The Average Price and What it Means

I often get asked what the average price for a home is in Edmonton. As I am writing this the answer is $374,005… or $234,300… $303,781… or $327,731 depending on whether we are talking about single family homes, condos, rowhouses or the overall average.

In my experience most people are looking for the average price of a single family home when they ask that question, so that is what I usually give them.  But even that answer, though highly sought after, can mean almost nothing. At best it can be used a very general indicator of how the market is doing as a whole over time. It should not be used to determine if a specific property has gained or lost value. Here is why:

Lets take the overall average price of all real estate in Edmonton today as an example. As I write this it sits at $327,731. This is calculated by taking the total value of all real estate sold so far this month ($279,882,408) and dividing it by the total sales that made up that number (854). Basic math right? Lets say that later today, some smart investor snaps up 15 small condos at $75,000 each. That would swing the average price down to $322,160. Does that mean that Mr. Smith in his perfectly average house across town just lost about $5500 on the value of his home? Not at all. If a major construction project that has a positive impact on his neighborhood got finished today, maybe he made some money on it.

The point is, the average price is a good tool to track the overall condition of the market over time. But to use it to determine the value of a specific home will not give you accurate results. Each home is unique and sits in a unique neighborhood. There are thousands of factors that can affect the value of a home and it often takes a professional to find and make use of those factors.

So yes, watch the general stats to keep yourself informed on a broad scale. But when it comes to finding out the value of your home or one you want to buy, you will need to dig a lot deeper. If you need a hand with that just give me a call and I’ll figure it out for you, no charge.

10 Top Quick Tips from HGTV

Before you put your home on the market, take heed of these 10 valuable tips from the producers of HGTV’s Buy Me.

1. Interview several agents before making your final choice.

2. Know your rights and obligations. Have your realtor explain the contract in detail or have a lawyer look at it with you.

3. Always base your price on market value rather than needs or emotions.

4. If the agent suggests your home needs some TLC, do the required fix-ups.

5. Make sure the agent is taking out advertisements to promote your property.

6. First impressions are important. Use attractive photos to advertise the listing.

7. Your house must have curb appeal. Make sure the outside is as attractive as the inside.

8. Keep your house clean and de-clutter before every open house and visit.

9. If the house isn’t selling, think about lowering the price. A house that sits too long on the market raises suspicion for buyers.

10. Take the first offer seriously. It’s often the best.

Edmonton Estate Continues Upward Trend

According to the REALTORS® Association of Edmonton, the average price of housing increased through July as compared to the previous month. The all-residential average price increased 1.1% to $334,054; up from $330,298 in June. Single family home prices increased 1.3% while condo prices rose 4.3% during the month.

Residential sales in July were 1,441 up 3.6% compared to the same time last year. Residential listing activity dropped slightly in July to 3,038 units; down 210 units from June but up 193 units from the same time last year. The inventory of homes on the Multiple Listing Service® is quickly approaching par from last year at 8,421 properties available as of July 31.

“Our local housing market is quite healthy with affordable prices, a good inventory and strong sales,” said REALTORS® Association of Edmonton President Chris Mooney. “The selection of properties on the market for buyers is excellent. With employment opportunities popping up throughout the region and interest rates being very attractive, now is a good time to purchase a property in Edmonton.”

The average* price of a single family detached home in July was $384,656 with a median price of $360,000. Condo average price was $244,225 with a median of $223,000. Duplex and rowhouse prices rose on average from $296,969 to $309,816, a 4.3% increase.

“The increase in housing prices is on track with our January forecast and as we move into fall, we don’t see prices increasing substantially,” said Mooney.

The average days-on-market in July was 51 days: the same as in July 2010. The residential sales-to-listing ratio was 47% in July and total MLS® System sales were over $3.887 billion for the year so far.

Highlights of MLS® System activity

	July 2011	% change from July 2010
Total MLS® System sales this month	1,604	1.78%
Value of total MLS® System sales – month	$542 million	2.55%
Value of total MLS® System sales – year	$3.89 billion	-2.72%
Residential¹ sales this month	$481 million	4.84%
Residential average price	$334,054	1.14%
SFD² average selling price – month	$384,656	1.32%
SFD median³ selling price	$360,000	no change
Condo average selling price	$244,225	4.28%

¹. Residential includes SFD, condos and duplex/row houses.
². Single Family Dwelling
³. The middle figure in a list of all sales prices

* Average prices indicate market trends only. They do not reflect actual changes for a particular property, which may vary from house to house and area to area. Prior period figures have been adjusted to include late reported sales and cancellations and therefore reflect a more accurate view of the period than previously reported at month end. For information on a specific area, contact your local REALTOR®.