January 2024 Edmonton Real Estate Market Update
It's a New Year, but what does that mean for the 2024 Real Estate Market?
2024 has finally arrived, and with it comes your Monthly Edmonton Real Estate Market Update! Often, this time of year, I get asked by people, "What do you expect the real estate market to do in 2024?" The best way to tell is by looking at what happened in 2023, and that will give us clues in terms of what we can expect in 2024.
So, if we go back even farther than 2023, say mid-2022, you may remember that interest rates were rising dramatically, and that really put the curb on our real estate sales, particularly in the fall and winter, things got really slow. Myself, and I think most people, were expecting 2023 was going to be a really tough year in terms of real estate sales in the Edmonton market, BUT, guess what happened!
Come around Spring 2023, the market really heated up, and we saw really strong sales at the end of the year; we ended up with 22,662 sales, which is down about 8% over 2022 and about 10% over 2021. Keep in mind that 2021 and 2022 were really strong sales years in terms of the real estate market because, of course, we had the Covid effect and super low-interest rates, so those were banner years! The fact that we were down a little bit from then is certainly not too surprising. As I said, I'm probably more surprised that the sales were as strong as they were.
Now, sales are down; does that mean prices have gone down too?
Well, actually, no. Most prices have not gone down, and again, it is a little dependent in terms of your property and location; however, according to the MLS Home Price Index, single-family homes were up 3.5%, apartment condos were up 5.2%, and townhouses were up 6.5%.
Now, that's the first time we have seen those go up in price in quite a while. I think the reason that we are seeing more gains in the apartment condos and town homes is that, at least from my experience, a lot of people moving here from Ontario and B.C are first-time buyers, and those are the properties they are buying because they are affordable, and so we are seeing more demand for those types of properties.
So, again, we are seeing some slight increases, but nothing major. In fact, if you look at this graph, which I found interesting, you can see there is a bit of fluctuation in terms of earlier-in-the-year prices. Still, over the last three years, if you look at the end of the year in December, there has been very little variation in terms of the price, so it has been fairly stagnant.
So, what is my expectation for 2024?
One of the things I always look at is the inventory levels. Are the inventory levels going up or down? The number of homes selling is one side of the equation, but we also have to look at the inventory, so we finished off the year at the end of December with our inventory level down about 7% over where they were at the same time last year. It's not significant; it's a little bit lower. We are expecting maybe we're going to see a little bit of a softening in interest rates in 2024, but I don't think it's going to be significant. Not enough to really make a big difference in the market.
My expectation is we'll probably see sales similar to what they were in 2023, perhaps a little bit more, and again, coupled with slightly lower inventory levels, I do expect we'll probably see some slight price increases again, probably similar to what we had this past year.
Now again, price increases are averages, and depending on where you are, some areas will have more demand than others, so the price of your home and the demand for your home can certainly vary depending on where you are.
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