The Edmonton Real Estate Blog

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Thursday, July 27, 2006

How Long Will The Edmonton Real Estate Market Stay Hot

You’ve probably heard about the real estate market in Edmonton; if you thought it was hot in the spring, the pot is boiling over now. Alberta is out pacing the rest of the country as prices are rapidly increasing; the average price of an Edmonton home was up 39% in the first half of this year compared to last.

You’ve probably also heard stories about homes selling with multiple offers and over list price. In the current market buyers should expect to pay at least list price and probably more. We’ve developed a new marketing strategy to get the most out of the hot market, and as a result our listings are selling well above the area average.

See www.JustSoldEdmonton.com for examples.

Why is the Edmonton market so hot?
  1. Jobs - The employment rate is the highest it has been in 30 years.
  2. Oil - Oil and gas prices are high, there are over $7 billion worth of projects on the books to expand the oil industry in the province (which means more jobs).
  3. Net Migration - All these jobs mean more and more people are moving to Edmonton. Out of town buyers are willing to pay more for real estate as they have short deadlines to find a home and many markets in Canada are priced higher than Edmonton.
  4. Price - Compared to Vancouver, Calgary, Toronto and many other areas, Edmonton is cheap.
  5. Vacancy rates - A very low rental vacancy rate, and relatively low prices is attracting investors like never before.
  6. Supply - Demand for housing is very high (see points 1 through 5), and supply is very low (last year there were more than 3 times as many listings as there are now). Economic principles dictate that prices go up under these conditions.

How Long Will Prices Continue to Rise?

While we don’t have any crystal balls, it is safe to say the market will continue to rise for some time. Edmonton has always shown moderate price increases, even when economic indicators have been poor. That being said, there would have to be a major shift in supply and/or demand for the current market to significantly change. If you are considering buying, it is still a good time to buy but the market can be challenging. We have proven strategies to help buyers in this market as well, so give us a call anytime.

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