The 1st quarter of 2019 is complete. To no one’s surprise, it was a slow one in reference to sale numbers. As we recovered from Christmas spending, endured one of our coldest and darkest winters, and coupled those with an uncertain economic state and a pending election, home buying wasn’t top of mind for many. Total sales in Edmonton and Surrounding areas were 2976, 16% lower than our 10-year average. The good news is that new listings to market have finally cooled- 4% below our 10 year average. New Home single family starts were also down 36% from last year and the lowest since 2009. This will help to cool supply and demand.
Our total average sale price was reduced by 5.6% from Q1 2018 to $351,367. Single Family homes had the softest correction in prices and Townhouse/Rowhouses saw the softest correction in number of sales.
Price Changes by Building Type:
Single Family Average in Q1 2018: $440,516
Single Family Average in Q1 2019: $420,675 Correction: 4.5%
Condo Average Sale Price Q1 2018: $235,997
Condo Average Sale Price Q1 2019: $217,709 Correction: 7.75%
Townhouse/Rowhouse: Average Sale Price Q1 2018: $351,521
Townhouse/Rowhouse: Average Sale Price Q1 2019: $326,701 Correction: 7.1%
Health of Sales by Price Range
Smallest decline in sales for Q1: $250,000-$500,000
Largest Sales Decline for Q1: $500,000-$700,000 and $1,000,000+
What’s coming for Q2 of this year?
The second quarter is typically the most active of the year. As spring arises, we see higher number of both sales and of new listings. 2019 should be no different. We saw a massive spike in buyer activity as the weather improved halfway through March. Those didn’t translate to sales in Q1 but will carry into the spring months. As the election is behind us, those who were awaiting results will start to move forward.
The Bank of Canada has recognized the slowdown across the country, with the exception of Toronto. As a result, interest rates are now subsiding and there is talk of moderately softening lending criteria. With a strengthening rental market, many move up buyers are realizing the viability of keeping their existing homes as a rental and moving forward with a move up home. If this trend continues, our supply and demand ratio should subside and stabilize prices. We’re seeing a healthy increase in out-of-province investors seeing the opportunity of low sale prices and healthy rents and as mentioned, new housing starts have drastically slowed.
Our total months of inventory at the end of Q1 was 8.5. We’re looking for 5 to balance our market and anything below for an upswing in prices. We’re seeing some positive signs that we may be trending in the right direction. Many things need to happen economically in order to gain full confidence in our growth but there appears to be a light at the end of the tunnel. Expect sales to increase and new listings to decline. The question is by how much? To dip below 6.5MOI (months of inventory) by end of Q2 would be a win and it’s quite realistic. Anything better is a big win.