The well-worn stereotype that “a house is the biggest decision people ever make” may not be as true anymore. For many in the Edmonton region, with the spiked house prices, mortgage rate hikes and other real estate market factors, the contemporary biggest decision is to buy or stay put and renovate.
The Edmonton residential real estate market is strong. “Overall, we’ve seen year-over-year increases in total residential sales for the Greater Edmonton Area in 2022,” says Melanie Boles, the incoming chair of the REALTORS® Association of Edmonton (RAE). “Benchmark prices for the composite/all residential categories have increased nearly 7 per cent, year over year, by late summer.
“The single-family and duplex/rowhouse markets have seen steady increases in year-over-year prices throughout 2022, and some levelling out month over month. The condo market has also seen some steady growth in 2022 benchmark prices but has also started to decline a bit in recent months. As far as listings are concerned, year-to-date numbers for total residential are sitting around 26,000, about 1,000 more than this time last year and a few thousand more than in 2020, 2019 and 2018.
“With another possible rate hike in store from the Bank of Canada, Edmonton buyers and sellers may need to be prepared to adjust to the evolving situation and changing interest rates. There are still a ton of opportunities for people to get into the housing market,” she notes with positivity.
Edmonton’s real estate market is notoriously stat and detail driven but Boles is enthusiastic that despite the market speedbumps, 2022 has been a good year for various Edmonton areas.
According to RAE stats, the most growth has happened in the North Central, Southwest, Southeast and Anthony Henday (ring road) areas of the city, including communities like Crystallina Nera, Griesbach, Oxford and Lago Lindo (North Central); and Windermere, Ambleside and Heritage Valley (Southwest and Anthony Henday).
“Although Alberta has always been long regarded as an affordable place to call home, with interest rates and inflation on the rise, housing affordability issues are becoming more prevalent,” Boles says. She notes the practical fact that it costs more for Edmontonians to borrow, and this may affect the ability to afford what potential homeowners originally desired.
It could also impact the types and prices of homes selling, as people may start to be priced out of the market, which isn’t necessarily something they would have been dealing with even a year ago.
“The unfortunate reality is that mortgage rates are not as affordable as they were this time last year or even six months ago,” she points out. “We know purchasing a home is a huge decision and a large financial obligation. So, for now, taking the time to find the right home and making the numbers work may be the key.”
For various reasons, particularly due to mortgage rates, affordability and inflation, there is an Edmonton (and national) trend of homeowners opting to stay put and focus on renovating their existing home.
Appraisers and real estate professionals agree that home reno projects, small and large scale, are beneficial in many ways. One of the most obvious benefits of renovating is increasing the home’s value. It’s been shown that adding space to a home will accentuate the look and value of the house and there are personalising touches and creature comforts in remodeling floors, bathrooms, kitchens or bedrooms.
In Edmonton, the past two-plus years of lockdowns and business disruptions were a big broadside for the reno sector. First it was the COVID commotion and then the reno industry was hit with supply chain issues and delays.
“It wasn’t easy but we managed,” says the enthusiastic James Belovich, owner of Edmonton’s Refine Renovations. “We’ve been steady through the past two years, although profit margins were down. Edmonton was impacted by supply chain problems, specifically with plumbing, flooring and plywood. Quartz countertop material and tile coming from China were delayed from some of our suppliers, causing delays on some jobs. However, this year the momentum has definitely picked up and it seems everyone who was thinking about doing a reno before is now finally doing it. From new kitchens, bathrooms and renovating basements to allow for more space, people are wanting to make their existing homes work, versus moving.”
Belovich notes some reno trend specifics, “Vinyl plank is definitely a hot trend. We are installing more and more on the main floors of homes, in kitchens as well as in basements. The quality of vinyl plank has improved considerably over the last few years and it definitely outperforms the old wood laminate plank of the past.”
Another popular new home and reno trend is technology features. “We have not experienced a lot of smart home renovations,” Belovich says, “though most people are doing wireless speakers as opposed to built-in wired sound systems. No one seems to be installing phone jacks anymore, likely because a lot of homeowners have opted out of conventional, land line phone service.”
Comparing Edmonton’s 2019 reno market to the rebounding 2022 reno market, there have certainly been changes. “With COVID came demand to create spaces that people loved at home,” says the personable Kerry Connelly at Glenora Lumber, the third-generation family business and a respected supplier of all-things reno in Edmonton. “This includes things like a backyard oasis and an appreciation for the outdoors, home offices and of course, accommodating home learning, aging in place and generally creating multi-functional spaces that are uplifting and purposeful.”
She adds that today’s reno customer, maybe thanks to online browsing and homework, is much savvier than ever before. “They are more knowledgeable in their selections and often have information in the palm of their hands. Technology has granted access to ideas, trends and comparisons. As a result, the scope of products available has increased with options, such as green products because customers are environment conscious. In the reno business, differentiating ourselves from our competitors with expertise and striving to be service driven enables us to earn business not based solely on price.”
Connelly points out that today’s reno market reflects changes in trends. “Technology and smart home features are in demand and hardware finishes have shifted. Black and satin brass are increasingly popular. Also, door styles such as single panel, barn doors and shiplap are very ‘in.’”
Although the Edmonton reno market is rebounding, she acknowledges that COVID and supply chain issues took their toll. “Some projects were put on hold waiting for a correction in the market. Lumber was at record highs and we were on allocation for many materials. The crunch has subsided but we are not at pre-COVID pricing levels.”
In Edmonton, to buy or to reno is the question. Either way, Boles is positive and enthusiastic. “Year-over-year trends show that Edmonton has seen immense growth in the last two and a half years and offers a high quality of life for less than many other Canadian areas.”