05/10/2021
APRIL 2021 Real ESTATE MAP AND STATS
April 2021 Real Estate Infographic
What a difference a year will make. This month's infographic is in the inspiration of the daily Covid-19 infographics by /u/joliette_le_paz. It ended up having a few fewer features in favour of a cleaner breakdown and layout. The colours denote a rough number of months of inventory for each Area. It is interesting since there is more activity and less relative inventory in the more distant areas than the core. The realities of WFH are pushing people to look for larger homes as opposed to more central homes. The big difference between this year and last year is that more expensive properties are selling at a much higher rate than in 2020. In April 2020, there was a significant amount of uncertainty, and that uncertainty meant cheaper properties and significant discounts were the norm.
Increasing interest rates have not slowed the market by any significant margin. In comparison, year over year numbers for the unit count will be less valuable since last April was the third-worst April in Edmonton Real Estate History (1990 and 1995 being one and two respectively). April 2021 has surpassed even the historic numbers of April 2007 by 21% (498 Units) to become the highest selling month in Edmonton history, with number 2 being March 2021. The percentage of properties selling for over list price is three times higher than 2020 at 19.55%, and this also is good/bad as it puts it for number 3 all time. The major difference is that only 4% of apartment-style condos sold for over list price versus 25% in 2007. The other difference is that the average above list price paid for single-family detached houses in April 2021 was $9,818, while it was $12,187 in 2007. Only 20% of homes are selling over-list may be small comfort to potential buyers as the median sale price is also at historic highs for April of $427K for SFD Houses. Vacant lot prices are also creeping up compared to rank 4th all time.
Thankfully inventory levels have stayed relatively constant overall for the market. Consistent inventory is heartening for most asset classes, and while condos are selling at a higher rate than previous years, the excess inventory is significant. In addition, there is the phenomenon of a large number of renters becoming homeowners, which will likely pressure prices down further. Since I began tracking in August 2018 at 2028 units for the Greater Edmonton Area, we are currently at the highest inventory level for apartment-style condos ever. Townhouses are performing better with more traditional levels of inventory and above-average activity. Yet, there feels as though there is a lack of buyers right now. Combined sales volumes for 2021 have consistently been second only to 2021.
If we take a closer look at specific areas, the University area has benefited from cheap money and is one of the better performing condo markets in the city. Coupled with the potential return to face-to-face classes for two cohorts of students may mean late summer and early fall will be very good for the Area and the market as a whole. This year has seen prices jump 20.6% compared to last year for the Area as a whole.
That jump in prices, though, is nothing compared to those experienced by the Areas south of the university along the LRT line. This Area is up 34.7% compared to last year. Realize, though, that is for properties that have sold. While the Area has over two months of inventory, there are only 1.5 months of House inventory which means it is most definitely the best seller's market in the city. However, it is not the best seller's market in the Greater Edmonton Area. Nearly every community outside Edmonton has lower months of inventory.
I want to focus on the two major communities(Sherwood Park and St. Albert) outside Edmonton proper and help give perspective to the current insanity. I am not entirely sure if it is WFH, white flight, or something else at play here, but Sherwood Park has only 1.38 months of inventory for SFD Homes, and 13% of the properties are currently pending conditions. This number is likely even higher as not all properties that are pending report as pending. I would not be too concerned about pending properties as 53% of properties are selling under 14 days, and the market is on absolute fire out there with line ups and multiple offers being the norm. These numbers are even higher than April 2007 for the community. St. Albert is no slouch either, with 41% of homes selling under the two-week mark. St. Albert and Morinville have seen average prices shoot up 25% and 31%, respectively. It is tough to explain how busy it is in these markets, but I would like to say what we are experiencing is simply an acceleration of the home buying process, not changing how the system works.
I want to elaborate on the above point by comparing what we are experiencing in Edmonton vs what they are experiencing in the rest of the major cities. In Edmonton, you still will be able to view a home without having to wait multiple hours outside or make an offer sight unseen. Your offer will be permitted to have financing and inspection conditions. However, in multiple offer situations, forgoing one or both is becoming more common. How this differs from years previous is that good homes simply do not last in the market, and if your home is not selling or getting showings, there is something wrong with the price, photos or a combination of both. This is true for houses and duplexes. For condominiums, it may simply be a lack of buyers. Buyers are spoiled for choice.
There are other elements at play here as well. The more distant areas of the city are also those who have experienced negligible growth or most loss in recent years. The primary reason for this lack of growth, in my view, is the activity of builders and developers to keep prices low. This ability to keep prices low has been attacked on three fronts over the past year. The first front is the well-known situation regarding lumber prices. This is said to contribute to at least a 15-25k increase in the cost of a new home. The second front is the increased cost of trades and competition for trades. There is a building boom going on, and trades seem to be in high demand from my experiences. This will either slow builds down (adding to the cost) or result in more income for the trades. The final one is a direct result of the uncertainty of Covid. Last year no one knew what was going on, and as a result, developers did not develop as many lots as perhaps they should have. This has led to a shortage of spec homes, building lots and longer lead times for new houses. This lack of new housing options for the first time in a very long time has pushed resale home prices up and decreased inventory. The interesting thing is that buyers are saying they can get what they want now for the same or a little less than the cost to build and waiting.
What does this mean for the coming months? Currently, the only listings I have that are not selling are either overpriced or a condo of some kind. Everything else has sold or is pending. On the buyers' side of the real estate transaction, my buyers cannot find what they are looking for or the prices have pushed what they are looking for out of reach. It is especially true in St Albert and Sherwood Park. As always, thank you for taking the time to read this, and I look forward to your questions.
SIDE NOTE on the GRAPHIC:
-It is tough to read but under each average price, i put a small percent change for your information.
