Weekly Market Update, Feb. 23/18

What's wrong with the outskirts? You got me worried now because I was thinking about The Rosenthal area about 7-10 minutes from West Edmonton Mall. I think this is a new development. I went there but didn't buy because it is a bit far away from the city. I am not sure if it's a good area to invest in rentals. What do you think?

I think the west has a lot going for it. Construction for the LRT to the west should start late this year, and they're getting a huge state of the art recreational centre in a few years. The southwest is different in thathe the roads are so congested, which will only get worse with the new hospital that will be built. Plus no LRT for a decade at least.

Tom, your friend had an unprofessional realtor who didn't advice him... He should have a clause for financing in the contract.... if he didn't use a realtor this can be a good lesson.... expensive but good... :)

I bet single family home prices will be higher in April. Anyone wanna take that bet?

He actually did have the clause, but then he waived it after 10 days when he lifted the conditions.

In the words of this blog, "Another trend we’re noticing is banks giving extra attention to deals after everything has been approved and conditions have been removed."

Based on what exactly?

The smoking hot Alberta economy?

Still clinging to the average price delusion I see.
.

Alright, well if things are going badly then the average price would still be down, correct? Who said the economy is smoking hot? It would just have to be better then you think for me to be right.

Very short sighted to believe average price is an important indicator.

Since 2006 everyone jumps on the boom economy and high in migration meme so prices rise beyond the economic fundamentals.

Now none of that exists, the oil money has by and large dried up people have left in droves and we have the deepest debt in provincial history (and going deeper) propping this economy and you and Tom and thus blog think the party's just gonna continue? Get real.

Anyway, basic economics states as supply outstrips demand prices fall. But guess what? Prices are already falling as many sellers have already found out.

That's interesting that you should mention about deals falling apart due to the banks. About a month ago a friend put in an offer for a condo near Windermere. He had lifted the conditions about three weeks ago, and he was supposed to close last week, but the day before he was supposed to take possession, the bank decided to underwrite the mortgage with additional questions about the condo. Then they refused to release the funds due to some concerns. The seller has already moved out into a new house, and they won't extend the closing date, and will relist the house instead, with my friend having to pay the difference should they get less. His realtor said there is now radio silence from the seller.

The real estate lawyer recommended he sue the bank, and also said that he had never seen this before this year, but has seen the bank reneg just before closing in about 25% of the deals so far in 2018.

Perhaps this trend is why sales are down this year? The friend is now thinking about renting for a year, and buying in Sky Condos. Banks don't want any deals in the outskirts of the city his broker told him.

Last Week we were bucking the national trend, now we're not?

What's the story here?

Edmonton Real Estate sales are down while listings increase, the Sales to Listing ratio falls even further below the 50% mark, indicating that Edmonton is now firmly established as a Buyers Market.
This trend will continue for the foreseeable future.


Remember ignore the Average Price! as an indicator it is virtually useless:

"Average price

This price is found by taking the total dollar sales volume and then dividing this number by the total amount of sales. This number can sometimes be biased if a lot of lower-priced homes or higher priced ones have been sold within this certain time period."

Authored by an unbiased Edmonton Home Owner. Yes I am a Home Owner.

Nice strawman gpc. I never said anywhere that average price was an important indicator. I said, if you believe things will get worse then wouldnt it stand to reason that the average price would fall?

I have a positive outlook for Edmonton Real Estate, although Edmonton is likely to see tepid appreciation for the next couple years.
Rental market is improving, enhanced by new mortgage rules.
GDP is set to remain around 2-3% for 2018 2019.
Jobs data is positive.
Migration was positive fro Alberta this quarter.

Lots of things going in the right direction for Alberta - Edmonton should be one of the top performing cities for real estate investment IMO.

Your bet is that SFH prices are going to increase in April and I asked based on what?

Care to answer that?

What "prices" are you referring to?
Average, Median, guy down the street?

I have no doubt that many will continue to delude themselves into thinking everything is hunky dory here (see Garry above) but the big huge smouldering pile of debt propping this province up says otherwise.

What debt are you referring to? Provincial or personal?

Trying to make this personal huh?

Legit questions which you won't answer which is answer enough for me.

I visit this forum every week looking for an update on Edmonton real estate and truly appreciate and thank Sara for providing weekly stats and her professional and fairly unbiased assessment of the market. However, just like Dr. Foda, I also find this forum to be "loaded with contradictory and bogus comments". For example, this week, Sara stated that sales are lower than last year's and banks impose additional restrictions. In my understanding such factor should have a direct impact on real estate market but according to Karlhungus, the outlook is great and as Garry stated "Edmonton should be one of the top performing cities for real estate investment IMO". Tom also believes that Sky condos are the best investment (LOL). If these guys had to provide their identities and professions, maybe their comments would be more realistic and supported by facts, which would bring some value to this blog. Garry says that job data is positive, where, in Alberta? Also, if "rental market is improving, enhanced by new mortgage rules" doesn't it mean that sales will be lower? Banks are concerned with oversupply and overvaluation of condos, isn't that an indication that right now it is not a best time to invest in rental properties?

That about covers it Reg.

Not sure what your comment means. I meant average personal debt. Just trying to understand which debt metric is in dire straights.

Again, I never said the outlook is great, just better then the doom and gloom that is spouted off by some posters.

Well if you want to add personal debt levels plus the historic PROVINCIAL DEBT than the picture just gets worse...

Again, based on what?

Are you ever going to answer the questions you've been asked?

Wiat what does Notley have to do with blocking pipelines? She's the only politician who's supporting pipelines and fighting for them. I guarantee nothing will be built under Kenney in the unlikely event he becomes premier. His support is slowly falling the more he talks since he has nothing positive to say. Would you vote for hope and change (Notley), or fear and negativity (Kenney)?

I'm as negative as they come on real estate, but I'm not sure why everyone's started freaking out here in the past few weeks because Edmonton has been resilient so far.

I've learned over the past decade that markets don't necessarily react to fundamentals -- don't get me wrong, they eventually will -- but just because something is horribly mispriced doesn't mean it's going to be priced reasonably any time soon. Sometimes it takes decades, and I'd say frequently it gets a lot worse before it gets better when the folks that matter behind the scenes are doing their best to maintain the status quo. All you can do in the interim is do your research, hold your opinion, be patient, sob/rage quietly to yourself, and slowly realize that you don't know as much as you thought you did. You weren't a genius then, you aren't a genius now, and you won't be a genius even when the bloody thing eventually corrects.

And to the folks who are upset that there are wildly differing opinions about the direction of Edmonton real estate, get a life! Nobody has a goddamn clue where the market is going, and if you're seriously basing your opinion off of what you read here in the comments you deserve all the misfortune that will inevitably come your way with high quality analysis like that. Tom is going to be Tom, GPC is going to be GPC, and I am going to be me. Do you seriously think any of us are capable at this point of changing our minds?

In any event, it's good to see the posts and I hope neither Tom nor GPC disappears in shame whatever the future holds. For all I know, maybe overall prices will significantly come down when people can't borrow willy-nilly but Tom's Sky condos will go up because the people that buy those don't really care about prices and don't have to borrow. I don't know, and I've stopped being upset about being wrong (though I'm still holding out for a major move down, 7 freaking years later!)

See you guys over the next few weeks come SFH at $460 or $400...

Hahaha! Well said!

Everybody is entitled to his/her own opinion. You cannot even trust "Expert". Anytime you involve human,
emotion is always high. If you buy, you of course want to see the price goes up....

The problem here is a one size fits all situation. Government tries to cool down the housing market in GTA and GVR, so they introduce this new mortgage rules on a market that is already slow down.

Now, they may raise the interest rate again.

No matter how you look at it, Edmonton will be affected in a negative way.

Gpc you havent stated a simple fact in all that rambling. And you continue to strawman. Please point to where I talked about the pcs or $100 oil. I fully expect you to misdirect the conversation again.

Gpc I don't even understand why you comment. Sara presents the facts, and then you dispute their relevance. Guess what? She is going to use the same methodology next week and you will complain again. Get used to it man! Or stop posting at least

Dude you asked me to educate you and here it is.

I suggest you read it again, this time with your glasses on.

Gpc, I fail to see how government debt has any relation to the housing market, but feel free to educate me.

As for your other question, oil price has more then doubled since its low of $26 and continues to recover. Alberta is expected to lead the country in gdp and this will bring jobs which in turn will bring people into the province.

Yes I am willing to see others side of things but you must present actual facts, not statements like" Says alot that you don’t know how Gov’t debt will affect the real estate market". I am done having discussions with you if you cant have a civilized debate.

Deleted the marketing blog comment huh Sara?

Karl, much as I'd like to believe you, oil producers in Alberta do not get the same price for their oil as others such as US producers. We don't get "world" oil prices. Thanks to Nutley and Turdeau stopping all pipeline production, the price we get for our oil is about $26 lower than world oil prices.

So a booming oil price isn't going to help Alberta. Not until we get rid of the NDP here and the Liberals in Ottawa. Until then Alberta is screwed.

Yes, stop being a troll.

Says alot that you don't know how Gov't debt will affect the real estate market...

So the price of oil is about 52 bucks a barrel and that's a good thing?

Except the PC's budgeted for oil above 100 bucks to keep the good times rolling remember that?

52 bucks isn't even enough to keep the lights on forcing the NPDers to spend the Sunshine fund billions and borrow billions more to avoid massive cuts and keep the economy going.

How am I doing so far?

The collapse in oil prices has devastated the oil industry and no one is expecting it to recover anytime soon.

Which means very few high paying jobs to attract workers so you can forget about any significant in-migration.

This is not doom and gloom, all this has already happened.

So where are the jobs coming from? What industry is going to replace oil? Gov't created? Which means more deficit spending.

As for your bet about prices rising by April, its just a fools bet. Who cares? Some people will get a good price for their properties and othesr won't. With listings remaining high and sales lagging it's a buyers market now.

No matter what the average price is now or in April Edmontons re market is on shakey ground and in the long term this will lead to lower prices.

You know accusing someone of being a Troll is as bad as being one so right back at ya. lol

You just can't handle someone who understands exactly what you're up to.

Marketing. Nothing unethical just morally questionable

If you ever want to have a public debate on this you have my email drp me a line and let's arrange something.

I'm up for it are you?

That's not very nice Tom, what's bugging you?

Word of caution there Hungus, as far as "facts" go, remember, this is a real estate marketing blog authored by a highly skilled marketing professional.

If you can't afford a condo in Edmonton then welfare isn't paying enough in Alberta. In the greater Toronto area and Vancouver area a condo cost five times what a condo costs in Edmonton.

Reggie Goman,

if you follow Trevor Tombe, Andrew Leach (on twitter) or even subscribe to the Alberta owl. You can find comprehensive positive statistics for the Alberta labour market. The city of Edmonton also provides good economic data on their website.

Other good follows on twitter are Thomas beyer, don r Campbell, tilt properties.

A 90 percent drop in stock market?!! Where do you get these numbers out of? Do you understand what you are talking about!? Clearly you don't....

I have better things to do with my time. I've been posting these stats weekly for 13 years and am happy to block your comments if this continues. I have no problem with people bringing up other points of view - read the other comments for evidence. I do have a problem with personal attacks and if that's the way you want to play, find another sandbox.

Edmonton real estate has basically fallen every year since the summer of 2007. The only worst investment has been cocoa during the last 11 years. Edmonton real estate will continue to fall in price unless the value of the U.S. dollar falls off a cliff. If they hike interest rates 4 times in America this year the odds of the U.S. dollar falling off a cliff are zilch.

At 60 dollars a barrel for oil the rig count will increase every week in America. Unless the U.S. dollar falls off a cliff West Texas intermediate crude is capped at 60 dollars U.S. or less. It follows housing prices will keep on falling every year in the future in Edmonton due to rising interest rates. In fact the entire world will see falling housing prices in the future. Presently just about every city in the world is seeing falling housing prices and valuations. Only a total idiot would be buying housing with the birthrate declining every year.

Buying a house anywhere in the world is a terrible investment choice at the present time. Worldwide stock markets are the most overvalued in history taxes can only go sharply higher and the birthrate is falling in almost every city worldwide. Remember a 90 plus percent drop in worldwide stock markets is a big, big negative for housing and is very deflationary. The only wildcard is buying in a city like Timmins, Ontario because the big boom will be in gold and Timmins is renown for being a city of gold.

Personal Attack? What are you talking about? Only personal attack has come from you.

And No surprise you won't take up the challenge didn't expect you to.