Edmonton’s actual property shifts towards balanced situations

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Activity remains strong, above historical averages, but sales are slowing down from their recent highs.

“It seems the pace is slower, and we’re not seeing as fierce competition with multiple offers we saw earlier in the year,” says Paul Gravelle, chair of the Realtors Association of Edmonton. Photo by Ian Kucerak /Postmedia

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Edmonton’s resale real estate market is showing signs of greater balance between supply and demand with sales in May down slightly from the month before.

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Still, activity remained relatively strong as transactions increased from May last year.

“It seems the pace is slower, and we’re not seeing as fierce competition with multiple offers we saw earlier in the year,” says Paul Gravelle, chair of the Realtors Association of Edmonton (RAE), which recently released its sales and price data for last month.

The Greater Edmonton Area saw 2,857 sales in May, down 1.6 per cent from April, but up slightly by more than four per cent from May 2021.

Activity remains strong, above historical averages, but sales last month were far from the record pace set this March with more than 3,200 sales.

Prices continued to climb in the city, year over year, by about nine per cent with the benchmark price (the cost of a typical home) reaching $417,300.

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The price was flat from April, however, a result of slower demand for single-family detached homes.

The benchmark for single-family homes was up almost 10 per cent, year over year, but down 0.1 per cent from this past April. That was in part due to falling sales for single-family homes, year over year, down about three per cent, even though transactions were higher than this past April by nearly two per cent.

Condominium sales, in contrast, rose significantly from last May by nearly 29 per cent. Yet sales were off from April this year by nine per cent.

Duplex/row sales last month followed the pattern of single-family homes up almost six per cent, year over year, while down about 1.4 per cent from April.

Condominium apartment’s benchmark price movement was also mixed, reaching nearly $190,000 in May up slightly from April but down slightly from last May. Meanwhile, row’s price reached about $255,000 up nearly two per cent from April, and more than seven per cent from May last year .

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Gravelle notes the somewhat conflicting numbers likely indicate a market moving from deeply favoring sellers to one with more balance between supply and demand.

“The pendulum had swung to one side a few years ago, favoring buyers, and then it swung the other way for sellers reaching a peak, and now it’s swinging back to the middle,” he says.

A cooling factor has been the Bank of Canada increasing its overnight interest rate, which dictates interest rates on mortgages.

“This means there are fewer buyers who can purchase a home for the same price (in May) as in February or March,” says local realtor Nathan Mol with Live Real Estate.

The upside is with more homeowners listing, seeing price gains earlier in the year, there are “more options for buyers who have less purchasing power,” he adds.

The additional hike of 50 basis points by the central bank earlier this month will further push the market toward balance while continuing to shift sales activity from single-family homes to typically less pricey segments, Gravelle says.

“People are starting to find a mortgage payment stretches them a little too far for a single-family home,” he says. “So it’s pushing demand into these different housing types.”

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