The sky may be falling in other parts of the province, but for now in Edmonton, it’s still looking pretty blue. The odd tufts of clouds may go scudding across the sky but it’s not crashing around our feet like it has in Fort Mac and maybe a little bit down south.
To be objective for just a second, look at Edmonton’s median house prices from January, as reported by the Edmonton Real Estate Board.
Certainly house prices are down somewhat. By approximately 3% in most of Edmonton including the immediate vicinity. When we say “down”, we’re talking the difference between $350,000 from January 2015 to $340,000 in January 2016. Not really enough to make Chicken Little even budge and inch. Sometimes you’ll take $10,000 off your asking price to close a deal so not a big deal.
In addition to the nearly imperceptible difference in house prices, realtors on the ground in Edmonton will tell you that they’re busy. More houses and condominiums in the city were sold in January 2016 than in January 2015. Granted, they are sitting on the market longer – homes are taking a bit longer to sell and move off the market. But, most people feel that it’s better to wait an extra few weeks to get a good offer than to grab the first low-ball offer that comes your way.
Another bright spot on the Edmonton landscape is the fact that the economy may not be growing as quickly as it was, but it is indeed still growing. Perhaps only by 1% in the past year, compared with 2% and 3% that Edmontonians are used to. But it is forward, not backward.
With economic growth comes some population growth, and the predictions for 2016 look good. With more people in the city, more housing is needed. Buying home, even for young people, is still a more attractive option over renting because interest rates remain ridiculously low – around 3%. Down payments for homes in the affordable $350,000 to $499,000 range remain at 10% which is still reasonable.
There definitely have been layoffs in Edmonton, but as of today, few foreclosures as a direct result. Two-income households may be the saving grace for those who are casualties of the drop in oil prices.
Unlike Calgary with more corporate offices where layoffs en masse seem to be an everyday occurance, Edmonton has one other thing that Calgary doesn’t.
As provincial capital, 25% of all jobs in this city is a government or public service job, funded by the public. We’re talking health and education, as well. That provides some consumer confidence to be out there checking out listings. A strong public sector is a bit comforting in this era of $27 a barrel oil. For now.
The NDP will be examining ways to cut billions should the oil industry not recover in the next few years. Since 1980, if there have been real estate disasters in Edmonton, they have been caused by government layoffs, not by the oil industry – directly.
Time will tell.