Economic Cycles Prevalent in Real Estate Ups and Downs
Tuesday, January 26th, 2016
Rowhouse/Duplex style homes continue to be the superstars of the YEG home market.
In the face of a potential economic crunch for Albertans, do EREB mid-winter sales statistics offer any light at the end of the tunnel? Has the real estate sector yet seen any fallout from this relatively recent downslide? While some areas have shown relative decline, such as condominiums, we continue to see promise in areas of duplex and rowhousing, which remain up in sales, while total number of property sales also remains strong.
REALTORS® Association of Edmonton Chair Geneva Tetreault summarizes her big takeaway on the year overall,
“2015 was a steady year for real estate in Edmonton. Edmonton and the surrounding areas experienced a decline in sales due to economic uncertainty, but we saw a slight increase in price that demonstrated that the market remained relatively stable. This began to cool in the fall months as inventory remained higher than normal.”
These expected patterns indicate the real estate market is following the largely predictable up and down cycle we see recurring year after year, and therefore provides an optimistic outlook about the market’s relative economic resilience.
As reported by the EREB, the cooling of December prices was not only “seasonally normal” but proved advantageous to potential home buyers. Total residential sale prices dropped a slight 0.9% from November of 2015, with the average price of a single family detached home decreasing to $424, 629 (compared to November’s $432, 862). Condominium prices decreased 1.8% to $248, 956 yet duplex/rowhouses reported a whopping 10% increase in price up to $374, 217. These prices are in fact up, in year over year comparisons. The year ended with average single family home prices up 1% from the year previous, and all residential properties up an average of 1.5% total. This is an area where even condominiums showed a slight increase (about 0.5% from the year previous). The 2015 condominum average sale price was up tp $252, 954, and single family homes rose to $437, 569, while all residential properties averaged out at $372, 511.
The sales to listings ratio for the year was 54% (evening out slightly from 2014 when it was 16% higher) while average days on market were up only 4 days from the year previous, to 51 days. Inventory continued to dominate throughout 2015, with year end inventory at a staggering 5,088 properties. In comparison, at the end of 2014, year end inventory was at 3059 available MLS properties.
The new year continues to carry forward 2015’s trends of high inventory, and in ever increasing buyers market. Tetrault comments on these trends,
“We continued to see home buyers take advantage of low mortgage rates. An influx of listings at the beginning of the year, meant that buyers had a larger selection of homes and were able to take more time selecting properties than in previous years. We continue to see a tight market in the popular $400,000 price range for single family homes.”
Overall, 2015 MLS sales were down about 9% from the year previous, however it should be emphasized that this drop still shows a 1% increase over 2013 numbers. Single family homes represented this average, with a 9% decrease, while condos showed a decline in sales of around 13%. The ever popular rowhouse/duplex category continued to dominate the market with a rise in sales of 6%. In total Edmonton realtors reported 17,298 residential sales via MLS last year.
CLICK HERE to connect with a real estate professional in your community.
