Realtors see Edmonton housing market ‘balancing out’ in 2023

The Realtors Association of Edmonton is forecasting house prices to drop in 2023, saying it’s a sign of the market “normalizing”.

“We saw some crazy things happen during the pandemic,” says chair Melanie Boles, “which I think were completely unexpected.”

The forecast expects the average cost of a detached home in Edmonton to be around $486,000 this year, down from $500,480 in 2022.

But Boles cautions against comparing 2023 to the last two years, where the pandemic boom of families looking for more space coupled with low-interest rates lead to a particularly hot market.

“Compared with long-term trends, the COVID years are anomalies.” Says Boles, “This means we will see a drop in 2023 numbers year-over-year, with sales, listings and prices hovering at levels seen in 2019 and prior so we are trending back to what was a stable balanced market in Edmonton.”

The predictions for 2023 show higher home prices than pre-pandemic levels.

But what does this mean for those looking to buy or sell in 2023?

Nana Asante-Apetu is a realtor at Liv Real Estate, he compares the market in the last two years to a fighter jet, saying the market now is closer to a passenger plane.

“There’s going to be a bit more turbulence which is expected, but a lot more balanced.”

Asante-Apetu says the speed of the market in the last two years was nerve-wracking for some buyers, needing to act quickly in order to get into the market. He expects a lot more predictability for buyers, saying generally people “like a bit of control and we like a bit of choice. In a balanced market, you get both.”

The decline in home prices also comes as a trade-off for higher interest rates.

“You can either be paying $50,000 above the average price in a very tense situation, or you are paying a little bit more interest, but you get a little bit more time to negotiate and to get more choice,” says Asante-Apetu.

Recognizing the decline in prices could be disappointing for some homeowners, Boles reminds “it’s relative. Although your house prices may have come down in selling your home, if you are buying in the same market, you are also getting that reduction.”

Boles expects to see more first-time home buyers gravitate towards condos or townhouses, with the expectation for the downtown condo market expected to continue rising. There is also a robust demand for luxury housing.

“Interprovincial migration remains strong, and our economy is braced for what may be to come” Boles also points to Alberta’s high weekly earnings and affordable housing stocks as signs the market will continue to make the Edmonton home market attractive to new buyers.

She still expects the spring market to be robust in Edmonton.