Edmonton Stats April 2011

The REALTORS Association of Edmonton released their monthly stats here and overall they show weak sales and normal level of new listings.


The preliminary number for sales held steady with 1487 in April compared to an initial report of 1503 in March. Normally, sales are expected to increase this time of year. Preliminary sales are at scorched earth level, which is equivalent to the worst six months of the financial crisis.


Listings are rising at a normal pace for spring.



Seasonally adjusted rate of sales have been low for a year following a bounce after the financial crisis. I assumed the final number for sales will come in about 7% higher than the preliminary figure.



Seasonally adjusted listings have been stable since a spike last spring.



With lower sales and stable listings on a seasonally adjusted basis the sales to new listing ratio fell to 47%. A ratio lower than 50% indicates a market with downward price pressure.





Finally a historical chart of actual sales, listings and inventory.

Edmonton Stats Feb 2011

Edmonton sales are now only slightly higher compared to the rate equivalent to the worst six months of the financial crisis.




Seasonally adjusted sales to new listings ratio fell below 50% again indicating downward pressure on prices.

Market Update for Edmonton

Preliminary sales are closely following the scorched earth benchmark after falling significantly from last year's levels.


Listings are back to normal after spiking this spring.




The seasonally adjusted sales to new listing ratio climbed to 51% from the decrease in new listings. This has not been enough to reverse the current trend of falling prices as inventory remains high, sales remain terrible and sentiment has turned.

Edmonton July Stats: Sales remain slow

Preliminary numbers showed a drop in sales as expected for this time of year. However that leaves us about the same as June where sales were terrible. I added the final numbers to the chart as well.

Seasonally adjusted sales are at a similar rate as the worst six months of the financial crisis. I estimated July sales to be 1378, or 6.5% higher than the preliminary number.


New listings fell as in July and inventory declined from 9,406 to 8,892. This can be expected but the decrease was more pronounced than usual for the month.



Sales to new listings ratio remains low but improved slightly due to the decrease in listings. The market conditions are beginning to show up in price with the SFH median falling to $360,000, down $10,000 from May.

Edmonton February Stats

The REALTORS Association of Edmonton released the February stats today. The trend is similar to that of Calgary I covered in the previous post. The pace of sales has declined from the 2nd half of 2009 (green line) and listings increased slightly.

The seasonally adjusted sales to listing is at 50%, about the same as last month (unadjusted is 47%).

The chart of the raw historical data shows this year has been a little slow on the sales side.



Thats all I have to say for Edmonton numbers.... Here are some other items that caught my attention recently.

Statscan reported GDP grew at an annualized pace of 5% in the 4th quarter of 2009. Some of those gains are due to government stimulus and investment in residential structures but nonetheless growth in December relatively broad based.

I am not sure if this is the case in Canada but in the US a large component of the increase was transitory. Calculated risk estimates that GDP growth would be 1.9% absent one time boosts that occur after the end of a recession of replenishing inventories.

BMO is offering a 5-year fixed rate of 3.75%, which is fairly competitive for a big bank. (source Canada Mortgage Trends)

Edmonton Sales Down

The REALTORS Association of Edmonton and the Edmonton Real Estate Blog have posted January statistics. Just like in Calgary seasonally adjusted sales are very weak. In fact, while we would normally expect sales to increase 18% in January they fell by 7%.

Despite slower sales new listings are following the same rate as the 2nd half of 2009 seasonally adjusted.


The seasonally adjusted sales/new listing ratio has decreased to 51% (non-adjusted is 40%). A sales to new listing ratio of 50% indicates a market with no price appreciation.


The weaker market is due to sales not increasing with listings last month.

Below are the charts for sales and listings seasonally adjusted.

Notice a Pattern?

The REALTORS Association reports on several statistics in their report and draw comparisons from either the previous month or the previous year. Below I made the opposite comparison they chose to make in the report [in red].

Edmonton, April 2, 2009: The average* price of single family homes in the Edmonton area has hovered around the $350,000 mark for the first quarter of this year [Average price of a single family home in 2008 increased from 379,567 to 387,632 January to March], reported the REALTORS® Association of Edmonton. At the beginning of January the average price for a SFD was $351,870. The price varied slightly and at the end of March the average SFD price was $349,716, up 0.7% from the previous month [decrease of 9.8% YOY]. Condo prices were a little more volatile but popped up 1.6% in March to $230,469, after a 5% drop in February. The average price of a duplex/rowhouse was $276,776.

“With price stability, low interest rates, spring weather and pent-up demand; it appears that REALTORS® are starting to get busy again,” said Charlie Ponde, president of the REALTORS® Association of Edmonton. “Our offices are reporting an increase in buyer interest. Sales in March were up 28% from the previous month.” [down 11.4% YOY]

Residential sales through the Multiple Listing Service® in March totalled 1,380 units. Total MLS® sales (including commercial and rural sales) were 1,513 units. This is a 30% increase over the previous month. [down 11.5% YOY] Total residential sales for the first quarter were 3,185 units and total MLS® sales were 3,471 with a YTD value of $1.1 billion.

There were 2,891 residential listings in March (down 31.7% from last March) [up 9.0% from February] resulting in a month end inventory of 7,476 residential properties (down from 9,464 in March 2008) [up from 7076 in February]. The sales-to-listing ratio was 48% and average days-on-market was 56 days (down five from February) [up 5 over last March].

“The market is once again operating in a normal fashion with typical seasonal fluctuations,” said Ponde. “REALTORS® are prepared with daily statistics and market knowledge to help clients understand the market fluctuations and advise them on pricing and marketing strategies that help buy and sell homes and commercial properties.”

REALTORS® (who are all members of the REALTORS® Association of Edmonton) have just completed their annual membership renewal. Some members choose renewal time to withdraw or retire from the industry so membership numbers dip slightly at the end of March. So far the renewals are typical and the Association expects that the more stable market will encourage most REALTORS® to remain in the industry.

Edmonton August Report

The August report is here. Sales were only compared to 2007's devastating numbers and not to other more "balanced" years. While its true that sales are up over 2007 consider some previous statements regarding sales:

“Near record January sales indicate that housing sales will remain strong in the Edmonton area as buyers and sellers adjust to the new pricing levels,” said Marc Perras, president of the REALTORS® Association of Edmonton.
Feb 5, 2008 (21% drop over 2007)

“We predicted that sales would be on par with the last ‘normal’ year that we had in 2005. So far the market is behaving as we anticipated.”
March 4, 2008 (32% drop over 2007)

Actually in the forecast released at the beginning of the year Marc Perras predicted sales to drop slightly. The actually number of sales this year will certainly be less than his forecast.

"The total number of residential sales in 2008 will probably drop slightly from 2007 levels. Perras expects that 19,100 residential properties will sell through the MLS® in 2008. There were 20,544 sales in 2007."
Jan 9, 2008

..There is more....

With the high inventory, demand was strong with residential sales near traditional volumes.
April 3, 2008 (34% sales drop over 2007)

April sales of all types of residential property through the Multiple Listing Service® were lower than the two previous years at 1,823 units but higher than the more typical years of 2004 and 2005.
May 5, 2008 (25% sales drop over 2007)

Sales were up 1% in April when compared to 2004/2005. See previous post.

May sales exceeded same month sales in 2003 and 2004 but were below May sales for 2005-2007 when the market was super-heated.
June 3, 2008 (36% sales drop over 2007)

This is a false statement. May sales were in fact below those of 2004. See previous post.

Don't get me wrong. Number are numbers and there were 18% more sales this August compared to last year. I just don't buy the spin. To EREB 2007 was off limits except when comparing to record low sales. This chart is probably the most enlightening way to look at the sales figures stolen from the Edmonton Real Estate Blog. It is laid out so it is easy to compare sales from each month to the last several years.

See the red line? Thats the sales surge the Edmonton Journal is referring to in this article: Edmonton home sales surge, prices dip.

There is still more. Marc Perras had to comment on price as well.

“Housing prices typically rise slightly through the fall,” said Perras. “We expect that the strong sales this quarter will support rising prices as we approach year-end.

This reminded me of a previous statement which I debunked in this post.

"I think it's a great time to buy now. If we're going to see any softening in prices, it's going to be in the second quarter, which is right now. This kind of inventory is going to thin out as we get into the fall."

.....

Ed Jensen's report for Calgary was less brutal and focused more on sellers. He still managed to call the Calgary market stable and had the same buyer's market charts.

CMHC Forecast Changes

The post will compare CMHC 2008 housing forecasts taken at different times in their Housing Outlook reports. The forecast is for yearly totals for sales and listings and yearly averages for prices.

CMHC Forecasts for Edmonton 2008
Resale	Spring 2007	Fall 2007	Spring 2008
Sales	22,600	20,000	18,500
Listings	29,000	29,000	43,000
Price	$374,000	$360,000	$350,000

CMHC Forecast for Calgary 2008
Resale	Spring 2007	Fall 2007	Spring 2008
Sales	33,250	31,700	26,000
Listings	57,750	57,750	62,000
Price	$473,000	$450,000	$429,000

2008 Actual Prices
Month	Edmonton	Calgary
January	$332,051	$408,672
February	$338,347	$415,017
March	$343,760	$419,396
April	$336,931	$414,006
May	$340,499	$418,881
June	$341,376	$418,866
July	$335,100	$413,738

These forecast have been lowered a couple times and it they will still be overly optimistic compared to what has occurred so far this year.

Lies, Damn Lies, and Statistics

Apparently prices in Edmonton in Calgary are stable. This from the Edmonton Journal Article Housing-start decline not a sign of dying market

First, consider overall housing prices in Calgary and Edmonton. In both cities, prices in June are off only slightly from the peak record highs reached last July. They're down 3.6 per cent in Calgary, and 3.8 per cent in Edmonton -- hardly a sign of collapsing prices. In fact, for a full year now, prices in the resale market have been remarkably stable.

Let;s look at Edmonton here. The statistic used is for average price for all properties which dropped from $354,718 to $341,376. However a look at prices by most any other measures would totally invalidate the article.

Some other numbers of price drop July 07 - June 08 from

Realtor Association of Edmonton (Edmonton CMA)

SFH Average $417,150 to $381,384 -8.6%
SFH Median $395,000 to $365,000 -7.6%
Condo Average $271,908 to 262,365 -3.5%
No Condo Median available

From Bob Truman's site (Includes Edmonton, St Albert, Sherwood Park, Spruce Grove, Stony Plain)
SFH Average $442,753 to $399,604 -9.7%
SFH Median $410,000 to $368,000 -10.2%
SFH Price per square foot $321 to $280 -12.8%
Condo Average $275,905 to $261,318 -5.3%
Condo Median $269,000 to $245,900 -8.6%
Condo Price per square foot $285 to $257 -9.2%

Here is a breakdown of Edmonton regions YOY price change. I didn't hav access to July 2007 regional prices.

Edmonton Regional Prices for June 2008 (detached)
		2008	2007
NORTHWEST	AVERAGE	338135	346172	-2.38%
NORTHWEST	MEDIAN	318000	348000	-9.43%
NORTH	AVERAGE	356462	405401	-13.73%
NORTH	MEDIAN	346250	385000	-11.19%
NORTHEAST	AVERAGE	297946	355189	-19.21%
NORTHEAST	MEDIAN	295450	343000	-16.09%
CENTRAL	AVERAGE	290966	278306	4.35%
CENTRAL	MEDIAN	252500	270000	-6.93%
WEST	AVERAGE	428566	511958	-19.46%
WEST	MEDIAN	402500	430000	-6.83%
SOUTHWEST	AVERAGE	457560	566179	-23.74%
SOUTHWEST	MEDIAN	419600	515000	-22.74%
SOUTHEAST	AVERAGE	356244	431395	-21.10%
SOUTHEAST	MEDIAN	339000	399950	-17.98%
ST. ALBERT	AVERAGE	449903	514678	-14.40%
ST. ALBERT	MEDIAN	424000	478700	-12.90%
SHERWOOD PARK	AVERAGE	443069	480363	-8.42%
SHERWOOD PARK	MEDIAN	423500	451000	-6.49%
LEDUC	AVERAGE	347915	401140	-15.30%
LEDUC	MEDIAN	330000	373450	-13.17%
SPRUCE GROVE	AVERAGE	377174	418583	-10.98%
SPRUCE GROVE	MEDIAN	361324	402500	-11.40%
STONY PLAIN	AVERAGE	390452	401990	-2.96%
STONY PLAIN	MEDIAN	364500	395000	-8.37%
MORINVILLE	AVERAGE	354745	345309	2.66%
MORINVILLE	MEDIAN	353000	335000	5.10%
FORT SASKATCHEWAN	AVERAGE	371281	381228	-2.68%
FORT SASKATCHEWAN	MEDIAN	355000	370000	-4.23%

Remarkably stable.

I wanted to rip on the article more... but I really don't think anyone takes the Edmonton Journal seriously anyway.

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.

Edmonton price weakness limited to Q2?

Mr. Perras was one of the experts quoted in the article How real estate went from boom to buyer's market in the blink of an eye

Q: Should I buy now or wait?

Perras: "I think it's a great time to buy now. If we're going to see any softening in prices, it's going to be in the second quarter, which is right now. This kind of inventory is going to thin out as we get into the fall."

First off why was the title of the article changed from boom to bust to boom to buyer's market? (Just speculating) So here we have yet another call for decreasing inventory, granted this is probably getting more and more likely as time goes on.

More importantly, I am not sure where the idea that the price correction is limited to Q2 came from. Last year prices and inventory fell in the fourth quarter.

Below I determined the frequency of varying rates of appreciation over each quarter going back to 1980. Quarterly appreciation was determined by calculating the difference of the average residential price from the last month of the quarter compared to the last month of the previous quarter.

For example take Q2 2006
June 2006: $254,240
March 2006: $220,124
change: 15.5%

So this is put in the Q2 chart below at 18%, representing the frequency of quarterly appreciation above 15% up to 18%. A histogram.



Source

Note that going back price weakness generally occurs in Q3 and to a lesser extent in Q4. In fact for Q3 there has been only 4 instances of positive quarterly price growth. While Q2 is the opposite with only 3 price decreases.

After this I wonder if the argument presented in the article is a genuine conclusion based on some sort of analysis? Or was it conjured out of nothingness to promote sales?

Edmonton April Report

From the Realtors Association of Edmonton April report:

April sales of all types of residential property through the Multiple Listing Service® were lower than the two previous years at 1,823 units but higher than the more typical years of 2004 and 2005.

It's technically correct by ignoring a few years sales are up. Compared to 2004/2005 they are up 1%.

RESIDENTIAL SALES:
2008 - 1823
2007 - 2441
2006 - 2026
2005 - 1802
2004 - 1805


Also, consider some choice words from the Realtors Association of Edmonton over the last few months regarding inventory

The current inventory of residential properties is now 7,094 homes. The inventory will decrease through the year but the wide choice of properties will have a dampening effect on prices offsetting increased demand from in-migration and economic growth.

Marc Perras,REALTORS Association of Edmonton, Jan 9, 2008

“We predicted that sales would be on par with the last ‘normal’ year that we had in 2005. So far the market is behaving as we anticipated.” The number of available residential properties listed on the MLS® at the end of February was up 12.7% from the previous month at 8,284 properties.

Marc Perras, REALTORS Association of Edmonton, March 4, 2008

"Now is the time to be buying," said Marc Perras, president of the REALTORS® Association of Edmonton. "The selection of available homes is very high and prices will increase by year end as inventory levels drop.

Marc Perras, REALTORS Association of Edmonton, April 3, 2008
Inventory = 9,464

“The Edmonton housing market is stable and buyers and sellers seem to be coming to a realistic view of housing prices,” said Marc Perras, president of the REALTORS® Association of Edmonton. “In this market, with a very high inventory, pricing is a key component of a successful sale.”

Marc Perras, REALTORS Association of Edmonton, May 5, 2008
Inventory = 10,606

February Real Estate Meta-Analysis

In the press release for February the Realtors association of Edmonton commented on sales falling 32% from last year and the increase in inventory:

“We predicted that sales would be on par with the last ‘normal’ year that we had in 2005. So far the market is behaving as we anticipated.” The number of available residential properties listed on the MLS® at the end of February was up 12.7% from the previous month at 8,284 properties. In February 2007 the inventory had just 2,120 properties.

Compare this to their forecast released less than 2 month ago:

The current inventory of residential properties is now 7,094 homes. The inventory will decrease through the year but the wide choice of properties will have a dampening effect on prices offsetting increased demand from in-migration and economic growth. Condominiums are expected to become a stronger option (especially for first time buyers) because of the lower price point.

The total number of residential sales in 2008 will probably drop slightly from 2007 levels. Perras expects that 19,100 residential properties will sell through the MLS® in 2008. There were 20,544 sales in 2007.

_____________________________________________________________

From Edmonton Weekly Stats on Working Together

The “sales to listing ratio” remains healthy, which is what really matters for the Edmonton real estate market.

Sales to listing for the week was 239/601=39.8% which is on the line balanced and buyers market. For every 4 people that bought 10 people listed - It is a stretch to label that healthy.

No real shock to anyone, the number of new listings in Edmonton is much higher than it was for the same week last year, and the number of property sales is much lower. But last year wasn’t a typical real estate market, and we all have to stop measuring against it.

Last year the high level of sales was seen as soley being attributed to Alberta's boom. Some did predict that price increases would moderate, but did not questions the legitimacy of the demand during this time. Comparing current demand to last year illustrates that some of this demand may not have been justified.

Based on the last 3 months worth of sales, we have 6.62 months of Edmonton housing inventory for sale. That puts us into a very balanced market, as 6 months of inventory is considered to be a perfectly balanced market, and anything over 8 months is a buyers’ market. We aren’t even over 7 months yet, so I don’t think you have to panic.

On the same page there is a graphic:

more than six months is considered a buyer's market.
Less than six months is considered a seller's market

Andrew Kyle, a Calgary Realtor defines a buyer's market over 3.5 months of inventory. The CREB had defined it a similar way until adjusting charts.

_________________________________________________________________

Consider the title of the Calgary Real Estate Board Statistics:

MLS® RESALE MARKET PICKS UP MOMENTUM IN FEBRUARY 2008

Single family Calgary metro properties changing hands in February 2008 were 1,252, an increase of 15.6 per cent over the 1,083 sales reported in January 2008 but showing a decrease of 35.5 from the same period last year, when the sales were 1,942.