It seems the Alberta economic bubble has started to deflate in the housing game, according to recent reports about home sales in Edmonton.
The Realtors Association of Edmonton reported Wednesday that Edmonton’s usually stable and arguably booming housing sales took a sharp downward turn in the final month of our short-lived summer. In August, there were 1,465 property sales, a marked decrease of nearly twenty percent from the previous month. Compared to last year at this time, August was down over five percent, solidifying the view that property sales are finally reacting to the shrinking oil prices.
But even as home sales decreased, the average house sale went up a modest one percent, from $368,459 last August to $372,256. Such a number means sellers are still making profits off their homes, but that could change if the trend continues. And since the total value of residential sales in August was $628 million, down 2.9 per cent year over year, the trend could be happening as we speak. In fact, we are already seeing a drop in condominium prices by 2.8%, but as construction projects go on hold in the economic fallout, prices could stabilize slightly as the supply goes down. Demand, however, seems to be staying relatively stable.
But the good news is that home sellers and buyers aren’t in as bad of shape as the numbers and reports would like to suggest. For sellers, the home values are continuing to flatline, essentially, instead of drop, like other prairie cities have experienced, and that means we’re still a far way off from severe economic implications from falling house prices.
For buyers, the market is ripe with opportunity. Not only are there plenty of houses and properties on the market, the nervousness of sellers could help you land a good deal on your next real estate purchase. It all depends on what you’re looking for, and where.
August traditionally sees a drop in sales compared to the seasonal highs of other summer months, but the drops from year-to-year suggest our housing market isn’t immune to the economic fallout of dropping oil prices. But this isn’t necessarily as bad for sellers as we may think, but it is good for buyers.