What's expected for 2009.
Sliding consumer confidence levels, augmented by
stock market volatility and diminished oil and gas
revenues, seriously hampered Edmonton and area's residential
real estate market in the final quarter of 2008.
The market softened considerably in October,
after a reported 65 per cent increase in sales activity
and a decline in the number of homes listed for sale
in September. Buyers moved to take advantage of
the glut of product on the market, making lowball
offers that were accepted more often than not.
Entry-level properties were most popular with purchasers,
while those in the top end of the market
experienced serious softening. Despite the instability,
$1 million plus properties held relatively
steady, with sales figures slightly off 2007 levels.
Approximately 18,900 homes are expected to change
hands by year-end 2008, an eight per cent decline
from 2007 levels. Average price, which hovered
at $338,000 one year ago, will close the year down
about one per cent to $335,000.
After years of unprecedented growth, Edmonton’s
gross domestic product will slow to an estimated
2.5 per cent in 2008, before climbing to 2.8 per cent
in 2009. Strong capital spending on public infrastructure,
a rebound in migration, anticipated job growth,
and the stability of Edmonton’s public service sector
should help bolster consumer confidence
levels and boost economic performance next
year. New home construction, down about 50 per
cent from one year ago, is expected to continue to
taper in 2009.
Lower interest rates and increased affordability levels
are expected to bring out homebuyers in 2009. The
number of homes sold in Edmonton by year-end is
forecast to match 2008 levels, while average price
should hold steady at $335,000 in 2009. Demand
should be greatest for properties priced from $300,000
to $350,000, as first-time buyers move to realize homeownership.
The trade-up market may also be brisk as purchasers
take advantage of buyer’s market conditions.
Sales over the $500,000 price point are expected to
soften as buyers in this price bracket deal with stock
Condominiums may be in for a ride in 2009.
High-rise units are particularly vulnerable to
price fluctuation as thousands of new units, pre-sold
during the run-up in 2005, 2006 and 2007, are
scheduled to close in 2009. Absorption will be key
in Edmonton’s residential housing market in 2009.
If speculators walk and developers take back units
and place them in a rental pool, values will remain
stable. Any substantial influx of new units will have a
serious impact on condominium pricing.