<<< back to article list

Strong Sales & Rising Rates: Edmonton Market Review


Blog by Sara Kalke | September 6th, 2013


Strong sales in August could be attributed to higher mortgage rates spuring many buyers to make a quick decision in order to capitalize on their low rates.  Otherwise, prices and activity were fairly stable.  The fundamentals are indeed in our favour in the Edmonton market.  I am continually reminded of how fortunate we are when I drive through booming new areas, new shopping complexes popping up and Edmontonians out en masse in the many new and expensive restaurants and shops here. 

Time to buy or sell?  I'm here for you!
Sara





No pressure from mortgage rate increases in local market

Edmonton, September 4, 2013: The local housing market will not feel any pressure from the recent mortgage rate increases, according to the REALTORS® Association of Edmonton. Several of the major banks increased their mortgage rates in August because of changes in the bond market. The higher rate will increase the monthly payments on a typical mortgage or decrease the total amount that a buyer can borrow from their financial institution.

“Buyers applying for a mortgage now may have to buy a slightly less expensive property than before because their qualification amount may be lower,” said President Darrell Cook. “In the short term, any reduction in the number of buyers will be made up by the potential buyers becoming more motivated to buy before their pre-approval period ends.”

The all-residential average* price in the Edmonton CMA in August was up a quarter of a percent from last month at $351,455. The average price for a single family detached (SFD) property in the Edmonton Census Metropolitan Area (CMA) in August was $416,494, up 1.5% from July but up 5.4% from a year ago. Condominium average prices were also up by 0.9% at $244,675. Duplex/row house prices rallied in August after a price dip in July at $337,745 (up 2.1%).

As compared to August 2012, prices of all types of residential property were up: SFD up 5.4%, condos up 3.8%, and duplex/rowhouses up 12.1%. The all-residential average price was up 3.7% over the same time last year.

“Our market continues to exhibit strong fundamentals,” said Cook. “Rental vacancy rates are low at about 1.2%, new home starts are up and weekly take-home pay rates are the highest in Canada. The upward pressure on housing prices will be moderated by the seasonal decreases as we approach winter.” Despite the increases, housing prices in Edmonton continue to be affordable, mainly because of the higher average incomes.

The sales-to-listing ratio of 65% was the result of 2,299 residential listings and 1,490 residential sales in August. The inventory of available homes on the Edmonton MLS® System was down from 5,834 units in July to 5,557 units in August. It took 53 days on average to sell a home in the Edmonton area.

The total value of MLS® sales YTD is the highest it has been in five years at $5.8 billion as a result of stronger sales numbers and higher prices overall.

-30-

MLS® System Activity (for all-residential sales in Edmonton CMA1)

1 Census Metropolitan Area (Edmonton and municipalities in the four surrounding counties)
2 Single Family Dwelling
3 Average: The total value of sales in a category divided by the number of properties sold
4 Median: The middle figure in an ordered list of all sales prices
5 Residential includes SFD, condos and duplex/row houses
6 Includes residential, rural and commercial sales

3 Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period sales figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end. The RAE trading area includes communities beyond the CMA (Census Metropolitan Area) and therefore average and median prices may include sold properties outside the CMA. For information on a specific area, contact your local REALTOR®.