This article contains my personal REALTOR® opinions, analyses, and forecasts for the Greater Edmonton Area real estate market in 2013. [For further background and details on my theories used and assumptions made for generating these forecasts, please refer to my December 22nd, 2010 blog (2011 Market Forecast)].
The purpose of generating this forecast is to predict how property values will change (upward or downward and by what %) in 2013 from their current 2012 values. While there are numerous contributing factors changing continually throughout the year, my forecasts generated use current market conditions while analyzing sales data over the past six months. In addition, for the first time I will analyze the Northeast Region of Fort Saskatchewan, Gibbons, and Bon Accord.
[For my forecast summary, refer to ‘Table A: Kelly Grant’s Forecast of 2013 Property Value Change vs. Location and Property Type’. P6MSR is the ‘Past 6 Months Sales Ratio’ and EMWAL is the ‘Estimated Months’ Worth of Active Listings’. Finally the ðPVF (2013) represents ‘Change in Property Value Forecast for 2013’.]
Firstly, below is my summary ranking of Greater Edmonton Area divisions from best to worst of forecast change in average property value for residential properties (i.e. houses, non-condo attached, duplexes, etc.):
- Sherwood Park (ranked #1 best at +7.0% property value increase predicted for 2013)
- Southeast Edmonton (ðPVF (2013) = +6.3%)
- St. Albert (ðPVF (2013) = +5.8%)
- Leduc and Beaumont (ðPVF (2013) = +3.6%)
- West Edmonton (ðPVF (2013) = +3.4%)
- Southwest Edmonton (ðPVF (2013) = +3.3%)
- Northeast Edmonton (ðPVF (2013) = +3.2%)
- Northwest Edmonton (ðPVF (2013) = +3.1%)
- Stony Plain and Spruce Grove (ðPVF (2013) = +2.9%)
- Fort Saskatchewan, Gibbons, Bon Accord (ðPVF (2013) = +1.8%)
- Central Edmonton (ranked #11 worst at ðPVF (2013) = +1.5%)
My overall residential houses 2013 forecasts for the Greater Edmonton Area is +3.5% and the Greater Calgary Area is stronger at +6.8% (both cities with a reasonable 2 to 3 months’ worth of active listings on the market).
Secondly, below is my summary ranking of these same areas from best to worst of forecast change in property value for condominium properties only (i.e. apartments, townhouses, carriages, etc.):
- Sherwood Park (tied ranked #1 best at +2.0% property value increase predicted for 2013)
- St. Albert (tied ranked #1 best with ðPVF (2013) = +2.0%)
- Southeast Edmonton (ðPVF (2013) = +1.0%)
- West Edmonton (ðPVF (2013) = +0.5%)
- Northwest Edmonton (ðPVF (2013) = +0.1%)
- Southwest Edmonton (ðPVF (2013) = -0.4%)
- Central Edmonton (ðPVF (2013) = -0.5%)
- Northeast Edmonton (ðPVF (2013) = -1.0%)
- Leduc and Beaumont (ðPVF (2013) = -2.0%)
- Fort Saskatchewan, Gibbons, Bon Accord (ðPVF (2013) = -3.1%)
- Stony Plain and Spruce Grove (ranked #11 worst ðPVF (2013) = -4.2%)
With the high current supply my overall 2013 condominium forecast for the Greater Edmonton Area is a stable, almost balanced market at -0.2% (with just over 4 months of active condo listings) and much improved +6.3% in the Greater Calgary Area (with just over two months’ worth of active condo listings).
For acreages within an hour of the City, both Edmonton (-2.1%) and Calgary (-3.7%) appear headed for drops with between 7 months to over a year worth of active listings (high supply of unsold listings) on the market.
As for the commercial properties for sale in the value range of $0.2M to $5M, despite the 2012 evidence of commercial property value increases, with a sizable number of unsold listings I expect the Edmonton market to drop roughly about 2.2% in 2012 with even higher drops coming in Calgary (10.9%) and Vancouver (12.2%).
Next, summary of forecasts: how did my 2012 forecasts match up with the actual 2012 change in property values? Table B below illustrates my Greater Edmonton Area predicted vs. actual property value changes:
My top 5 best 2012 residential forecasts of predicted vs. actual margin of error were as follows: St Albert; Greater Calgary Area; Sherwood Park; Northwest Edmonton; and Southwest Edmonton.
My top 5 best 2012 condominium forecasts of predicted vs. actual margin of error were as follows: Central Edmonton; Sherwood Park; Southeast Edmonton; Greater Calgary Area; and the overall City of Edmonton.
Overall my residential and condominium predictions for 2012 were conservative relative to the actual market performance in many areas. Residential housing in both Edmonton and Calgary (and surrounding areas) appear very strong for 2013. As for the commercial properties in Calgary and Vancouver, despite the better than expected sales performance in 2012, based on current market conditions of between 2 to 3 years’ worth of active listing on the market I am still predicting sizable average price drops in 2013 to be continued in future years. The fact that commercial real estate prices in Calgary and Vancouver did not drop in 2012 could be suggesting that a ‘market bubble’ is now developing (meaning commercial Buyers in these areas should be very careful). The same advice holds true for acreages located within an hour of Edmonton and Calgary – my estimate: an average 2% to 3% value drop in 2012. As for buying condos: investors need to be somewhat careful – a few areas will likely see price drops in 2013.
In closing, to help the reader put many of the figures in perspective: a 1% price decrease on a $350,000 property is only $3500 so small % changes up or down in most cases are not significant vs. the overall value.
Again I will take this opportunity to wish everyone (my past and future clients) a safe, prosperous holiday season and Happy New Year!
[Article written and ©2012 by Kelly Grant, M.Eng., ABR, NCSO, P.Eng. - REALTOR® at MaxWell Realty in Edmonton, AB]
Disclaimer: for those readers not currently represented by another licensed REALTOR®, to obtain more information on this topic and / or if you are serious about selling or buying in the Greater Edmonton Area, call Kelly at 780-414-6100 (pager) or send Kelly an email to SOLD@KellyGrant.ca to schedule a confidential appointment.