Spring has arrived in Edmonton however you know there is always going to be one last snowfall once the City start their street sweeping. Now that is over we can concentrate on the outsides of our homes, improving the landscaping and finally planting now the garden centres have opened. And why should you do that? With the crazy Real Estate market we have been having, people have been looking to sell and being prepared will help your home sell quicker and for a higher amount. A good example in our neighbourhood is two almost identical homes both asking the same amount. One rushed to get it on the market while the other (our listing) took a week to prepare. That other home is still available while our listing is already sold and for over asking price. Based on the feedback, it has good curb appeal and they loved the back yard which is why they made an offer for our listing.
The following chart showing average prices for Single-Family homes in Edmonton looks rather flat and you may be thinking to yourself “That can’t be right, I thought the market was going crazy.” Well, the chart is correct but there are a couple of things which make it look flat. The first is the scale. The average price has increased by about $100k or almost 25% over the last 2 years which is huge, but all the activity is crammed into one line due to the scale. The second part which makes it look flat is it is missing the typical ∿ shape of a winter-spring-summer-winter market.
We could ask why this happened but a better question is what are the implications of this happening. What caused it is strong demand through the winter months instead of the normal dip down. What this means for Real Estate prices in Edmonton is the spring market should see a bigger than normal increase unless the interest rate rises dramatically and buyers are not able to qualify for as much home.
Bank of Canada recently raised the interest rate by 0.50 basis points in an effort to curb increasing Real Estate prices in Canada (guess which two cities they are hoping this will have an effect on but I can tell you, Edmonton is not one of them) and I have seen several articles saying the next bump may be 0.75 basis points. There is a flurry of house buying before they make each announcement as people try to lock in a better rate, so are these interest rate hikes really working to cool the market?
Edmonton remains very affordable despite news of our heated market and tales of woe from renters claiming they will never be able to afford their own home. (but are they really trying?) At the time of writing this, we are currently working with several new home buyers who have made the choice and are actively taking steps towards home ownership, and at the same time, we have done valuations of tenant occupied homes where their flat screen tv is so big (and expensive) I am surprised they could get it through the doorway, so it really is just a case of setting priorities. We are seeing more out of town buyers looking to invest in Edmonton because it is so affordable, rents are increasing and the economic fundamentals look good. The City of Edmonton tracked where they mail out tax assessments to and the vast majority, 91.7% of tax notices, were mailed to Edmonton addresses. A further 5.5% (making a total of 97.2%) were mailed to addresses in Alberta. About 2.6% were mailed to other provinces. B.C. makes up 1.5% probably because it is a close neighbour but more likely because Vancouver is so expensive.
Foreign ownership or vacant property tax, even luxury home tax hardly applies to the Edmonton market.
Life is finally getting back to normal. Businesses have changed some of the ways they deal with the public so its is a kind of new normal but I see lots of new restaurants opening in town which is a good sign the economy is doing well, plus there are some areas where there is a ton of new commercial premises being built. Along with all the infrastructure projects, that is creating lots of jobs and now travel restrictions are lifted we expect to see a lot of immigration and in-migration to fill them.
Now Covid is no longer trendy, people are starting to get back to normal and that includes taking a break. We have booked our first mini family vacation in three years and looking forward to having a few days off to relax.
This article contains the opinions of Andrew Barrett and Selena Cheung. Licensed Realtors® with COLDWELL BANKER Venture Realty.
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