A combination of low mortgage interest rates, fewer listings and pent-up demand may have led to a spike in single-family home sales in St. Albert last month, according to a local broker.
"The market as a whole has been active since June for condos and single family. The fact that there's a low inventory has really helped to push these sales," said Shandrie Lewis, owner and broker at RE/MAX Professionals in St. Albert.
Sales for single-family homes increased by 87 per cent in September compared to last year, the Realtors Association of Edmonton (RAE) reported in their monthly housing bulletin.
While single-family home sales jumped, there wasn't much of an uptick in pricing. Single-family homes sold at a median price of $349,000 compared to $347,500 the year prior.
Lewis said this is a shift from the spring when the early onset of COVID-19 saw fewer people buying and selling their homes. All that pent-up demand from March, coupled with low inventory, helped kickstart a late spring market through summer and fall.
"It's becoming a very balanced market, where a seller has a really good shot of selling right now, and a buyer can still get a very reasonable price on a home," said Lewis.
Mortgage rates have also dropped to historic lows with most major banks and mortgage brokers offering five-year fixed rate loans at less than two per cent. More buyers keen to get into a single-family home may be taking advantage of this, but so are investors, Lewis said.
"That is remarkably low, so I think it is pushing a lot of people into the market if they can qualify," she said. "Then there is a flip side where people can't afford homeownership anymore and so they are looking to rent. So it's a good market for any investor to be getting into."
Condo sales also saw an increase with six sales in September, compared to five the year before. Those sold at a median price of $249,500, a 34-per-cent increase from $185,000 last year. While surprising, this increase could be tied to recent condo sales at the Botanica development on Boudreau Road, Lewis speculated.
Word of advice? Sellers should be careful to make sure they're pricing it correctly to take full advantage of the current market, she said.
"Anybody who overprices right now is actually shooting themselves in the foot because we don't know how long this window will last," she said. "If you overprice, then you get into the game of doing price reduction after price reduction, and suddenly you have a stale listing. It's better to price it correctly at the beginning."
Buyers should also make sure they're pre-approved with a mortgage broker before they start looking at homes, so when their realtor sees something that fits their criteria, they can go look at it right away and write an offer, she said. In the Edmonton area, single-family homes averaged 47 days on the market, a twelve-day decrease from last year.
"The good properties are going fast, and they will lose out."
Association chair Jennifer Lucas said the uptick in sales is consistent in a majority of municipalities across the board. Sales in the Edmonton region showed significant growth overall with a 35.55-per-cent increase compared to September last year, according to RAE's report.
What's been interesting to see is how the consumer's concept of a home has been redefined with the pandemic, she said.
"We saw people in condos saying, 'I think I want to go towards a single-family home, I'm not feeling comfortable with shared community living.' We saw people in single-family homes saying, 'I want an acreage because food security is something I've never thought of before.' Those are all comments we heard from people," Lucas said.
Slower housing markets are expected when temperatures drop, but there are still a lot of unknown factors at play with the pandemic, she said. Real estate is directly tied with the health of the economy, so employment rates, government support and mortgage deferrals all play a role.
"We'll just have to see how all these other factors that we didn't consider at the beginning of the year will play out."
