Inflation and the Edmonton Housing Market

Close-up Of A Person's Hand Protecting Profit On Property Over The Blue Desk

Hello! It has been a busy couple of months and I realize I haven’t sent one of these out in quite some time. Thank you all for your kind words and referrals over the last while. Business is good and half of that business is because of people like yourselves.  

Most of us concerned with the housing market are watching with more curiosity than ever right now, as the Bank of Canada has aggressively raised its overnight lending rate, sending mortgage rates to highs we haven’t seen in years! As dramatic as I just made that sound, when I sought my first mortgage in the early 2000s, 6.75% on a five-year fixed wasn’t considered overly poor. Today however, staring down the barrel of 4.2% on a five-year fixed shouldn’t be as shocking as it is, but when we are getting out of a pandemic stimulus that saw rates as low as 0.99% on a five-year fixed, there is some sticker shock. The pre-pandemic housing market had been in decline for years, so now the new elevated price per square foot and new rate to borrow, are leaving a lot of us skeptical of this new environment.

What does this mean for prices and rates moving forward? So far, prices have remained stable for housing in the greater Edmonton Area, despite rate changes (source HERE & HERE ).  We are fortunate enough to have a stronger than normal energy sector, bolstering high wages and lower unemployment, and a building industry restrained by supply and labor shortages bolstering home prices and buying activity.

In the following year, we will likely see prices start to come down as we afford less, as the result of rate increases. Personally, I’d rather pay more at a smaller rate, but unfortunately the higher rates look like they are here to stay (source).



Interesting Tidbits from the Market

Opportunities in the Market for Buyers Right Now

We are in a unique situation right now. Although home prices, the number of homes for sale, and the number of people buying them are declining, as they do every fall, coupled with rising interest rates there is an opportunity to capitalize on deal hunting for a primary residence. There are a number of homes listed whose owners purchased during our boom this spring, but are now trying to sell as they are carrying two mortgages. This isn’t to say sellers are now willing to give away their home, but it is to say if I’m in a position to buy and am on the fence, there are opportunities worth exploring as we head into the colder months. I can capitalize on current interest rates and get a better deal on a home than I could have competing with buyers a few months ago.

Opportunities in the Market for Sellers

Good news: there is still demand! Now is the time I am doing a refresh on my unsold listings. New pictures, new write-up, and new prices. I wouldn’t be holding out for “my price” any longer, I would be aiming to get out from under the mortgage before the snow falls. This means price well to begin with.  Although we have seen the number of agents operating in the market surge over the last few years, there will be a consumer retreat to value. Brands, agents, and marketing that makes a difference.

Personal News 

On a personal note, as our oldest son had an adenoidectomy and tonsillectomy this summer, we were forced to come up with stay-cation ideas, to be able to answer the call when he could have his procedure completed. This led us on an adventure we did not anticipate and it was wonderful. We took in everything from Oilers playoff games to Legacy Trail biking trips, to beachside cabanas at the Waterpark. Two things really surprised me. One was to experience things for the first time with our children, almost like it was through their eyes. There is so much joy in a child who discovers Calloway Park for the first-time haha. Secondly, how many fun things there are to do in the Province if I look. Did you know we have basketball culture? Our daughter preformed at an Edmonton Stingers halftime show and the Edmonton Events Center was packed!

I hope you found this Market Update helpful. If you have any questions or dialogue, I’d love to hear from you.

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