Hello!
We are now in the first six months of 2024, and sales are up almost 30% across all housing types, while price increases vary by housing type and area. Net migration to the city from around Canada and the globe has put upward pressure on all real estate asset classes in Edmonton. As more people get out to enjoy summer holidays, sales will likely plateau and eventually, both sales and prices should start to trend downward, as they tend to do in the latter months of the year.
Imminent Interest Rate Announcement
The Bank of Canada is expected to cut its overnight lending rate this week by 0.25%. If true, this will be the second consecutive 0.25% rate decrease in as many months. This decrease is not enough to significantly impact our housing market. It will however decrease variable rate mortgages by 0.25%. Cost savings for borrowers should average $100 per month.
On the Ground
It seems to be another year of being shocked by how much homes sell for and in how much time. We are seeing countless multiple offer situations, line ups, and bids – sometimes uncharacteristically so! A beat-up home in the right area can now demand top market dollars.
What is useful to you, the consumer? Work with someone established, who is able to listen to what you need. A booming market attracts a lot of new agents, contractors, inspectors, and mortgage professionals. Get ahead by using someone that can navigate all of it, and charges fairly for quality work.
Interesting Experience
When listing a home, this has probably been the most interesting year in some time. Some homes will receive as many as seven showings in the first few hours of going live on MLS, and agents will submit offers almost immediately. Other new listings will receive only two or three showing requests within hours of listing and may only receive one or two offers in short order. This leads to the question; how do you deal with either of these scenarios to maximize a sale price for your client?
I’ve liked coming to the market with a new listing, and letting agents and their clients dictate how we will maximize value for our sellers. If the activity on our listing is overwhelming, we almost immediately set a day and time for an offer presentation, and sort through offers as they come in. The more people that can view our listing and offer to buy it, the more we will increase the sales price for my clients.
When showing activity is less than overwhelming, considering offers as they come in is a great way to leverage low days on market, and squeeze a little bit more out of buyers. It is completely common for a seller to ask for over list price on the first offer they receive, and it's common right now for a buyer to agree.
Listing Pricing
Market value is a small range of prices for a home, based on other homes that have sold in the last 90 days, of similar year, type, style, fit, finish and garage style. Listing at market value, or 5-10K over estimated market value, almost always guarantees a multiple offer situation. While it is still possible to sell by overpricing a listing by 15-30K, it will decrease the likelihood of sale, decrease the purchase price, and increase the number of days for sale. It can also stigmatize the home in the minds of buyers and agents, leading them to wonder, what is wrong with this house and why isn’t it selling? Which might lead them to low ball an offer or skip it altogether.
Market Statistics
Detached Single Family Homes
Sales are up nearly 30% from the first six months of 2023, while inventory remains almost the same as the previous year. 11,827 units have sold thus far, an increase of 484 more homes for sale than last year. Prices are up by almost $30,000 per home, now at $525,812 (previously from $492,253) in the first six months of 2023.
Semi-detached Homes, Duplex/Triplex, Condo-Fee Less Townhomes
Sales are up 30% from 1255 units in the first six months of 2023, to 1628 units in the first six months of 2024. The number of new listings has only increased by 112 units, from 1844 in 2023, to 1956 today. Average sale prices YTD are up from $374,337 in 2023, to $406,812, up approximately 9% year over year.
Semi-detached with Condo-Fees
Sales are up almost 35% while the number of townhomes for sale has increased 14% to 2,496 in 2024, from 2,181 units in 2023. Prices have increased 12% from $253,972, to $286,872.
Apartment Condominium Units
Apartment condo sales have increased by almost 58% from last year. They’ve gone from 1,732 sales to 2,435 sales in 2024. Prices have only increased by 4%, now at $199,780, from $192,734 in 2023. Inventory has risen by approximately 8% year over year in comparison to 2023.
Economic Indicators
Alberta Net Migration
Total net migration from all sources into Alberta amounted to 45,375 persons during the first quarter of this year, representing a 4.5% increase from the first three months of 2023. Newcomers from outside of Canada represented the biggest driver in Alberta’s population growth followed by continued high levels of interprovincial net migration.
(Source)
Single-detached Housing Starts (YTD) (Edmonton CMA)
So far this year, single-family home building starts in the Edmonton CMA have increased 41% from January to May 2023 to 2,221 units. Inventories have remained low relative to absorption rates and this has encouraged builders to ramp-up production this year.
(Source)
Personal Note
Recently for fun, my oldest and I nerded out on a spreadsheet and looked at all the neighborhoods in the city. Here are the most popular neighbourhoods in Edmonton, by number of single-family home sales in the last 30 days. There are actually 249 communities that made this list this month, including a community I had no idea existed: Gorman!
About Me
After a career in Oil and Gas Field Services I graduated from the University of Alberta, with a Degree in Business Economics and Law with recognition, and a scholarship from the Appraisal Institute of Canada and the School of Retail for his design, implementation, and completion of "The History of Real Estate in Edmonton". Since then, I have been active in and throughout the Alberta real estate market, and continue to win awards for sales volume and customer service excellence.