Edmonton Real Estate Market Update December 2021
Well, here we are in early December, when the real estate market it typically heading into hibernation for the holidays, but not this year. For December, the market remains fairly active compared to your more typical year. So what gives? What is causing this continued activity?
There are a couple things that I see driving this activity. I'll explain them below in a bit more detail.
1) Interest Rates - I feel this is probably the biggest reason why we are seeing a bit more activity than normal for this time of year. Over the last year, we have witnessed some of the lowest interest rates we have seen. Currently, they sit somewhere in the mid 2%'s, give or take depending on the person, and they have even increased a bit since their lowest point in recent months! This is still an incredible rate historically speaking. There has been some recent talk about the bank starting to increase these rates in coming months to a "more normal" rate, and this is very likely what is casing people to continue shopping now. Buyers want to get a home secured at todays awesome rates!
If your plan is to purchase in the near future, this shouldn't put you into a panic to get out and start shopping for a home when you probably haven't even finished (or started) your holiday shopping. However, if you do have plans to buyer in the new year, I would make it a priority to talk to your bank, or mortgage broker, and lock in today's interest rate. You can hold the rate for up to 120 days. This way, if the interest rates increase, you have guaranteed yourself today's better rate. If they drop for some reason, you can still get the better rate, but you are safe if the increase!
2) Carry-Over from previous markets - I feel a second driver to our current market activity is carry over from spring and summer markets this year. The truth is, the real estate market was quite active all year. Many buyers experienced higher than normal activity, especially on the good listings. With more competition, some buyers may have missed out on a home or two due to multiple offers being submitted, and maybe got frustrated and decided to wait for things to cool off. Right now, There is still good inventory, and the market is certainly less competitive compared to a few months ago. This is a much better scenario for prospective buyers looking to secure their new home.
3) Migration - Alberta and Edmonton have seen some pretty good headlines lately. Edmonton was voted in the top 4 most affordable major cities to live in North America by Oxford Economics. Alberta has also led the country in economic growth in 2021, with this growth expected to continue into 2022. These are welcomed headlines, especially since not only have we been in the middle of a pandemic for the last 24 months, but Alberta has also been in recession for the last several years due to a struggling Oil & Gas sector. Migrations has increased, and is expected to continue from other provinces like BC and Ontario due to affordability.
4) Resale Surges - A fourth reason that I did not mention in the video above is the resale market surged due to the new home market struggling with supply chain issues. Completion dates for new construction were pushed out longer than buyers wanted to wait in some cases due to low building supplies available. This caused many buyers to explore the resale market instead.
Here are some of the numbers recently released by the Edmonton Real Estate Association for the month of November 2021
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