RE/MAX Edmonton Real Estate News

Reports indicate increases in inventory have been the most influential market factor.

The EREB has released their first market report of the new year, outlining how real estate in the city has fared this past January.

The name of the game has been inventory, as the market saw a 30% increase in residential listings, as well as a total inventory growth of 17%, when compared to January of last year.  Within the first month of 2015 there were 2316 residences listed, while in December of 2014 only 932 new listings hit the market.

An additional factor in inventory increases was a slight decline in sales, to be expected this time of year, by a margin of about 13% in month-over-month totals. These considerations have created an excellent climate for buyers overall. REALTORS® Association of Edmonton President Geneva Tetreault clarifies the current market environment,

“We ended 2014 with low inventory. While this is not unusual for the winter, it can make it difficult for buyers to find the right home. The influx of properties we have seen on the market in January will be a relief for buyers – allowing them more choice in their price range and possibly more time to make their selection…Buyers in the popular $400,000 price range often struggled in 2014 to find their ideal property or had to move quickly before it sold. This increase in inventory will be a great benefit to them.”

Despite some sales decreases and current economic factors in Alberta creating pressure, the market has remained as strong as ever, with sale prices still seeing increases. January sale prices increased 1% from the previous month and almost 4% from the same time last year. The residential sale price averaged $362,394, with single family homes at $427,178, and condos remaining stable at $247,116.

President Tetrault elaborates on the local conditions,

“We are likely seeing the effects of oil prices and a feeling of economic cautiousness amongst some buyers. Clients are looking to REALTORS® for advice and guidance to navigate their own individual situations. We expect more of an uptake in the market as spring approaches and more people start to look for homes.”

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Housing prices have been resistant to economic decline

In the face of economic downturn there are still expectations that Canadian home prices will continue to rise. It is being reported that while the growth may slow understandably, there is no foreseeable slump in the any of the major real estate markets of Canada.

Despite plummeting oil prices a predicted nationwide appreciation of 2.9 % can be expected on 2015 residential sale prices. The major centers of Toronto and Vancouver are predicted to see increases of as much as 4.5% and 2.8% respectively.

2014 saw prices surpass historical averages; residential detached bungalows rose about 6.7% throughout the nation. Edmonton’s condo market saw the largest nationwide increase at 12.2%, contrasted with the cross-country average of 4.5%.

ATB Financial Chief Economist Todd Hirsch comments on the predictability of the oil markets:

“This happens over and over. In fact, in 2009, we saw a similar price plunge like this and it was quite short-lived and things rebounded…I don’t think we should worry too much because I think it will be quite temporary.”

Alberta in particular has prosperous industry to fall back on, such as agriculture and forestry, which have the potential to thrive in low oil price conditions. Additionally, as reported by the Calgary Herald, Alberta saw a “50 per cent increase in meat product exports last year along with growth in the aerospace, farming and chemicals sectors.”

Pierre Cleroux, Chief Economist with the Business Development Bank of Canada reasons

“Oil of course is the No. 1 export product from Alberta but we often forget that Alberta is also a diversified economy. There’s other sectors that are doing well.”

The real estate market outlook is optimistic due to other economic factors like labour market trends and a continuing surge in demand from homebuyers. At this point the multitude of positive aspects continue to outweigh the decline seen by a deteriorating oil market.

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