Due to 2015’s ongoing rise in sales inventory there has been a foreseeable lowering of real estate prices this past July. While June saw continued rises in homes on the market, only a moderate price dip meant figures still remained higher than compared to the same time last year.
The EREB’s latest market report published last week indicates that July finally saw the impact of inventory catching up to list and sale prices. While all average residential prices were down in month over month comparisons, the most significant impact was to single-family homes, with other categories remained largely unaffected.
EREB reports have indicated that, while still falling somewhat, average prices have likely remained stronger than expected due to the abundance of high priced properties, which began impacting the market last year. So far this year 73 homes have been sold on the market all with price tags over the million dollar mark, which is the same figure as we saw by this time in 2014.
Residential list price ended up averaging $372,910, dropping 1.4% from June. Single-family homes were the biggest catalyst in that average, showing a 1.8% decrease down to $436,948. Contrarily, duplex/row houses saw an increase of 1.4% to $356,237 and condominiums, at $256,708, saw a negligible 0.4% rise. When compared to year over year averages prices were still 3.3% higher than July of last year, despite pressures cause by inventory surpluses.
“This small dip in prices is expected due to our higher inventory and lower sales numbers. We continue to be surprised by how strong prices have been this year compared to last when we had higher sales and very tight inventory. The ‘wait and see’ attitude of buyers seems to be diminishing, but people continue to be cautious,” explains Geneva Tetreault, Chair of the REALTORS® Association of Edmonton.
By the end of July, inventory in the city’s census metropolitan area had reached 7,226 properties, which was only slightly higher than the 7,177 listings on the market at the end of June. However this is a significant upswing when compared the same time last year, with inventory in July of 2014 at 5,609.
Another result of the current market environment has been an increase in average days on market, indicative of a slowing in residential sales. July sales dropped 9.8% from June, and 2.8% in year over year comparisons. The average home spent 50 days on the market in July, up from 46 in 2014. While row houses spent the fewest number of days (43), followed by single-family dwellings (48), the largest slowing was seen in the condominium category, averaging 54 days on the market.
“We have seen the biggest drop in condominium sales year to date at 14%. That drop coupled with an increase of condo listings of 17% explains why condos are taking longer on average to sell. Some of these buyers may be moving over to duplex/townhouse options which is the only residential category showing an increase of sales of 6% year to date.” Tetreault continues, “We are seeing the effects of many condominium projects that broke ground when inventory was coming onto the market recently. Condominiums continue to offer the best price point for those entering the housing market and the ease of care and smaller size that appeal to an older demographic.”
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