Edmonton Housing Market Predictions for 2022
With 2022 drawing closer, thoughts are naturally drifting towards what the housing market will have in store for us over the next 12 months. As a result, we thought it was a good time to look at Edmonton’s housing marketing predictions for the next year!
While it’s impossible to predict exactly what the market will do, we can look at several factors that are currently affecting home prices and are likely to continue into the next year or more, as well as some other professional forecasts and predictions, to get a sense of where things are headed.
Let’s take a look at some of the real estate market trends and predictions for 2022.
Trends That Will Affect The Housing Market
Many factors are likely to affect real estate prices over the next 12 months and beyond, some of which are ongoing from previous years and others that are more recent:
MLS Inventory Levels Are Lower Than Usual
Edmonton continues to see demand outpace new supply in the aftermath of the COVID-19 outbreak. Current MLS listings are showing 3.6 months of inventory, which is more than two months below the 10-year average and 36% down against the previous three years. The laws of supply and demand say that this outpacing of demand over supply will lead to another increase in pricing in 2022.
The COVID-19 Pandemic Continues To Cause Disruption
While COVID-19 disruptions are no longer as severe as they were during the first few months of the pandemic (when huge parts of Canada were either closed or in lockdown), there are still some residual impacts affecting the market.
Land development is still catching up from COVID shutdowns, meaning new developments and neighbourhoods are more scarce than usual. This is being exacerbated by ongoing supply chain disruptions and worker shortages which are preventing building supplies from reaching new developments at the necessary rate. This has also been made even more difficult due to the recent rainstorms and flooding in B.C, stretching supply chains even further.
With these disruptions in mind, demand for new single-family detached homes in Edmonton continues to be high. More affordable home prices compared to other provinces and a large influx of people working from home make the migration into suburban areas a trend that’s not going away any time soon. This trend towards new home construction and suburban neighborhoods suggest we will see new home values continue to rise over the long term.
Housing Affordability in Major Metropolitan Cities is a Concern For Buyers
As home prices continue to rise, some people are finding it increasingly difficult to afford property in big cities such as Vancouver and Toronto. This trend doesn’t show any sign of slowing down in the near future, but the good news is that the effect is much less pronounced in other places.
Regina, Winnipeg and Edmonton are considered among the top three undervalued cities in Canada, which is good news for local home buyers. By buying now, there’s a good chance your home’s value in Edmonton could rise because of this inter-provincial migration trend.
Interest Rates Are Still Low
The last few years have seen mortgage interest rates hitting historic lows, which have been encouraging sales as people rush to ‘lock in’ these favourable rates. While economists are predicting that rates will begin to rise in 2022, the effect shouldn’t be too dramatic – it’s more of a correction back to what should be ‘normal’ levels.
Looking back over the last 25 years, the average mortgage rate history shows peaks in the late 1990s through the early 2000s. However, once that drop hit in 2008, mortgage rates have hovered around the 5% mark. But for 2020 and 2021, it’s been under 5% – 4.94% and 4.79% respectively. Note: we’re talking about a 5-year fixed rate; variable rates have been all over the map with the highest at 7.2% in 2000 and the lowest at 2.20 in 2010. With things starting to stabilize again, it’s a pretty safe bet that those interest rates will creep back up as we mentioned.
It’s also expected to have a cooling effect on some of the more intense seller’s markets caused by low inventory, which have seen bidding wars happening over certain properties. This is good news for anyone trying to buy a home in a crowded marketplace.
Some Other Predictions For The Housing Market in 2022
Another good way to get a sense of where 2022 is headed is to take a look at what some of the larger national companies and housing market authorities are predicting.
For example, CMHC (The Canada Mortgage and Housing Corporation) is predicting a rise in home prices of around 5% in 2022, while Fannie Mae is predicting an increase of 7.4%. On the more extreme end of the scale, Goldman Sachs is predicting more than double that, with an estimated increase in home prices of 16%.
While nobody can say for certain who’ll be the closest in their estimates right now, the general trend seems to indicate that we can expect at least some degree of price increase throughout the next year. So if you’re planning to buy a home it would be wise to budget accordingly.
If you’re looking into buying a home in 2022, you can look at these ongoing effects and expert predictions to give yourself some idea of what to expect in the coming year. While they don’t guarantee you’ll be able to plan for every eventuality, having a good amount of knowledge about the upcoming market can greatly help you navigate the market. If you need more assistance, you can also give us a call and speak to one of our Area Managers, who will be glad to help.
Photo credits: depositphotos.com
About the Author:
At Sterling Homes, our mission is to provide the opportunity for affordable homeownership without compromise. Over the last 70 years, Sterling Edmonton has quickly become one of Edmonton’s most popular builders. We bring more than seven decades worth of exceptional customer service, superior design and unparalleled craftsmanship to the greater Edmonton area. As a member of the Qualico Group, Sterling Homes focuses on greater Edmonton’s finest family communities, while being able to offer some of the region’s most family friendly prices thanks to volume purchasing power for materials, trades and land. This has not only made Sterling one of Edmonton’s bestselling, move-up builders, but also one of the industry’s most respected home providers.
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