Sunday, May 31, 2009

Favourite Neighbourhoods

This will probably come off like a puff piece, but it's been a beautiful weekend, I don't really feel like doing actual research, I need one more post to hit my self imposed monthly quota of ten and I just took a stroll through mine yesterday and feel like waxing nostalgic! After all, this is my sandbox dammit!

Back when I was at the U of A, well, my first couple years I lived at Lister Hall, which anyone who has lived there can attest, is an experience in itself before they tamed it down in there... and my floor really took it to another level beyond that even, we set all kinds of records for incident reports and property damage. Out of the 15 freshmen that lived down my wing, only four of us not were kicked out for behaviour, poor grades, or in most cases, both. Good times!

Anyway, after surviving that, I moved down off campus into the neighbourhood of Queen Alexandra, right in the heart of Whyte Avenue. It's such a vibrant area, Queen Alex/Garneau/Strathcona. So full of life and I don't think there is a better part of the city to spend the summer in.

Sure, it's a bit dumpy in areas, but there is just so much to do, beautiful tree lined streets and the homes/buildings have so much character. There is also such a wonderful energy in the air when people are out and about (and for those raging alcoholics out there, you can get drunk every night for over a month and not have to crawl home from the same bar twice!).

Personally I find the new developments of endless cul-de-sacs fulled with cookie cutter McMansions so depressing. You don't find that in Old Strathcona, though there are some new condos here and there (is it just me or is that ecohouse complex a giant eyesore?).

As I've eluded to, there is an endless supply of things to do down there. Ton's of restaurants, bars, and shops of all varieties. Also live theatres and a couple art house cinema's, not to mention the annual Fringe Festival.

Not sure why, but of all the places I've lived during my twenty some odd years, Old Strathcona is where I feel most at home.

How about for you all? Where are some of your favourite areas/neighbourhoods?

Thursday, May 28, 2009

Price to Rent Ratios

Obviously there are no lack of indicators and ratios out there, we've looked at several here over the months. Some in my opinion are fairly useful, like absorption rate... others I feel are as useless as tits on a bull, like sales to new listings.

In any case, today we'll look at another one... price to rent.

I briefly took a look a historical rents awhile back, but have since came across a better data set (well, same set actually but a longer horizon, and in cases like these, the more data the better). To set the groundwork, here are the rents for Edmonton and Calgary going back to 1990.

The two cities have tracked fairly similar patterns. Rents were relatively stagnant in the early 90's, then in 1997 they started about a 5 year run up then plateaued again through 2005, after which they again took off. These figures are from October of each year for those curious.

As the name implies, the other part of the price-to-rent ratio is price. Creative name, I know. Anyway, here are the residential averages and condo averages for each city taken from October of each year.

Now our rent variable is that of 2-bedroom apartments, so obviously the condo average would be the better comparison other. So why did I include the residential average, well, it's because I only had Edmonton condo averages going back to 1999, so I had to do some estimating to fill in the '90-98 portion.

For the three years, '99-01, the condo average was generally around 70% of the residential average (FWIW, in recent years that ratio has been closer to 75%). So going backwards, I used that proportionally. As prices were very stagnant over that period I felt that was an acceptable method... but if you disagree, I have also done these ratio's using the residential average.

No such issue with the Calgary number as I had the full set. It is interesting to note that the Calgary condo numbers track extremely close to the Edmonton residential number. Also of note, the Calgary condo average is usually closer to their residential average (85%) then in Edmonton (as discussed in the prior paragraph). Why is that? I'm not sure, but perhaps condos are more prevalent in that city and thus make up a larger portion of the market.

Price-to-rent Ratio
Here we see the price-to-rent ratio for condo's to two bedroom apartments in our respective cities (or, in case you didn't like how I derived this as explained earlier, here is the graph using the residential average to two bedroom apartments, in any case, they yield very similar curves).

How this is calculated is to take the price, then divide it by the monthly rent multiplied by 12 (in other words the amount of rent paid in a year). Interestingly we can see that Calgary generally seems to track 2-3 points higher then Edmonton. So while Calgary prices and rents are both higher then those in Edmonton, their differences are not proportional.

Looking at the trend, through 2001 in both cities the ratios remained relatively consistent... but from '01 through '07 they steadily increased at a rate of around 2 points per year. A reflection of the big run up in prices, but interestingly this trend was very much evident long before prices really exploded in 2006.

We can also see the effects of the drop off in price, as the ratios for both cities fell off to the tune of about 4 points in 2008, reflecting the drop off in price while rents continued to go up as evident in the earlier graphs.

Both these upwards and downward movements display how rents are generally more 'sticky' then prices, in both directions. This should not be surprising though as sale prices concern only one-off transactions that take place that month, while rents are determined by ongoing agreements/relationships/leases that can be made months or even years earlier.

One of our regular commenters Chris, aka CM, mentioned a good article concerning the price to rent ratios witnessed in many bubble cities in the United States at their peaks. One passage reads.
Throughout the 1970s, ’80s and ’90s, the average rent ratio
nationwide hovered between 10 and 14. In the last few years, though,
it broke through that historical range and hit almost 19 by the time
the housing market peaked, in 2006.

And while home prices — and rent ratios — have always been higher on
the coasts, they reached whole new levels recently. In the Washington
area, the ratio went above 20. In Boston, New York, Los Angeles and
south Florida, it topped 25. In Northern California, it approached 35,
higher than it had been in any city, at any point on record.
So it's interesting to note some of those figures with our findings above. Firstly, that the nationwide ratio in the US was generally between 10-14. This would certainly describe Edmonton's situation until the run up... and would largely also ring true for Calgary though they were closer to 15, so they were close.

In any case, Calgary would be at the high end, while Edmonton would be right in the mix. So it's interesting to compare the peaks, Calgary at 25.4, and Edmonton at 22.9. These ratios are very close to those experienced in Boston, NY, LA and south Florida.

While all four of those US cities experienced bubbles, those experienced in LA and south Florida were far more extreme, and both have suffered very badly in the aftermath of the bubbles bursting. This could also indicate trouble for us, as the magnitude of the bubble experienced in Edmonton is much closer to those witnessed in LA and south Florida moreso then Boston and NY... the bubble in Calgary was somewhat in the middle ground, significantly lower then the former two, but much high then the latter.

Thus, our price to rent ratio is another indicator of just who severe a boom we experienced... the question is, how bad will the bust be?

Also just want to do a quick appendices on another measure I found. These are the rented accommodation indexes, and owned accommodation indexes for Edmonton and Calgary.

These are part of StatCan's Consumer Price Index. Not entirely sure exactly what and how many factors are included in these measures, but all things being equal, I thought they were worth a quick look.

It's interesting to see how they've evolved since 1971. For both cities the two figures have tracked very closely up until 2006 when the rapid run up of real estate prices caused a significant decoupling. Rented actually have largely continued their traditional course, but Owned underwent a massive spike, to a magnitude never witnessed before.

It's also interesting to note that in both cities in the early 70's that the Owned index was actually significantly lower then the Rented index.

Monday, May 25, 2009

Latest Mortgage Arrears Figures

The Canadian Bankers Association released their latest mortgage arrears stats today, these are for March.

Mortgage Arrears
As we can see, they're continuing their meteoric rise, and have now passed the 0.50% threshold. 2,416 Albertans now find themselves three or more months behind on their mortgages (typically at the point foreclosure proceedings begin, though it often takes another six months before such properties hit the market). There are now over three times as many Albertans in arrears then there were two years prior (740 in March '07), and well over double the number from a year ago (1,054 in March '08).

We still haven't neared the levels witnessed in '96/'97, but are well above the long term average (0.37%) and the current acceleration is showing no signs of slowing down (if the current trend holds (~0.03% MoM, we could hit the 0.70% level by October).

Last month it was requested to take a look at the year-over year change in these figures, so here those are (this is of the % of mortgages in arrears, NOT the raw total of mortgages in arrears)

Mortgage Arrears
From mid '07 on we've seen an explosion of mortgages going into arrears, and in the last 8 months this has leveled off at roughly 120% year-over-year increases, which means the figures have more then doubled over any given 12 months. Such year-over-year increases haven't been seen in the last twenty years, and likely not since the early 80's when the first bubble burst.

It is interesting to note the contrast with the first graph, where we saw that as many as 0.70% of mortgages were in arrears during the mid-to-late 90's... and this second graph we can see that was reached after an extended period of more moderate year-over-year increases (30-50%).

This time around it's been a result of rather explosive year-over-year increases (110-130%), and while it has leveled off, it has leveled off incredibly high and as of yet shows no sign of slowing yet... beyond that, much of the economic turmoil (layoffs, etc) experienced in the new year would still be largely unfelt in these figures.

On a national level, arrears ticked up to 0.39% from 0.38%. Like last month, Alberta again has the highest rate in the country, and is opening it's lead, as the Atlantic has dropped to 0.44%, while Ontario remained at 0.41%.

At the opposite end of the spectrum, Manitoba and Saskatchewan now enjoy the lowest rates, at just 0.22% each. B.C. is next at 0.29%, but the effects of their housing bust is starting to be felt as the rate there is growing rapidly (they were a nation low 0.16% a year earlier).

Friday, May 22, 2009

Warranty? What Warranty?

Warranty? What warranty?
Over the last month there has been a great many stories appearing about the effects of shoddy construction practises here in Alberta... particularly concerning stucco exteriors with faulty membranes.

A quick googling turns up this and much more:

No bailouts over faulty condos: gov't

Faulty new homes not widespread, builders say

Thousands of Alberta homes could rot, experts say

No tally kept on rotting buildings

Membrane, not stucco, is the problem

Shoddy workmanship blamed for leaky homes

Dream home a nightmare of problems

Edmonton condo owners face $8M bill for repairs

This is some scary stuff, people are getting hit with some massive bills for repair. In that last story a woman who paid 150K for her condo 5 years ago, is now being hit for a 45K repair bill. There aren't too many young adults who can swallow that kind of hit to the wallet easily.

Hell, it can even knock the established for a loop, one of the stories talks about a couple nearing retirement now forced to take out a second mortgage just to cover repairs to their home.

Seeing we've been talking about asking prices, I thought it would be interesting to see if we could find any listings from the complexes mentioned in the above articles. In this article they were talking about a building on 102 Ave and 120 St, which is now faced with about 450K in repair costs for the 29 unit building. There are a couple... a 1000 sqft unit for 270K, and a 1055 sqft on for 300K.

Then in another article from just this week, we hear about a 200 unit building that is now faced with an 8 million dollar price tag to repair mold and rot damage in their six year old building. Couldn't discern from that article where it was, but Global TV did a little piece on it last night, and from that I figured out it was at 104 Ave and 122 St. Just a few block from the other building.

Since in the piece they talked about the developer, Tessco, I took a look at their site... and yup, there it was, Glenora Gates. Also found six listings on MLS from the building, (one, two, three, four, five, six). Ranging from a 770 sqft unit for 200K, to a 1137 sqft unit for 290K.

It would be interesting to hear how forthcoming the real estate agents are with the information about the damage and cost of repair. Or if perspective buyers will be left to find out about it in the condo board minutes... cause, there is nary a mention of any such deficiencies on their listings.

Obviously one must feel for those who currently own, and are now faced with these huge repair bills for problems that should have never been. Many will now be faced with taking a second mortgage, or forced to sell (likely at a significant discount to boot).

Going forward, for those looking to buy, whether new or old, be sure to do your homework... and if you see any building with a stucco exterior, condo or otherwise, be asking even more questions and don't stop until you get answers. All those people talking up a property will want nothing to do with you once problems arise... and as we've been seeing, new homes are no exception as the new home warranty program has been exposed as no help whatsoever to these people.

Wednesday, May 20, 2009

Asking Prices - Condos

Asking Prices - Condos
So, the nominations are in and the selections made. Added a couple more to represent all the new building in Terwillegar as well as to represent the university area, so we'll be tracking 12 complexes. Since we can focus on buildings/complexes with condos it should be far easier to track and find good comparables should these listings sell or expire.

I'll do the houses sometime in the next week or so when I get some time. One of our commenters, CM, also found a rather ingenious way to track the median listing price for areas, so we'll also be able to keep an eye on that. But without further ado, the condos...

Northeast - Canyon Ridge - 451 Hyndman CR complex

We have two listings, E3179050 & E3185140.
  • 1250 sqft townhomes
  • similar conditions
  • built in 2004
  • condo fees - 145/month
  • taxes - ~1,600/year
  • DOM - ~10 and 60 respectively
  • asking prices 230K and 240K
Northwest - Cumberland - 13215 153rd Ave NW complex

There are four listings in this complex, all never been lived in. Cheapest is a 1250 square-footer listed at 300K, most expensive an 1825 square-footer listed at 350K. We'll focus on the two in the middle, assuming they're the most common E3165890 and E3173613.
  • 1470 sqft townhomes
  • identical units
  • built in 2007, never been occupied
  • condo fees - 100/month
  • taxes - not available
  • DOM - ~110 and 210 respectively
  • asking price 330K per
West - Ormsby Place - 64th Ave - 178th St complex

We have two listings, E3170325 and E3185243
  • ~1040 sqft bi-levels
  • similar conditions
  • built in 1978
  • condo fees - ~240/month
  • taxes - ~1,350/year
  • DOM - ~10 and 140 respectively
  • asking prices 212K and 218K
Central - Downtown - 10125 - 109th St complex

There are currently three listings from this building. Cheapest being an 870 sqft 1 bedroom listed at 200K. Most expensive being a 915 sqft 2 bedroom corner unit listed at 245K. We'll focus on this one, E3183255.
  • ~911 sqft apartment
  • built in 1981
  • condo fees - ~330/month
  • taxes - ~1,550/year
  • DOM - 20
  • asking prices 220K
Central - Downtown - 10024 Jasper Ave complex

A ton of these lofts available, 14 to be specific. To be brief here is the price/sqft for each - 135K/465, 140K/457K, 149K/409, 149K/400, 150K/398, 150K/441, 155K/465, 157K/441, 160K/464, 175K/645, 180K/490, 189K/678, 190K/570, 300K/1135. We'll focus on E3182099 and E3179906, there is a third 465 square footer, but no pictures, so I'm suspecting that's a foreclosure and there is no telling the condition of it.
  • 465 sqft apartment
  • built in 1998
  • condo fees - ~254-320/month
  • taxes - ~900/year
  • DOM - 30 and 50
  • asking prices 155K and 160K
Southeast - Ellerslie - 230 Edwards Drive complex

There are currently four listings from this complex. All units appear to be about the same (same size, structure, fees, taxes). E3185206, E3179401, E3183029, and E3172019.
  • 1200 sqft townhomes
  • built in 2005
  • condo fees - ~125/month
  • taxes - ~1,700/year
  • DOM - 10-60
  • asking prices 240K, 246K, 247K, 260K
Millwoods - Meyonohk - 2703 79th St complex

Seven currently listed in this complex. Cheapest being a 960 square footer for 180K. Most expensive a 950 square footer for 200K (which ironically is also the smallest, and with the oldest furnishings. There are four with identical size (all with 3 bedrooms, or 2 and a den) so we'll assume they are the most common, E3184778, E3176919, E3185046, and E3177684.
  • 1119 sqft carriage homes
  • built in 1982
  • condo fees - ~280/month
  • taxes - ~1,250/year
  • DOM - 11-280
  • asking prices 190K, 190K, 190K, 200K
Southwest - Sweet Grass - 11255 - 31st Ave complex

There are currently three listings from this complex. All units appear to be about the same on paper anyway. E3170513, E3185720, E3184464. Low prices and taxes, but some rather large condo fees.
  • 800 sqft apartments
  • built in 1977
  • condo fees - ~420/month
  • taxes - ~925/year
  • DOM - 10-140
  • asking prices 130K, 135K, 140K
Southwest - Queen Alexandra - 7907 - 109th St complex

Eight of these units listed that have never been occupied in this new university area building. Range in price from a 826 square footer for 325K, to a 875 square footer for 387K. We'll look at these two, E3145626 and E3145633. Actually you only really need to look at one, since they're both totally identical listings.
  • 940 sqft apartment
  • built in 2008
  • condo fees - 390/month
  • taxes - not available
  • DOM - 60
  • asking prices 361K
Southwest - Haddow - 2503 Hanna Cr complex

Three up for sale currently in this building. Cheapest being an 1144 square footer listed at 275K. Most expensive being a 1300 square footer listed at 330k. We will give you the details on the middle sized/priced E3178631.
  • 1220 sqft apartment
  • built in 2007
  • condo fees - 340/month
  • taxes - 1840/year
  • DOM - 60
  • asking prices 325K

St. Albert - Woodlands - 260 Sturgeon Rd complex

Two very similar listings in this low rise complex. E3180356 and E3175405.
  • 1050 sqft apartment
  • built in 2002
  • condo fees - 253/month
  • taxes - 2260/year
  • DOM - 90
  • asking prices 250K per
Sherwood Park - Lakeland - 115 Chestermere Drive complex

Three units in this complex are listed. E3165443, E3180060, and E3180404.
  • 1200-1275 sqft townhomes
  • built in 2005
  • condo fees - ~115/month
  • taxes - 1875-2000/year
  • DOM - 50-210
  • asking prices 295K, 305K, 316K

Monday, May 18, 2009

Hit the bottom or sitting on a trapdoor?

Curious times we're in.

We're hearing a lot of bluster, doom, gloom and just generally conflicting messages from all over the economy the last little while. Shouldn't really be surprising, we're in this massive economic fugue, and there is no consensus about what will come next so everyone is grasping at straws.

One day they're talking about green shoots and how the stock market has been rallying for weeks on end... the next the market tanks. One day you're getting all kinds of bravado from the realtors associations about how great things are and that the bottom is a thing of the past... the next there are reports the Canadian Real Estate Association of all outlets is telling everyone prices will be dropping through 2010 (truth be told, price wise, their predictions for Alberta in '09 and '10 were exactly the same as their February forecast).

Anyway, with the amount of shilling the media does for the real estate industry, sometimes it's almost nice to see their know-nothing cut-and-paste writers can get it so wrong both ways... would be nicer if they could get someone who actually knew shit from shinola and could write, but evidently it's that's not as profitable.

In any case, we've been witnessing what the bulls are claiming as a resurgence... really just a pretty typical spring. But I guess pointing out much the same thing happened last year at this time and prices still fell off the table in the fall doesn't get the gullible off their wallets.

What is different then last year is that we are actually approaching something resembling affordability. How can this be when six months ago prices were about the same but were considered very unaffordable?

In two words... interest rates. The governments have been slashing central bank rates to the bone, bond rates are negligible and finally mortgage rates followed. So, prices didn't need to go down to meet affordability... affordability rose to meet prices.

The question now is, are current interest rates sustainable in the long term?

If you think they are, perhaps we have reached a new balance and current prices will prove sustainable... but if you think rates are destined to rise, this so called bottom is nothing more then a trapdoor with another long hard fall for prices still to come.

What will happen? Who knows, there are far smarter and more worldly people then I that are completely lost trying to figure this economic situation. It's fairly safe to say that as long as the central banks rates stay so low, shorter term rates don't have much more room to go down, but we will likely see longer term rates continue to get closer and closer to their short term companions.

What I do want to take a look at is the impact of a change in interest rates has on financing. (Admittedly, I lifted this idea from a post I read on another blog, just to give credit where it's deserved)

Effects of Interest Rate fluctuations
Here we see how much one could qualify for on a conventional mortgage (25 years) given certain monthly payments. This shows us why with rates hitting these historic lows, suddenly the same amount of money can qualify one for a lot more money.

With rates at 3.5%, even as little as $1,500 a month will qualify a person for $300,000... back in November, the average rate was 6.51% and all a person with $1,500/month could qualify for was 222,000. As anyone who has every looked at finance could attest, that's HUGE.

Prices are largely the same (at least statistically, though asking prices still appear to be dropping), but in November $1,500 a month couldn't even buy an average condo... today, just six months later, it could probably get you a decent bungalow.

So, it's not hard to see why prices are holding at the moment. At these rates even a slight rise in price isn't out of the question. With interest rates getting so low, they have caused a massive increase in the buyers pool.

But, big but, the real question should be, can these rates hold for years if not decades. Cause if they don't, and start going back up, even to historically moderate levels like 6-8%, that buyers pool contracts in a hurry... and we again have severe unaffordability, and prices will again have to make up that gap.

And that's not the only problem...

Effects of Interest Rate fluctuations
To examine interest rates from another perspective, here we look at things from a post-purchase angle. The price is locked in, the principle is owed and now it's a matter of can those who bought when rates were low, survive rates going up when they renew?

Lets say a person bought a $350,000 home when rates were 3.5% and locked in for 5 years, so they're paying about $1,750 a month... come renewal, the question is, what will the rates be then and what will their payments be?

If they're at 6%... $2,250

If they're at 8%... $2,700

If they borrowed well within their means, and/or gotten some raises in the meantime, would still hurt a little, but they can probably swing it... if they leveraged themselves to the max though, they're in trouble. A 25%-55% increase in your largest monthly expense is not easily swallowed. And 6-8% is still at the low end of historical values, gawd forbid rates hit the double digits.

So, people thinking of buying today, just keep that in mind... and buy based on your needs, not just according to what the bank is willing to give you.

Friday, May 15, 2009

Asking Prices - Update

Sorry for no mid-week post, it's been a busy one... sure sucks when they want a guy to do some actual work during office hours!

Thanks for all your submissions, I've been wading through all the comments and e-mails and this is what we have so far (if I missed one, please let me know). We have a few areas that haven't had properties suggested for them yet, so we'll are now looking for those areas... particularly houses.

Keep 'em coming!


Northeast - Canyon Ridge - E3179050 & E3185140 - 451 Hyndman CR - Appears the one Aaron suggested has been sold or otherwise removed, but their are two others in the same complex.

Northwest -

Central - Downtown - E3183255 - 10125 109 ST - a couple others in this building on MLS

Central - Downtown - E3168564 - 10024 Jasper Ave - tons in this building on MLS

West - Ormsby Place - E3170325 - 64th Ave and 178th St complex - several on MLS

Southwest - Sweetgrass - E3184464 - 11255 31 Ave - several from this complex on MLS

Southeast -

Millwoods - Meyonohk - E3175352 - 2703 79 ST - several from this complex on MLS

St. Albert -

Sherwood Park -


Northeast -

Northwest - Beaumaris - E3184265

Central -

West -

Southwest - Allendale - E3176787 - E3184977 , E3184982, just down the street.

Southwest- Steinhauer - E3175848

Southeast -

Millwoods - Crawford Plains - E3180036

St. Albert - Kingswood - E3185012

Sherwood Park -

Monday, May 11, 2009

Homework: Asking Prices

Asking Prices
Doing something of an interactive project today... we're going to start tracking asking prices. If you've been following some properties you've probably noticed that even with prices largely holding this year, asking prices still seem to be dropping. So we're going do a bit of an unscientific sample of our own and see how prices progress the next few months.

Just to give it a loose framework, I figure we'll pick 20 properties, each with a fair number of immediate comparables (neighbourhood, square footage, condition, etc)... 10 single family homes, and 10 condos, from all over the city and all price ranges

Shouldn't be hard to find comparables for the condos since they'll very likely be other units available in the building/complex, but the single family homes could be a bit more nuanced, especially with older homes, but we'll do our best.

So, for the next week you can submit any properties you think will fit the bill via e-mail or comment... just submit the MLS# or the url of the listing (ex.

Now, why don't I just do it myself you ask... well, maybe I want to promote reader participation... or maybe I'm just lazy... okay, well, there really isn't any 'maybe' about that last one, but it's not mutually exclusive with the former.

Then we'll narrow it down to 20 properties in various price ranges and neighbourhoods, and start tracking them. Obviously some will probably sell, that's why we want to make sure there are direct comparables available.

So if you come across a listing that you think would work, please fire me an e-mail or post a comment.

Wednesday, May 6, 2009

Price Ranges

We've been hearing from the real estate boards and their minions in the media about how sales in the 300-400K range have been strong for the last couple months... so I figured I'd see what I could gather from the stat packs.

In their quarterly reports they include sales by price range, and that's about all I could really find, but it'll do. Then had to figure out how to present it, that was a bit of a puzzler, but I ended up settling on one that I think works.

So without further ado, here it is.

Edmonton Proportion of Sales by Price Range
These are for the month of March each year going back to 2002. If you take a minute to soak it in there are actually quite a few interesting observations that can be made. I'm sure I haven't found them all either, so feel free to offer up your own in the comment section.

Since I was already keying on the 300-400K range to begin with, the first thing that struck me was that sales in that range are actually contracting significantly as compared to last year, as are the ranges above.

Now, this shouldn't be surprising, because as we've been seeing, prices are down year-over-year... but with all the bravado about sales in the 300-400K range I was expecting that it would at least hold while the ranges above them dropped. Instead we can see it itself dropped from 37% to 31%.

It's actually been the sub-300K ranges that make up the majority of sales, and are gaining steam as increasing numbers of listings are falling into their ranks. 200-300K now being the most prominent price range.

Looking at it over the long term, it's interesting to see how the 300K+ ranges made up all of 2% of sales in 2002, and just six years later it made up 63% of sales... but it's now contracted to 48% in the last year.

It's kind of also interesting to see the somewhat natural growth of prices progress through 2005, when suddenly the larger ranges start to explode.

Some may be wondering how if prices had been dropping since 2007, like we've been talking about, how is it that prices apparently kept growing through 2008 when they should have been dropping?

There is a couple reasons for this, the major one being that as of March 2007 the prices were still yet to peak, and as the month-over-month gains were quite substantial at the time, there was still a ways to go. So, while prices had been dropping from the peak, their year-over-year comparison come March 2008 was still largely up year-over-year (interestingly SFH's were down slightly, but condos and the residential average were up a fair bit.

I'll try to remember to do this again when the next quarterly report comes out (they include YTD and that months stats, but not the months in between or the actual quarters for whatever reason), and compare the June's, as June 07 was right around the peak.

It'll be interesting to track this over time. I should do one comparing the progression from quarter to quarter, unfortunately I don't have enough complete data to do that just yet. In any case, there is lots of observations that can be made from that graph, so when you find one I missed, please, add your two cents.

Monday, May 4, 2009

April numbers are in

It's that time of the month again... okay, well, not that time of the month... or perhaps it is that too... you know what, never mind. The EREB released their final April resale stats today. There, we'll go with that.

I guess the big story this time around would be sales, April saw a rebound back into their normal range for the month, coming in at 1,843. Which is up 1.1% over last April, which is the first time we've seen that in 2009.

Ultra low interest rates seemed to finally draw out the buyers. I just hope for their sake that they aren't leveraging themselves to the max, cause you have to figure rates are going to be going back to 6%+ eventually.

Though Mark Carney tells us they'll be this low for at least another year or so... but back in February he was also screaming from the rooftops not to worry and to expect 3.8% growth in 2010... and walked away from that prediction soon after.

Ultimately Carney will just follow whatever the US does... if they hold them, we'll hold ours... if they jack theirs, we'll jack ours... and if they go negative, we'll go negative.

Whodathunk that last possibility would have ever existed even just a few months ago?!

Edmonton Prices
Back to the Edmonton resale situation. Inventory and prices for the most part stayed the same, going up about a point each. Condos a bit more, at 2.4%. Compared to last year though they're all down between 7-10%.

Edmonton Sales and Inventory
Obviously with sales increasing and inventory holding we're seeing the absorption rate go down, and is now at 4.1. Still considered a buyers market, but the lowest we've seen it since the inventory explosion of 2007 when over six months it went from 1.09 to 9.52. So it's getting back into the normal range, but 4.1 is still very high for April.

Edmonton Absorption Rate
Finally, as always, here are the hard numbers.

Sales = 1,843
Since April '07 = -24.5% (-598)
Since April '08 = +1.1% (+20)
Since last month = +33.6% (+463)

Active Listings = 7,539
Since April '07 = +139.3% (+4,388)
Since April '08 = -28.9% (-986)
Since last month = +0.8% (+63)

Single Family Homes Median= $337,000
Since peak (May '07) = -15.8% (-$63,000)
Since last April = -9.5% (-$35,000)
Since six months ago = -1.7% (-$5,750)
Since last month = +0.9% (+$3,000)

Residential Average = $312,127
Since peak (July '07) = -12.0% (-$42,591)
Since last April = -7.4% (-$24,804)
Since six months ago = -1.8% (-$5,657)
Since last month = +1.0% (+$3,095)

Single Family Homes = $353,386
Since peak (May '07) = -17.1% (-$72,642)
Since last April = -8.5% (-$32,647)
Since six months ago = -2.7% (-$9,888)
Since last month = +1.0% (+$3,670)

Condos = $236,020
Since peak (July '07) = -13.2% (-$35,888)
Since last April = -8.1% (-$20,927)
Since six months ago = -0.7% (-$1,570)
Since last month = +2.4% (+$5,551)

Townhouses = $291,068
Since peak (Oct '07) = -20.9% (-$76,896)
Since last April = -7.9% (-$24,997)
Since six months ago = -5.2% (-$16,110)
Since last month = +5.2% (+$14,292)