Edmonton Stats June 2011

Sales have dropped somewhat which could be expected for this time of year. Even with this drop the rate has maintained some gains from the dismal levels seen this time last year.



Listings dropped as expected in June.


Seasonally adjusted sales are low historically but they have been worse. This is a range similar to before the boom but above crisis levels.

The relatively low level of listings is having a stabilizing effect on the market.


The sales to new listing ration is slightly above 50%. A rate of 50% indicates a market with stable prices.

Edmonton Market Stats December 2010

Once again the updated sales, listing and seasonally adjusted charts for Edmonton.


Sales remain above the dismal pace of the financial crisis but below the more robust pace set during the 2nd half of 2009.



Listings are following the rate set during the 2nd hald of 2009.



On a seasonally adjusted basis home sales have recovered somewhat from earlier this year.



The spike of listings which contributed to the year over year increase in inventory has settled down.


The seasonally adjusted sales to new listing ratio has increased due to more sales and reduced listings. The rate currently stands at 57%. I would be cautious reading too much into this due to the lower volume in the winter months. However, if this ratio stays at this level into the spring market we may see YOY inventory drops and prices stabilizing. The question is how big of a listings rush will there be this spring?


The last chart shows sales, new listings and inventory over the years.

The median price of single family homes has moved down considerably since spring. Down to $336,500 from $370,000 in May, or almost 10%. These price declines are a combination of real market deterioration and seasonality as I mentioned in June.

The seasonally adjust sales to listing ratio is 42% and has been flat for three months. Expect price drops soon.

I think that some of the price measures are elevated right now due to seasonality and high level of luxury sales (see Edmonton Real Estate Blog for price stats). This works both ways as it shows prices have been rising all year (when they haven't) and will exaggerate the drops during the second half.

It comes as no surprise that the EREB was way too optimistic on their revised prediction of 19,000 sales half way through the year. I was also optimistic guessing 16,576 when the preliminary total right now stands at 16,241.

Edmonton Market Statistics June 2010

The REALTORS Association of Edmonton released statistics for June and describe the market as "normal".

Instead of being normal sales were slightly worse than "scorched earth", a benchmark rate equivalent to the worst six months of the financial crisis.


Listings appear to have peaked early this year but remain somewhat high.


There are only 4 months in recent history which are as bad or worse in terms of seasonally adjusted sales - Nov 2008 to Jan 2009, when the world was falling apart and Sept 2007, following an insane boom.
Seasonally adjusted it is clear listings have eased up. Despite this inventory increased last month and remains very high. (9,406 active residential listings vs. 6,785 last year and 11,006 at the peak in May 2008)

Sales to new listing ratio was 41% seasonally adjusted. When this ratio dropped below 50% right after the end of the boom in 2007 and during the financial crisis there were corresponding price declines and this time is no different.

Initial explanation of seasonally adjusted data and benchmarks and seasonally adjusted sales to new listing ratio.

Edmonton New Construction Update: May 2010

It's been three months since I have posted on the new construction situation in Edmonton. Since then single family home construction has increased and starts have remained high.

Single family home under construction peaked at 6,528 in August 2007 before falling to 1,764 April 2009 and finally rebounding to 3,760. It looks like the weakness in resale market has not yet had an impact on new homes. I expect to see price declines on existing resale inventory to lead a shift away from new homes as they become less competitive.

Total construction has been slower than single family alone. This is because condos took longer to recover with units under construction bottoming at 2,142 this March and have rebounded to 2,759 in May. While there is less oversupply going into this downturn compared to 2007 (10,314 vs. 17,781 in the chart above), weaker interprovincial migration and declining resale market will have a negative impact on new construction going forward.

Edmonton Statistics May 2010

The REALTORS Association of Edmonton released statistics for May and describe the market as "relaxed".

Listings are down from last month but remain at elevated levels. It appears they have hit a top early this year below the benchmark level of "stampede", equivalent to the flood of listings experienced in 2007.



Sales are now at the "scorched earth" benchmark which is the same rate seasonally adjusted during the worst six months of the financial crisis. Although I expected sales to be slow, I am surprised how bad they really were in May. The story is shifting from a flood of listings to the dismal sales pace.





The seasonally adjust sales to listing ratio is 42% and has been flat for three months. Expect price drops soon.



I think that some of the price measures are elevated right now due to seasonality and high level of luxury sales (see Edmonton Real Estate Blog for price stats). This works both ways as it shows prices have been rising all year (when they haven't) and will exaggerate the drops during the second half. Too bad Edmonton doesn't have a sales pair measure like Calgary does in the Teranet index.

Initial explanation of seasonally adjusted data and benchmarks and seasonally adjusted sales to new listing ratio.

Edmonton New Construction Update

It has been awhile since I've posted about the new construction situation in Edmonton. The most important change has been the increase in single family homes under construction. The resale market for single family homes has recovered more after the "great financial crisis" than condos and this has spilled over into new construction market.

At the peak of August 2007 there were 6,528 single family homes under construction in Edmonton. Exactly two years later that surplus was reduced to 1,986 and has since rebounded to 3,169. SFH starts have jumped significantly (shown in blue) but have not reached the level of the boom.

The next chart shows all types of construction including housing that has been completed but not absorbed by the market. With these factors considered the recent bounce in new detached homes has been offset by the continued decline in condo construction.



At the peak in February 2008 there were 7,730 condos under construction in Edmonton (orange). The last month available, February 2010, this has been reduced to 2,220. Over the past two years the glut of condos constructed during the boom has mostly been completed and absorbed. There remains an elevated number of condos not absorbed but that has reversed slightly as completions slowed (dark gray).

There are several changes coming to the market soon; however, the relatively low level of construction compared to the boom may limit the severity of the next downturn.

Comfree Success Rate

The new Comfree is here as described in the monthly report:

Further assisting sellers with pricing, ComFree launched the “New ComFree” with a bang. Thursday June 5th ComFree played host to a day of fun-filled activities including special appearances from the Edmonton Esks cheerleaders, Edmonton Rush, Joe FM live on location, and best of all our friends from Big Brothers and Big Sisters were present to take in the fun.

With all the celebration the private listing company now charges $947, up from $699! They also re-animated the corpse of "sales success", now called "success rate" (See previous posts here and here)

We expect our success rate to jump from 73% to the high 80’s maybe even 90’s with the New ComFree.” says Travis Holowach, “Just another reason that the ComFree Advantage works for buyers and sellers in this market.”

I cannot fathom what type of twisted process could be used to arrive at a 73% success rate for Comfree in the current Edmonton market. Comfree hasn't been 73% successful at selling houses for awhile now. However, unlike REALTORS, they are 100% successful at getting paid.

Lets take a look at some metrics that are derived from actual numbers in a repeatable and straightforward way. One is the sales-to-listing ratio and another is sales-to-total inventory. Another insight is to determine the properties that are removed from the inventory each month without selling:

"REMOVED NOT SOLD"
=
PREV. MONTH INVENTORY + NEW LISTINGS - SALES - INVENTORY

Date	Sales	Listing	Inventory	Sales to Listing	Sales to Inventory	Removed Not Sold	Comfree's Sold to Listing
Jan 07	327	419	820	78.0%	39.9%		82%
Feb 07	416	496	837	83.9%	49.7%	63	82%
Mar 07	513	664	893	77.3%	57.4%	95	82%
Apr 07	505	788	1180	64.1%	42.8%	-4	78%
May 07	556	1212	1616	45.9%	34.4%	220	73%
Jun 07	405	1243	2179	32.6%	18.6%	275	61%
Jul 07	277	1100	2696	25.2%	10.3%	306	58%
Aug 07	237	788	2972	30.1%	8.0%	275	58%
Sep 07	201	613	3423	32.8%	5.9%	-39	50% *
Oct 07	146	470	3108	31.1%	4.7%	639	-
Nov 07	124	356	3060	34.8%	4.1%	280	-
Dec 07	91	162	3026	56.2%	3.0%	105	-
Jan 08	151	389	3088	38.8%	4.9%	176	-
Feb 08	164	449	3108	36.5%	5.3%	265	-
Mar 08	201	574	3196	35.0%	6.3%	285	-
Apr 08	233	624	3329	37.3%	7.0%	258	-
May 08	205	597	3386	34.3%	6.1%	335	-

*Changed to sales success

Look how the properties removed and not sold from Comfree inventory has exceeded sales for several months now. This would imply a "success rate" of less than 50%. Also note that it has been an entire year with a sales-to-listing ratio of under 40%, excluding December.

Just some things to consider before shelling out $947.