From big bargains to bank breakers, Edmonton real estate stays stagnant
About 60 properties listed at less than $100K and 60 listed for more than $2 million
Search high or low in Edmonton's real estate market and you'll find similarly sized clusters of properties waiting to be sold.
On the low side, about 60 Edmonton properties were listed at less than $100,000 late last year.
At the other end of the spectrum, roughly the same number of properties were listed for more than $2 million.
In this sluggish market, the struggles can be similar for sellers, whether the home has a spiral staircase and room for a baby grand piano or is a one-bedroom condominium in an aging building.
"(They're) different leagues but it's interesting that some of the same pressures apply but in different ways," said Michael Brodrick, chair of the Realtors Association of Edmonton. "The whole market has been subject to these pressures on price."
But every real estate market is defined by opposing forces, which means if things are rough for sellers the possibilities are great for buyers.
"At the high end, you're getting very good value for your money. You're getting everything you could possibly want for a reasonable price," Brodrick said, adding that those looking to enter the market will find reasonable prices, too.
How low can you go?
The lowest end of Edmonton's real estate market, excluding mobile homes, is dominated by one-bedroom condominium units. At least two were listed for less than $50,000 in late 2019.
"If you think about the things that affect housing value, this all makes sense," said David Dale-Johnson, the Stan Melton executive professor in real estate at the University of Alberta. "They're old, small and generally speaking they're not close to the downtown core or hubs of business and retail.
"These are all factors that affect the value of any home, and these are no exception."
Such prices might evoke memories of the 1990s for long-time real estate watchers. And many units in that price range were built long before that, often in the 1960s and 1970s.
That brings risks for buyers, Dale-Johnson noted.
"If I were looking to buy one of these, one of the very first things I would be asking is, 'How well has the property been maintained? What's been replaced? What's going to need to be replaced in the near future?'"
A new heating system, roof or windows are all significant costs that might be passed on to individual unit owners if a building's reserve fund isn't big enough. A condominium association can impose a special assessment on owners to cover such expenses for the whole building.
Overall, the average condominium sale price in Edmonton in October 2019 was $227,802 — an almost three per cent increase over the previous year. But that average price was down about eight per cent from 2015.
"One of the very first things I would be asking is, How well has the property been maintained? What's been replaced?- David Dale-Johnson, University of Alberta professor
The drop in Edmonton condominium prices has been blamed on a number of factors: overdevelopment in the past and a flood of new units now entering the market; a flurry of conversions that turned rental units into condos; and investors who bought during the boom and now want to get rid of their properties.
"It's not a great market, to be honest," said Dale-Johnson.
"The city continues to grow but it won't grow as quickly until either the pipeline gets on stream or we develop other business activities to fill the void. Having said that, it's a great city, with good schools and affordable housing. People do like it."
Calgary had just two properties listed for less than $100,00 at the end of 2019.
Luxury properties still a hard sell
Climb the price scale and you'll find mansions on well-manicured lots, with majestic river valley views and plenty of granite and marble.
Multi-million dollar properties are relatively rare in the city.
"When you look at the Edmonton market versus a market like Vancouver, we still have space in which to build," said Brodrick from the realtors association.
"When you start getting into two-, three-, four-million dollars in Edmonton, there are still places where you can buy whatever lot you want and you can build whatever house suits your style."
The highest priced Edmonton property listed for sale late last year was an $8.5-million mansion that belonged to businessman Bruce Saville. The house has almost 20,000-square-feet of living space, an indoor pool and a wine room.
But it sat on the market throughout 2019.
"The right question for these properties is, 'Is the right buyer out there?'" said Dale-Johnson.
"Money isn't an issue for these households or individuals. It's more a question of whether the property suits their wants and needs. That said, if they're buying today, they know what's going on in the economy and they will negotiate aggressively."
And even the wealthiest sellers sometimes have to consider their options in a tough market, said realtor Wayne Moen, who has sold real estate in the city for about 45 years.
He noted one client trying to sell a luxury property outside of the city who had dropped his price from $1.5 million to $1 million but still couldn't find a buyer.
"I had to be frank with the client and said, 'If you had a good renter, I think you'd be better off renting,'" he said.
"You just try to counsel people. Our job, if we're going to call ourselves professionals, we have to actually tell people the way we see things and what the outlook is. You don't want to blue sky people, you have to tell them, you have to be aggressive with price selling and make sure your property presents itself well. Because you'll have lots of competition."