The latest report released by the Realtors Association of Edmonton shows the 2020 market didn’t end up so bad.
The statistics show in December, single-family home sales were up 26.44 per cent compared to last year, while condos jumped 34.09 per cent.
That, in spite of a September forecast by Moody’s Analytics Inc. saying there was a “dangerous” oversupply of new, single-family homes in several major Canadian cities, including Edmonton.
At the end of 2020, the realtor’s association said the average cost of a single-family home was $428,000 — a 4.24 per cent increase.
The findings may come as a surprise considering Edmonton’s struggling economy.
“2020 was my second-busiest year ever”, MaxWell Progressive realtor Bill Bowers said.
Those probably are not the words one would expect hear from a realtor selling homes in the midst of a pandemic.
“There is a lot of consumer saving right now, especially because the people aren’t taking that trip to Disneyland or Hawaii,” Bowers said.
He added low interest rates have also helped with sales.
Interest rates were thought to have hit rock bottom in Canada after they were slashed last March to a record low of 0.25 per cent. But in November, Bank of Canada Governor Tiff Macklem said a lower floor could allow Canada’s central bank to ease further if the economy weakens.
The BoC, which is due to make a policy decision next week, has ruled out negative interest rates, so further easing would likely be a so-called “micro rate cut” of less than 25 basis points.
That’s an increment the central bank has not used since the target for the overnight rate became its main policy tool in February 1996.
When it comes to who’s buying homes in Edmonton, the realtor association said it is people who have managed to keep working through the pandemic.
Shortly after the first lockdown in the spring, buyer Jae Kim said that’s when his family wanted to move into a home with more space, but he was skeptical with so much uncertainty.
“(Our realtor) took us through the pros and cons, and we said, ‘If there’s ever a time, this might be… the time.’ And for us as a family, it did work out,” Kim said.
Kim said the overall experience was positive, despite the fact there was less to choose from with fewer homes for sale.
The association said that is probably due to sellers feeling wary about where the market was heading, but added consumer confidence grew compared to the spring, and that the good news in December will likely continue.
“Despite all the things that have happened in our region, I think we’ve seen a real stable real estate market and I think that Edmonton will experience stability in the future too,” said Tom Shearer, the chair of the Realtors Association of Edmonton.
“I don’t foresee a major spike or a major drop happening.”