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.

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

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.

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

While some real estate markets in Canada are really hot it would appear that we are cooling down.  That is not to says we were really hot to begin with.

As of this morning there were 1,810 active residential single family dwellings listed for sale in Edmonton proper.  That is down 6.2% from last weeks number of 1,930.  The number of sales were also down 9.3% last week from 652 to 604.

That would give us a listing to sales ratio of 3:1 a slight increase over last week.  Looking at that number alone would indicate that the market is still strong and we should not be concern.  However the trending of listing dropping is a concern, but what is even more disturbing is the number of sales is dropping at a faster rate than the listings.

If that ratio get to 4:1 or greater expect it to become a buyers market here again, but for right now we are still in a slight sellers market.

If you are a buyer are you willing to roll the dice that things will get worse and maybe better deals might be out there?  But remember the number of listings are dropping which means there would be fewer homes to choose from and it might be more difficult to find the right home.

As for sellers are you will to roll the dice that things will turn around and valuations start to rise again??  Remember that economic numbers as of late shows that the economic recovery isn’t that great as a matter of fact based on the last numbers it might be getting worse again.  Are you prepare to take the chance, and possibly have to sell your home at an even lower price in the near future?

Only you can make those decisions.  As for me I will continue to give you the statistics every week and give you my opinion.  And right now I am concern because unlike the rest of the year where I was able to accurately forecast increasing valuation, right now I am not sure which way we are going to go.

Some of you might have heard how the Toronto market has become a seller’s market.  A large number of the new listing coming on the market are receiving multiple offers, and people have even gotten creative by including videos with their written offers pleading for their offer to be accepted.

Well we are a long way from that here in Edmonton.  The Edmonton marketplace has been strong in comparison to the rest of Canada for well over 18 months.  The listing to sales ratio is hovering around th 3:1 at this time, which indicates that there might me still some upward pressure on valuations, but we are far from becoming a hot market.

The number of new listings coming on the market has kept pace with the sales, and until that changes we can expect the market to remain fairly stable.

Well I think the fall market place is definitely here.  There has been an increase in the number of single family homes for sale in Edmonton proper from 1,930 homes to 1,951 this week.  The slight increase in available homes for sale is probably due to the reduction in the number of sales in the last 30 days from 683 to 652.

With those kinds of numbers we would have a listing to sales ratio of 2.99:1 and increase from last week at 2.83:1.  This indicates to me that we are going to be seeing less upward pressure on valuations, possibly even a leveling off.  We are going to have to watch this ratio closely as if continues to rise we might even see downward pressure on valuations.

Well it is appearing that the Edmonton real estate market is staying strong.  As of today there are 1,930 single family homes listed for sale in the Edmonton area which is only a slight drop in inventory since last week.  Sales however increased slightly from 675 to 683.

The end result is that the listing to sales ratio dropped to 2.83:1 from last weeks 2.88:1 which indicates that the market is still strong and that valuations should still continue to rise slightly.

With pressure still on valuations to rise in Edmonton and the potential for an interest increase now is the time to buy.

Happy Thanksgiving Day!

I guess there is no rest for the wicked as I am off after this to show home on this wintery day, but that is not why you come here to visit me today.  So here is what is happening to our real estate market in Edmonton.

As of this morning there were 1,946 single family homes listed on the Multiple Listing Service in Edmonton proper.  That is a slight decrease of last week but to be expected as we are heading into the fall season.  In the last 30 days we have seen 675 sales of single family homes in Edmonton proper.  That gives us a listing to sales ratio of 2.88:1

This is very consistent to what we saw last week and I am expecting the market to remain fairly stable for the next few weeks.

Although sales were not at record levels in September, they compared favourably with sales levels last year and settled in for the third best September ever. Only sales in September 2006 of 1,844 residential units and last September (1,729) were better than the 1,704 sales pegged last month.

“We have experienced strong sales through the third quarter,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “At the end of the first quarter YTD sales were down over 21%, and after six months they were up almost 2%. The last three months have had strong buyer demand and year-to-date sales are up 5.3% over the same period last year.”

The strong sales also boosted prices of both single family and condominium properties. Prices dipped slightly in August after showing steady gains all year but bounced back to mid-summer levels in September. The average price of a single family dwelling was $371,947 and condos were priced on average at $245,546 (both up 1.4% over August prices). SFD prices are up over $20,000 from where they were on New Years Day.

Higher prices have not resulted in greater listing activity. 2,564 homes were listed in September resulting in a 66% sales-to-listing ratio as compared to September 2008 with over 3,100 listings and a 55% S/L ratio. The slower listing activity dropped inventory to 6,032 from 6,445 units last month but there is still almost four months of inventory at present sales volumes.

Duplex and row house properties sold on average for $299,964 and the combined Average Residential Price was $327,235 in September; up 2% from September 2008.

“Homes are selling slightly faster than last month and much faster than last year at this time,” said Ponde. “I expect that sales in this market will show continued strength through the fall and early winter.” The average days-on-market was 44 in September; down four days from August.

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

Source: Realtors Association of Edmonton