The real estate market is on fire in Edmonton, with record sales and prices. While we saw record sales in the Edmonton area last year, we were nowhere near as hot as other markets in Canada, and we may be playing a bit of "catch up" now with sales up 85% over last February. In Calgary and Edmonton, there is less than a month's supply of single-family homes on the market. While some of the demand is due to interest rate increases (the Bank of Canada increased its policy rate by 25 basis points this morning with more increases expected this year) there are a number of other trends we are seeing that are affecting our real estate market.
Lower New Listings
Last year, listings took off in March to well above normal levels, which would typically be a cause for concern, but demand was so high we were in a seller's market for all but one-month last year (January). So far this year, the number of new listings has been lower than normal, creating more competition amongst buyers. Many homeowners that would like to move are hesitant to list their property for fear of not being able to find a new home. Many are trying to buy first, and list later (partly because they are trying to take advantage of today's price on the buy-side and hoping to get a higher price later on the sell-side). Some are buying a new home and opting to keep their current home as an investment property. This is leading to fewer new listings coming on the market. While we can't predict what is going to happen, I can report that home stagers and photographers are getting more difficult to book, some needing more than a week's notice, which is an indicator that listing activity is increasing and is normal for this time of year.
When you compare the price of homes in the Edmonton area with the rest of the country, we are extremely affordable. Homeowners in other markets can sell there, buy a nicer house here and still keep hundreds of thousands of dollars in equity! We are seeing an increase in buyers coming from other provinces to take advantage of this relative pricing gap. The gap between the price of single-family homes and condos has also gotten very large and we are starting to see more activity in the condo market as well.
Many of the buyers from out of the Province that we are working with are able to take advantage of our more affordable market because they can work from anywhere. Some of them are actually moving back to Alberta, some are moving to be closer to their families, but the fact that they can work remotely is what is allowing them to move here.
We have definitely seen an increase in investor activity in our market, and many of the investors are from out of the province. They tend to be experienced investors that see our affordable homes as an opportunity. This leads me to...
After years of stagnation, a "perfect storm" is brewing that will push rental rates higher. Ironically, one of the factors pushing up rents are the "accidental landlords" that have recently sold or are listing their homes, forcing their tenants to find new accommodations (an accidental landlord is a homeowner that decided to rent out their property instead of taking a loss). This is bringing in interest from investors and pushing renters into the market.
Oil and Gas/ Economic Recovery
I think this one speaks for itself, but in general, the job market has improved and that is attracting more people to the province and giving people confidence in the housing market.
I don't want to get into a whole mess of economics here, especially since I'm not an economist. So I'll just say Real Estate can act as a hedge against inflation and when inflation goes up, the value of real estate tends to outpace it.
So, without further ado, here are all the Greater Edmonton Area real estate stats for February 2022.
With an interest rate announcement coming from the Bank of Canada tomorrow, I will update this post when the REALTORS® Association of Edmonton releases their monthly report later this week.
City of Edmonton Stats
It's easy to see on the chart below that we hit a new record number of single-family home sales in Edmonton in February. More single-family homes were sold in February than in any month last year, which was a record year. Single-family sales were up 95% over last February, with 1237 sales reported.
Condo sales were also quite strong; 433 condo sales were reported in Edmonton in February, up a staggering 119% over last year!
The average sale price for single-family homes set a new record at $478,636, up 12% over last year, and the median price also set a new all-time high at $435,500, also up 12%. The average price for condos was was up 6% over last February (haven't said anything like that in a very long time) and sits at $227,304 and the median price was up 8% to $210,000.
The average price per square foot for single-family homes was up $24 to $297 and for condos was up $7 to $212.
Posted by Liv Real Estate on