News of job creation and an oil and gas sector that may be starting to recover is helping to balance a previously sluggish housing market in St. Albert and Edmonton.
Jennifer Lucas, new chair of the Realtors Association of Edmonton, said last year continued on as a buyer's market, but as sellers came down in price and more homeowners were able to qualify for a mortgage, inventory has finally started moving.
Total residential unit sales in the Edmonton Census Metropolitan Area (CMA) real estate market for January 2020 increased 0.5 per cent compared to this time last year, according to the latest quarterly report. The number of new residential listings is down, decreasing 11.58 per cent from January 2019.
Last month in St. Albert, single family home sales climbed by 38 per cent in comparison to the same period last year, selling at a median price of $444,919 compared to $451,360 the year prior. Condos lagged behind slightly with eight sales in January, compared to nine the year before. Those sold at a median price of $194,325, down by $46,175 from the same period last year.
“We are seeing what we expected – generally things are pretty stable,” Lucas said. “Especially in this region, when people start talking and reading good news about oil and gas, that translates into people starting to feel more confident.”
Continued stabilization could depend on the mortgage stress test, she said – a federal policy in place since 2018 aimed at helping homebuyers ensure they can qualify for a mortgage based on income and expenses. The test sets the financial bar higher than the actual mortgage rate, with the goal of saving borrowers from incurring more debt than they can handle if rates rise. It also put downward pressure on pricing in Vancouver and Toronto, Lucas said, but had a ripple effect across the country.
“Equity was essentially stolen from homeowners because sellers had to lower their price to get to a point where home buyers can actually qualify,” Lucas said. “Some of the sellers said, 'You know what, I bought here, I had this much equity in it, and I can’t lose money,' so those went off the market.”
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St. Albert welcomes balance
To see the housing market balance out is a sign of a healthy economy, said Shandrie Lewis, real estate agent and broker for RE/MAX Professionals.
“St. Albert is a more desirable place to sell real estate in. Our market value is always a little bit higher than Edmonton, and we always seem to be a bit more balanced,” Lewis said.
So far in 2020, it seems like people selling their homes have come to terms with where the market is, meeting homebuyers at a level where they can qualify for a mortgage.
According to an MLS composite benchmark comparison of home pricing in St. Albert, Strathcona/Sherwood Park and Morinville, St. Albert has seen the most stability over the last year. Pricing for a "typical" residential home has generally hovered around the $400,000 mark before dipping slightly below last December.
There are 315 total properties still listed in St. Albert right now, with 207 single family homes and 108 condos. For the last six months, single family homes stayed on the market for an average of 55 days, while condos were on the market for 80 days.
The RE/MAX office in St. Albert has been noticeably busier in the last month with calls from potential buyers, Lewis said.
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“Actually for the start of the year, we’ve had too little inventory, especially in the under-$500K market,” she said. “Even at our meeting this morning, most of the realtors were talking about what they need for a buyer rather than what they have coming onto the listings.”
The condo market is a different story though – inventory is actually quite high, and they’ve been a tough sell over the last few years, Lewis said.
“Unfortunately, condos come with condo fees and sometimes there can be special assessments, which is a little bit scary for first time buyers. Having a condo fee of $200 to $300 a month on top of their mortgage is harder to qualify for.”
Looking ahead in 2020, Lewis said she expects to see more infill projects pop up slowly in St. Albert’s older neighbourhoods, like Braeside, Grandin, Mission and Sturgeon Heights.
“(Infill markets) are becoming very trendy in Edmonton, and I think it’s going to be gaining more traction in St. Albert,” she said.
Overall, the year ahead is looking positive for St. Albert’s real estate market.
“I firmly believe this will be a better year,” Lewis said. “Property won’t be sitting for quite as long, and while it won’t be a seller’s market, I don’t believe prices will be dropping. So if you can get your home on the market now before there’s more inventory in the spring, you’re better off.”
