Edmonton realtors are bracing for another tough selling year ahead.
2018 saw record-high inventory levels along with price drops and 2019 isn’t looking much better.
“The market is tough. Period,” said Michael Brodrick, chair of the REALTORS Association of Edmonton.
Brodrick has been in the home sales business for 18 years and according to him, this is the worst he’s seen it.
After speaking to 600 realtors at an event in Edmonton on Wednesday, Brodrick pointed to rising interest rates and said the lack of home sales go hand-in-hand with Alberta’s cool economy.
“So a seller can only come down so far and a buyer — because of the qualification — can only come up so far, and the two aren’t meeting,” he said. “So we end up with inventory and slow sales.”
Another issue is the mortgage stress test, where buyers now have to prove they can make their payments if the interest rates do go up.
Brodrick said the stress test was brought in to cool markets in Vancouver and Toronto and unfairly targets Edmonton homebuyers.
“We have to be taking a regionalized approach,” Brodrick said.
“Until the federal government starts looking at that and doing something to help Alberta, we’re going to remain in the stagnant market we have right now.”
In 2018, residential year-to-date unit sales were down 5.57 per cent, to a total of 15,519 residential units sold, compared to 16,435 in 2017.
Condominium sales struggled even more. Average prices dropped nearly five per cent and the number of sales dropped to their lowest level in a decade.
Megan Bonnah said she listed her Summerside home this past fall. The neighbourhood is desirable, with schools, parks and a lake.
She knew it would be slow, especially in December, but not like this.
“No showings. Absolutely none.”
It is taking approximately 62 days for the average single-family home to sell in Edmonton.
Bonnah’s house has been listed for more than 50 days.
On Wednesday, The Bank of Canada announced it is keeping its key interest rate at 1.75 per cent.
John Rose, the City of Edmonton’s chief economist, said Edmonton does not need higher interest rates.
“Our real estate market isn’t in trouble,” he said.
“Edmonton needs higher interest rates like a hole in the head.”
Rose expects the second half of 2019 to bring more stability to Edmonton’s housing market and predicts modest growth.
For those selling right now, Brodrick has one piece of advice: “They need to be extremely patient.”