Last week, RE/MAX released a report on the current state of the Canadian Housing Market and the major changes it has undergone in the last 20 years, which was featured in an Edmonton Journal news article. The report contained information on several major Canadian real estate markets, including Edmonton.

You can read the section on the Edmonton market in the report excerpt below, or check out the full press release and downloadable report on the RE/MAX website.

Alberta, Edmonton

A red-hot economy fuelled unprecedented price appreciation in Edmonton over the past decade, but rising values have had as much to do with new home construction as they have supply and demand. Canada’s second strongest performing market – up 165% since 2000 – has seen close to $19 billion in residential building permits issued during the same period, virtually tripling values reported in the previous decade.

Average price has climbed from $124,203 in 2000 to $328,803 in 2010, peaking in 2007 at $338,636. Prices have since stabilized and regained some of the ground lost during the recession and subsequent fall out. More balanced market conditions have emerged, with buyers gaining a slight advantage.

New condominium construction has led the way in recent years, with an abundance of newer units coming on stream. Condominium now represent close to 28% of total residential housing sales in Edmonton, with an entry-level price point of $234,982 (YTD September 2011). Rental conversions have also occurred at a steady pace, given that affordability is top of mind with many purchasers. Yet, single-family dwellings remain most popular, with year-to-date (January to September) average price hovering at $325,252.

The city’s newer housing stock tends to be found in the peripheral areas, surrounding Edmonton proper. With more than 8,000 properties currently listed for sale, little movement is expected in average price in the months ahead. Although inventory levels are down somewhat from one year ago, supply remains considerably higher than the 5,500 to 6,000 units traditionally on the market at this time of year.

Renovation is on-going in the city, representing approximately just over 5% of building permits issued so far this year. Infill is a relatively uncommon phenomenon. Upscale communities such as Glenora have seen some properties priced at $400,000 to $500,000 torn down to make way for larger, custom-built homes, but, to date, the trend has yet to gain traction.

Edmonton remains one of the fastest growing metropolitan areas in the country, with a 10% increase in population in the last census, bringing the number of residents to 1,034,945 in 2006. Job opportunities remain plentiful in the area, thanks to an unemployment rate that is well under the national average. As economic performances improves, so too will the residential housing outlook.

How much is my home worth?

That’s the first question sellers ask, and one of the most important questions a professional real estate agent can answer. The price you set for your home has a huge impact on the sales process, and if the number is wrong — either too high or too low — the selling process won’t be a pleasant one. Too high a price and no one will make an offer, but set too low a price and you may end up losing out.

Setting the price is an extremely difficult thing for homeowners to do on their own. Not only do you have to include physical changes to your home in the equation — things like renovations, improvements, and wear and tear — but you also have to consider market factors such as where your home is located and inflation. Often your home will be worth more, maybe much more, than you paid for it, but sometimes the real estate market shifts and economy factors mean your home might be worth less.

A Comparative Market Analysis is Critical

To find the optimal price for your home, we need a benchmark. Something relevant to compare your home against. The best way is to perform a Comparative Market Analysis or CMA, where we find four or five homes in your area that are similar to yours and are on the market or have recently been sold. By looking at the actual money paid in real estate sales with similarities to your house we can zero in on a general value, often called the “appraised value”. The appraised value isn’t necessarily the exact price you’ll sell your home for, but when combined with market trends and the particular details of your property, we can create an excellent benchmark.

When you hire  a real estate professional to appraise and help sell your home, you are guaranteed to set the best price that optimizes both the likelihood of drawing lots of interest to sell quickly and maximizing your investment. With the right investment property in the right market, a strategy for selling success may actually be to price your home slightly lower to maximize buyer attraction and offers. Our team understand the nuances of the Edmonton real estate market better than anyone, and because our agents sell and see so many homes we can pinpoint the perfect selling price.

The Terry Paranych team knows setting the right price will give you maximum exposure and get you top dollar for your home. We are so confident in our expertise and market research that we guarantee the sale of your home in 90 days or we’ll buy it from you.

With well over 10,000 properties for sale we’re seeing a lot of buyers jump back into the market. Activity has been picking up since the end of August.

There are two key reasons we’re seeing a strong last quarter: first, buyers have lots of choice; and second, interest rates are low. These facts combine to make this fall an extremely appealing time to buy Edmonton real estate.

Right now is an incredible time to get into the condo market, with prices as much as 50% off the original listing price. In the last few months prices have come down to the point where we can see positive cash flow again, making September an incredible time to invest.

Buyers and investors: get started searching our Edmonton Home Listings.

From the EREB’s Edmonton Real Estate Market update:

Edmonton, September 2, 2010: The average price of single family property in the Edmonton area has softened with a small drop for the second consecutive month. Prices were plateaued at just over $388,000 from March to June. Condominium prices have dropped steadily from their high point of $253,000 in April and are down another 2.99%.

*Average prices indicate market trends only. They do not reflect actual prices, which vary from house to house and area to area. For information on a specific area, contact the Terry Paranych Team today.

According to The Edmonton Journal, February 9, 2010:

“Canadian real estate sales and prices are poised to set records this year, according to a new forecast that’s bound to reignite calls in some quarters for tighter lending rules.
The Canadian Real Estate Association, which represents 100 boards across the country, said Monday it expects existing home sales to reach 527,300, a 13.3 per-cent increase from a year ago and 1.2 per-cent increase from the record set in 2007.
Bank of Canada Governor Mark Carney has warned about rising household debt, which is reaching record levels. Finance Minister Jim Flaherty has suggested he’s prepared to tighten mortgage requirements and continues to monitor the market.
“One of the legitimate concerns of the finance minister might be if you make qualifying for mortgage default insurance prematurely restrictive that it will quell housing activity even as erosion in affordability continues,” said Gregory Klump, chief economist with CREA.
There have been rumblings that the government is considering rules that would require buyers who need mortgage insurance to have at least 10 per cent down over 25 years instead of the current 35 years. Buyer’s with less than 20-per-cent downpayment must get mortgage insurance, if they’re borrowing from a financial institution governed by the Bank Act.
Klump’s group believes the market is going to correct on its own in the second half of 2010. CREA has called for sales to drop by 7.1 per cent in 2011. The group says that while prices will rise by 5.4 per cent in 2010, to an all time high of $337,500, they will drop by 1.5 per-cent in 2011.
Some economists agree price increases will shrink once interest rates rise and inventory levels increase.”

In my opinion, this is a very exciting time again for the Edmonton real estate market. I am seeing multiple offers due to the edmonton’s home inventory being so low. I personally was not expecting to see these market trends until very early or late spring.

One comment I typically hear from potential clients is “Should I wait until the Spring to put my house on the market?”. In most cases the spring market is considered the ideal time to list your house, but not now. If your planning on selling, do not wait! Putting your house on the market sooner rather than later is the best decision that you can make. To find out what your home is worth, give me a call today at 780-457-4777 or fill out our online form at: www.paranych.com

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