In my last newsletter I said it is time for Edmonton to shine and that certainly seems to be true. We have two hot topics in Edmonton right now, Hockey and Real Estate. On the hockey side of things, The Edmonton Oilers have been doing us proud by making it to the finals. Go Oilers, Go. Go get that Stanley Cup and bring it home. And the other hot topic is our Real Estate market which up until Wednesday included speculation on the Bank of Canada interest rate announcement which they just released, and how that will impact buying and selling a home here in Edmonton.
Along with the interest rate announcement, The Edmonton Real Estate board have just released figures for May and depending on which side you are on, it is either good news or bad news. For home buyers looking to get in the market, the news is not so good as prices have been increasing (up 16%) and the chances of competing in a multiple offer situation when you finally do find the right home is great. On the selling side however, this is all just good news. There are less listings than normal for this time of year which puts more upward pressure on home prices and increases the likelihood of buyer frenzy the first day your home is listed on the market. We are finding the majority of our listings are running into multiple offer and over asking price on day one. Great news for sellers but we still caution that a home needs to look its best if you want to receive the maximum value for it.
As you can see in the above graph, prices have been steadily increasing and are at the highest they have ever been in Edmonton which is a welcome change to the rollercoaster of the last dozen years. There are several factors driving this change which includes immigration and in-migration so why are people moving here in such large numbers? Jobs. Alberta is renown for oil and gas but there has been significant investment in all kinds of energy projects including solar and wind since the government restriction was lifted along with other kinds of alternative energy projects. Once again, billions of dollars are being invested in the heartland so expect places like Ft Saskatchewan to see a jump in house prices as more people move to the area for jobs. The biggest factor driving our market however is affordability. Compared to other cities, Edmonton is so affordable and is an attractive place for new buyers looking to buy their first home that almost anything under $500,000 gets snapped up.
Our brokerage provided this image comparing 20 major cities in Canada and the respective times it would take a family earning medium income to save up the downpayment required to buy an average home in each market. It is no surprise Vancouver tops the list with over 50 years and Toronto takes 39 years which fuels the claim home ownership is unaffordable for new buyers but even when you don’t include those two anomalies, home ownership in Edmonton is realistically attainable compared to most other Canadian cities which explains why so many people are choosing to move here.
When selling a home, it needs to be priced right and needs to look its best when it is first listed on the market. You only get one chance at a first impression and even in a hot market like Edmonton, this is still important. So here are some tips so you get maximum value when selling.
Curb Appeal: clean up the outside, mow the lawn. It is amazing how such a simple thing can add so much value.
Inside: Clean, Clean Clean. Everyone has different standard when it comes to clean so we suggest to go the extra mile and make sure it sparkles like a show home and this includes eliminating odours both cooking and air-fresheners.
Renovate: If you can afford or have the time then new flooring and paint can go a long way but only if you will get a significant upside on the renovations.
Vacant: Homes that are tenant occupied typically take longer and sell for less than an identical home that is vacant. For investment properties, plan well in advance and try to have fixed term leases end when for when you want to put on the market.
It is easier to sell investment property if it is vacant but to do that you need to plan well in advance as here in Alberta you cannot kick out a tenant if they are on month to month lease just because you want to sell. Best to have fixed term lease ending for when you want to sell (spring is ideal). Some owners balk at the idea of not having any rental income coming in but still having ongoing expenses such as mortgage payments, insurance and property tax but given vacant homes typically sell quicker and at higher prices than a comparable tenant occupied home the benefits often outweigh the costs in my opinion. If the home is vacant, you will need to make sure you have the right insurance in place and check on the property every few days according to the terms of your provider. Many of our clients use AwayFromHomeCheck.ca as they provide an affordable solution when you are selling and your home is vacant.
Earlier this year the Land Title transfer fees increased but even with this change, Alberta still has the lowest fees.
The MLS department now allows rentals to be advertised, not just homes for sale. As this is such a recent change, it is hard to say if it will have a positive or negative impact on people looking for a new home.
Before the Bank of Canada announced the recent .25% reduction in interest rates we read many articles hedging their bets because even though they stated the evidence (primarily inflation below 3%) was overwhelming, there are other factors at play which may have held the rates steady such as a robust April adding 90,000 jobs and an increase in spending on services. Positive signs for the economy which helps to boost consumer confidence which leads to more spending which leads to higher inflation.
Being almost halfway through the year means the school holidays are upon us and to celebrate Fionna completing grade 6 is time to visit some of our favourite restaurants. I think she inherited her love of fine restaurants from my side of the family. Ok, maybe it was from her daddy too. Either way, make sure to spend time with your loved ones this summer. Enjoy the weather, enjoy your time off if you get some and enjoy your vacation if you are lucky enough to get away.
This article contains the opinions of Andrew Barrett and Selena Cheung. Licensed Realtors® with COLDWELL BANKER Mountain Central.
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