[Note: Monthly prices last updated November 22, 2010. Subscribe to RSS or Email updates to get the latest information.]
Here’s something a little different and kind of fun if you’re a big dork like me. I took the historical price data from the EREB and did trailing averages. Then I put it in a Google Docs spreadsheet for cool investors like you to use. You can also access the the entire spreadsheet of Edmonton House Prices to use for your own manipulations.
I make no guarantee of this data, or make any promises that it’s accurate, well calculated or pretty. I also burn toast with the best of them. It’s only here to display my willingness to be wrong in public, and give away resources to those investors who wish to use them. 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.
Important Points:
- The average annual price increase is 7.46%
- The average 5-year price increase is 50.26%
- Only 10 years since 1962 showed negative price growth
- In a 5-year hold, only 4 years would have resulted in negative growth
- If you held for 9 years, you’d always see an increase
- Edmonton values appear to double every 9 years, on average, since 1962
Now, I bring you a big pretty looking spreadsheet! (Also check out the sliding chart of house prices and REIN’s Top Alberta Towns Report)
What’s the point of data like this? Compare towns, pick the strongest in the country. Buy using a system. Hold. Enjoy profit.
Comments on this entry are closed.
This is the kind of analysis that really helps. Thanks very much!
Joan
Thanks Joan! There’s all sorts of crazy real estate stats out there, and it’s nice to make a little sense of it. I saw a similar price analysis with trailing averages for Calgary someone from REIN did, and thought I’d do one for Edmonton. It just took me 4 months…
As the saying goes… “Past performance is not necessarily indicative of future results.”
Most of us simply extrapolate historical numbers to arrive at future estimates. Implicit in this kind of projection is the assumption that established trends will continue. Your analysis is a vast oversimplification of the actual market. Have you looked at the S&P lately?
Hi Pete,
I agree with you that past performance isn’t an indicator and that there’s a danger in using the historical numbers alone to forecast. However, it’s essential to know the past, especially for those who know what real estate looks like beyond the last few ‘Tiger Woods’ years.
I provide this analysis, and most of my posts, as a resource for other investors. Someone did a similar chart for Calgary and people liked it, so I did one for Edmonton. It’s a tool, nothing more. Thanks for the comment!
Hi Chris
I’m assuming you have used nominal dollars in your data. 12,000 dollars sounds like nothing but it was of course out of reach for a lot of people in 62. Any sense of what the purchasing power of the average joe was in each year? Housing affordability index?
Hi Dave,
You’re right, and it’d be interesting to see the numbers indexed to some other measures of purchasing power. I’ve heard many times that hard assets such as real estate have the best chance of outperforming inflation.
It’s just intended to be a resource for other investors, as those numbers can be frustrating to find.
Thank you for your work on this – no doubt it was a non-trivial effort.
That said, you seem to be inferring an increase in value for a _particular home_ from the increase in _average_ sales price. This is flawed, as Edmonton’s housing supply has clearly not stayed static over the interval that you have analyzed. I find it very hard to believe that the “average” home of 1962 would still be considered “average” in 2008 (at least not without significant expense).
Hi RJ, thanks for the comment. I agree that one can’t directly examine the price trend and apply it to a single house (as no one buys an ‘average house’).
I do think that the comparison year-over-year is a valid one. An average ’62 home only has to be compared to it’s near neighbors for the types of analysis that we’re looking at.
Also, this post is more intended to help provide investors with a easy place to find these numbers, as they’re not always easy to locate.
Thanks for your reply.
“I agree that one can’t directly examine the price trend and apply it to a single house (as no one buys an ‘average house’).”
I’m not sure i’m getting my point across that the “average edmonton home” changes over time.
In a “sliding chart” of asset types like stocks or gold prices, the underlying asset doesn’t vary over time – a (split-adjusted) share of IBM in 1962 is the same as a share of IBM in 2008; an ounce of gold in 1962 is the same as an ounce of gold in 2008. Because of this, it is easy to calculate things like average annual appreciation, ROI, etc. However, this is not true of real estate – due to new construction, the notion of “average home” (generally) improves a bit each year. Put another way: if Home X is exactly average in year N, it will be slightly below average in year N+1, and noticeably below average in year N+10. Year over year, this may not make a huge difference, but in the long run it is significant – the “idealized average” home that sold for $12556 in 1962 likely would not sell for close to the average price of $351529 in 2008. So I don’t think you’re interpreting the 7.91% figure correctly – indeed, I don’t see how it is a meaningful number at all (from an investment perspective).
(As an aside, the EREB’s anticipated 4% growth for 2008 over 2007 seems virtually impossible – according to the Edmonton real estate blog, the 2008 average price thru July is essentially the same as the 2007 average price.)
“Also, this post is more intended to help provide investors with a easy place to find these numbers, as they’re not always easy to locate.”
Fair enough, the effort to collect the data is appreciated. But there seems to be a lot of confusion around what the 7.91% and derived values actually mean, and I think its worth clearing up. For example, I think you’ve used it incorrectly in your recent slide deck where you use it to justify an anticipated “conservative” appreciation of 5%/year.
That said, I appreciate your site and hope you continue with it. I trust you will take my comments as constructive criticism, as that is how they are intended.
I definitely appreciate you taking the time and welcome the constructive criticism. I do understand what you mean about the asset changing over time, as new houses come on to the market, and older houses are demolished. However there’s two sides to that: first, the 7.9% makes sense in the types of time frames we’re looking at for joint venture partners (3-8 years). In those types of time frames the average dwelling doesn’t shift enough to have a significant impact on comparables when it comes to revenue properties. The seconds is that a well maintained 1962 property still may actually be worth over $352,000. Just look at areas like Edmonton’s Crestwood, Parkview, Elmwood and Meadowlark.
As for the 5%, that’s a number derived from forward looking information such as migration and economic data and forecasts. The historical data is for context, not for projections. I should have been more clear about that.
There’s been a great deal of discussion at myREINspace.com about what value to use. I’m guessing the average increase in Edmonton will be right around 1% this year (average vs. 2007 average). The following 4 years will average out to be more than 5%.
great resource
Hi Chris,
Do you keep this chart continually updated? I’d like to embed it into my website as well. Any chance you’ve grabbed similar data for townhouses?
Thanks
Sean
Hi Sean,
I haven’t updated it since I published it originally, but I’ll be sure to put that on my to-do list. I also found a great site today with some useful charts and stats. I’d be happier if they posted some numbers with the graphs, but beggars can’t be choosers. It’s from the Center for Urban Economics and Real Estate at UBC. https://cuer.sauder.ubc.ca/cma/index.html
Cheers,
Chris
Hi Chris, so is it correct to say that these are not inflation-adjusted dollars? If so that would skew some of these figures substantially. Also, are you including the wild ride up in 2006 and 2007 in your calculation of average y/y increases? The percentage run up in those two years worries me, frankly.
Hi Mark,
They are not inflation adjusted, they’re taken straight out of EREB’s reports. Inflation adjustment does cause some skew, but there’s still value in reporting the raw numbers. (I don’t know of any other investment where they do past performance numbers indexed to inflation.) I’ll be reviewing the numbers in the near future when I add the data for the end of 2008 and January 2009.
As for the big run-up, it’s more interesting than concerning. For those of us paying attention to the market and the economy, we saw it coming, and now are taking advantage of the buying opportunities. It has moved some people’s strategies to a longer term focus (e.g. 3 year to 4-5 year)
Hi Chris
i am trying to find the cost of commercial land prices over the years to see how much it holds its value within Edmonton city limits..even residential lots will help if u can
thnxx
Kelly
Hi Kelly, I’ll do some poking around and see what data we can come up with. I have a contact at the Edmonton Real Estate Board who might be just the guy to ask, and there might be publicly available data. Good question!