Like the weather, the residential real-estate market continued cooling in and around Edmonton over the holidays, a local realtor’s association said.
The greater Edmonton area saw declining inventory, listings, sales, and average sale prices at the end of 2022, the Realtors Association of Edmonton (RAE) said Tuesday. Total residential unit sales in the area fell 22.1 per cent compared to November, the association said, and fell 26.1 per cent compared to December 2021.
While it’s not unusual for the market to cool at this time of year, a climbing interest rate could be leading buyers to revaluate, association board chairman Paul Gravelle told Postmedia.
“Buying power is just not as strong as it used to be, and that limits people’s choices,” he said.
From March to December, the Bank of Canada raised the interest rate to 4.25 per cent from 0.25 per cent in the fight against inflation and the Bank of Montreal’s 2023 forecast expects one more hike.
Sales and sale prices down
The association listed the average sale price for Edmonton-area homes in December at $361,172, which is 1.9 per cent lower than November, and 5.2 per cent lower than December 2021.
Moreover, it found the number of single-family home sales fell to 537 the same month, which is 24.2 per cent lower than in November, and nearly 32 per cent lower year-over-year. While the average price for those homes increased 0.6 per cent month-over-month to $457,371, the figure was still down one per cent year-over-year.
Gravelle, a realtor with Maxwell Progressive in Edmonton, anticipates activity to pick up in March for the spring market. In December, Royal LePage released a forecast expecting home prices in the city to increase one per cent by the end of 2023.
Meanwhile, the association reported the average sale price for condos in December at $207,114 — 4.4 per cent lower than November and 4.6 per cent lower than December 2021 — while sales fell 15.5 per cent month-over-month and 2.8 per cent year-over- year.
Condos can be harder to sell because of monthly fees, Gravelle said, adding that he anticipates more interest in the year ahead.
“Because of the interest rates, maybe that first-time homebuyer can’t afford to get into a house,” he said. “Now, perhaps, that buyer is going to look more at condos.”
Likewise, duplex prices dropped 0.7 per cent month-over-month to $356,822 in December, and nearly two per cent year-over-year, while duplex and row house sales also fell 33.6 per cent month-over-month and 41.9 per cent year -over-year.
‘That pressure is off’
Residential listings in December spent an average of 58 days on the market — six more days in November or the year before.
With low borrowing rates and Edmonton’s market heating up in early 2022, it seemed like buyers were competing to snatch up prospective homes, but the change in climate is creating room for more thoughtful purchases, said Tom Shearer, a broker and owner of Royal LePage Noralta Real Estate in Edmonton.
“That pressure is off,” Shearer said. “Now that the foot is off the gas pedal a little bit, I think we’re closer to what a normal market might feel like.”
December also saw the number of new residential listings fall nearly 39 per cent month-over-month to 1,211, and nearly 13 per cent year-over-year. While inventory decreased by 21.8 per cent from November, that figure is up 6.1 per cent compared to December 2021.
The report found single-family homes were on the market for an average of 52 days in December (six days longer than December 2021), as condos averaged nearly 70 days (five more days year-over-year), and duplexes 47 days — the same as in 2021.