CITY NO LONGER BUYER’S MARKET
Brokers see more balance in Edmonton’s home sales
Edmonton is not the buyers’ market it used to be. According to a recent analysis of sales and inventory data by a Canadian real estate brokerage firm, the market in the city is more balanced than it was just one year ago.
Realty firm Zoocasa analyzed market data provided by realtor associations across the nation, including statistics from the Realtors Association of Edmonton, and ranked major cities from the most buyer friendly to the most seller friendly.
“We looked at the sales to new listings ratio in each market to figure out which ones are balanced, sellers’ and buyers’ markets,” says Penelope Graham, managing editor with Zoocasa.com, which provides listings and other resources for the resale market across Canada.
The ratio is calculated by dividing the number of sales by new listings that come onto the market over the course of a month, in this case, June.
According to the Canadian Real Estate Association (CREA), a balanced housing market has a ratio of 40 per cent to 60 per cent. If the percentage is less than 40 per cent, then it’s a buyers’ market and if it’s higher than 60 per cent, it favours sellers, she adds.
Nationally, the average ratio was 59 per cent — at the edge of sellers’ market territory. Edmonton came in slightly lower for the month at 55 per cent. “Compared to last year, that’s up 10 per cent,” she says.
Saskatoon was the most buyer friendly at 42 per cent, while Montreal was the most seller friendly at 94 per cent.
Out of all the 25 cities analyzed, Edmonton ranks fifth, she adds.
Graham further notes sales were flat for the month, rising one per cent while new listings dropped 18 per cent.
Despite moving closer to a buyers’ market, the average price fell by about three per cent year over year to about $370,000.
“Prices can be a bit sketchy and it can take them time to respond to these kinds of developments,” Graham adds.
While buyers still have a lot of choice in the market, they are more likely to start seeing competing bids, particularly on more affordable options, “which is just another word for a bidding war,” Graham says. “Those are the kinds of trends we see develop when a market is toward the tighter end of balanced.”
Eventually, falling inventories and competition for more affordable homes may translate into higher prices overall for the market.
Graham further notes whether a market is considered a buyers or sellers has little to do with affordability.
“Just because a market is a buyers or sellers, doesn’t mean it’s expensive or not expensive.”
Graham points to Greater Vancouver as an example of having a buyer-friendly ratio at 43 per cent, but it is much less affordable than Edmonton.
Rather, the ratio data help illustrate the level of competition for homes and the relative number of options for buyers.
“But if we do see a trend toward sellers over a sustained period of time, you could see that translate into higher prices.”