[Ed Note: If you've surfed here looking for the price of your own home, you can signup for a free market evaluation on my main site.]

And we’re back from the break! This time it’s Patrick Shaver from UDI. When will people learn to stop using bad pictures on their powerpoint slides.

This is mostly residential housing info, but looking at growth in the Capital Region for 2011. Keep in mind that he’s a developer, representing developers and they have to develop what people want (affordability, density, location and amenities).

Patrick thinks that people want single family houses, or as he says “Fee Simple is King” in 2011. They want a front door and a patch of grass at the back. Housing Types – they’re looking at the 36-40′ lots, or a detached house on a 30′ lot. There’s a lot of good duplexes coming out with a good combination of attached garages. He thinks we’ll see more townhouses that are street facing.

How do we build higher density? High employment areas, urban villages in suburbs or infill areas. Young professionals, couples with kids, and empty nesters, but also those motivated by price.

Capital Region Board developed a growth plan in 2009, ratified by the provincial government last year (2010). They’ve laid out priority growth areas where they’ll focus infrastructure. They’re also making sure there’s focus on creating denser areas, and there’ are some interesting rural areas where they’re trying to create ‘clustered residential’.

The evolution of the ASP/NSP (area or neighbourhood structure plans) has moved to create denser areas, from 52 persons per net residential hectare to 80+ today and moving to 95 in the city.

Predictions:
- Edmonton to lead the region, but challenged by affordability (due to higher construction costs relatively speaking).
- Higher demand and price for large lot single family
- Higher density in some Edmonton Areas (Downtown, West Downtown, University, some suburban pods like around Heritage with slower absorption)

Current developing areas in Edmonton:
– West, south west and south east, with a good strip on north up against the north leg of the Anthony Henday.
- South is the only expandable option which doesn’t run into other municipalities.

We’re more decentralized, but so is the employment and growth.
- St Albert and Sherwood Park – development is essentially the same as a suburb. Sherwood Park has a lot of variety in product. St. Albert has less smaller SF and doesn’t allow lane product.
- Leduc has some great product variety, and is part of the priority growth curve.
- Fort Saskatchwan is doing well, and the North West Upgrader is going ahead they’ll see some good growth.

Growth occurs here due to:
- Localized demand
- Availability of servicing
- Diversity of housing
- Cost of servicing
- Attitude of municipalities

The 5-year trend forecast for housing starts is going to be modest increases, which levels off. 2010 will be better growth (which makes sense because starts are a lagging economic indicator).

People are looking for more amenities, sustainable/smart/low impact developments.

Patrick was a good speaker, and kept it nice and brief.

We’re getting down to it, with Ian Glassford, CFO of Servus Credit Union. He’s a bit of a quick talker, but reasonably entertaining.

Ian’s very dubious about the possibility of a double dip, but it’s a very divergent economy. The developed economies are a little weak, but there’s lot of positive items. The US, India and China are moving forwards and growing, which can pull the world along.

The IMF Global Outlook lines up with what Servus thinks, with a slower, more stable growth and emergence from the recession. The 2009 doom and gloom was pretty well founded, with advanced economies at -3.2%. Imagine if the sovereign debt crisis hit then, instead of now. The US is still a basket-case, with terrible real estate markets and a crazy banking sector. When you break it down, Germany is carrying the EU’s growth and backstopping the promises of bailouts for Portugal and Ireland. If Germany gets into trouble, the promises become untenable.

Concerned about Government debt (globally), where slow growth plus slightly higher rates doesn’t really help reduce deficits. This can push some of the slower developed countries further down. We are globally dependant on a handful of countries (China, India, Germany). He does point out that in a bad employment and economic situation increased the risk of ‘dysfunctional behaviour’ by US politicians. That’s part of why he thinks we’re seeing acceptance of a cheaper US dollar. That allows (among other things) easier trade of their goods and eventual repayment of their foreign debts with cheaper dollars.

Ian thinks that Canada can beat the IMF forecast (2.7% GDP) if:
– Commodities hold in
- Rates stay low
- Dollar doesn’t get too strong
- But we’ll hit a ceiling until the US gets it’s act together

Patrick’s made the interesting comment for an economist that he doesn’t understand the Chinese economy and that he has a vague concern that they’re stockpiling commodities (which would kind of make sense).
The Bank of Canada gets the risk from the dollar and rates. My favourite quote of the day: Rates that are too low for too long create stupidity.

Interest Rates – Short Term
– Modest upward pressure on rates
- Conditions won’t support meaningful movement until 2012
- The bank used to say a 3% increase in the dollar has the same drag on the economy as a 1% increase in rates. That’s an older formula, but the principle still applies.
- A .5%-.75% hike isn’t unreasonable. We’ve already been through a 0.75% hike, and we can handle it.
- Watch capacity utilization, which might cause faster action by the BofC

Interest Rates – Medium Term 1-2 years out
– There is still ‘considerable monetary stimulus in place’, which is the same as ‘my foot is still on the gas’. Pulling it back would be a 1-2%, but it’s not likely to move until there’s action on inflation
- EQ2 was to get money out of the US banks hands, by pushing yields so low that the banks had to lend it and get it out.
- 5 year rates will move in anticipation, but it’s still a ways out.

How does the US get out of debt? The classic solution is with inflation, which is a worry 2-5 years out.

Housing!
– Ho-hum is Ian’s prediction.
- Housing is more about where you live now, which is better. It gets people out of thinking of their house as making or losing money, and into where they live.

Ian’s going through his 2008 slides to compare what they thought would happen which would cause an Orderly Correction. It does seem to apply, and there’s some interesting math I can provide more for you if you’re curious (just leave a comment).
- Alberta should fare better than most, with a recovery well underway, and a Central Bank which recognizes the importance of a supportive rate environment.

Here’s Richard Goatcher from CMHC

- Employment stats: Full-time exceeding part-time job creation. We’re looking at 5.7% unemployment this year, which is back to a strong demand and helps confidence.
- Edmonton’s 2010 job growth was just barely positive, and the 2011 forecast is ~15,000 which is 2%. 2012 is when the economy really starts to get rolling.
- Interest Rates – Later, rather than sooner.
- Carrying costs – minor changes, with costs staying below the peak 2007 levels.
- MLS Sales – we’re a little slow compared to the past 10 years. 2011 will be up a little bit over 2010 sales, starting off slow and seeing some more movement through the mid-end of the year.
- Listing Supply – We’re still above the 2003-2005 times, and sales to active listing ratio is in buyer’s market territory around 14% right now.
- Average price last year was $329 and now we’re at $308. They’re going to see an average annual price change of 1%, but the front half of the year will be the up to balance the down in the last half of the year.
- There’s some interesting stuff in his slide deck about housing starts, but that’s not an important number at the moment. It’s more about inventory adjustment than market movement. Again, leave a comment and I’ll send a copy of his slide deck over.
- Edmonton Average House Price predictions – Year over year will be essentially the same, but month over month will vary substantially.
- Rental housing inventory which still remains very low (and has since 2005)
- Vacancy rates are coming back down, forecast to drop below 3.5%. (You typically need to see vacancy below 2% to see rental increases over inflation).
- Rents held in 2010 at just over $1,000 for a 2-bedroom on average, but we’ll move up by 2% or so in 2011.

CMHC’s prediction in a nutshell: Next year will be better than this year. 2011 will see slight progression and modest gains. 2012 will really get things moving.

Ron Hutchinson is putting in a quick plug to get Realtors to contact their MP’s and discourage them from increasing down-payments or lowering amortization limits.

MLS Edmonton Housing Price Forecast

Here’s the main event, with RAE President Chris Mooney reviewing the resale housing market for 2011.
- Things moved very quickly in 2010, and the rush caused a swell and drop back in inventory towards the end of the year.
- Prices and sales keep going up and down, rolling along, causing people to react to it like a dodgeball game.
- We’ll start going up towards the end of the year and the next potentially hitting 2007 prices.
- National sales stats get skewed by bigger centres (Vancouver Toronto), and Edmonton seems to move out of step with the national numbers.

Numbers!
- DOM is about 13 days longer in 2010 compared to 2009.
- Inventory is back down around 6,000, which is a little more than what we’d like, but still fine.
- There’s some more interesting numbers about 2010 in review, which I’ll spin into a new post in a little bit.

2011 Real Estate Forecasts!
– Rural and Recreational – Good inventory and DOM will be >100. People are still suckered in by purchasing more US property.
- Commercial/Industrial/Business – Trending upwards with values over $300 Million. Remember, lots of commercial isn’t reported because they sell privately, using a Realtor but without using ICX.
- Multi-Family – Most multi-family sales will remain as rentals. Unabsorbed condos will enter the rental pool, with entry level prices depressed and being a buyer’s opportunity. Forecast low volume but steady.
- Residential Single Family forecast – Prices will increase 3% in 2011. Inventory will hit 7,000 in the spring and go back to normal in the second half of the year. Sales will be up slightly from 10,400 to 11,000.
- Condos – Sales and prices to remain static, with new completions keeping prices in check.
- MLS System Overall – Total sales up from 18.293 to 19,500 and the total value to be up to $7 billion (last seen in 2008).

The Edmonton housing market is stable and ‘normal’. The year will have higher DOM and inventory through Q2, and inventory will drop in Q3-Q4 with DOM falling back to 45 days. Buyers have time to make a good decision, and sellers can sell, but require patience, site improvements (staging) and appropriate pricing.

No related posts.

I’m blogging this morning from the EREB 2011 Housing market forecast at the Shaw Conference Center. It took me a bit to get here, and Lord only knows where I’m parked, but I’m here. The schedule of events for today:

• Welcome and Opening – Ron Hutchinson, EVP, REALTORS® Association of Edmonton
• Edmonton’s Strength – Garth Warner, President and CEO, Servus Credit Union
• Edmonton Business and Commercial Climate – John Rose, Chief Economist, City of Edmonton

[Ed Note: If you've surfed here looking for the price of your own home, you can signup for a free market evaluation on my main site.]

Then we get a bit of a break, and hopefully I’ll get to publish this (they’ve canned the free Edmonton wi-fi apparently) by tethering my iPhone.

Then after the break (circa 10:15 or so):

• Development Trends – Patrick Shaver, President, Urban Development Institute (UDI)
• Edmonton Housing Analysis – Richard Goatcher, Senior Market Analyst, CMHC
• MLS System Market Forecast – Chris Mooney, President, REALTORS® Association of Edmonton

And we’re away to the races, right on time! I didn’t catch this gents’ name, but he’s an EVP for the Realtor’s Association. Apparently this is the 23rd annual forecast.

Ok, we’re about to get rolling with Garth Warner from Servus. He’s babbling about goal setting and new year’s resolutions. While he’s a good speaker, it’s a good reminder to avoid the cheesy jokes when doing public speaking. There’s a lot of thank you’s and rambling, so I’ll spare your eyeballs reading any more out Garth’s optimism.

That was slightly painful.

Now we’re on with John Rose from the City of Edmonton. He’s a little more upbeat, and just compared his job to being the Angel of Death for the last year or two.

The Global Economic Environment has been improving since mid 2009, but with some caveats. Mild concerns about a global double dip, and some fragile global financial market issues. The possibility of reducing stimulus too quickly and other policy mistakes might cause a bit of a bump, but not a full-dip collapse. Beyond the EU monetary issues, there’s a small risk that the US mortgage debt crisis will have more impacts and that’s related to the mortgage rate issues.

Natural Gas is likely to remain low (forecast to stay below $5). Oil is going to remain in the high $80′s or low $90′s for the foreseeable future, but over $100 oil is unlikely. It’s still a very solid price point and good news for us here.

GDP-wise, Alberta was lagging, likely because natural gas didn’t respond to the recovery as expected. The CMA (core) Edmonton was more likely around 3.2% GDP growth, and we weathered the storm quite well.

The dollar being at parity, and he’s expecting we’ll stay around $1.00-1.05 USD for the while ago. It’s fuelled by weakness on the US side more than strength on ours. That’s bad news on two sides: first, it causes competitiveness concerns, and second, it puts upwards pressure on commodity prices. Interest rates, John thinks the Bank of Canada is softening us up, since rates have no where to go but up. He things we’ll see fairly dramatic increases in the second half of 2011, about 0.75% this year, and in 2012 as much as 2%.

Edmonton specifically, has inflation which is essentially 0. Employment is back below 6% (currently at 5.8%), and the good economic prospects stimulating net in-migration. CPI (inflation) is essentially flat, and has been since 2008, which is good news in that costs are in control and prices are moving up modestly and providing stability.

Unemployment is trending down and Canada has recovered all the jobs lost during the recession, as has the city of Edmonton. We’re actually creating jobs at twice the rate of Alberta (which isn’t doing too bad at all). It’s going to take the US at least 4 years to get back to their pre-recession levels, and that doesn’t even take new entrants into account. 6 of every 10 jobs created in Alberta were in the Edmonton area. There’s some remarkable strength in the Edmonton area.

Are we risking another boom and bust cycle? No, the huge growth in 2004-2005 was driven as much by natural gas and conventional oil as it was oil sands growth, and the juice just isn’t there.

He did a three baseline forecast. Baseline (55% probability), High (15%) and Low (30%), used to create the average numbers to drive his forecast. He’s not a fan of the US market at all, and they’ve seen some exceptionally poor performance. The growth outlook is around 3% now, to 3.5-4% in 2012 with a taper off to a 2.2% level out to 2018. The slow down is largely due to demographics, and an ageing labour force.

The Edmonton CMA is going to do well, and the City will be able to expand faster further out, having a slightly younger demographic. There’s another great graphic for the City vs the CMA GDP growth forecast that I’ll try to grab later and edit this post.

Summary:
- Low interest rates won’t last, longer term rates will move up to the more traditional levels, and short term rates have nowhere to go but up.
- Inflation is relatively low, tracking the national rate of 2%, and then moving up to the 3%.
- Modest but solid and sustainable growth out to 2019, and not so much risk of the boom-bust cycle.
- Some downside risk due to the US being sluggish and taking a while to get their stuff sorted.

That’s it for the moment, it’s break time!

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This may be more like Seven Reasons I’m Too Lazy To Blog, but we’ll work under the assumption I’ve just been busy. It might not look like it, but I’ve actually been busier than a one legged man playing Twister. There’s been a bunch of stuff happening in the background this week.

WP 3 I finally upgraded my poor blog to WordPress 3.0. Part of the reason is I like to let other people work out the bugs before I risk breaking my blog. I’m starting to be at the point where I get enough traffic and am lacking enough time such that if this thing goes down it’s a real pain in the butt. I’m happy to say that is was a painless experience.

Part of the reason I didn’t want to upgrade to WP 3.0 was I’d heard that there were some bugs between it and Thesis. I hasn’t upgraded from 1.6 to 1.7 yet, for the same lazy reasons as WP, and I really didn’t want to break my thesis installation. This was also pretty slick, although it still requires some FTP work. Anyways, I like it a lot, and even with the random GPL licensing legal conversation out there, Thesis is my preferred premium theme and is pretty fantastic for SEO.

1962 Stats I updated the ever popular Edmonton Real Estate Values Since 1962 spreadsheet with the must recent numbers. It goes up to June 2010 now, and I’ll give it till the fall and then recalculate the retrospective analysis. For now it’s all here if you want the data in a more accessible and useful format than the PDF’s you can get from the Edmonton Real Estate Board.

Housing Type Stats Since I was going through EREB stats anyways, I pulled the last few years worth of Edmonton’s average house prices by housing type into a spreadsheet and made a wee graph. Again, the data is here for you to enjoy and make use of.

Some have reminded me that I haven’t published the retirement savings post I mentioned in last week’s post about my generation being potentially screwed in retirement. I wanted to do more research into the actual numbers based on how old I am, when I want to retire, when my kids will go to University, etc. Stay tuned, it’ll come out this week.

It’s been a bit of a trend, but I’ve done more renos! Surprise! Actually, Leigh’s been the real rockstar of this project. Her role is much more that of a Project manager, since we’re using sub-trades for a lot of the work, but she’s still put a lot of sweat into this job.

And finally, I sent out two JV letters to friends who are interested in doing some real estate together. Unlike a lot of people in this industry, I don’t use this site to get people to invest with me. You can’t just throw me an email and then send me a cheque. I prefer to work with people I know reasonably well, have some shared interests and mutual friends. It keeps us both accountable and makes sure we’re both looking for the same things.

And actually, one more thing. I’m pretty stoked for the REIN fieldtrip and Multi Family weekend in August, although I’ll be at a wedding on the Saturday. Drop me a line if you’re going to be in town from somewhere far away, cause it’s always nice to meet new people. I get a kick when I bump into people who read my blog.

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I believe in sharing and teaching. There’s a lot of people in the real estate space and the internet marketing space who are just starting out or who have questions about what I do. In the spirit of sharing, here’s my second annual post of blog traffic stats. I was also fairly inspired by SEOmoz’s post of  their stats and lessons learned.

I don’t really do any SEO work on this side, except for picking WordPress as a base and using Thesis for the theme. I just try to write great posts and I comment on other great blogs that I read.

I don’t get insane traffic, but I do think I’ve had pretty good results. The last year didn’t always leave a lot of time for blogging. I got married, moved twice, spent four months in Ireland, left a job and returned to it. I still managed to write a fair bit and more people than ever are reading it.

Visitors and the number of visits are both up ~90% YoY.

Traffic from search engines is up, although 2009 has been a wonky year. This is due to a) not enough blogging and b) showing up for some weird queries which skewed the numbers. Overall I’m happy for now.

And people last year liked the top-posts bit.

Links to the most popular posts of 2009 (by visits):

1. What will Alberta be like in 2010 for Real Estate?
2. Edmonton Real Estate Prices Since 1962
3. Canadian Rental Website Rankings – June 2009
4. Canada Loses 129,000 Jobs
5. Problem Tenants in Ontario

Email and RSS subscribers are possibly the most important visitors to my site because they care enough to subscribe to everything I publish. This one’s been a strong trend since I started writing and it makes me happy.

Some of the important metrics for a blog that I didn’t mention include:

• Comments per post
• Post frequency
• Links
• Site usage metrics

Anyways, that’s the 2009 in review for my blog.

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I’ve finally updated my very popular spreadsheet of Edmonton Stats (with over 3,000 views). I should probably re-title it Edmonton Real Estate Values 1962-2009. Now it includes the real 2008 average value from the EREB, adding an 8th year with a negative year-over-year average price decrease.

I’ve also updated the monthly prices with the Q1 2009 values, and I’ve updated the sliding chart as well. (The big version is easier to play with on the third tab here).

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I knew I forgot something when I was doing up the stats on the weekend. That’d be our friends at BMO. I guess I’ll have to do CIBC next, but that’s getting to be a little much.

Here’s the graph for BMO’s GDP projections. I’ve updated the graphs with the other banks’ growth projections.

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Here’s just one chart from a great big workbook of historical stats for Alberta. It’s the Consumer Price Index, set to 2002 as the zero year. It’s reported quarterly, with the first day of the quarter reported as the data point (i.e. April 1, 2002 is Q2 2002)

Yes, this only goes up to the end of 2007. More will come later, and this spreadsheet has been in the stack long enough that I’ve forgotten the source. The raw data comes from Stats Can and CMHC though.

Enjoy!

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After two great weeks off, I’m back on the blogging bandwagon. I managed a week in Edmonton, three days up skiing at Big White, and my very first proper shift as a Ski Patrol.

I’ve been reflecting on the past year, and a 2008 Year in Review will follow shortly. In 2008 this blog went from nothing to 7,679 visits, generating 17,660 views, from 63 countries. Based on the average, that’s just over 305 hours of time on site. 

Enough of the random analytics…here’s a 4×4 of my most popular posts. Why 4×4? Try driving up to Big White in a snow storm with out it….actually it’s four posts for four types of popularity.

The Four Posts with the Most Comments

• Edmonton Real Estate Prices Since 1962 (16)
• Six Steps to Finding Cashflow Creek (and two bonus steps) (11)
• What to do with dead tenants (5)
• Interactive Maps of Edmonton and Red Deer (5)

The Four Posts with the Most Views

•  Edmonton Real Estate Prices Since 1962 (2,095)
• Six Steps to Finding Cashflow Creek (and two bonus steps) (384)
• What will Alberta be like in 2010 for Real Estate? (286)
• Edmonton Townhouse Rents – CMHC Stats in a Motion Chart (274)

The Four Posts with the Longest Time on Site

• For Real Estate Investors (category) 23:07
• Alberta (Category) 14:21
• Don’t Buy Here! The Black Triangle of East Edmonton 11:59
• My Belize is in Italy 9:28

The Four Posts with the Most Links (according to Google Webmaster Tools)

• Chris’ News Roundup – Canadian Edition
• The Tragicaly Hip – Song of the Week
• Where to Advertise your Properties (and some traffic tips)
• Moving charts for Edmonton, Calgary and Toronto

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People seemed to like the numbers and fun spreadsheet from last time.

I use Google Finance to track my stocks, so I’m familiar with this type of sliding chart. This one has the full set of monthly Edmonton house prices, as reported by EREB.

Really, it’s just another fun toy, which you can also find as the second tab of that sheet. As per my fair use policy, feel free to borrow, but please credit me. You have no idea how annoying it can be to format that data in Excel.

You can see the full chart on Google Docs

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