Melanie MoralesA lot of people want to know if the Edmonton housing market is friendly to buyers.
At the moment, Edmonton is a place to buy a house if you want affordable and safe housing choices.
According to the Edmonton Housing Market Report by WOWA.ca, January 2023 had the average price of a house in the city showing an overall 5.4% year-over-year decrease and a 2% month-over-month decrease.
Want to learn more? Let’s take a closer look at the current state of the housing market, the best locations to buy real estate, and the factors to consider when buying a house in Edmonton.
What is the housing market like in Edmonton?
The housing market in Edmonton is expected to be balanced in 2023. The supply and demand for properties in the city are close to equal, so investing in the real estate market is relatively safe.
However, as the market stabilizes, house prices are predicted to rise by the end of 2023. Based on the data we gathered from WOWA, we created a table below that shows an overview of the housing market in Edmonton.
Based on the data above, WOWA states that the average housing price for a single-family dwelling had a 1% year-over-year decrease and a 0.6% month-over-month increase.
A townhouse’s average price shows a 1.7% year-over-year increase and a 1.6% month-over-month decrease. On the other hand, the average housing price of a condo apartment shows a 4.6% year-over-year decrease and a 4.4% month-over-month decrease.
The table below shows Edmonton’s average housing price compared to other cities in the Greater Edmonton Region. We gathered the data below from Zolo’s Edmonton Real Estate Housing Market Report for January 2023.
As you can see, Edmonton ranked the 6th most expensive out of the cities in the Greater Edmonton Region.
This might be over the budget for some. However, based on the turnover rate (homes sold over listings in the last 28 days) from Zolo, we can say that many homebuyers still prefer buying a house in Edmonton.
Compared to other cities in the Greater Edmonton Region, Edmonton ranked 8th out of the 10 cities with the highest turnover rate.
Is it a good time to buy a house in Edmonton this 2023?
For many, 2023 may be a good time to buy a house in Edmonton. Based on the data provided above, investing in property here is only moderately risky for the year.
You see, even if the housing prices are at a midpoint, the buyers’ demand and turnover rates softened in 2022.
Nonetheless, the real estate market is volatile, and 2023 is just starting, so the price trends can still change significantly.
If you find a home that suits your requirements and preferences, we recommend buying it as soon as you can. This is because the average housing prices and interest rates are predicted to rise from 1% to 3% at the end of 2023.
In the table below, we’ll show the difference between buying a house in January 2023 versus buying later when the prime interest rates increased by around 1.3%.
The slight difference in prime interest rate can cost you $107,468 more in interest paid.
That’s why getting into the housing market earlier this year is recommended. Through this, you can pay less for interest costs.
Where are the best places to buy real estate in Edmonton?
Whether you want to invest in real estate or find a forever home, it’s best to know where to look for it.
Listed below are some of the popular neighborhoods in Edmonton, together with the average housing prices of listings in that area.
Out of the 20 popular neighborhoods in Edmonton, MacEwan offers the most affordable, while Haddow features the highest average housing price.
Remember that the real estate market in Edmonton cooled down in December 2022 and January 2023, however. Moreover, the listings and sales slowed down due to the holiday season.
Thus, home prices in Edmonton are likely to rise in the following months but at a more moderate level. Apart from that, interest rates may increase, but with more listings, you can generally expect the prices to settle.
What are the things to consider when buying a house in Edmonton?
Are you ready to buy and maintain a house? Before you start searching for a house, you have to consider the state of the housing market, down payment, house inspection, as well as your budget and lifestyle requirements.
Here are the factors you should ponder upon before making the final choice.
Budget
The overall budget for buying a house includes more than just the actual house pricing, interest rate, and mortgage rate. You also have to factor in the property tax as well as the cost of the home inspection, appraisal, real estate lawyer, utility hook-up, and moving services.
The transition costs can surprise you if you don’t consider it in the early stage of your house-hunting. That’s why it’s highly recommended to have extra funds on hand or an available line of credit when purchasing a house.
According to the affordability calculator of Nerdwallet, your monthly housing costs (mortgage payments, property tax, and heating) shouldn’t be more than 28% of your gross monthly income.
Besides that, your monthly debt (student loans, car payments, credit card, etc.) shouldn’t be over 36% of your gross monthly income.
We recommend hiring a mortgage broker if you need professional help in assessing your budget when buying a house. They can help you determine an ideal choice based on your budget and also assist you in the pre-approval or pre-qualification requirements.
State of the Local Housing Market
Take your time and do your own research before closing the deal. Through this, you can have an overview of the current housing prices across your preferred locations.
For example, if the prices are dropping and the house listing inventory is up, you can have more negotiating power.
However, it’s best to note that finding a low-priced house is not always considered a good deal. If you want to find a house that suits your requirements, you can work with a real estate agent.
Lifestyle Requirements
If you plan to stay and live in Edmonton for good, you must consider your current and future lifestyle requirements.
For example, if you plan to build a family in the next five years or so, it might be best to invest in a single-family house rather than a studio-type condominium.
Here are some considerations you can include in your home-buying checklist:
- size and floor plan
- outdoor space
- number of bedrooms and bathrooms
- parking space
- transportation options
- distance from work
- distance from hospitals, restaurants, shops, etc.
- distance from schools
- crime rate index
Down Payment
The minimum down payment to buy a property or house in Canada is 5%. However, there are still conditions for this.
The house should be your primary residence. Besides that, the price should be less than $500,000.
If it’s more than that, you have to pay a minimum of 10% as a down payment. Note that mortgage default insurance is mandatory if your down payment is less than 20% of the purchase price.
The premium for the mortgage insurance is added to your monthly mortgage. This is imposed to protect lenders in case a debtor can’t make mortgage payments.
Nonetheless, if you need extra funds for your down payment, you can search for down payment program offers in Edmonton.
House Inspection
Once you’ve picked out a house that has the potential to be your forever home, you can request a house inspection.
Through the inspection, you can check if the house is worth its purchase price. Apart from that, you can determine if the house has minor or major issues.
If you hire a professional home inspector, they can help you thoroughly look at the interior and exterior parts of the house. They can check the plumbing, electrical system, roofing, drainage, foundations, and HVAC.
After that, they will assess if there are safety issues as well as major or minor defects that require repairs or replacement. The result of the home inspection can either make or break your home-buying decision so make sure to go through this step.
