A few weeks have passed, and the market is slowing down for the winter. Sales are dropping to 70-100 sales a day in Edmonton and the number of listings coming on is outpacing the number of sales daily. We are in or are heading in-to a buyers’ market.
This does not mean Seller’s will be any more likely to accept low offers or are willing to negotiate more terms, especially coming out of the miniature boom we were just in. We as agents have been touting its a ‘great time to sell’ for the past several months. It will take awhile for this new reality to set in. A buyers’ market will mean that, on average, it will take people longer to sell their home and they will get less money for it over time. Sellers chances of actually selling comes down as well. Leading up to the shut down, a home had a 40-50% chance of selling and would take 60-70 days on average, to sell. When this new reality sets in, then we will see Seller’s start to accommodate lower prices and give more at the negotiating table.
What is interesting is the timing of it all. Year over year the number of sales drops seasonally as we head into a deep freeze for 5 months. Naturally, so do the number of listings coming on. This year, sales are coming down, albeit slower, but listings are steadily coming in. If this continues, prices in the spring should be driven lower than they would have been if we all decided to wait to list in the springtime. Foreclosures should be coming to market approximately 6 months after the deferral and CERB payments ended, this should put downward pressure on prices as well.
Over the past several weeks. I had a chance to dissect flip financing. I wrote about it HERE. I would like to do more in this market. The major hurtle, after finding cash and the right labour and material is market timing. If I buy X property today, what does the market look like in 3 months when I go to sell? With Covid numbers rising, and the unprecedented mini boom that we just experienced, rock bottom interest rates, healthcare layoffs, I’m not sure what the next 3-6 months look like for the Edmonton Housing market.
I had a chance to go through the Edmonton rental investment market. My money is one the periphery condo market. I do a quick analysis of what I’ve seen over the last few years to substantiate this HERE.
In the Profession
This “hot” housing market has brought about the rise in for sale by owner listings and for sale by owner through a corporate vehicle. More often than not, its kind of a nightmare on my end. Trying to schedule an appointment, get an offer to the seller, get a question to the seller, and then deal with no disclosures on defective properties, improperly measured homes, improperly listed homes, side deal offers, one off random inflated sales. This business model has gone bankrupt in many parts of the world, but for the last few months has really taken a foot hold in the greater Edmonton area. In the long run, I would think it gets squeezed out by competent service as the market gets more competitive.
Neat Stuff to Watch
The big orange senior down south looks to be moving on from his seat as the leader of the largest hegemony the world has ever seen. This will have effects on our relationship with our largest trading partner and our local economy. Covid numbers are high. Interest rates are low. Our prime minister is touting a Canadian economy built on immigration, while our local government appears to be focused on green-busses and speed limits. Our provincial government has managed to cheese off and confuse the lot of us. The balance of these events, at present, lack any substance to substantiate any stability in the Edmonton housing market, but yet, here we are. Buying, selling, and investing. This may appear flippant. It absolutely is. What a time to be alive.
As iterated last month, this should be interesting. The market is all crickets right now. We (myself and the mortgage specialists I share my business with) expect foreclosures to pick up in the new year. 6 months after the deferral periods and CERB ware off. Let’s see what happens.
Thank you for your support and engagement over the last few months. Every contact, referral, engagement, and outing directly support my business and my family. For those of you I haven’t seen in years, this includes my partner Sam, and our two kids, Thomas and Mckenzie. Your Business is HUGE.
I have been contacting people like yourselves at random with invitations to lunch and have been delivering flowers as “Random Acts of Kindness”. The exercise for me has filled me with gratitude. I’ll be doubling down with Birthday Month cards and House-aversary cards as we head into the new year. Its an effort to give back, and unintentionally, get greatful.
As per usual, if you’d like to be removed from this list, please let me know and it’ll happen in short order.
Thank you for your time and stay safe. I look forward to hearing from you.