The 2018 real estate market in Edmonton was quite a challenge for both buyers and sellers due to a record-high amount of homes for sale. As an Edmonton mortgage broker, I have to keep tabs on trends and quarterly reports for 2019 in order to give my clients useful information and updates. The Realtors Association in Edmonton has predicted that there will be further drops in average prices and sales as we continue through 2019.
It’s a bit of a double-edged sword for buyers at the moment. On one hand, this is a good time to buy because of the level of inventory. On the other hand, it’s not the best time as a result of the federal mortgage stress test, which has made it difficult for some buyers to qualify for mortgages. It seems both buyers and sellers are needing to be a bit patient for now.
High Inventory, Low Sales
The higher level of inventory on the market now is a result of properties last June taking longer to sell with a record number of 10,000 homes that came into the market. In average, last June it took 62 days for a home to sell. So, this current decrease in demand and increase of supply has created downward pressure on prices that looks to continue into the 2nd half of 2019.
For duplex and single-family homes, sales are forecasted to remain stable as we move through 2019, perhaps having some slight declines in units sold and the average prices. The market is expecting single-family homes to have an average price of around $428,900, which is down from last year’s $434,028.
Trouble for Condos
Where condos are concerned, things have been struggling along and it looks like this will continue through 2019. It’s expected that there will be a 2.06% drop in sales, in comparison to the 4,000 units sold this time last year. In 2018, condominium prices hit a 5-year low with a 4.69% drop. It is expected that it will drop a further 1.63% during the remainder of 2019.
There are a few factors involved with the falling market, such as the energy sector experiencing recent hits. Situations in Alberta are having a knock-on effect with everyone. It’s also expected that we won’t see any major improvements economically until the end of this year, but it is not believed this will be a result of a booming energy sector.
What Lies Ahead
It is expected that, by the end of 2019, we will see a housing market that has become more stable. Part of this will be down to interest rates and the economy stabilizing. The Bank of Canada has recently announced its decision to maintain the 1.75% benchmark, which will give many people that push needed to move into the housing market rather than just sitting on the fence.
For both potential buyers and sellers this year, there doesn’t seem to be any immediate cause for concern. However, patience will be needed. It isn’t a case of nothing selling because properties are moving. It’s just happening at a slower pace.
One detrimental aspect has been the federal mortgage stress test, which is causing less movement than needed in the market. However, the new addition of housing incentives for first-time buyers in the recent federal budget may help to balance things out a bit. How it will affect things in the market is a bit uncertain for now.
If you would like to know more about what is happening in the market in your area, give your trusted Edmonton mortgage broker a call today!