The REALTORS® Association of Edmonton released their annual housing forecast today at a seminar at the Northlands Expo Centre attended by 700 REALTORS® and business leaders. Chair Steve Sedgwick forecast that sales of residential homes in the Edmonton Census Metropolitan Area will remain relatively stable. A decline of about 2.3% from 2015 sales levels will result in less than 17,000 sales in 2016.
Edmonton CMA had a good year last year with all residential sales at 17,298. That is down 9% from 2014 but up over 1% from 2013. Sedgwick expects another solid year in sales of single family homes in the Edmonton area but with a small decrease of about 2.5%, as economic uncertainty continues. “The continuation of low oil prices and economic decline have made buyers cautious. While much of the decline is offset by record low lending rates, we don’t expect sales to pick up without a boost in our overall economy. That said, Edmonton has fared much better than many other places in Alberta. We expect continued growth and development in our city to continue to keep interest in our housing market strong.” explains Sedgwick.
Condo sales are expected to decline by a modest 2.7% throughout the region as the rental market eases up and migration slows down. The popular duplex/rowhouse category was strong in 2015 and looks to remain so through 2016 as more inventory comes available in this category. Duplex/rowhouses offer both affordability and an ownership model that appeals to many first time buyers.
Prices, as usual, will fluctuate through the year but the 12-month average price for a single family detached property is anticipated to decrease modestly about 2.7% as inventory grows. Condominium property average prices are projected to decrease at the same rate with many higher priced options keeping the average price inflated.
Sedgwick’s forecast was supported by four other speakers at the seminar including Todd Hirsch, Chief Economist, ATB Financial; John Rose, Chief Economist, City of Edmonton; Bruce Edgelow, VP of Strategic Initiatives, ATB Financial; and Christina Butchart, Senior Marketing Analyst Canadian Mortgage and Housing Corporation.
There are 3,300 REALTORS® operating in the greater Edmonton area which extends as far as Cold Lake, Wetaskiwin, Drayton Valley, Vegreville and Westlock.
A recent article in the Edmonton Journal stated that “Edmonton resale home prices will soften and sales will slide rufther in 2016 – but not as much as other places in Alberta battered by a faltering economy, says a forecast by the Realtors Association of Edmonton. ‘Edmonton and area has not felt the same effects of oil prices as the rest of Alberta has,’ Steve Sedgwick said Wednesday. ‘There’s a lot of exciting growth happening in Edmonton and we remain conservatively optimistic when it comes to our housing market.’
It’s an assessment backed by prominent economists, who say that Edmonton’s economy will slow in 2016, but not as much as other Alberta municipalities.
‘While you’re going to continue to see some very negative numbers and some very negative commentary about the province as a whole, people have to bear in mind that Edmonton is a bit of an island in the storm,’ said John Rose, chief economist for the City of Edmonton. Rose predicts a growth of 0.5 to one per cent for 2016 for the city and a slightly lower rate for the region.
Todd Hirsch, chief economist for ATB Financial, agreed Edmonton’s real estate market will endure an economic slowdown better than other Alberta markets because of its more diversified economy.
‘I do see the Edmonton real estate market faring generally in better shape than Calgary or Fort McMurray this year,’ Hirsch said. ‘It’s the centre of government, health care and education – broader sectors that support employment growth in Edmonton. I don’t see the downturn in the real estate market in Edmonton to be as severe as it will be in other parts of the province.’
Christina Butchart, senior marketing analyst for the Canada Mortgage and Housing Corporation, said the situation has shifted from a market that slightly favored sellers to a buyers’ market because of larger inventory and fewer sales.
Meanwhile, despite Alberta’s economic slowdown, the assessed value of the average Edmonton house has still gone up this year, said municipal officials this week. The typical single-family detached home is now worth $408,000, up 1.7 per cent from last year. The average value of condos, townhouses and duplexes went up 4.8 per cent.”
After reviewing the REA annual housing forecast, Don Cholak recommends selling sooner rather than later. “If selling in the next year, with a negative forecast in place, the sooner you sell, the better price you will receive. If you are planning on moving up in 2016, you stand to gain the most in this type of market. Lower price homes will not be impacted as much as the upper end market will be in 2016.”
