Spring thaw in city house market
Prices, listings, sales up over 10% in March
April 7, 2010 Bill Mah, Edmonton Journal
Edmonton’s resale housing prices, listings and sales all posted double-digit increases in March compared with a year earlier, according to figures released Tuesday by the Realtors Association of Edmonton.
Buyers trying to beat higher mortgage rates, a seasonal surge and an improving economy heated the market in March, said association president Larry Westergard.
“We’re back from where we were in 2008 into 2009 where the market really corrected based on what happened globally, back to where it should be for what the Alberta and Edmonton economy is demanding for houses,” Westergard said.
Single-family homes in the Edmonton area sold on average for $388,473 in March — up 4.7 per cent from February and 11 per cent over March 2009. The median, or midpoint, sale price for a single-family house was $364,000, up 9.2 per cent from March 2009.
Condominium prices rose to $252,416 in March. That’s up 8.4 per cent month-over-month and 10.5 per cent year-over-year.
Duplex and row-house selling prices averaged $313,836, down a third of a per cent from February, but still up 10.4 per cent from a year ago.
Compared with a year earlier, sales were up 15 per cent to 1,571.
Residential listings rose more than 30 per cent year-over-year to 3,728 in March. The rise in listings quells concerns from earlier in the year about a shortage of inventory, Westergard said. “I think the market has reached a balance between buyers and sellers.”
The question now for homebuyers and sellers is how the market will respond to the hike in banks’ fixed mortgage rates late last month. The Bank of Canada is expected to boost its trendsetting rate in June or July.
Westergard downplayed the impact of higher interest rates. He said entry-level buyers will still enter the market, but may downgrade their expectations — for example, by buying a condo instead of a house.
“You’ll see some of the buyers that are coming in on the fringe or the cusp of qualifications might have to make some choices — staying out of the housing market for a little while or perhaps lessening some of their requirements as to what they want in a home,” Westergard said, adding that interest rates will still be relatively low.
Canadian real estate author Don Campbell said the prospect of higher interest rates fuelled market activity in March, but he expects demand to continue even after rate increases.
“There was a lot of money sitting on the sidelines for a year or 18 months while they were trying to figure out the downturn. … They’re starting to see some momentum, some job growth and confidence.
“You’ll probably see it actually stimulate the market more than it will be a deterrent,” Campbell said of mortgage rate increases.
“It’s getting them out of their 18-month funk of wondering if Alberta is shutting down or …. opening up.”