Sunday, October 4, 2020 / by Sergey Korostensky
The association’s board chair Jennifer Lucas said Saturday that September’s numbers are significantly better than what was being predicted in January, even before the COVID-19 pandemic hit, and after a difficult 2019.
“It’s certainly not the year we thought we were going to have. In January, we did an economic forecast and we were trying to prep people for a very stable (year), no significant increases, no significant decreases for 2020,” she said.
COVID-19 hit just as the industry was beginning what is typically its busy spring season. It took time for real estate to be declared an essential service and that busy season got pushed to the summer, Lucas said.
“But then we’ve also had this sort of reimagining or reshift, of the purpose of our house,” she said.
“So we have people now that have spent several months working from home, they know that they’re going to continue to work from home. We have families that are now educating their children from home and sometimes in those instances the house just doesn’t work for them.”
Single-family homes sold for an average of $440,020, a 4.73 per cent increase from September 2019, and a 0.11 per cent increase month-over-month from August 2020. Condominiums in September sold for an average of $232,237, a 6.74 per cent increase year-over-year, and prices are up 1.34 per cent compared to August 2020.
The Canadian Real Estate Association reported record-shattering home sales in July and August amid low mortgage rates. Lucas said Edmonton also broke records in August.
She said she’s not surprised September numbers dipped slightly from August.
“Typically, the end of August, beginning of September, people are focused on getting their kids back to school so there tends to be a little bit of a break…. I suspect we will get one last push for those people that want to be in their new homes before Christmas,” she said.
Lucas disputes a report released last month by Moody’s Analytics Inc. which suggested there is a “dangerous” oversupply of new single-family homes in Calgary and Edmonton.
“Now, that would have been different if … they started to put their numbers together, let’s say in January or February. You know, yes, there was (oversupply), but we’ve sort of, over the summer, ate that supply,” she said.
The association’s numbers say the number of single-detached homes in the Edmonton area where construction was started decreased in August by 15.7 per cent from a year prior to 371 units. However that is still the best month this year for single-family builders since the pandemic hit in March.
The Moody’s report predicts home prices across Canada could tumble about seven per cent in 2021, as unemployment dampens the hot real estate market.
Lucas said implications from COVID-19 will have an effect on the market but it is too soon to predict how it is going to shake out.
She said the outlook will depend on consumer confidence.
“It’s going to depend on jobs. If people feel comfortable that they’re going to have a job, then we may not be as bad off but, you know, Alberta, we’ve got a long road to recovery for sure,” she said.