Both buyers and sellers are facing favourable conditions heading into the spring — traditionally the busiest time of year for residential real estate — as the Edmonton market is much more balanced between supply and demand than at any point in the last two years.
“The balanced conditions so far this year have us very optimistic for the spring,” says Melanie Boles, chair of Realtors Association of Edmonton.
She points to the sale-to-new-listings ratio — a metric indicating if the market favours buyers or sellers — from February.
RAE statistics show the ratio was at 50 per cent, about as balanced as market conditions can get, Boles adds.
“To me, the current conditions set the table for an ideal spring market.”
The conditions also mark a stark difference from this time last year when in March, for example, the sales-to-new-listings ratio was 76 per cent, favouring sellers. (Of note: a ratio exceeding 60 per cent favours sellers, and one below 40 per cent favours sellers, whereas a ratio between 40 and 60 per cent is considered balanced.)
Moreover, Edmonton’s market was breaking records for sales and average prices last February and March.
To that end, this past February’s numbers show a marked decline in activity with 1,291 sales, down more than 43 per cent from the same month last year when 2,282 homes sold — a record for February.
Although down from last year, February sales are a significant improvement from January, up 31 per cent, indicating growing momentum.
“I would call conditions ‘the new normal,’ ” where buyers are getting comfortable with higher mortgage interest rates, which began rising rapidly in March last year, Boles says.
“Now buyers are looking at different options for homes than they were this time last year.”
RAE sales numbers from February illustrate that changing focus, driven by affordability with continued strength for apartment condominium sales. Although sales fell about one per cent year over year in February, that was the smallest decline among all segments.
In comparison, single-family detached homes — the most active part of Edmonton’s market — saw sales drop more than 49 per cent.
Yet the condominium market also has not yet seen a big jump in its average price. In fact, the average price of a condominium fell in February by 0.1 per cent year over year to about $187,000.
By comparison, the average price for a single-family detached home rebounded last month, up nine per cent from the same month last year, to about $460,000. Boles notes the differences reflect ongoing low supply for single-family detached homes, especially in the low to mid-ranges, and less tight conditions for condominiums.
Overall, Edmonton’s market is in much better shape than larger markets like Vancouver and Toronto, in large part due to its affordability, says Phil Soper, president and chief executive officer of Royal LePage.
“In fact, Edmonton’s affordable homes are attracting buyers from across the country,” he says. “It’s also worth noting that in our 2023 forecast there were only two metropolitan areas in the entire country that we saw potentially ending the year with home prices higher than they started the year — Edmonton and Calgary.”
Yet even with growing interest from out-of-province buyers and strong economy amid higher energy prices, Edmonton’s spring resale real estate market will likely not see a replay of the red-hot conditions of last spring — and that’s OK, Boles says.
“But it’s likely to be a good market for both buyers, who have time to look, and sellers, who can still get a good price.”2023-03-17T20:17:00Z dg43tfdfdgfd