Edmonton and Area Real Estate Market Update
2021 so far has been a very special year in Edmonton and Area Real Estate. Purchasing is climbing before it was supposed to begin!
In a short period of time, we’ve shifted into a seller’s market from years of being in a buyer’s market. The last time we saw this was before the oil crash in 2014. There are many reasons why we’ve seen such a change lately and we are going to break them down for you…
Record Low Interest Rates:
Bond rates have been on the rise in the last week or two. 5-year fixed rates are now at approximately 1.94% up from 1.59%. The good news, however, is that variable rates remain low at around at 1.4% mark
These rates have had a massive effect on the market. Since 2015, young millennial buyers have opted to rent properties to shield themselves from a sliding Real Estate market. Prices dipping faster than the mortgage pay-down can keep you renting long term. Now, with record low interest rates it is now a poor decision to be renting. Owning with 1.59% financing vastly outperforms tenancy. Also, the lower rates allow the typical Albertan to afford a larger property. The federal government adding funds to a buyer’s down payment also has its affect. The result is an influx of buyers entering the market. Home prices Canada wide are on the rise. Interest rates and government funds are hyper inflating good economies and propping up struggling economies across Canada.
Influx of Buyers, Low Inventory:
At the very same time, we are still in the winter! A seasonally low time for inventory. We are not yet at the low inventory levels of the Boom times of 06′ but we have seen new buyers gobble up the existing winter inventory. The price range of 350k- 410k has been unusually busy. If you own a home in this price range, you may regret not selling this year. We as agents can monitor how many eyes view our listings online. We can tell you personally, that in some cases, listings online are getting viewed much more than others. If you list a home in Sherwood Park for 350k, you will get 1100 people view it immediately. If you list a similar home around 450k, that one will get viewed by 200-300 instantly. You can see the kind of volume in that price range. Seasonally listings ramp up in March, all the way to June before they slow down or flatten. The buyers are under pressure to keep their low rates and find quality. So, the good homes are selling for 5-20k over list! If this were happening in May, we would have the supply. We are very interested to watch how this Spring plays out with inventory bound to ramp up.
The Great Migration to the Suburbs:
With Covid looming overhead and folks destined to work from home for a while people have re-evaluated their living situations. What we had before, was a push to the core with urban sprawl devaluing the never-ending inventory on the outskirts of town. A push for mass transit. A bustling downtown, and new Arena. What we have now is a de-valuing of office space, and a need for in homework space. Something the Core of the city is not built to accommodate. We have seen a bustling market in Sherwood Park, St. Albert, Spruce Grove, Leduc etc. affordable lake properties and acreages have been in short supply. People have migrated to where they can access space. Universities closed have softened the rental market in key central areas.
Areas to Watch:
Sherwood Park tops the list. Sales in February 2020 = 53. Sales in February 2021 = 92! That is a massive increase!
Riverbend. There have been almost no new listings this winter. It’s set to explode.
Acreage Properties from 550-650k within 30 min of the City. Tell me these won’t be in high demand this spring.
St. Albert Sales in February 2020 = 43. Sales in February 2021 = 75!
Places People have Forgotten:
With the exodus to the burbs, what are we forgetting? We are forgetting that after Covid is over, we will be back to Carbon Tax, LRT expansion, Universities Open, Bike lanes and a brand-new mayor, who that Mayor will be remains uncertain. Point is, it may be a good time to take on central properties while the competition and rents are low.
Market Stats from Realtor Association:
“ All residential average prices are up to $377,931, a 7.6% increase from February 2020, and up 3.8% from January 2021. Single-family homes sold for an average of $437,977, a 2.7% year-over-year increase from February 2020, and a 2.4% increase from January 2021. Condominiums sold for an average of $230,929, an 8.4% increase year-over-year, and prices are up 6.6% compared to January 2021. Duplex prices increased 6.6% from February 2020, selling at $343,028 which was a 0.4% decrease from January 2021.
“The Edmonton market in February saw a significant increase in year-over-year residential unit sales as well as month-to-month sales,” says REALTORS® Association of Edmonton Chair Tom Shearer. “There have also been more sales of single-family homes, condos and duplexes compared to February of last year as well as last month. The high level of activity we have seen in February is uncharacteristic for this time of year. We are witnessing a very strong market.”
Single-family homes averaged 48 days on the market, a 23-day decrease from February of last year. Condos averaged 62 days on the market, an 11-day decrease year-over-year, while duplexes averaged 48 days on market, a 32-day decrease compared to February 2020. Overall, all residential listings averaged 52 days on market, decreasing by 21 days year-over-year and decreasing by 13 days compared to the previous month.”
We at the Beech Woolger Team hope to be your source and reference guide to housing in Central Alberta. If there are any questions about your property or long-term real estate planning, please do not hesitate to reach out to us!