Monday, February 25, 2013

Local Housing Market Continues to Grow – REALTORS®


Edmonton, February 4, 2013:

Year-over-year average prices and sales were up for most types of residential property in the Edmonton Census Metropolitan Area (CMA) in January. Single Family Dwelling (SFD) average prices were down 1.93% from December but up 7.7% when compared to January 2012. Condominium prices were also down (-3.1%) month-over-month but up 1.7% year-over-year. The all-residential price was up year-over-year at $328,525 (up 2.5%). The average price for an SFD was $399,832. An average condo was priced at $216,139, while a duplex/row house was priced at $328,351 on average. The all-residential average price in the Edmonton CMA was $328,525 as compared to $320,482 in January 2012.

The 2013 year started off with a residential sales increase of 27 (25) units over the previous year. There were an estimated 921 (853 reported) residential sales in the Edmonton CMA and an estimated total of 1,084 (1,005 reported) sales of all types of property. SFD sales were down 1.4% from a year ago at 536 estimated (496 reported) sales. Condo and duplex/row house sales took up the slack with an estimated 286 (265 reported) condo sales (up 30.7%) and duplex/row house estimated sales of 64 (59 reported) units (up 24.9%).

“If there is an impending national housing crash, it is not evident in Edmonton,” said President Darrell Cook. “The number of price reductions is 4% lower than the same month last year.” The number of residential properties in the City of Edmonton that sold at or over list price rose from 9% in January 2012 to 12.6% this year. “This indicates that homes are appropriately priced for the market and that more home sellers are holding firm to their asking price,” said Cook.

The average days-on-market was 74 and the sales-to-listing ratio ended the month at 47%. There are currently 3,743 residential properties in inventory in the Edmonton CMA. This is lower than the five-year average for January (4,324) but still represents a 4.4 month supply at current sales levels.

REALTORS® changed their statistics reporting format this month. Sales and average price figures are given for the Edmonton CMA which includes the City of Edmonton and about 40 surrounding municipalities as defined by Statistics Canada. Then, because sales in the City of Edmonton account for about 75% of all sales, the figures are given for Edmonton only. Finally, communities and counties outside the CMA are not forgotten. The number of sales for each municipality along with average/median prices and total value of sales are provided in the Total Board section. All three reports are attached.

“All real estate is local,” said Cook. “It is important that we provide statistics that are relevant to each specific location. REALTORS® can provide their clients with more granularity or more specific details at the neighbourhood level.”

Friday, February 8, 2013

Restrained growth seen for Edmonton housing in 2013

January 9, 2013 Edmonton Journal, Bill Mah
Despite leading the country in employment, a steady stream of migrants and still-enviable economic growth, the Realtors Association of Edmonton forecasts “restrained” growth in the local resale housing market for 2013.

The prices of single-family MLS homes in the Edmonton region will increase on average by two per cent to $390,020 from $382,373, according to the group’s annual forecast released Wednesday at a seminar.

With sales moderated by a growing supply, condominiums will increase by one per cent to an average selling price of $237,829 from $235,474.

The number of homes sold in 2013 is expected to inch upward by three per cent, according to the forecast.

“The real estate market in Edmonton and area will remain stable and show steady but restrained growth in prices and sales numbers,” said Darrell Cook, new president of the Realtors’ group.
“Unless there are unforeseen external influences, there is very little possibility of any cliffs, bounces or bubbles.”

The forecasted increases would represent a slower pace of growth than the market saw last year, when the average residential price jumped 5.4 per cent year over year.

Single-family homes ended 2012, up 6.8 per cent over last year, but condo prices ended last year down by less than one per cent.

A forecast released earlier in the week by Royal LePage was even more conservative, predicting Edmonton homes would sell an average of only 0.6 per cent higher in 2013 than 2012 while sales will fall 3.4 per cent year over year.

Cook and others who spoke at the real estate seminar said newcomers to the region are a major influence on the housing market.

Edmonton’s annual population growth has averaged 12,000 since the last municipal census in 2009, according to the City of Edmonton.

“We’re seeing a lot of in-migration but a lot of these people are coming into town and they’re renting for the first year. Who knows what will happen for 2014 when they do start to buy,” Cook said.
John Rose, chief economist for the City of Edmonton, said a tight labour market will put Edmonton on pace for slower economic growth of about four per cent, compared to about 4.5 per cent in 2012.

The same skills shortage is attracting migrants and keeping wages high, he said.

A growing population and high average incomes are good news for the housing market, but Rose agreed with Cook that the rental sector is the first to benefit.

“The rental vacancy rate is down below two per cent and we’re going to see that spill over into the housing market in terms of both resales and new housing,” Rose said.

Economic uncertainty in other parts of the world and Canada may also be restraining homebuyers, Rose said.

“The other key factor is I think people are looking around at what’s happening in Vancouver, Toronto and Montreal, so there’s a little bit of hesitancy on the part of consumers to go out there and buy like there’s no tomorrow.”

While newcomers to Edmonton haven’t yet left their mark on home sales, their impact is being felt on the rental market.

Rents are forecast to rise in 2013 to an average $1,100 a month from $1,070 a month last year, said David Lan, senior market analyst for Canada Mortgage and Housing Corp.

Rental housing starts are expected to more than double in 2013 to more than 1,800 units.

Thursday, February 7, 2013

Alert Raised over latest Alberta Population boom.

January 25th, 2013 Calgary Herald.

People are once again moving to Alberta in droves, but the rapid growth has spawned fears the province could face the same infrastructure, labour and housing pains felt during the last economic boom.

“There is cause for concern,” said Bob Barss, president of the Alberta Association of Municipal Districts and Counties.

“I don’t think the cause is insurmountable. Working with urban and rural Alberta, we can solve this population issue.”

Statistics Canada figures from the third quarter of 2012 show Alberta experienced the biggest net influx of interprovincial migration and immigration since 2006.

During the mid-2000s, a wave of new arrivals put a huge strain on the province — including schools, roads and health care.

Barss, head of an organization representing 69 counties and municipal districts, said provincial growth has once again put pressure on schools, hospital and housing in some areas. Infrastructure is also feeling the squeeze.

“There’s a huge deficit on water and wastewater,” Barss added.

In Calgary, Ald. Gord Lowe pointed to jam-packed CTrains, bumper-to-bumper traffic and growth pressure in the new suburbs as proof that municipal infrastructure is bursting at the seams.

“We’ve been playing catch up since 2001 when I first came on council,” said Calgary Ald. Gord Lowe. “We still have not fully caught up.”

And while he hesitated to use the word “boom” to describe current times, Lowe believes the city is in better shape than during the last “period of rigorous growth” because of the investments the city has made.

Nearly 14,000 more new arrivals came to the province than left in a three-month span ending Oct. 1, 2012.

Julien Berard-Chagnon, a demographer with Statistics Canada, attributed the surge to the province gaining back the people who moved away when times got tough during the global recession.
“A few years ago Alberta lost people to the great recession,” Berard-Chagnon said.
“Now they’re gaining back those people.”

Ben Brunnen, chief economist with the Calgary Chamber of Commerce, said it’s evident that “big numbers” are pouring into Alberta.

“Even for three-quarters, we’re ahead of every single other year except for 2006,” Brunnen said.
And he expects the steady flow of new arrivals to mirror economic growth in 2013.

The growth will be good news for business owners, but will also have an impact on the social services and the affordability of housing.

Brunnen warned social services could become stressed as more “people fall through the cracks” in a time of economic prosperity.

The apartment vacancy rate in the Calgary region averaged 1.3 per cent in October, down from 1.9 per cent last year, according to Canada Mortgage and Housing Corp.’s Fall Rental Market Survey released last month.

“The higher migration numbers have been supporting the rental market, and with that we’ve seen vacancy rates moving lower,” said Richard Cho, senior market analyst in Calgary for the CMHC.
The CMHC predicts the average house price shows a rise of 2.7 per cent to $422,000 in 2013. While it pales in comparison to the 38 per cent hike seen between 2005 and 2006, the average house price during the boom was $346,675.
With that in mind, Louise Gallagher wants to get the message out: Plan ahead before moving here.
Gallagher, spokeswoman for the Calgary Homeless Foundation, worries people are racing to the city without knowing where they’re going to live.

Finding a job can also be tough in the hot job market. Alberta has the highest job vacancy rate in the country, the Canadian Federation of Independent Business recently reported, and that is translating into close to 55,000 unfilled private sector jobs.

“The concern is that people will come and they’re not going to find a place they can afford,” Gallagher said.

Alberta Municipal Affairs Minister Doug Griffiths acknowledged tough choices are ahead as Premier Alison Redford has warned about a looming fiscal crunch.

“It’s different than last time because we’re not flush with revenue,” said Griffiths, referring to the last economic boom in the mid-2000s.

But Griffiths agrees the province needs to keep spending money on infrastructure to keep up with population growth.

“Our economy will suffer horribly by not investing in the infrastructure we’ll need for the next 40 years,” he said.