So there’s been a lot of talk lately about how bad the real estate market has been. But I have to ask… how bad have things really been? I mean, homes are selling. I think it’s just the size of the inventory that’s been the issue. So let’s look at some real numbers. Regardless of the cause, I’m getting tired of the “sky is falling” attitude of the press. I recognize that their job is to sell papers, but they can at least be realistic!

First, I would like to point out my problem with recent reports and studies. 2006 and early 2007 were insane real estate markets. The Edmonton market was out of control, and was not typical for the area. So it’s not really fair to compare the current market to those 2 years. It would be like comparing the golf game of your local golf pro to Tiger Woods. Of course there’s no comparison… but the local pro is still a pretty darned good golfer! I think that’s what we’re seeing in the market. Let’s stop comparing to Tiger.

Second, I want to see the long term history of the market, and see how we fare against past “normal” years. So I’m going to extract the # of sales, #of new listings, and sale-price vs. list-price ratios to see how we fare.

1. Sold Listings

Going all the way back to the year 2000, the average number of Edmonton home sales in July has been 1098.55 homes. The peak was in 2006 (who’s surprised by that!) at 1,356 and the lowest was in 2000 at 818. The second lowest was last year (2007) at 1013.

This year… 1,177 homes sold in July. That’s the second highest July Edmonton real estate sales volume in recent history, and well above the average year.

Conclusion: Edmonton homes are selling well.

2. # of New Listings

Really, the only people who care about how many homes are coming onto the market are analysts and Realtors. The rest of you don’t really care, because a listing means nothing to you unless you’re buying it or selling it. But we care, and since many of my “anonymous readers” are Edmonton Realtors… I figured I’d talk about it. Just remember you heard it from me first!

This July Realtors listed 2,335 homes. That’s the second highest listing level in recent history. The highest was last year, at a whopping 3,339 homes. Ouch. No wonder last July sucked so badly. The average number of listings in July since the year 2000 is 1,812.78 homes.

So we’re high. Very high. That’s where the problem is. We have a ridiculous number of homes on the market. So while sales are decent, the number of listings is simply eclipsing it. If you want to sell newspapers you talk about the crazy, not the normal right?

Interestingly, our sales to listing ratio (number of sales vs. number of new listings) is still rather hideous. Mainly because of how out of control the invenotry has gotten. For every 100 homes that came onto the market in July, there were 50.4 sales. (I was part of the .4 sale… it was an ugly real estate transaction!) The average ratio for the millenium is 65.89%. 2006 saw 87.54% (WOW!) and 2007 saw 30.33% (OUCH!).

Conclusion: We have too many listings. but at least we’re slowing down on the listing speed.

3. Sales Price vs. Listing Price

So how bad of a bath are we really taking? How badly are sellers really discounting their homes to get them sold? We’re hearing a lot about how badly people are getting beaten. So let’s look at the numbers to see just how terrible the abuse is.

The average sale-price vs. listing-price ratio for the month of July is 97.466%. The best was again 2006 at 100.38% (HOLY SxxT!!) and the lowest… well, it’s actually this year. Oh oh. We are selling homes for 96.09%, which is the lowest of the new millenium. The average list price right now is $349,010.00 and the average sale price is $335,380.00 This means that the average seller is discounting their price by roughly $14,000 to get a sale.

Compared with the average over the last 9 years(97.46%), and we’re only OVER-discounting by about $4,500. really, that’s not terrible. Especially not when you look at the change in price since 2000 ($125,000 quickly became ($335,000)

So in conclusion, I would like to point out that things aren’t really as terrible as the press would lead you to believe. They’re not great. People aren’t dancing in the streets like they were in 2006. but hey… it could be a lot worse. We could be Americans.

John Carle
www.knock-knock.ca

By the way… you might be interested to know that the average sale price in July was only $237 lower than it was in January of this year. That’s less money than the car payment on the average Honda. Why are we gettting so worked up about it? the sky isn’t falling… it’s barely even moving!