“2016 turned out to be a stable year, and we aren’t forecasting anything dramatic for 2017”
Earlier this month, the Realtors Association of Edmonton hosted the 2017 Housing Forecast for our city. It was jam-packed with great information on what we can expect from the real estate market this year, and I am happy to give you the highlights of the presentation.
Of course, we can’t forecast the future without taking a look at 2016 first! 2016 and 2015 were quite similar: over all, the prices stayed strong, there was a lot of inventory, but there was a dip in sales. Here’s a quick breakdown of what the market looked like last year:
- Single family home sales were down 5.4% from 2015
- Condo unit sales were down 14% from 2015
- Duplex/Row house sales went up 8.3% from 2015
- All residential sales were down 6.7% from 2015
As we look at sales within Edmonton, a few “hotspot” neighbourhoods had the most sales in 2016. For single-family homes, Summerside, Windermere, and The Hamptons were the most popular in sales. The communities with the highest sales in condo units were Oliver, Downtown Edmonton, and Rutherford. When it comes to duplexes and row houses, the neighbourhoods with the most sales in 2016 are Walker, Chappelle Area, and The Hamptons.
Selling a home took a bit longer in 2016, as we saw an overall increase in days on market for all property categories. Single family homes averaged about 52 days on market in 2016, condominium units averaged 63 days on market, and duplex and row house properties averaged 62 days on the market. Although days on market have increased from 2015, the average has remained stable since 2008.
We also saw some great new inventory in 2016. The top three communities with the most single family listings last year were Summerside, Windermere, and The Hamptons, which does make sense since they had the highest single family sales in 2016. The top three communities with the most condo listings were Oliver, Downtown Edmonton, and Rutherford – again, the areas with the most condo sales in 2016. Lastly, the communities that listed the most duplex and row house properties were the Chappelle Area, Laurel, and Walker.
Now, looking onward to 2017!
The good news is that major banks are expecting GDP growth in Alberta, but it won’t take place right away. Because employment rates will take a bit to catch up, we will not see this change in the housing market until mid to late 2017. As well, lower rental rates and higher vacancy rates will keep buyers who are already on the fence at bay just a bit longer until growth takes place. The increase in mortgage rates are thought to be quite minimal, so impacts on the market in this way will be minor.
Looking at the sales forecast for 2017, the predictions are that overall residential sales will decrease 1.3% in 2017. For single-family homes, it is expected that there will be a decline of 1.7% in sales over 2017. With economical growth expected in the second half of the year, a dip in single-family sales is only predicted for the first half of the year. Last year there was strength in the price of $325,000 – $425,000 with multiple offer situations happening, and this expected to continue in 2017.
The number of condo sales this year are expected to increase 0.2%, as there was a rise in inventory in the condo market last year, and this will make condo prices more competitive for 2017. Because condos are generally more affordable, it is expected that more buyers will purchase condo properties instead of single-family homes in 2017. And although duplex and row house sales increased in 2016, we are looking at an expected decrease of 1% in sales for this year.
Looking at inventory for 2017, it is forecasted that single-family homes will see a small increase of 0.5% in their inventory. Condos are expected to also see an increase of 1.1%, and duplexes and row houses will see a 0.5% decrease of inventory in 2017.
Residential prices are also expected to drop in 2017, with an average overall price drop of 1.3%. Single-family homes are expected to drop 2.2% in average price, as it is predicted that less higher priced properties (over $500,000) will sell this year. Although there is so much great inventory in condo units, the prices are also expecting a decrease of 3.8% this year. Duplex and row house sales however, are expecting a price increase of 0.5% in 2017.
Now that you’ve worked through all of this information, here’s a quick summary of what the market is going to look like in 2017!
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