It’s time for an update to provide you with the latest insight about Edmonton’s real estate market! Home prices and overall sales in Edmonton have increased significantly compared to last year, and days on market have decreased. Needless to say, the market is hot and the numbers we’re seeing now are usually not anticipated until the Spring (if at all).
Let’s talk stats to put this strong market into perspective! Edmonton’s total home sales have increased by nearly 50% from this time last year and the total home sales in February and March 2022 have increased 69.3% compared to January 2022.
However, the number of sales are not the only exponential numbers–the average price for a single-family home has increased 12.7% year-over-year and a month-over-month increase of 10.8%.*
As new home prices continue to increase, Edmonton’s home prices have not increased as severely as other major cities such as Vancouver and Toronto. Average single family home prices are $700,000 in Ontario’s major cities, ultimately forcing residents out of the market altogether. Similarly, the price hike is happening to the West of us in Vancouver. This trend has left residents on both coasts no choice but to live elsewhere–like Edmonton and Calgary where the average single-family home is approximately $500,000.
So, why the increased pricing? If you guessed supply and demand–you guessed correctly.
Transportation & Labourers
The pandemic has slowed the economy down, and everything takes longer to get to where it needs to be. Raw materials need to be shipped and pricing for transporting raw materials in containers has increased. The containers are overloaded. Wait times at ports, shipping docks and warehouses are extremely long. Fuel for transportation has gone up. And, there’s a shortage of labourers such as truck drivers making transportation more complicated and costly.
Supply & Demand
The cost of transportation and labourers changed the housing market, and the supply and demand for resin and lumber contributed. Hurricane Laura and the unexpected winter storm that hit the deep south put a halt to resin production making it next to impossible to obtain simple materials to build homes. Products like window frames, PVC piping, siding and more were all backordered, putting these simple plastic products in higher demand with pricing to follow.
Labourers, raw materials, and transportation aren’t the only shortages we’re dealing with–we’re also out of land. When the pandemic hit, there was uncertainty like everything else. Land developers paused production, purchasing and servicing. So, not only are the building materials difficult to access, lots to build on are also in great demand.
Canada's Prime Rate
On top of the above explanation for high home prices–the bank of Canada’s prime rate has also contributed to higher home sales as the prime rate hit record lows due to the pandemic. People reacted and purchased where they could to lock in a low interest rate. Now, the bank of Canada is raising the prime rate as a reaction to the hot market in effort to balance the astronomical numbers. The prime rate just went up .5% in February and it’s projected to go up again this month.
Let’s wrap this up! The concluding message we are trying to send is to get into the market while you can. The competition is stiff, and not projected to ease up anytime soon. The ongoing current affairs are only making it more difficult to purchase, and interest rates are on the rise!
Resources:
“Monthly Market Statistics Update.” Realtorsofedmonton.com, www.realtorsofedmonton.com/Market-Stats/Monthly-Housing-Statistics.
Global News. “Edmonton Real Estate Market Breaking Records as Single-Family Homes Average near $500K.” Global News, Global News, 8 Mar. 2022, globalnews.ca/news/8655740/edmonton-real-estate-market-february-2022/.