Published in March, 2022
Real estate trends can be a great indicator of what’s coming next for Canadian real estate. But every housing market in Canada is different, so national housing prices should be considered in context. For example, we’re seeing home values drop in Saskatchewan this month while they’re skyrocketing in Toronto and Vancouver. Trends differ within each province as well. Alberta is a great example. Prices in major Albertan cities like Calgary and Edmonton are going up, but they’re falling in smaller secondary markets. So beware of the catch-all forecast for Canadian real estate. National housing prices might not reflect what’s going on in your area, and looking to local experts offers depth and context for your homebuying journey.
Will the housing bubble pop in my market?
With bidding wars and supply shortages affecting resale and new builds, many buyers are wondering if the housing bubble will pop anytime soon. The upward trend in median prices and increased demand makes real estate intimidating for anyone looking to buy. How can you use local trends to forecast what will happen next in your area?
“I’d focus on the number of investors in a particular market, the growth of rental rates and a potential increase in interest rates to determine if a particular market is frothy and vulnerable to a sell off,” says Natalka Falcomer, President of OJOHome Ltd.
“The areas of concern are the ones where you see more investor activity; this is in secondary markets that are increasing in prices at eye-popping rates.”
We’ve compiled insights from three agents based in Ontario and Alberta to give you a sense of how local trends inform what you’ll see next in your market.
Selena Cheung: Greater Edmonton Area
Selena Cheung (BBA, CPA-CMA), a member of the OJO Select Network, has been a top 5% REALTOR® since 2009. She is also a real estate investor, professional accountant, educator and business builder. Here are her market insights for Greater Edmonton.
Greater Edmonton market insights
- Greater Edmonton’s average home price rose substantially in February 2022 to around $433,672. The average home price is even higher within the City of Edmonton itself. In January, the average home price was $376,000 –– that’s a whopping 14% increase within less than a month, Cheung says.
- For single detached family (SDF) homes, the average price is inching upwards close to $500,000.
- For condominiums, the average price in Edmonton is heading to $225,000.
“The current inventory for single family dwelling is only available in 1 ½ month supply which is why single family prices have increased so much, whereas condos are available in a 5-month supply. In this sense, demand and supply are simultaneously driving prices. For condominiums the market is more balanced and still in favour of buyers.” -Selena Cheung
Advice for first-time buyers in Edmonton
As a first-time homebuyer looking for lower priced homes, be prepared for the seller to receive multiple offers. Cheung recommends being strategic: “Your offering price might need to be higher than the asking price. I’ve seen the price of listed homes increase, especially for pre-constructions and newly built homes. We often see increases of $5000 – $10,000 per week for these types of homes, and properties are pending or selling incredibly quickly.”
Want to win a bidding war? If you’re bidding along with multiple other offers, Cheung recommends keeping your offer simple, and shortening the conditions to 5-7 business days when you can. You can also use conditions to protect yourself as a buyer. “Buying a home is a very emotional decision but do your best to remove as much emotion from the decision-making process as possible. If you miss your first offer, don’t worry. As we say, the deal of the decade comes around about once a week.”
Marko & Mike Realty: Edmonton and surrounding areas
Marko & Mike Realty are members of the OJO Select Network with Realty One Group Insider based in Leduc, AB. They service the Greater Edmonton Area for residential, recreational and country residential properties. Here’s what they’re seeing in Edmonton and the surrounding area.
Edmonton market insights
The Edmonton market is very active at the moment and a shortage of listings is causing a spike in sold prices, and decrease on days on the market. “The Province of Alberta just balanced the budget for 2022” say Mike and Mark. ”Jobs are plentiful in the region, low taxation rates and lower cost of living are the main reasons we see for migration to the province. The Edmonton area still has some of the lowest costs of ownership in all of the major metropolitan cities in Canada, and we see many out-of-province buyers actively looking in the Edmonton area”. Here are some more trends they’re seeing in 2022:
- An increase in single family home sales: There were 1513 single family home sales in the Edmonton Board Zone in February 2022, compared to 1400 home sales in February 2021.
- Home prices rose substantially: The average sold price of a single-family home in February 2022 was moving towards $450,000, while the 2021 average was $402,772.
- Shorter number of days on the market: The average home was on the market for 46 days in 2022, compared to 56 days in 2021.
Advice for first-time buyers in Edmonton
- Get pre-approved by a mortgage broker or your bank so you are shopping in the right price bracket. “Regardless of price bracket, desirable homes are moving quickly in this market so you can’t afford to waste time looking at homes slightly above your budget. Buyers need to be agile in the buying process,” say Marko & Mike.
- Choose a reliable REALTOR® and remember that as a buyer, our services are complimentary. Commissions are always paid for by the seller of the home.
- Have your REALTOR® complete a CMA (Comparative Market Analysis) on the home you are interested in purchasing. This will allow you to make a competitive offer and not overpay for your home.
“Did you know that your bank does a similar exercise after you are pre-approved for your mortgage? The banks do this to ensure that you are not overpaying for the home and putting yourself under water on the mortgage at the time of purchase. In 2021, a significant percentage of deals in our market fell through due to financing issues.” – Marko & Mike Realty.
- Shop around for the right representative. Buying a home can be exciting, overwhelming and scary all at the same time! It’s an enormous life decision and commitment to own a home. Your REALTOR® is there to help protect you through the process, offer guidance, support and advice on the best ways to proceed with the purchase of your home. Interview a couple of professionals to find yourself a good fit for your personal style, schedule and personality.
Jennifer Parsons: Ontario
Jennifer Parsons is a real estate agent, a member of the OJO Select Network and REALTOR® at StreetCity Realty Inc. in Sault Ste. Marie, Ontario. Born and raised in Sault Ste. Marie, Parsons operates her business on the pillars of respect and transparency. Here are the local trends she’s seeing with an application to the Ontario market as a whole.
Sault Ste. Marie housing market insights
The average cost of owning a home in Sault Ste. Marie is far below the average in Ontario. In January of 2022, the average cost of a home in Ontario was $998,629. In Sault Ste. Marie, the average cost of a home was $296,281.
- What does the market look like for a would-be buyer in Sault Ste. Marie? “We are seeing similar trends to the rest of the province, just on a smaller scale.” says Parsons. “Whether you’re a first timer, investor, retiree or someone who is now able to work from the comfort of your home, the Sault is a fantastic and viable option for any real estate buyer.”
- High vacancy rates provide opportunity. According to CMHC data, the approximate vacancy rate in Sault Ste. Marie as of October 2021 sat below 2%, providing an incredible opportunity to real estate investors to jump in and add some great cash flowing properties to their portfolios.
- For families looking to purchase in the Sault, expect to pay between $350,000-650,000 on a detached three-bedroom, full two-bathroom home that is move-in ready in established neighbourhoods.
Advice for first-time buyers in Sault Ste. Marie
Surrounded by Lake Superior and Lake Huron, the Sault Ste. Marie and Algoma Region offers an abundance of lifestyle options.
“On top of having some of the most affordable housing in Ontario, we also capitalize on having the most impressive sunsets in the summertime, and the best ski hills and snow mobile trails in the winter. If you’re considering a move, consider Sault Ste. Marie and Algoma Region. Those looking to get away from the fast-paced hustle and bustle of large metropolitan cities in the Greater Toronto Area will appreciate the amenities that the Sault and surrounding area have to offer. Owning a home, owning a cottage, and planning for retirement can be realized in northern Ontario.” -Jennifer Parsons, StreetCity Realty.
- Expect to pay between 20-40% over the asking price, get your pre-approval ahead of time and be prepared to submit aggressive offers.
- Work with a local real estate agent that can understand your wants and needs in a home, that has a good working relationship with their local colleagues and understands market trends based on your long-term goals.
- As an investor, there is ample opportunity to capitalize on long-term family and student rentals. Sault Ste. Marie is home to Algoma University and Sault College, which are both seeing increases in international student enrollment on a year to year basis.
- Education opportunity abounds in Sault Ste. Marie. There are three public high schools and one catholic high school that offer grade 7/8 programming. For elementary school kids, the Sault offers 15 public schools, two French immersion public schools, six Catholic schools and two French immersion Catholic schools.
Looking for local advice for your home search?
The OJO Select Network is Canada-wide, with expert knowledge pertaining to each market. Whether you’re searching for a home in an urban centre like Toronto, or Vancouver, or looking to buy in a small town or rural area like Elk Point, Alberta, or Dundas, Ontario, we’re here to help.
Ready to get started on your home search? See what’s on the market near you and to connect with your local agent at OJO.ca.
