The Edmonton real estate market has drawn the attention of interest for buyers, sellers, investors, and industry experts. In recent years, it has experienced fluctuations and changes influenced by various economic factors, government policies, and the ongoing COVID-19 pandemic. As we enter 2023, staying well aware of the latest updates and predictions of real estate investing in Edmonton is crucial. This article will provide you with a comprehensive overview of the current state of the market and some predictions for what to expect in the year ahead.
Edmonton’s Real Estate Market Latest Updates
The CREA (Canadian Real Estate Association released a report around July 2023, providing some interesting details on the current state of the real estate industry. Sales in the year 2023 are below the levels seen during the pandemic. There has been around 40% drop in the sales since last year, but when you take a closer look at the stats from the previous years since 2007, keeping the year 2021 & 2022 aside, one can witness that sales in 2023 were comparatively much better.
Edmonton Housing Market Conditions
The Greater Edmonton Area (GEA) saw the total residential unit sales upto 2,250, providing an increase of 21.8% in comparison to August 2022, and also faced a drop of 3.1% in July. New residential listings rose up to 3.7% from August 2022, and from July 2023, it increased a mere 0.3%.
According to home builders in Edmonton, sales of detached units increased to 16.8% from August 2022, and at 1,311, there was a decrease of 5.8% from July 2023. The unit sales of townhouses/rows went up 50% in August 2022 and 23.2% in July 2023. Whereas semi detached unit sales decreased month by month from 11.6% and increased by 12.9% last year. The apartment condominium unit sales increased 25.1% in August 2022, but a slight decline of around 6.95 in the previous month.
Mortgage Rates in Edmonton
Throughout Canada, there was a massive spike in mortgage rates. This has become unarguably the biggest challenge amongst homebuyers. However, Edmonton has a relatively affordable market compared to other states like Toronto, Vancouver, etc.
The average rate is around 5.25% for a 5-year variable mortgage and 4.59% for a 5-year fixed in Edmonton’s capital, Alberta. Since 2022’s spring of 2022, the Bank of Canada (BOC) has been increasing the lending rates overnight; while these rates reflect the interest the bank charges, they also impact mortgage rates.
Most of the time, these rates significantly impact variable-rate mortgages making them expensive. Whereas when BOC decreases the rate, the variable rate also decreases, but the fixed rates go up.
Guidelines For First Time Home Buyers
Buying a home is one of the most significant financial decisions you will ever make, but it can also be among the most rewarding. As a first-time home buyer, there are a few things you need to know how to get started.
Get Your Finances In Order:
Before looking for a home, it’s essential to get your finances in order. This means knowing your credit score, debt-to-income ratio, and how much you can borrow. You should also save up for a down payment, typically 20% of the home’s purchase price.
Get Pre-Approved For A mortgage:
The best way to show the home builders in Edmonton that you are seriously interested in purchasing the house and have the financial resources to purchase a home is to get pre-approved for a mortgage. It also gives you an idea of your affordability to borrow and monthly mortgage payments.
Find A Real Estate Agent:
A good realtor can help you find the right home for your budget and needs. They can also guide you through the buying process and negotiate on your behalf.
Look For Different Types Of Homes:
You can look for a home once you’ve found a real estate agent. Be sure to visit different neighbourhoods and see different types of homes to get a feel for what you want.
Perform A Home Inspection:
Once your offer has been accepted, getting a home inspection is essential. This is a professional assessment of the home’s condition. The inspector will look for any potential problems with the home, such as structural damage, mold, or pests.
Here are some additional tips for first-time home buyers:
Don’t Be Afraid To Ask Questions:
There’s no such thing as a stupid question when buying a home. Your real estate agent, mortgage lender, and home inspector are all there to help you.
Be Prepared To Compromise:
It’s essential to be realistic about your expectations when buying a home. You may not be able to find a home that meets all your criteria, so be prepared to compromise on some things.
Real Estate Market Predictions For Edmonton
The market interest rates highly influence the real estate market. As interest rates keep rising, the Bank of Canada has decided to pause rate hikes as inflation will significantly decline in the coming months. While the current rates may seem high, they are much lower than in the 1980s.
Home builders in Edmonton predict that there can be some unexpected shifts in the buying trends. People looking forward to buying new homes need to strike a balance between affordability and their expectations. CREA is predicting to see a major decline across most markets in Canada, and Edmonton is likely to follow the trend.
With a flurry of listings hitting the market and declining sales volumes, one can also anticipate a decrease in price pressure. Condos may perform badly in terms of prices but maintain a certain level due to their affordability factor. Single-family homes will be highest in demand, especially the ones ranging within $500K, as they give the most significant benefit, keeping in mind the money.
With a bright future awaiting potential buyers, one can hope for some improvement in the declining condition of the real estate market. On the one hand, where condos may not likely see a brighter day, single-family homes and quick possession homes in Edmonton can provide that extra boost that the declining market was looking for.
If you plan on buying the piece of property you always wanted, don’t rely on the future. Make a decision as soon as possible to avoid paying more than what you could have purchased at a lower price.