Monday, August 20, 2007

Noticeable price declines are here in Edmonton

Despite denials about the fundamentally changed nature of the market, the view from ground reflects something that we've all talked about here for months.

Take this example of a detached SFH in Ellerslie crossings. I distinctly recall viewing such places back in 2003. They were selling for around $175k (but on the west side of Edmonton). As late as February 2006, I remember visiting one of very similar show homes. The builder's agent said, "Price are going up very rapidly in Edmonton because of the very low vacancy in Calgary. Companies are now going to start shifting their head offices to Edmonton and that's why there's this sudden increase in prices." At that time, a similar home was selling for $225k. Of course, it was hard at that time to come out with any rational explanation for price increases and this was at least plausible. Of course, in the bigger back drop of speculators, flippers, 'real estate always goes up crowd', realtors, bankers and the main stream media, such excuses were superfluous. Of course, the world, or Alberta at least, as we know all changed somewhere around Feb-March 2006 when one of the biggest buying frenzies in Canada ensued in Edmonton.

Fast forward to June this year: this type of property would not be sold for less than $400k.

Two and a half months later, this property is selling for $360k. I doubt that the sellers would refuse a no-condition all cash offer of anywhere between $340k or $350k. May be some people will find it an attractive price, especially those who are contemplating paying anywhere between $250 to $300k for 2 bedroom condos in the same vicinity.

The question is: what's it going to do the condo/townhouses that are selling for over $300k to $330k just a few blocks from this place?
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