Easing prices for homes in middle range putting city market into balance
Edmonton's real estate market is likely to remain in a balanced state for the remainder of the year, a recent study suggests.
And you can thank sellers in the mid-range market for the improving conditions, says a leading realtor in the city.
“One thing that happened this year is those executive and junior executive homes — in the 2,400to 2,800-square-foot range — had a reckoning,” says Tom Shearer, broker/owner of Royal Lepage Noralta Real Estate.
“Sellers lost their patience with waiting, and so they reduced their price a little bit to get their homes sold.”
Shearer, chair-elect of the Realtors Association of Edmonton, notes a shift in the market is likely a key driver behind the data in the recent Royal Lepage House Price Survey, released earlier this month. The survey noted the Edmonton market is in balance and should remain so for the rest of 2020. It even found the average price of a home in the city rose one per cent from July to the end of September over the same span last year to $373,156.
Two-storey, single-family detached homes — in the middle to upper range in price — saw the greatest price acceleration.
Prices jumped by three per cent in the third quarter over last year to $428,787.
Shearer notes the middle to upper range segment has had its struggles. But many sellers knocked about two to four per cent off their listing price to move their home in recent months.
Executive homes are typically pricier than the average — in the $550,000 range and up — but still within reach of move-up buyers.
“Edmonton is one of the most affordable cities in Canada,” he says. “First-time home buyers have long been a strong part of the marketplace, and so that buyer can purchase a nice single-family home to start a family.”
This demographic is critical to deal flow in the marketplace, he adds. It supports move-up buyers by providing demand in the lower-priced, single-family market. In turn, that frees up sellers to purchase their dream home.
Recent RAE numbers from September support this notion. Sales for homes priced $550,000 and up increased across the board from 2019.
In fact most price segments between $500,000 and $1 million experienced their best September in years. For example, 47 homes sold last month priced between $575,000 and $599,999. By comparison, nine sold in 2019, 16 sold in 2018, 20 sold in 2017, and 16 changed hands in 2016.
Still Shearer cautions recent numbers reflect pent up demand from a historically slow spring. As such July and August were strong. But so was September — across all price ranges.
All told, 1,400 homes sold compared with the average of 1,400 for the month, he says. Year to date, the market is still down about three per cent for sales.
“But with a last little surge, we could catch what we did last year,” he adds.
Regardless, the Edmonton market remains affordable even for executive homes, priced at about $550,000 and up, when compared to other major cities.
“That's like a 600-square-foot condo in Toronto, right?” Shearer says.
As for the remainder of 2020, the survey forecasts average prices are likely to fall 0.5 per cent, year over year. That's compared to a forecast seven per cent price increase nationally.