Oil Field Politics and the YEG Market
How much will oil field politics impact Edmonton’s Real Estate economy?
A February sales report published by the EREB titled “Home buyers continue to cautiously watch market” has left some feeling less than optimistic. There is no denying the ongoing concerns of Albertan’s over the economic future of the province, however the real question is, to what extent will recent political and oil industry events impact the province’s real estate industry? It is very plausible that the market, which has proven itself as more than a little resilient, is simply experiencing a predictable lull.
The recent economic downturn appears to be creating undue concern amongst market consumers and professionals; a concern that is starting to be reflected in market activity, as explained by REALTORS® Association of Edmonton Chair Steve Sedgwick,
“Sales volumes are down, relative to the same time last year…It is likely that home buyers are responding to current economic uncertainties. Although prices have dropped slightly, they remain stable. Growth in inventory may create more opportunities for potential buyers, and given the low interest rates, we remain optimistic about market growth as we head into the spring buying season”.
The report goes onto to show strong inventory numbers, with 5,751 MLS properties available going into February. This figure is almost a 40% increase from the same time last year, creating a great deal of consumer options for discerning buyers. This massive inventory increase hasn’t yet caused market saturation concerns, as sales from the same time last year are down a mere 7.21%. However in contrast to the month previous, December of 2015, sales dropped just over 14%.
Continuing in favour of a buyer’s market, a small decline occurred in residential sale prices. The average single family home price hovered at $418, 928 down 1.2% from the month previous, while condos show a larger 8.8% decline in the same time frame, for an average of $227, 052. The largest drop showed in the category of duplex/rowhouses which averaged out at $326, 885, a double digit decrease of just over 12%. All in all the residential category saw a 7.2% decreases in month over month sales, and a 6.3% decrease year over year for an average price of $339, 714.
The larger inventory is likely contributing to a rise in average days on market, which has increased to 71 days, up from December’s 62. Comparatively, this time last year, the average was about 58 days to market. The EREB report attributes this average rise mainly due to condominium sales “which sat at 85 for January, up from 62 from last month and 61 YoY” (EREB).
Concludes Sedgwick,
“The increase in the average days on market just appears to reflect that buyers are taking time to consider their options before purchasing a new home,”. He continues, “Clients are looking to their REALTOR® for advice and guidance as they navigate their own individual situations.”
