Finally, we are having summer. While some of you may say summer is almost over and time to get ready to go back to school, I was simply referring to the weather.
With a week of sunshine and temperatures getting to 30 and above, it finally feels like summer. Watermelon weather. Sipping lemonade in the shade or catching a movie because they always crank up the A/C. That is what I am referring to. So while the temperature has been going up along with the interest rates, the sizzle hasn’t left our Real Estate market just yet.
On to the numbers part of the newsletter but first you need to realize what numbers to compare and why they may be significant. While Edmonton is our city and we can give you stats for just Edmonton, our board covers the Greater Edmonton Area which includes all the surrounding communities and so the averages for the greater area will be lower than just for Edmonton. CREA will give all Canadian averages, and even provincial averages, but Edmonton is not all Canada so the trends will be different. Similarly, Real Estate is divided into 3 main categories, Residential, Commercial and Rural. Furthermore, Residential is subdivided into Single-Family, Duplex and Condominium. So when someone says “The average price…” what are they really talking about. Some property types like condos have seen prices continue to drop, while the others have held steady or improved. Next, there are many indices that are measured with the most common being price. But we also look at number of listings, number of new listings, number of sold listings, number unsold listings, number of expired listings, ratio of new to sold listings, and days on market just to name a few. Then what are we comparing it to. Month to month, year to date, year to year, cycle to cycle and for added complexity, our Real Estate cycle to the rest of Canada and general world economics….. yeah, it gets complicated.
So with that out the way, in the above graph you can see the average price for Greater Edmonton area has decreased from its high in April however it is still higher than the previous 2 years. Looking at a similar graph for just the City of Edmonton the dip down is less pronounced. And if we are to look at Single-Family within Edmonton, the price actually increased compared to the previous month. Within the City of Edmonton, the central area has decreased while others typically increased. Looking at just Single-Family, the South West has the highest average price at $689k being a 20% increase from last year. The North West saw a 23% increase but their average is lower at $524k. So you can see you need to be careful which numbers you go by. We do this every day and we look at hundreds of houses so we know the market intimately. So what is the forecast? Depends. We are just over half way through the year and already the total number of sales is equivalent to the average yearly number of sales so even if the market slows down dramatically, we are still having a good year.
In a balancing act between curbing rising inflation without stalling the economy, the Bank of Canada has raised the interest rate by another 50 basis points on June 1st with more forecast for July 13th (maybe up to 75 basis points) as the U.S. feds just raised their rate by 0.75% a couple days ago. I have heard 3% target but I feel a target of 4 to 5 % by the end of the year and further increases for 2023. You have probably seen headlines like “The housing Party Is Over” with stories saying anything from modest corrections to big % drops (people like to be dramatic to attract more attention).
No need to panic however. If you have variable rate mortgage, then consider to lock it in before the increase. Depending on several factors such as your current term and what you intend to do with a property, it may make sense to fix your rate now. If you only have a year left on your term, or you are considering to sell, locking it in now may cost you more money in the long run, so ask your mortgage broker for professional advice.
This summer we chose to do several mini vacations and weekend trips as we have been rather too busy for a long break. August long weekend saw us at one of our favourite places, Canmore. I like Canmore because it is larger than Banff so its easier to find good accommodation and you still have such beautiful mountains at your doorstep.
One of the biggest challenges we find is coming up with activities that are suitable for the whole family. With such a spread of ages from Fionna to Grandma sometimes this is not so easy. Fionna really enjoyed doing horse back riding but it was a covered wagon ride for the rest of us so we could relax and enjoy the scenery.
Another good all age event we tried included decorating ceramic pottery which we should see the results of in about a week as it had to go into the kiln. If you have suggestions for fun activities, we would love to hear them.
This article contains the opinions of Andrew Barrett and Selena Cheung. Licensed Realtors® with COLDWELL BANKER Venture Realty.
The trademarks REALTOR®, REALTORS®, MLS®, Multiple Listing Service®, and the associated logos are controlled by
The Canadian Real Estate Association (CREA) and identify real estate professionals
who are members of CREA or identify the quality of
services provided by Real Estate professionals who are members of CREA
Copyright © 2022 Wealthyhome. All rights reserved.