Search high or low in Edmonton’s real estate market and you’ll find similarly sized clusters of properties waiting to be sold.
On the low side, about 60 Edmonton properties were listed at less than $100,000 late last year.
At the other end of the spectrum, roughly the same number of properties were listed for more than $2 million.
In this sluggish market, the struggles can be similar for sellers, whether the home has a spiral staircase and room for a baby grand piano or is a one-bedroom condominium in an aging building.
“(They’re) different leagues but it’s interesting that some of the same pressures apply but in different ways,” said Michael Brodrick, chair of the Realtors Association of Edmonton. “The whole market has been subject to these pressures on price.”
But every real estate market is defined by opposing forces, which means if things are rough for sellers the possibilities are great for buyers.
“At the high end, you’re getting very good value for your money. You’re getting everything you could possibly want for a reasonable price,” Brodrick said, adding that those looking to enter the market will find reasonable prices, too.
How low can you go?
The lowest end of Edmonton’s real estate market, excluding mobile homes, is dominated by one-bedroom condominium units. At least two were listed for less than $50,000 in late 2019.
“If you think about the things that affect housing value, this all makes sense,” said David Dale-Johnson, the Stan Melton executive professor in real estate at the University of Alberta. “They’re old, small and generally speaking they’re not close to the downtown core or hubs of business and retail.
“These are all factors that affect the value of any home, and these are no exception.”
Such prices might evoke memories of the 1990s for long-time real estate watchers. And many units in that price range were built long before that, often in the 1960s and 1970s.
That brings risks for buyers, Dale-Johnson noted.
“If I were looking to buy one of these, one of the very first things I would be asking is, ‘How well has the property been maintained? What’s been replaced? What’s going to need to be replaced in the near future?'”
A new heating system, roof or windows are all significant costs that might be passed on to individual unit owners if a building’s reserve fund isn’t big enough. A condominium association can impose a special assessment on owners to cover such expenses for the whole building.
Overall, the average condominium sale price in Edmonton in October 2019 was $227,802 — an almost three per cent increase over the previous year. But that average price was down about eight per cent from 2015.
“One of the very first things I would be asking is, How well has the property been maintained? What’s been replaced?– David Dale-Johnson, University of Alberta professor
The drop in Edmonton condominium prices has been blamed on a number of factors: overdevelopment in the past and a flood of new units now entering the market; a flurry of conversions that turned rental units into condos; and investors who bought during the boom and now want to get rid of their properties.
“It’s not a great market, to be honest,” said Dale-Johnson.
“The city continues to grow but it won’t grow as quickly until either the pipeline gets on stream or we develop other business activities to fill the void. Having said that, it’s a great city, with good schools and affordable housing. People do like it.”
Calgary had just two properties listed for less than $100,00 at the end of 2019.
Luxury properties still a hard sell
Climb the price scale and you’ll find mansions on well-manicured lots, with majestic river valley views and plenty of granite and marble.
Multi-million dollar properties are relatively rare in the city.
“When you look at the Edmonton market versus a market like Vancouver, we still have space in which to build,” said Brodrick from the realtors association.
“When you start getting into two-, three-, four-million dollars in Edmonton, there are still places where you can buy whatever lot you want and you can build whatever house suits your style.”
The highest priced Edmonton property listed for sale late last year was an $8.5-million mansion that belonged to businessman Bruce Saville. The house has almost 20,000-square-feet of living space, an indoor pool and a wine room.
But it sat on the market throughout 2019.
“The right question for these properties is, ‘Is the right buyer out there?'” said Dale-Johnson.
“Money isn’t an issue for these households or individuals. It’s more a question of whether the property suits their wants and needs. That said, if they’re buying today, they know what’s going on in the economy and they will negotiate aggressively.”
And even the wealthiest sellers sometimes have to consider their options in a tough market, said realtor Wayne Moen, who has sold real estate in the city for about 45 years.
He noted one client trying to sell a luxury property outside of the city who had dropped his price from $1.5 million to $1 million but still couldn’t find a buyer.
“I had to be frank with the client and said, ‘If you had a good renter, I think you’d be better off renting,'” he said.
“You just try to counsel people. Our job, if we’re going to call ourselves professionals, we have to actually tell people the way we see things and what the outlook is. You don’t want to blue sky people, you have to tell them, you have to be aggressive with price selling and make sure your property presents itself well. Because you’ll have lots of competition.”
One of Vancouver’s heritage homes has a new owner.
The residence called Jeffrey House sold for $1,614,750 after only two days on the market.
The 2168 Parker Street residence is located in the Grandview Woodland neighbourhood, where many heritage homes can be found.
In 2018, the Jeffrey House got a centenary sign from the Grandview Heritage Group.
The grassroots-based organization recalls online that the building permit for the house was issued on November 18, 1912.
The house was built for William Jeffrey, who worked as a furnace man at the Terminal City Iron Works.
The builder was R. Armishaw, according to the Grandview Heritage Group.
“It was to be a $1,500 one-storey residence for William, his wife Georgina, and their three children,” the local heritage group related.
“In 1921, they added a $75 garage. They were still living in the house when Georgina died in January 1924 after a long illness. This house is a bit of a hybrid, but its main form is California Bungalow – the cottage-sized version of the Craftsman house of the period.”
The Jeffrey House is listed in the Vancouver Heritage Register in the C category.
This means that the home’s heritage significance is “Contextual or Character”, based on the City of Vancouver’s classification.
A home of contextual or character significance “represents those buildings that contribute to the historic character of an area or streetscape, usually found in groupings of more than one building but may also be of individual importance,” the city register explains.
On its website, the Vancouver Heritage Foundation refers to the original owner as William Jeffery.
“Jeffery, a printer, remained at the house until at least 1955. The house is an example of a simple Craftsman style residence,” the heritage foundation relates.
RE/MAX Select Properties listed the home on November 10, 2020 for $1,698,000.
The listing was terminated, and replaced with a new one on the same day for a reduced price of $1,568,000.
The property sold on November 12 for $1,614,750, according to tracking by real-estate information site fisherly.com.
Real-estate site Redfin provides a sales history for the 2168 Parker Street home.
Available information from the site indicates that the house sold in 1975 for $45,000.
In May 1985, it was bought for $104,000.
In June 2010, a buyer purchased the heritage home for $809,000, according to documentation by Redfin.
Opinions expressed by Entrepreneur contributors are their owns.
As we enter the homestretch of perhaps the most turbulent year of our lifetimes, it’s hard not to ask the major questions: How did we get here? How can we fix it? And what does the future hold?
In March, virtually the entire US economy shut down as the world grappled with the Covid-19 pandemic. Companies around the country were forced to close their offices, quickly implementing work-from-home policies for non-essential workers; and many of those policies remain in effect for the foreseeable future, as organizations continue to prioritize their workers’ health and safety. The closing of offices and need for social distancing simultaneously caused a mass exodus from major US cities like New York, San Francisco and Los Angeles, with suburban markets experiencing a boom as a result. And systemic racism — highlighted in recorded acts of police brutality, violence and injustice — spurred widespread, national protests and ignited a sense of responsibility for many Americans.
So what does real estate have to do with this, you might ask? PwC and Urban Land Institute recently published a new report, “Emerging Trends in Real Estate 2021,” which highlights the ways the pandemic will change how property is bought, sold and used. Perhaps one of the most interesting takeaways from the report is “Housing as a solution — for people, for communities, and for societal repair” — and the way real estate will emerge as one of the coming decade’s forefront business opportunities.
In this article, we examine some the report’s findings, including the opportunities for housing and real estate to emerge as a solution for afflicted individuals, communities and society at large.
When examining recent trends from an individual perspective — for buyers and sellers of single-family properties — Covid-19 has impacted everything. According to the PwC and Urban Land Institute report, “listings during the first half of 2020 declined,” with many homeowners fearful of inviting contagious disease through their doors during showings and open houses. But the second half of 2020 has seen a boom in both listings and sales, particularly in suburban areas. The report goes on to suggest that the months spent adjusting to social distancing, working from home and sheltering in place, “emerged as one of COVID-19’s wild-card forces, tripping thoughts to motivations, tripping interest to pursuit, and tripping new-home purchases into a higher gear.”
Individuals and families are shifting into planning mode. Looking ahead, they are thinking about their living space in terms of both personal and professional comfort, as well as safety. This shift in focus has undoubtedly impacted the homebuilding and construction sectors, which despite logistical challenges due to the pandemic, experienced booms in the warmer months as families and individuals continued to seek home upgrades ahead of the colder months.
Technologies like Punch List, which enables seamless, contact-free communication, progress tracking, project approval and payment via a mobile app, have made the process easier and safer for both contractors and homeowners. If anything, the pandemic has cemented the importance of “home” for many Americans, as home has become not just where we sleep and eat, but also where we work, where our children learn and where our in-laws and even adult children can stay safe. At Punch List, we’ve witnessed a continued increase in bathroom and kitchen renovation projects, as well as upgrades to indoor/outdoor space, in-law suites and home-offices. Homeowners and contractors are doing what they can to prepare for the uncertainty of this winter with home purchases and upgrades that will help keep everyone safe.
For larger developments, living communities, and multifamily enterprises, the need for social distancing has caused a massive shift in focus and outlook. Amenities like community pools, fitness centers, theaters, and game rooms were a top selling point for these developments — until recently, when the health and safety of residents became top priority. Then there is the pandemic’s economic effect on vulnerable populations, who can’t afford to contribute a large percentage of their income toward rent.
As the pandemic has decreased the popularity of community living, many developers and investors have temporarily hit pause on large development projects, both in major cities and suburban markets.
But pausing is not the answer. As an industry, real estate needs to better address the needs of working-class families and individuals with secure, affordable communities — focusing less on amenities and more on health and safety.
As the PwC and Urban Land Institute report indicates, “The pandemic’s lens could favorably alter the conversation. For instance, in light of the likely need for a New Deal–style work, training, and economic vitalization megaprogram, might housing — especially multifamily rental communities for working-class families and individuals — qualify as infrastructure?” It’s certainly a solution worth considering.
As I pointed out earlier, 2020 has been trying — both due to the pandemic, and the police brutality and violence that highlighted our society’s ingrained systemic racism. It is our responsibility as a society to do better. According to the 2021 Emerging Trends survey, only 25 percent of respondents agreed with the statement, “I believe that the real estate industry understands how past policies and practices may have contributed to systemic racism.” We need to educate ourselves and take an objective look at how the real estate industry, lenders and the government share responsibility for historic redlining and segregation across the United States.
Per the report, “Many interviewees suggested that the real estate industry could be more proactive in creating and supporting neighborhoods that are racially and socioeconomically integrated, and reversing the impact of de jure segregation, as well as investing more in areas that have been overlooked and that have suffered from perpetual and deliberate disinvestment. Institutional investors are increasing commitments to ‘impact investing,’ and real estate investments that address racial inequality are a key target.”
Let’s challenge ourselves to be more proactive in addressing the wellbeing of our society — and in promoting racial equality within the real estate industry, starting with housing. We can and should be part of the solution.
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