2021 EDMONTON REAL ESTATE OUTLOOK
Where do we go from here? It is uncharted territory to say the least. Not since World Wars or the pandemic of 1918 has the world been so united in tragedy. With a more established financial system and fiscal policy, intertwined global economies and trade and our global supply chain interdependence – things are different now than they were then. The governments ability to stimulate economy – in Canada to the tune of over $350 Billion in Covid support (deficit) in 1 year (which is equivalent to the annual Canadian budget in a given year) and the same has been duplicated by economies and central banks around the world – the amount of money injected into the economy has been nothing like we have ever seen. Under the incoming Biden administration, the US is ushering in another 1.9 Trillion dollar stimulus and support package.
At the start of the pandemic, I thought the worst for the market in Edmonton, especially in Alberta which has been inundated from all sides in previous years, however, like the rest of the world it has seemingly shown resiliency – both sales volume and average prices in 2020 were up from 2019.
It is apparent that the pandemic is disproportionately having a negative effect on the lower class – and seemingly benefiting the upper class with roaring stock markets, unworldly valuations and soaring property prices. Those with better jobs are able to keep their jobs and work from home – coupled with no travel or entertainment are seeming to have more disposable income and increased cash reserves. Pair this with endless hours at home with family with time for much introspection – for better or worse – people are making moves. People are re-evaluating priorities.
Interest rates remain at all time lows and are certainly contributing to the buying activity. HSBC in December came out with a 0.99% rate on a high ratio 5-year fixed mortgage, below the 1.00% threshold for the first time. Rates will remain low in 2021 and we may even see further reductions as banks compete for your mortgage business during the usually busy spring months in Canada. The fed is not expected to make and drastic moves as inflation remains low.
At the same time inventory is very low and many people are hesitant to bring their properties to market at this inconvenient time – especially those in higher risk categories. This increased disposable income and decreased inventory lends itself to the possibility of further price increases in Edmonton for 2021.
With a vaccine and mass immunization optimism is increasing. While we still have a long road ahead and an uncertain 2021 our bet is on a strong market in 2021. I don’t feel we will see the same activity decrease as we saw during the uncertainties of the first lockdown as people are starting to find their now normal and figuring out how to navigate within the given parameters. That means we will likely finish the year with more sales than 2020.
Single family and attached asset classes will perform better than multi-family. And sales under 500K will account for the largest increases in both volume and price.
Those are our predictions for 2021. If you are looking to sell or buy in 2021 there will be opportunity. It will require navigating different processes and protocols than generally accustomed to in previous years with regard to showings and open houses – but we are a fully digital brokerage with a strong digital marketing acumen to garner the most exposure for your home while keeping you and your family safe. If you are thinking about making changes in 2021, now is the time to start the dialogue – and we would be honored to advise with a free no obligation market analysis for your home and your specific needs.
& The Team at Rimrock Real Estate