, at 0.3. In both cities, prices were lower because builders slashed prices to remain competitive, the agency said.

Year over year, the index was down 2.1 per cent in October following a 2.7 per cent decline in September. The largest decreases continue to be in the west, Statistics Canada said.

CBC News

A new report will be greeted as a good news/bad news proposition for Canadians, depending on which side of the home ownership fence they currently reside. Good news for home owners, who can expect housing values to end 2009 at an average of $318,000, up five per cent from 2008; and bad news for those still waiting to break into the market, as prices are expected to rise another 2 per cent by the end of 2010 – the highest level in Canadian history. Where are home prices headed across the country? Click to find out.

Canada
Average price in 2007: $307,265
Average price in 2008: $303,594
Average price in 2009: $318,000
Change in ’09: +5%
Average price in 2010: $325,000
Change in ’10: +2%
Source: CREA, Local real estate boards, RE/MAX

Edmonton

Average price in 2007: $338,636
Average price in 2008: $332,852
Average price in 2009: $321,000
Change in ’09: -4%
Average price in 2010: $330,000
Change in ’10: +3%
Source: CREA, Local real estate boards, RE/MAX

Well it appears that the seasonal slow down in starting to hit us here in the Edmonton marketplace.  The number of single family dwellings in Edmonton proper listed dropped significantly from last week from 1,762 to 1,649.  That is a 6.4% drop in one week and that is very significant.

The number of sales also drop significantly in the last week from 545 to 494 in the past 30 days.  That is a 9.4% drop in sales volume.  Again the trend that is of concern to me is that the number of sales are dropping faster and by a greater amount then the number of listings.

What does that mean?  Well it means that our listing/sales ratio his risen from 3.27:1 to 3.33:1, which means that I am concerned that valuations could drop if the trend continues.

Edmonton, December 2, 2009: Total sales through the Edmonton and area Multiple Listing Service® system to the end of November have surpassed total year end sales in 2008. The total value of all types of property sold to the end of November is $6.64 billion. The same figure at the end of December 2008 was $6.42 billion. There have been 20,355 property sales so far as compared to 19,448 at year-end 2008.

“Both sales and the value of sales have exceeded our expectations this year,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “We anticipated sales levels would be the same as last year but REALTORS® have already sold more property than last year with a month to go. This is a good indicator of the strength of our local market.”

In November, the average price of a single family dwelling went up 1.2% to $368,018, reversing a 2% drop in the previous month. Single family dwelling prices are 1.5% higher than the same month last year.

Although condominium prices are down 2.5% from last month they are just $50 higher than condo prices a year ago. The average price for a condo in November 2009 was $231,684. At $284,849, the duplex and rowhouse prices were down 4.7% from last month and down 9.5% from a year ago. Overall, the all-residential average price is down marginally from October and the previous November. It sits at $318,482.

There were 1,894 homes listed on the MLS® System in November with 1,261 sales for a sales-to-listing ratio of 67%. The total value of residential sales in November was $402 million and total available inventory was 5,226 homes which is a typical four month supply. Homes sold on average in 48 days which is up one from last month but much brighter than the 63 days it took to sell a home in November 2008.

“The market remains rock steady,” said Ponde. “Prices vary from month to month within a small range and with a slow gradual upward trend. Buyers have confidence in this market and REALTORS® are prepared to match their needs with the perfect housing option.”

-30-

Highlights of MLS® System 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.

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.

Another week another dollar… Maybe.

As of this morning there were 1,781 single family homes listed for sales in Emdonton proper.  That is only a slight drop from last weeks number of 1,794,  So the listing inventory is remaining fairly stable.

In the last 30 days there were 545 single family homes sold in comparision to last weeks 546.  Again, a very stable number.  That ultimately give as a listing to sales ration of 3.27:1.

Stability is good and if the market can continue to hold its own for the next few weeks we shouldn’t see market values dropping over the winter months.

So if you have been waiting for prices to drop over the winter months before you buy you just might be out of luck and end up paying more because you waited.

Well another week has gone by and things are not improving.  As of this morning there are 1,794 active single family homes in Edmonton proper which is almost the same as the inventory level we had last week.

The real concern comes from the number of sales in the previous 30 days of single family homes in Edmonton proper at 546.  That is a 5% drop in the number of sales in just one week.  It also brings the listings to sale ratio up from 3.11:1 that we had last week to 3.29:1 this week.  Both of these are indicators that the market is softening.

Sellers will have to be more aggressive in their list price in comparison to their competition, but the ratio is still not high enough to put downward pressure on valuations.  So I would expected the valuations to remain fairly stable over the short term.

Also keep in mind that historically we do get a slow down in the market at this time of year until approximately February when things start to heat up again.