How the real estate went from boom to buyer's market in a blink of an eye

水管工 · 发表于 2008-5-6 08:34

The experts explain city house prices
Bill Mah, The Edmonton Journal
Published: 9:20 am
EDMONTON - If you were selling a "typical" home this time last year, chances are it lasted 22 days on the market before someone bought it.

You got $413,488 for it.

That was then. This is now.

Selling a typical home these days? Chances are you'll wait, and wait, for 52 days before selling.

And the payoff? About $28,000 less for your single-family detached house than if you'd sold it last year -- an average of $386,033, according to monthly figures for April released Monday by the Realtors Association of Edmonton.

Condos, duplexes and rowhouses also dipped in average price, and thickets of "For Sale" signs seemingly stand outside every multi-family development.

So what happened? What's a seller or a buyer to do? Where does it go from here?

We asked three Edmonton housing experts for answers: Richard Goatcher, Edmonton senior market analyst for Canada Mortgage and Housing Corporation; Pat Adams, a condominium builder and president of the local branch of the Canadian Home Builders' Association; and Marc Perras, president of the Realtors Association of Edmonton.

Their answers appear in edited form.

Why are home prices acting the way they are?

Goatcher: "As we went into 2006, we went into sort of an overheating, accelerating market because demand outstripped supply, so for most of 2006 and four months of 2007 we had record-

level price increases and a lot of speculative activity and high levels of new construction.

"Since then, we've seen a reversal, and a lot of that has to do with what's happened to migration coming into the province.

"Demand has throttled back and a lot of the markets are oversupplied, so we've got very soft prices."

What happened to the market in the last year?

Goatcher: "We went from an accelerating market in April, to a sellers' market in May to a balanced market in June to a buyers' market in July. It moved that rapidly. The relationship of supply and demand over a four-month period just totally shifted and it really surprised a lot of people on how rapidly it happened."

There are 10,606 residential properties currently on MLS, up 12 per cent from last month. Why so many?

Adams: "In 2005, if you could put up a house you could sell it.

"What happened to us in the industry is that it started taking longer to build and it cost more to build ... . Now, we've got an affordability problem and you've got an oversupply problem because one of the answers to a rapid increase in costs is to build as fast as you can. That means you're going to end up with unsold houses if the market turns, and that's what happened."

Perras: "It takes a while, particularly for new homebuilders to gear up for dramatic changes in demand, and there were speculators in the marketplace as well. The builders ramp up and it takes 12 to 15 months to complete a property. By the middle of 2007, we've got net

migration figures dropping off just as production is ramped up to meet it. We went from about 2,000 properties on the market to about 9,500 in three or four months."

What's happening to house prices?

Adams: "What we're seeing in the market on the new home side is, if people have inventory -- homes completed and unoccupied -- they'll perhaps move the price down to recover their investment. But once that inventory's used up and the pace of starts has slowed down dramatically, the bargains will be gone. And I think a lot of that inventory's getting used up."

Perras: "We might see a two, or three, maybe four per cent drop in pricing and as we chew through some of that inventory, we thought there would be positive growth at the end of the year."

Is the typical home worth more this year than it was last year?

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Font:****Goatcher: "If you bought your house in May of last year, you're probably going to lose money. If you bought your house two years ago, you're probably going to make money. Prices kind of peaked in the second quarter of last year, single-family houses dipped for a number of months, month-over-month, and now they've gone flat. If you bought it in April (2007), is it worth the same amount it was last year? It'll be close, but you won't have seen any real appreciation at all."

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."

Should I sell now or hold?

Perras: "It's tough to answer carte blanche. There's people in our marketplace who need to sell property and there are people who are testing the market. I've been telling people if you're testing the market, you may want to wait for a different year to do that in."

And if I have to sell?

Perras: "About 40 per cent of our sales volume typically happens in the second quarter (April, May and June)," Perras said. "Any family with school-aged children, we see them move in July and August, so they're out there making deals now."

I'm a first-time buyer? Condo or house?

Adams: "I think that the number of people who can afford a single-family (house) at the price that we have to charge in Edmonton is greatly reduced because they're just getting expensive.

"It's really the second-time buyer in that market now. Where we're at in Edmonton, is people have begun to understand your first home isn't a single-family home on a 50-foot lot because it's just not affordable anymore. The first home is an apartment or a townhouse, depending on location and price."

RESIDENTIAL MARKET IN APRIL

Here are the highlights of the Realtors Association of Edmonton's sales report for April:

- The average price of a single-family house in the Edmonton region dipped slightly in April, after three months of small increases.

- Detached houses sold for an average of $386,033 last month, down 0.4 per cent from the previous month.

- Single family house prices are down 6.6 per cent -- or $27,455 -- from April 2007, when the housing market was still hot.

- April's median selling price, the middle figure in a list of all selling prices, for single-family dwellings was $372,500, down 6.6 per cent from the previous year.

- The average price of a condo in April -- $256,947 -- also dropped by 2.3 per cent from last month.

- Duplexes and townhouses bucked the April trend, selling for 2.3 per cent higher than March, at an average price of $316,065.

- The Multiple Listing Service recorded 1,823 transactions in April for sales of all types of homes -- down about 25 per cent from the same month last year. But April sales were still higher than the more typical years of 2004 and 2005.

- Residential listings stayed on the market in April an average of 52 days, more than double the same month last year when it was 22.

- The value of total MLS sales for the year to date totalled $2.27 billion, down 27.5 per cent from the same period last year.

Market assessment

"The Edmonton housing market is stable and buyers and sellers seem to be coming to a realistic view of housing prices.

"While the typical sale is completed at 97 per cent of the asking price, many sellers have had to reduce their price to find the level that would attract a buyer."

-- Marc Perras, president, Realtors Association of Edmonton

SOUND OFF!

What do you think of housing prices in Edmonton? Join the discussion under Your Turn at edmontonjournal.com.

© The Edmonton Journal 2008

依勒特 · 发表于 2008-5-6 14:51

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