As days become noticeably longer and winter temperatures lose their bite, we can look towards spring and summer which is the busiest time for the Edmonton real estate market.
While not all experts agree on the outlook for Edmonton house prices, the general consensus among market forecasters is that we can expect a return to relative normalcy. On the heels of what was a record-setting year in 2022, it’s not surprising that the frenzied pace of home prices and sales is slowing to a more normal pace in large part due to the higher cost of borrowing.
What is the ‘new normal’ for the Edmonton real estate market?
When we look back on the market over the longer term, the red-hot market we saw in 2021-2022 will likely be a blip compared to several years of steady, sustainable growth.
As the Edmonton real estate market shifts to a similar pace we saw pre-pandemic, there are a few key differences now. Most notably, the Alberta economy is in a much stronger position than it was back then.
According to a recent economic forecast by ATB Financial, Alberta’s gross domestic product is expected to grow by 2.8% in 2023. This growth is driven in large part by strong migration and a relatively steady energy sector.
Compared to other provinces where the economic outlook isn’t as rosy, this bodes better for the Alberta real estate market overall.
Will Edmonton home prices fall?
The outlook on Edmonton house prices varies depending on who you talk to. While there’s no way to know for certain what impact the higher cost of borrowing will have on Edmonton home prices, experts generally agree that the Edmonton market will fare better than other cities across the country.
Some forecasts predict that the price of single family homes in Edmonton will drop from the record high of $500,480 set at the close of 2022 to $486,000 by the end of 2023. Other reports suggest that the strong economy and low home inventory could fuel a modest increase in single family home prices somewhere around the 1% range.
Even if house prices in Edmonton do not see a major drop this year, the market still represents some of the best value in the country. Even in Toronto where house prices are expected to drop the most, the average house price there will still remain over $1 million.
Semi-detached homes and Edmonton condos will be excellent, affordable options for first-time home buyers especially for those who are migrating to the province from other cities where they have been priced out of the market completely.
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Is 2023 the year to buy or sell a house?
I always say that the reasons why people need to buy or sell a house exist regardless of what the market is doing. Of course many people have been holding their breath a bit, waiting to see what the Bank of Canada will do next. With rate hikes seemingly on hold for the relative future, we can expect to see people making moves again.
As everyone adjusts to the new cost of borrowing, we can expect to see shifts in buying trends. Buyers looking to move up will need to adjust their expectations both in terms of what they can afford and what they can expect to get for their current home. Affordability will be a major factor and we can expect to see more people looking for the best bang for their buck, with more folks considering semi-detached homes and condos.
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Heading into spring, the outlook for the Edmonton real estate market is positive. While the memory of the hottest year in the Edmonton housing market’s history is still fresh in our minds, it will be important to frame this adjustment back to a normal pace as just that: a return to normal. The Edmonton market continues to offer excellent value across all segments, particularly for first-time buyers.
Are you a first time home buyer with questions about buying a home in Edmonton? With 20 years of real estate experience, Wally has helped first-time buyers jump into the Edmonton real estate market.
From mortgage pre-approval tips to what to expect at closing, Wally will guide the process at every step. Call/text him at 780.238.7384 to discuss your home buying/selling needs.