THE REAL ESTATE MARKET IN 2020 | EDMONTON REAL ESTATE MARKET UPDATE


I think there’s lots of reasons to be
enthusiastic about the marketplace for both buyers sellers and also Realtors. Welcome to another episode of Edmonton
Real Estate Today! I am your host LeRoy Warden and today I have with me two very
special guests Bill Briggs, he’s the Broker of RE/MAX Real Estate and Sheryl
Stephens of RE/MAX Real e Estate. Sheryl and Bill, welcome! Good to see you guys!
Happy New Year LeRoy! A Happy New Year! The Real Estate Association of Edmonton released
some stats here and they said that the average prices for single-family homes
were $411,000, condos are at $227,000 and duplexes at $325,000 now what are your thoughts about the average
prices how they performed in 2019 and what do you think the prices are going
to be doing in 2020? Well I know when I was just looking at the actual last
quarter I found using single families as an
example, the second last quarter of the year we were at an average around $427,000 and now this last quarter we’re down to you know the $417,000, just average numbers so obviously I think that just as seasonal
and it seems to happen every year that we drop a little at to the end of the
year but I do think the phones are ringing a little bit more I think again
things will come up as 2020 comes into play just like every Spring market does
but what do you think Bill? I’m actually a little surprised that the average
purchase remained as strong as they have because we’ve had some difficulties in
Alberta there’s no question we’ve had some economic difficulties we’ve had
some political difficulties we’ve had unrest politically between provinces and
the federal government and those kinds of things yes we’ve had things like the
stress test which was intended to solve problems in major markets like Toronto
and Vancouver and very unfortunately the federal government chose a universal
program to try to correct that which has affected our marketplace here too so our
clients are having to approve for mortgages and interest rates that are
vastly significantly higher now what they’re going to end up with on
their mortgage which means that they can afford less if they’re going for a
maximum mortgage and the lowest possible down payment so there are a number of
factors in play here and so it really surprises me that the average prices
have remained as strong as they have. Okay. That’s a good sign.
That’s a good sign, yes and so as we continue in the year I know days on
market is something the board also reports on and they talked about that
the average days on market for a single-family home being 64 days
on the market. The condos 77 days and duplexes taking 75 days to sell so what
do you see as the trend in this first quarter of 2020? Well first of all
I’m a little skeptical about the days on market number as something that we
should be using as much as we do because after all that’s the average number of
days on the market for the houses that have actually sold. We’ve had high
inventories in recent years that have not sold but it does not include those
houses that have not sold so I’ve been on the market for two or three hundred
days. Believe it or not I ran across one yesterday in my travels on the internet
that have been on the market nine 990 days and so those
statistics don’t don’t mean a lot to me and I think we have to be a little
careful when we’re discussing that with our sellers as well because we can’t go
to a seller and say listen if you list with me today
your house is likely to sell in 64 days. Right!
Simply because if you don’t do everything correctly and if we don’t do
everything correctly it may not sell at all so it’s an interesting
statistic. I think it’s valid to look at it but we
have to explain it very carefully. And I know when I go in with my sellers
I very much say it’s just an indicator given you a sense of like the average
time a house is taking but also keeping in mind that there’s those other houses
that therefore have been on the market 200 days the sellers finally has reduced
the price or another once at 400 days they finally reduce the price but when
reducing the price they chose to relist so now when those two houses sell and
they sell in you know 30 days or 45 days it again adds to that average of the 64
but we’re not really using all the true numbers right so I have to remind those
sellers that just gives you a sense of how fast some places are moving but like
you said they have to have it priced well, it has to show well. I
actually had a client the other day where I showed them a house it’s been
sitting for 200 days. It did not show well at all they’re still you know it
kind of looked like the parents weren’t living there and just the kids were so
the teenager sort of show. And my buyer called me back later and said Sheryl I
really like that house but could we ask the seller to professionally clean it
before we view it again. It’s sort of like my house when my wife’s away.
But it changes how fast that house is gonna sell by how it shows. And on
the other hand we had a situation in our office just this last week where believe
it or not it was all priced properly and it must have been in great condition but we got an offer on it prior to the sign going up. Wow! So there are
amazing things going on out there still in the marketplace you just have to do
everything right. And are you guys still seeing sometimes again if you
talked about doing everything right where if it is priced right if it is
prepared for showing properly that you’re still getting in some areas
multiple offers, that buyers are then trying to purchase that home?
Yeah again in a marketplace like we’ve had this last little while you would be
surprised at how many multiple offers are actually are. Now not a lot of them are
selling vastly over list price like we may be used to in the past
but they’re selling and they’ve got multiple offers there’s interest out
there and there are people that can afford to buy houses. Absolutely, so one
of the key things for a home seller to keep in mind even going into 2020 is not
only positioning their home right in terms of pricing but also looking at
having the home prepared properly for showing and doing the little things to
make the home show well. Absolutely. All right so in December the
stats that were released was 1,315 new listings, there were sales of 843 and the
ending inventory was 5,961. Now it seemed that throughout 2019 it fluctuated
between a buyers market and a balanced market so what are your thoughts
of 2020 for the first few months of 2020 in that regard? It’s really hard making
those kind of predictions because there’s no question the type of market
depends entirely upon the inventory so it depends on the attitudes of people
out there as to whether they’re going to list their houses early in the year,
later in the year. There’s some seasonal differences that that people perceive on
when they put their house on the market so it does it does honestly depend on
the amount of inventory that we have out there. Frankly the market has been more
balanced I think than the impression we get when we listen to the news and I
expect that trend to continue in 2020. I don’t think it’s gonna be
a huge swing either direction. I believe it’s a relatively balanced marketplace.
Yeah and I would agree because I know, Bill, when we definitely listen to the news or
any buyers I take out even their co-workers are reminding them and
telling them oh it’s a buyers market so you just get out there so it’s so funny
because it’s not actually legitimately according to the numbers necessary a
buyers market at certain times of the year but I think again the media hears
that they everybody jumps on it goes it seems like that’s when you’ll get the
best deal especially if you’re a buyer and so therefore we kind of just keep
perpetuating that story but as we know with the telephone game the story has
changed from each person but if we look at the numbers you know it all comes
down like you said down to inventory so if it’s a balanced market that just
means that you know right now we sold 853 homes in December that means we
just need you know roughly I’ll say 3,500 to 6,000 homes on the market which would
mean we’d be right in that balance market, right. And in the market place in
general, well LeRoy and I’m sure you would agree, that we not only have to
caution our sellers that their product has to be priced properly but we
have to caution our buyers then it’s an excellent market place right now.
Interest rates are at a spectacularly low rate, compared to what I’m used to in my past, and they’ve got some choices out there for inventory so it’s a great time for
them to go look but that may not last so so just like we’ve got to caution
the sellers to price properly we’ve got to caution the buyers that the
marketplace has worked in their favor right now and there’s no better time. And
lower interest rate. This is remarkably low in comparison to everything in the
past yeah yeah so yeah so I just honestly had brunch with my uncle the
other day and he was saying how back in the 80’s he was paying 17-18 % and
so many of his friends had lost their homes because of those interest rates so
we do need to value what we have and maybe not take it for granted quite so
much. So that stress test doesn’t look so bad when you look at 18%. Exactly oh my
first house, I know it was a long time ago but it was a 12.5% mortgage and I thought it was fantastic. Perception…. Yep right I don’t want to date myself so I’m not going to talk about it. Sheryl and Bill, will 2020 be a good year for someone wanting to sell or buy
a home? What do you guys see in regards to what will be happening in the next
little while for someone thinking of putting their home out there? Truthfully
I don’t think there ever is a bad time and I’ll tell you why I’m that
enthusiastic about the marketplace is that for particularly a first-time home
buyer or a home buyer wanting to upgrade or downsize, your buying and selling in
the same marketplace so you know what it honestly doesn’t matter what the
marketplace is you can wait until the price of your home goes up but so is the
one you’re gonna purchase right so it’s a good time for that. Secondly, I’m seeing
an influx right now of out of City buyers that are buying investment
properties. Places like Vancouver and Toronto have
priced themselves out of range for a lot of these particularly first-time
investors and young investors who are coming in here looking at the house
prices that we’re selling for in our market place and saying this is a great
place to be. So there are a lot of good reasons why it will be a good
year, as it always has been, to put your’s on the market as long as you’re
realistic and it’s a good time to go out and buy a house because things really are
working in your favor as a buyer right now. And I think that’s huge and I
find with my sellers there’s a lot of times that they’re like oh whoa we’re
losing this much money if we sell now but I have to try to remind people that
just because maybe you know in 2007 your house was worth $450,000 and maybe now it’s only worth the $427,000 but you never actually got that money right it’s kind
of like that investment if we would have invested in the Aurora stock back in the
day we would have made a lot but if you didn’t actually cash out you never got
that money anyways and that same sort of thing instead of thinking of what
am I losing it’s like no no but what is this move gonna do. Yeah so right now my
kids are little and they’re growing up they need more space I need to buy that
larger home. I just seen the other day a brand new two-story built just last year
selling for $500,000 in Sherwood Park. There were years before that same house
might have gone for $550, 000 to $600,000 but I think that’s the thing is getting in while you
can now at these great interest rates and these great price points. Well and
I’m a really bad example of of what people should be around the real estate
industry because I’ve been in my host for 35 years
so my $400,000 house is now worth $375,000. I paid $89,000 for it. So, really am I in bad
shape? No! It’s all timing right? Absolutely! And like you said the key is that if I’m
buying something else I’m buying in that same lower market. In the same market place. And trying to time the market…Whether you’re trying to time the stock market or the real estate
market yeah pretty challenging to do. Bill and Sheryl, are there any last
comments that you want to leave us with? I would just say continue to be
enthusiastic about it and maybe if you have a reason to sell, a reason to
upgrade, a reason to downsize, it’s a good time to do it call your Realtor. I’m
right here for that! All right guys so thank you very much and have a wonderful
New Year. Thank you! You as well. Thank you LeRoy!

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