Prices for Edmonton homes saw a modest decrease in the last quarter of 2019, with some market segments actually showing price growth.
Royal LePage House Price survey data released earlier this month found the aggregate price of a home in the city fell by 0.7 per cent in the last three months of 2019, compared with the same period in 2018, rising to $379,426. Those numbers speak to a growing sense the market is stabilizing, says Tom Shearer, broker and owner of Royal LePage Noralta Real Estate in Edmonton.
“I feel we’re getting back to whatever the new normal is,” he says.
Although the city is a far cry from pre-recession market conditions, he notes buyers and sellers are adjusting to a new era of price stability.
The data compiled by the Royal LePage Canadian Real Estate Market Composite found strength in two-storey, single-detached homes, and condominium apartments, which rose by 1.2 and 0.3 per cent respectively. That translated into a median price of $435,426 for a two-storey and $230,969 for a condo.
“Condo had been beleaguered for quite some time, but over November and December prices have started to creep back up, exceeding the previous year’s figures,” Shearer says.
Shearer points to pockets of strength in the city driving the market, including downtown’s Oliver neighbourhood where a number of condominium sales occurred later in the year.
“That’s likely where that small bump up in average condo prices could be coming from.”
In contrast, the bungalow market has struggled, seeing prices fall by 5.1 per cent to $361,943, year over year for the quarter.
The year-end data bolsters the forecast by Royal LePage from last month, which predicted housing prices will increase by one per cent in 2020 to $383,200.
Shearer explains the positive momentum is a result of buyers finally getting their footing after a few of tough years for the economy and changes to lending regulations. He notes the OSFI (Office of the Superintendent of Financial Institutions) stress test was particularly impactful. It came into effect in 2018, stipulating buyers with 20 per cent down needed to qualify at the Bank of Canada benchmark, five-year fixed rate, or their contractual rate plus two per cent.
Shearer says historical sales figures for December show the impact with sales dropping in 2018 to 799 from 962 in 2017 for the Edmonton census metropolitan area. Last year, December saw 845 sales in the city.
He further adds some areas of the city are experiencing more sales activity, including in the south side off of Ellerslie Road, where new homes (built after 2005) are changing hands at a relatively brisk rate.
For the year, sales in the Anthony Henday region, which encompasses communities around Ellerslie, saw 1,440 single-family home sell, according to Realtors of Edmonton Association data.
That is an increase from 2018 (1,356) and 2017 (1,312). Sales were up year to date for December in the northwest and north central, too, but modestly so, while single-family detached homes sales were down in other regions from past years.
He further notes activity in new neighbourhoods is also driving the market because builders “are more competitive than they ever have been.”
Overall, Shearer says the data shows the market is moving toward balance. Just don’t expect boom conditions to return anytime soon.
“But that’s OK because what you really want is steady, gradual increases, and I think that’s we’re going.”