Edmonton Real Estate Investor: housing prices

House prices are softening in Edmonton and people are once again worried that we will see a spectacular bust in the Edmonton market.

"There's no sense reducing any product by 5% because it just doesn't work. We're seeing reductions of 10% and more,"Re/Max agent Abe Hering Read Article

In a normal market you don't always get the price you ask for. Edmontonians have gotten used to multiple offers and bidding wars on properties. That kind of market can't last forever and it needs to adjust.

On the other hand CMHC released a report last week that house prices are expected to increase 25% this year.

"With Alberta's economy still red hot, oil prices remaining high, and $150 billion worth of oilsands projects, upgraders and related work in the pipeline, no one is forecasting anything like an '80s-style housing crash, of course.
In fact, quite the opposite."Read More

Which means another 10% increase this year. Alberta is still leading the nation for increases in housing prices.

If you are really worried about the market falling I will be more than happy to buy your house at today's market value.

A plateau in house prices and the increase in inventory of unsold homes is shifting Edmonton's hot real estate market from the selling frenzy of 3 months ago to a buyer's market.

"The advantage has definitely moved from the seller to the buyer," Richard Goatcher, senior analyst at Canada Mortgage and Housing Corp.

Many people are worried because house prices dropped $9000 last month and $115 this month. I have even heard the price drop referred to as "a falling knife".

Then on the other hand we had $38B invested into Alberta last week. So, yeah, there is NO reason that the housing prices will increase again.

Especially when the President of Shell Canada says that the Oil Sands are just beginning are they will require a huge injection of qualified labour - people who will need a place to live that is an easy commute to the big refineries.

Realtors association president Carolyn Pratt said that buyers have a larger selection of homes to choose from and they are taking more time to decide.

"Sellers cannot just throw their property on the market and wait for a sale; they now have to develop a strong marketing plan," Pratt said.

This is how a regular real estate market works it goes up and then plateaus adjusts itself and then increases again.

As I have said before, "Where Calgary goes Edmonton follows". Calgary is hitting new housing highs and Edmonton will follow the leader. CMHC released a forecast in May projecting that single detached homes in Calgary and area will hit $474,000 by the end of this year.

"Only Edmonton is forecast for a bigger percentage hike, with prices expected to jump $90,000 to $340,000 by the end of this year, up 35.5 per cent.

"We (in Alberta) have the strongest economy in the country," Vinay Bhardwaj, manager of market analysis for the prairies region of CMHC, said.

"We have virtually full employment ... just about everybody in our province who can work and who has a skillset has a job," he said, noting that makes people more likely to consider home ownership. "On top of that, you have people who are moving here."

Although Alberta has been known for its boom or bust cycles, there is little expectation of a major correction that would see housing prices collapse."Click Here For More

Good time to get into the market? Strong Yes!

Here we go stability without stifling the market. One year's notice for a condo conversion is a little long if you are an investor looking to do flip out condos you will have to budget for that year. This will definitely help slow down the market.

"The Alberta government is changing some of the rules governing rent hikes, but won't go as far as implementing rent control, Housing Minister Ray Danyluk announced Tuesday.

Under changes to be introduced in the legislature, landlords will only be allowed to increase rents only once a year instead of twice.

And landlords wanting to kick a tenant out to do major renovations or convert a rental to a condominium will have to give at least one year's notice and won't be allowed to increase the rent during that time.

Even though there is no cap on what the rent increase can be, Danyluk said he isn't worried that renters will get gouged.

"I don't believe that it's going to jack up the price, but it gives some stability for the renter to know that he does have stability for an extended period of time."

By 2010, the provincial government will also introduce a province-wide program to help landlords and tenants resolve disputes outside court, Danyluk said." CBC News

Yesterday was my day off so my husband and I went for a bike ride to see a Surrealism exhibit at the Tochigi Prefectural Museum. I remembered I don't like surrealism except for Salvador Dali.

On the way there we stopped at an open house by one of the largest home builders in Japan. Seikusui House (pronounced "sexy house"). So for a 1290sqft house we were looking at $400,000, granted it was near the university. This is a suburban area where the houses are jam packed; I mean the neighbour coughs and you hear it. This price is reasonable because it includes the land and it is in a semi-rural part of japan. By semi-rural I mean 1 hour by bullet train to Tokyo.

So when I think of homes in Canada or America with gorgeous lawns, big backyards and big square footage for the same price it is a real reality check. I know, I know I am generalizing.

One nice point is Seikusui house gave us a present just for looking at their homes. We got some kitchen and bathroom wet naps and a dishcloth. Nice!

Edmonton residential prices have increased 16.5% since January. Unbelievable. As usual no signs of slowing down. The city is still affordable, prices are still rising and it is still no.1

“Edmonton is still affordable compared to Vancouver, which has an average of $590,000,” said Pratt. “(Edmonton is) certainly not in that range yet.”
She said she expects the increases to continue, especially through the busiest months of real estate, which are April, May, June and July. The market will then likely stabilize for the remainder of the year, she said. Carolyn Pratt, president of the Edmonton Real Estate Board (EREB.)read full article

The Edmonton Real Estate Board released their findings for the first quarter of 2007. The price of single family dwellings increased 6% in MARCH.

“It is clear that housing prices have not yet peaked in the Edmonton area,” said Carolyn Pratt, president of the EREB. “The spring season is always very active for REALTORS® and we do not anticipate that the pace of price increases will slow until early summer.”