It’s well understood that Alberta is a place people can look to for more affordable real estate, and if you can be gainfully employed in the Province it’s certainly true that you can get more for your money with housing there. The majority of people who do relocate to Alberta will probably be moving to Calgary or Edmonton, although there are some nice smaller towns there too if you can make a go of it there. The Province is blessed with some amazing natural beauty, and anyone who has been there will agree with that.
Calgary real estate may cost less on average than in Vancouver, Toronto, Montreal, or Halifax, but it’s Edmonton of the two where you can still buy a detached home for a reasonable price. This has long been part of what’s drawn people to Edmonton, and of course they love their hockey too just as much as any of the more traditional cities in the regard. But it would appear that Edmonton isn’t safe from the real estate market slowdown that is occurring across the country in Canada.
No one is disputing the fact that interest rate hikes from the Bank of Canada were very much needed to combat the ongoing inflation, but the unintended side effect is that financing the purchase of a home becomes a lot more challenging. It is what it is, and people who are first-time homebuyers will still often find a way. But the ever-fewer numbers of homes being sold as a result of this can be trying for everyone, and including those who work in the business as realtors.
It’s for this reason that our online real estate lead generation system here at Real Estate Leads is so highly recommended as a means of drumming up new clientele even when there’s fewer of them to be had. But we’ll leave that part for now and instead use this week’s entry to talk about what’s going on with Edmonton-area real estate and slumping home sales there.
Down 24%
Our friends at the Edmonton Realtor’s Association are stating that Edmonton saw the first large decrease in home sales since interest rates began to rise earlier in 2022. A 24% drop was seen in total residential sales in the greater Edmonton area for July of this year compared to the preceding month, June. In addition they have new residential listings declining month-to-month since June but countered by an overall increase of 6.2% from July 2021.
While decline in the later months of summer are common, a drop of this size is but the chair of the Association is saying he thinks this is a trend that will continue. It’s expected to be a marginal decrease and shouldn’t be anywhere near double digits. The estimate of a 1%-or less decline by the end of the year is realistic, and then the market should rebound for Spring 2023.
Let’s keep in mind as well that across Canada home sales dipped the same 24% from this time last year while the national average selling price has declined almost $200K since the record of $816,720 was set in February 2022. How things can change, and drastically.
Mortgage Renewal Concerns
Single-family homes in the Greater Edmonton area averaged $489,370, which works out to a 5% year-over-year increase. The average for a condominium was $229,463, and that equates to a small decrease of 4.4% year-over-year. The reality being created here is that there are going to be people facing mortgage renewals and perhaps realizing they can no longer afford the home they’re currently living in.
In addition to the volume of home sales now being back to about what it was before COVID-19, there is also the fact that there is more of a gap between what sellers have become accustomed to and what buyers are prepared to accept and pay.
The Canadian Real Estate Association said Thursday that the number of homes that sold on the real estate group’s Multiple Listing Service has had a decrease for 6 months in a row now.
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