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Excess supply in Edmonton new housing market, research shows

June 20th, 2017 by chetaylor

Growing supply and decreasing demand are helping create a buyer’s market for new homes in the Edmonton suburbs, show new figures from a real estate consulting firm.

The number of “spec” homes built before they’re sold rose to 2,430 last winter from 2,156 in the summer of 2016, while sales dropped about 20 percent to 1,263 over the same period, according to Intelligence House research.

That gave the city an oversupplied 2.3-year backlog of new homes, Intelligence House co-owner Alex Ruffini says.

“Technically, if you have too much supply in the market, that tends to drive prices down, or you see lots of promotions … Builders are more willing to give more discounts or give deals,” he says.

“(Having 2.3 years) is not tremendously oversupplied, but the power is on the demand side right now.”

However, the situation around the city varies. The west end has almost three years’ supply of single-family houses, while on the south side the supply is 1.5 to 1.7 years, and across Edmonton, only 1.5 years of duplexes exist before all the current inventory dries up.

Ruffini’s survey of home sales in 46 of 87 new Edmonton subdivisions found single-family house prices ranged from $508,133 in the north-west to $431,625 in the northeast.

Households in the north-west are more expensive because on average they’re bigger than in other sectors and they’re influenced by higher prices in nearby St. Albert, he said.

Although companies are now constructing fewer spec homes (homes built on speculation that they will be sold once construction is complete), which should reduce the oversupply to a balanced two-year inventory within a few months, Edmonton will likely see little change in the market for about the next year, Ruffini says.

“It won’t go down, but it won’t spike in sales … Consumers still have power in their hands for the next little while.”

His company estimates the total value of all Edmonton residential home transactions grew 42 percent from 2012 to 2015, to $9.2 billion, before sliding into the recession and new federal mortgage rules hit in 2016.

Ruffini expects the value of transactions in the city to be flat this year. While Calgary home prices are traditionally higher than in the capital, he says Edmonton’s more stable employment base in the public sector and energy industry help it avoid Calgary’s real estate roller-coaster.

“(Calgary) is seen as more peaks and valleys, and Edmonton’s more soft ups and downs … We don’t go too crazy in a boom, we don’t crash too badly in a recession.”

Faulkner Real Estate Report: Knowledge is power for condo buyers

February 18th, 2017 by chetaylor

condo-with-for-sale-signs-for-the-lansdowne-project-assignmWrote by Dennis Faulkner
Published on: February 10, 2017 | Last Updated: February 17, 2017 1:44 PM MST

A condo can be a great option for many who want a simpler lifestyle. Eliminating snow shovelling and lawn maintenance can be attractive to those with a busy lifestyle, or those that just don’t like being out in the middle of winter scraping ice off their sidewalk. The exterior maintenance and upkeep is typically done by the condo corporation. Many condos will even have underground heated parking, which makes our winters more bearable.

With condo ownership, the concern for many is fear that there may be a problem with the condo that requires a cash call in a special assessment. We’ve seen a special assessment for over $60,000 per suite in a downtown Edmonton apartment. It is rare that a condo will require such a costly cash injection. On a condo we own, we were faced with a $15,000 special assessment last year when it was discovered that the sewer lines needed to be replaced. While this came as a surprise, the condo board was forward-thinking and put together a loan option for those that were unable to pay the lump sum. Here are a few ways to reduce the risk of an unexpected special assessment in the condo you are considering to purchase.

First, is what I call the ‘walk around.’ When you are buying a condo, take a walk around the entire building. What you want to look for is the general condition of the building itself. Is it well kept, and are they keeping up with the cleaning and general maintenance? Is there loose siding or areas of disrepair? If there is, it can be a sign of deferred maintenance, which is one of the major causes of unexpected cash calls.

Second, start knocking! Once you have identified a candidate, why not talk to others who live in the building? Asking questions can help with peace of mind about your potential purchase or even notify you of potential issues that may dissuade your purchase. Often you can get information that has not yet been recorded in the condo documents.

Third, review the condo documents. We highly recommend that everyone buying a condo read through the documents carefully. When buying a condo, you are also buying into a corporation. Knowing how well that corporation is doing is vitally important. The bylaws will go over the rules of the condo corporation. It will outline the rules regarding things such as pets, noise, guests, parking, who is responsible for maintenance, etc. Make sure there is nothing in there that will negatively impact how you want to enjoy your home. The condo board meeting minutes will go over the day-to-day operations of the condo and can offer insight into specific issues or problems. Make sure you read not only the monthly minutes, but also the minutes from the annual general meeting.

The reserve fund study, which is required every five years for all condo corporations, is like a massive home inspection of the entire complex. It will outline the life expectancy of all the condominium’s components and the expected replacement cost. Along with that is a reserve fund plan which goes through what the corporation should have in the coffers to ensure that the recommendations in the reserve fund are met. Ideally, the fund will be on track with the recommendation in the reserve fund plan. If you are not up for all that reading, you can hire a company that will review the condo documents for you and provide you with a summary. The cost is about $500 and may well be worth every penny.

Fourth, find a realtor you can trust with experience in condos. They can make a big difference in helping you make a good decision with your condo purchase. And, of course, there’s the condo fee. Take the time to learn what it includes and doesn’t include. Generally speaking, apartment condos will include heat, water and sewer. Power is only sometimes included in the fee.

Condominiums, when managed well, can be an affordable option that offers a more carefree lifestyle, as long as buyers inform themselves before committing to a condo of their own.

Edmonton home sales surge in January

February 17th, 2017 by chetaylor

moving-in-edmonton

Edmonton home sales staged a rebound last month, rising 19 percent from the previous January, new figures from the Realtors Association of Edmonton show.

There were 738 home sales in January. The 2,185 residential listings were down 7.6 percent from the same period last year, and the average price for all types of housing rose 4.8 percent to $355,841.

The average single-family home sold for $416,859, virtually unchanged over the last 12 months, while the $246,727 average condo selling price was up 8.7 percent.

“2017 has started strong, with an increase in year-over-year unit sales and prices remaining,” association chair James Mabey said in a news release.

“While it is still early in the year, the rise in sales suggests that consumer confidence in the housing market is on the rise.”

Meanwhile, in a 2016 year-end investment report, a real estate brokerage company for commercial properties found that Edmonton’s market proved resilient despite a slumping economy.

“Over the course of 2016, Edmonton’s multi-residential market experienced a 60 percent increase in year-over-year increase in dollar volume, with approximately $464 million invested,” said the report by Barclay Street Real Estate.

But investment volume was down in industrial, commercial and investment land by 20 percent.

“(It’s) reflective of generally lessened activity coupled with an increased appetite for partial-acre properties which come with smaller price tags,” the report said, noting that year-over-year office investment was flat.

“Overall, a healthy appetite remained for quality properties while sustained demand was demonstrated for older, less sought-after properties in the hunt for bargains.”

Edmonton real estate market looking unsettled, expert says

February 15th, 2017 by chetaylor

calgary-alberta-april-23-2012-don-campbell-senior-anal

Edmonton has been sailing through relatively calm waters during Alberta’s economic meltdown, but there could be choppy days ahead, real estate specialist Don Campbell said Tuesday.

The capital has benefited from a stable government workforce and such major construction projects as northeast Anthony Henday Drive, Rogers Place and towers in the Ice District, said Campbell, senior analyst at the Real Estate Investment Network.

But much of the building work is finished, and deficit-laden governments won’t take on many new employees this year, which could lead to a softening economy that isn’t good for housing prices, he said.

“I’m already seeing vacancy rates increasing and rents dropping slightly,” said Vancouver-based Campbell, who has provided analysis of Canada’s real estate markets for more than 20 years.

“In residential housing, supply is starting to creep up, which is another indicator that right now sellers haven’t come to the reality that the market is slowing down, so they haven’t dropped prices much (and) buyers are sitting on their hands.”
He foresees Edmonton prices remaining flat in 2017. That’s better than the approximately four per cent drop he expects in hard-hit Calgary, but he cautions Edmonton residents shouldn’t start celebrating.

“It will feel more fearful because the slowdown will be on in Calgary. They’re 18 months into it already … This will be year one of that (in Edmonton).”

Campbell, who’s speaking in the city at an event Wednesday, is more optimistic about 2017 than the Realtors Association of Edmonton, which expects single-family home sales and prices to decline while inventories stay high.

The prospects for housing vary elsewhere in Alberta, Campbell said.

Rents and prices have gone down in Grande Prairie and Peace River due to the oil and gas industry downturn, while the situation for forestry towns such as Slave Lake and Whitecourt is uncertain unless Canada reaches a new softwood lumber deal with the U.S.

Fort McMurray, on the other hand, should experience a boom rebuilding from last year’s wildfires.

Oil prices, the impact of the carbon levy and whatever trade measures might be taken by incoming American president Donald Trump are all wild cards.
Campbell anticipates housing in the $300,000 to $400,000 range will be the most popular in the next few years, partly a result of new federal mortgage rules that have reduced the amount many people can borrow.

He sees the strongest demand for two- or three-bedroom homes in good condition and within 800 metres of an LRT station, but warns that people shouldn’t buy unless they’ll hold their property for at least five years.

“It will be smaller homes and smaller lots, because people want to have lots still, but we are also seeing the condo lifestyle is becoming an OK choice for the next generation.”

gkent@postmedia.com

twitter.com/GKentEJ

Buddhist temple for sale in historic Riverdale

February 25th, 2015 by chetaylor

 

 

 

a-smiling-buddah-inside-the-riverdale-temple

 

A Korean Buddhist temple in the heart of Edmonton’s historic Riverdale neighbourhood is up for sale.

The 100-year-old structure at 10155 89th St. is owned by Chun Su Kim, or Moon as he’s called.

Moon says he purchased the building 18 years ago.
Chun Su Kim, 82 is selling his Buddhist temple. (CBC)

At age 82, he “hates to leave Alberta,” but the winters have become too cold for the former oilpatch worker, who ran work camp kitchens in northern Alberta.

First built as a Methodist church in the late 1900s, a living space was added when Moon bought the building. Since then, it has been a monthly gathering spot for about 25 Edmonton Buddhists.

Real estate agent Janey Ochotsky says the unusual listing comes with unique challenges for listing. A search of the property at the city of Edmonton assessment site, says Ochotsky, showed the sprawling temple as covering a mere 11 square feet.

It meant she had to employ rudimentary methods to find out just how big the building was.

“My dad and I measured the place,” says Ochotsky, and it came in “a little bit over 3,000 square feet.”

“So it’s a significant structure in its size.”

Moon wants to set up a new temple when he moves Nelson, B.C., that would be three times bigger than his current building.

The temple building opens into a large worship space with vaulted ceilings and plenty of natural light. Ochotsky says it’s zoned as RF2 for religious assembly purposes or potentially for a duplex development. The property is listed for sale at $475,000.

 

 

 

Welcome To My Blog!

October 1st, 2014 by chetaylor

Welcome to my new blog! I look forward to sharing new and exciting updates about the Real Estate Market and what is happening around town! Stay tuned for new posts coming soon!

Che Taylor, Realty Executives Challenge
201, 6650-177 Street, Edmonton, Alberta, T5T 4J5
Tel: 780-984-1639 Fax: 780-701-5312
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