Thats Edmonton Information About Edmonton, Alberta

Readers Predictions for 2011

On Tuesday we posted a poll asking our readers what they thought would happen with the real estate market in Edmonton. We've had 95 responses so far and they keep coming in. It seems to me our readers are more optimistic than in the past (certainly more so than the last poll we had in July).

Here are the results:

1. At this time next year the average residential sale price in Edmonton will be:

• 43% said higher
• 36% said lower
• 20% said about the same

So 63% of readers think prices will be the same or higher at this time next year.

2. The total sales for 2011 will be:

• 40% said higher than 2010
• 30% said lower than 2010
• 29% said about the same as 2010

3. Some economists have said Alberta's economy will grow more in 2011 than any other provice. As a result, our real estate market will:

• 64% said we will do better than the other provinces
• 28% said we will do about the same as the other provinces
• 5% said we will do worse than the other provinces

So I guess that means even if we can't agree on what the market will do, we can agree that Alberta will at least do as well, if not better than the other provinces next year.

4. The 2011 spring market will be:

• 31% said good
• 31% said average
• 27% said below average
• 11% said hot hot hot!

5. In 2011 mortgage rates will:

• 48% said stay about the same
• 45% said rise
• 3% said drop
• 2% said skyrocket

The interesting thing is, although the answers to the questions were middle of the road to positive, the comments were almost all negative. We asked "Do you have any other thoughts on what will happen to the real estate market in Edmonton in 2011?" Here is what our readers had to say:

• same as what will happen everywhere else in Canada: not goodThe arena may spur some commercial development in downtown Edmonton but we won't see that announced until the end of 2011 and nothing started until the arena footings are in and investors can see something tangible - perhaps early 2013.
• The cost of new construction on the outer edge is still cheaper on greenfield than on brownfields so the city will increase the cost of urban sprawl to encourage developers to infill.
  New construction will be on smaller lots with less "real" amenities. The "features" of new homes will all be fit and finish, glitzz and glamour rather than long term features (garages, finished basements, extra bedrooms, landscaping) that really add value to a resale down the road.
• It will grow slowly. Not extreme...but steady growth.
• I believe that Alberta's real estate market will continue to decline next year due to the following reasons:
  1. Commoditites will do much better next year, partly due to continued demand outside of the USA (namely China), for our natural resources...
  2. This will cause greater inflation, (namely demand pull). This in turn with a stronger dollar will cause interest rates to rise....
  3. I strongly believe that there are a majority of people out there who have overextended themselves and you will see this begin to bite in a big way.
  4. This however will not have much effect to the overal employment figures in Alberta as companies have learnt to operate in a much more efficient manner. I also believe that the majority of the construction/ upgrading has already been completed/ accounted into next years growth.
  5. Construction companies will continue to build at full speed in order to repay thier loans, as these loans will beginning to expire next year and the cost of servicing that debt will increase, due to higher rates. This is my 2 pennies worth!
• Looking for more "normal" market - ie 2005-06.
• Keep up the great work
• If builders can stop creating a glut then prices will recover. Otherwise, we're screwed.
• Demand for workers will tend to shift people to Alberta once again. Once people believe the bottom of the market was reached and the swing back up has momentum (even if the speed is not fast), then the trade-up market will get back on track. I don't see this happening until mid-year, but you never know and it could happen in the spring.
  Condo sales will heat up, especially in the mid and high level marketplace as aging suburban residents who have been putting off the move will want to respond to the improving market conditions by trading up and even down.
  The first time buyers market will also improve as jobs increase and workers move in. This will be strong even at the start of the year as people take advantage of record low interest rates.
• I think the excitment will even be lower then the past few years. People just don't care like they did in 2006 and 2007. Users on blogs might be higher but thats just the realestate market breaking through online. Real estate will go back to being a home not a money making machine.
• Edmonton will muddle through the next two years better than most cities. It's 2013 and 2014 when things get interesting.
• 2011 should be a repeat of 2010 with the exception that prices will dip by at the most 10%, made evident in first half of year. This should bring the resale prices at a bottom. Finally!
  Sales should remain put.
• Lots of inventory, an average number of buyers with prices trending lower than the prices at the same time in 2010.
• It will be considered stable as compared to other provinces , but the slow decline in prices will continue due to mortgage rule changes in Apr 2010. When I talk to people in mortgage business, they say that the difference in max mortgage approval is around 50K to 100K less now than before Apr 2010. That has to have an effect somewhere. Its already showing because people are buying smaller houses more than before.
• Newer neighborhoods that mix condos and higher price point houses may be in for a bit of a shock if cash-poor condo owners have to start renting out at reduced prices.
• It will be another good year for sellers. Last spring there were only some owners bought in 2007 peak started to list their properties. This time almost all or most 2007 peak buyers would list them. Thus price should not go higher too fast due to the inventory. On the buyers side, this time the real buyers who have been waiting for 2~3 years would step into the market. For these buyers, there is no time and room for them to waite further longer. Most lost their patient already.
• High listing and high sales would be a main tone for 2011!
• What is your prediction?

Thanks to everyone who participated, the results are very interesting and the comments are terrific. We will have our predictions for 2011 in the near future.