Edmonton’s ever-changing housing market continues to fluctuate

Reports from September indicate it is a buyers’ market out there

Prices of homes sold through Edmonton's Multiple Listing Service (MLS) continued to soften last month while housing inventory bulged once again.

According to the Realtors Association of Edmonton, single family dwellings listed on the MLS sold on average for $399,555 in the Edmonton area for the month of September down one per cent from an August average of $403,757. This is down just 0.99% from last month.

MARKET CORRECTING ITSELF

“Every market has fluctuations and this market is still correcting after a dramatic upswing,” said Carolyn Pratt, president of the Realtors Association. “Right now buyers can take advantage of prices that are below the peak of last May. Sellers, on the other hand, are still realizing significant equity gains from prices that are still 23.5% above this time last year.”

Condominium sale prices rallied in September, selling on average for $270,745 up 0.6% from Augusts’ average condo selling price of $269,139 duplex/rowhouses were down six per cent over the month, selling for $310,110 on average. The average residential sales price was nearly a wash thanks to the gains made by condo sales, dipping just 0.15% from last month to $344,286.

“Condos are still affordable for a lot of people and that’s why that end of the market is holding up,” said Pratt. “It wasn’t that long ago that $270,000 was a lot of money for a house. A lot of first-time home buyers do not have the income to spend $400,000 on a home, so they put their emphasis on buying a condo to build up equity.”

From January 2006 to May 2007, the average price of single family dwellings rose 74%, setting back just six per cent since then. This cooling trend may be the cause of an industry inventory explosion that saw the month’s sales-to-listing ratio hit 26% with 3,952 residential listings.

With only 1,042 sales, September’s homes sales represent the lowest number in almost 10 years, registering a drop of 43.5% over September 2006. As a result, the residential inventory increased to 9,918 from 9,185 over the past 30 days. The average days-on-market in Septembers increased from 36 to 43 days.

“I think buyers are sitting on the sidelines because they have a lot to choose from,” said Pratt. “They’re taking their time making decisions and deciding if the market is sustaining itself yet.”

RECORD AMOUNT OF CHOICE

At the end of the third quarter, year-to-date sales were down slightly compared to last year. Total residential sales were 17,188 units, down 1.5% from the same time last year with a year-to-date sales-to-listings ratio of 52%.

“There is a record amount of inventory and there are a number of factors,” said Pratt, listing investors rushing to dump rentals, spec homes coming due, families who build new, putting their previous homes for sale, builders continuing to build to meet forecasted demand all added on top of normal MLS activity.

“The fundamentals are still good for a growing market. Edmonton has high employment, a lot of people are still moving into the city, low interest rates, I think we’re going through a correction and in the new year we see the market stabilizing and starting to increase gradually again.”

The north central quadrant of the city was the most active with 83 single family dwelling sales while the central and northwest regions were the least active with just 18 sales each.

Central also offered the most affordable single family homes with median sales below $300,000. An average priced house in the southwest was priced at $517,106.

Outside the City of Edmonton, St. Albert was the most active community with 387 single family dwelling sales and the highest average price of $497,380. Six homes sold in Morinville where the average price was just $327,333.

Edmonton Sun – Sunday, October 7, 2007