A couple of key factors behind this boost in sales are, of course, the hot Alberta economy and those good ol’ historically low interest rates – which make home ownership a reality for many people, especially first time home owners and former renters.
However, another factor that is boosting home sales appears to be a slight dip in average selling prices, which further makes ownership affordable and attractive. The average price for a single family home fell 2.86% in June to $379,409, while condo prices dropped about 5% to $231.582.
So what do these numbers foretell about the summer and fall? According to ATB Financial economist Dan Sumner, the road ahead should be marked by stability and balance, instead of volatility.
“A strong Alberta economy and an improving labour market means that prices are unlikely to fall by much,” Sumner stated, “while the fact that valuations are near the upper end of what many homebuyers can afford means prices have limited upside potential, especially with mortgage rates set to rise eventually.”
For home sellers, this means that there’s no need to panic – there’s no “bubble” here that appears on the verge of bursting, and you shouldn’t expect to wake up next month and find that the value of your house has sunk. So it’s no time to panic. However, it does mean that there is going to be more competition, given that more homes are now within the budget of more home owners. So that means preparing, staging, and marketing your home is VERY IMPORTANT if you want to realize full market value, and not get “damaged” by the increased competition.
For home buyers, this means that it’s a very good time to jump into the market and, when you find the right house, make a competitive offer. As Sumner states (and as everyone knows), interest rates will rise – they can’t really go in any other direction! – and even if home prices stay stable, even a 1% spike in interest rates will add tens of thousands of dollars over the life of your mortgage. Why pay that money to your bank or lending institution, when you can keep it in your account – or better yet, spend it on your new house (or maybe that amazing golf vacation you’ve been dreaming about...).
As a Realtor® who specializes in serving the Edmonton marketplace, my job is to make these local statistics work for my clients – whether they’re buying or selling. Give me a call at 780-709-0811 to discuss your unique real estate plan. Remember, I’m here to help!