Edmonton Real Estate Statisics Blog - Rod Thompson's View Of The Edmonton
Market
EDMONTON, Sept. 1 /CNW/ -
August 2010 in Review
Even though sales are lower than we had hoped, it's the inventory that continues to be the story. Even though listings are down by 207 over the previous month, the numbers are well over what we listed the previous four years and that's a cause for concern.
Overall inventory is down under 9000 and I expect that to continue into the winter as sellers pull their homes off the market or just let them expire. This presents some opportunity as sellers will have less competition through the last quarter, but we have to also accept that there will be fewer buyers as well.
Most confuse the higher demand of spring with higher prices and that's simply not the case, so be careful thinking this way as it can potentially affect your final selling price. Expect prices to be lower in the spring and inventory to be higher than normal.
I do encourage sellers to stay on the market through the fall and winter even though it's frustrating, but buyers out during this period are usually very serious and ready to act quickly so don't miss that opportunity.
If you're selling today then it's essential you be more patient, and you have to continue to be the very best priced home in the very best condition if you want to increase your odds of selling.
He Who Sells First Sells For the Highest
Back when the market was moving upward there were new benchmarks in price being set daily. During that period you wanted to buy quickly and take your time selling. In fact, if you owned two homes during this period then you were likely experiencing equity growth in both homes. Today with markets receding you want to sell first and fast, and the last thing you want is to own two homes as both are likely losing value.
In the market today you're either leading or you following and what was true in a seller's market is not true in a buyer's market, so it's critical the advice you get reflect this. At SellerInvite.com we're selling in what are very difficult times because we understand this very simple principle.
Pressure to Sell Rests More on Sellers Shoulders
If one understands the role a REALTOR(R) plays then you'll understand that the pressure to sell always rests on the shoulders of the seller, sounds odd but it's true.
As a REALTOR(R) my responsibility is to provide real time information, professional advice and a medium to access buyers, but it's up to the seller to apply all of this. So the pressure on me is to ensure I do this in a professional manner and always act in the best interests of my sellers. Unfortunately, today I have to tell sellers some things they don't like to hear, but it's essential I inform them (sellers) of what they need to hear and not what they want to hear.
SellerInvite.com is successful because we make an extra effort to ensure our sellers completely understand the market conditions that exist and that they be prepared to work within them.
MLS(R) Not the Key to Selling
Imagine me a REALTOR(R) telling you that the MLS(R) isn't the key to selling your home. In fact, there are actually four keys to selling your home and MLS(R) is just one of them.
Factor 1: Sellers require a solid understanding of the market they exist in and that's where my job as a REALTOR(R) comes in.
Factor 2: With the awareness provided to you, you now have to appropriately price your home.
Factor 3: Once you understand the market conditions you exist in and have priced your home accordingly, you then need people to see the home. This is where the MLS System(R) comes in.
Factor 4: Now it's up to you. You need to be above all realistic and you need to be proactive and reactive to any changes in the market.
Put these four elements together and you have a pretty good chance you're going to sell.
Renters to Have Impact on Market
Just like in 2007, many sellers who were stuck with two homes or a home they couldn't afford and couldn't sell turned to renting. In fact, a lot of the reason our inventory shrunk through 2008 and 2009 was because many homes were tenant occupied. Today, we see a lot of those homes have come back to the market and again these sellers are having challenges getting them sold. So expect that throughout the fall and winter many homes will come off the resale market and enter the rental market.
This can be both positive and negative. Positive because it reduces the inventory and hopefully will encourage more buyers to act. However, it's negative because it can take away many potential buyers who have lost confidence in our housing market and gravitate toward renting, which can be both cheaper and easier.
New Home Builders Will Come Off High
If you read my 2010 Outlook you saw that I made it very clear that this year would be the year of the builder. With plenty of inventory, cheaper trades and empty lots plus an aggressive attitude, builders came out of the gates and took a lot of thunder away from the resale market.
However you can expect that to change. Demand is already slowing and as the resale markets adjusts and news of a weakening global real estate market plants seeds of fear into buyers, you can expect a correction here as well.
Overconfidence and High Inventories Threaten Prices
I've felt strongly for three years that prices of homes were simply too high, a product of overconfidence and government intervention. I've also felt that after 2007 prices would naturally correct downward to a more reasonable position, but with mud in my face along comes 2009. With pent up demand and plenty of inventory to choose from combined with record low lending rates and the government injecting billions into our economy, our real estate market regained its strength and unfortunately it again became a bit overconfident.
Today things are very different. The government has changed lending rules and interest rates are climbing, but more importantly that oversupply was completely overlooked. It's as if we were all in denial, but there's no denying that inventories are high right across the board, and there's no denying that prices are dropping and will continue to do so for some time.
It's also important to note that even though our average price is high, it represents a very small portion of what's on the market, the very best of what's on the market and like I said earlier this year, it will begin to move downward.
For further information: For further information: Author: Rod Thompson, broker/founder, SellerInvite.com (Edmonton); contact info: 780 994 9998 office, [email protected]
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