Published on January 31st, 2023
Last year was as good a year as any to sell a home in St. Albert. Benefiting from low interest rates, buyers bid up prices to record highs over the past 12 months, with multiple offers beyond the listing price becoming a common occurrence. And while prices have come down since topping out in June, sellers are still cashing in big on their investments in one of the capital region’s most desirable areas.
With homebuyers vying for the city’s limited inventory, steady upward pressure last year swiftly pushed the average price of a detached single family home to $540,996, eight per cent higher than in 2021. Moreover, detached single family homes were selling at an average of 99 per cent of their list price, a testament to the enthusiasm of those looking to enter the market.
Last year saw a big lift to the market overall, but that movement took place disproportionately in the winter and spring. According to Ross Storoshenko, a St. Albert native and owner of River Valley Realty, the reasons for this half-year boom are twofold.
“Firstly, interest rates were still historically low, and people knew they would be increasing soon. Secondly, at the start of 2022, house prices were still decently low,"" Storoshenko said.
The St. Albert market shot up until it hit peak pricing in June 2022, said Storoshenko. In December 2021 the benchmark price of single family homes in St. Albert was $460,800, but by June of 2022 the benchmark had climbed to $525,300, a whopping 13 per cent increase in only five months, Storshenko said.
Like all sectors of the economy, however, housing booms only run for so long before the froth gets shaken out and the market corrects itself.
“After June, prices started to fall and sales started to decline,” said Storoshenko, noting the market’s cyclical nature. “Real estate is a seasonal business, so this is normal — just not quite at such an exponential rate.”
In St. Albert most buyers in 2022 were looking for single family detached homes.
One specific layout was especially sought after last year, particularly among the city’s more elderly demography, according to veteran St. Albert real estate agent Brian Cyr.
“Bungalows were the hottest commodity by far, and there are reasons for that. We’re at the tail end of the baby-boomers, so we’re seeing people who are becoming empty-nesters and downsizers, but who also want to stay in St. Albert,"" Cyr said.
""The reality is there are very few bungalows being built today — mainly because of shrinking lot sizes.""
Through the '80s, bungalows were very common because there were larger lots, but because of demand for land, developers are narrowing lots to build multi-story homes, which can be a problem for buyers who are trying to get away from stairs, Cyr said.
While new developments are constantly popping up along the periphery of the city, these builds are often apartments or duplexes, not the sort of sprawling, ground-level property desired by older buyers.
“If you’re someone who wants main-floor laundry or main floor bedrooms, it can be very difficult to find a home on a newer, narrow lot,” said Cyr.
Design isn’t the only factor that can drive demand. While all areas of St. Albert had a healthy volume of interested buyers throughout the year, some areas were particularly attractive.
“St. Albert has an abundance of mature neighbourhoods like Grandin, Lacombe, Braeside, and Forest Lawn,” said Storoshenko. “These areas saw a lot of first-time home buyers, purchasing bungalows under $450,000, while other newer areas like North Ridge, Erin Ridge, Oakmont and Kingswood saw many new families, and had their average prices soar.”
Sales were hot everywhere. And though established areas of the city have long been popular with buyers, this past year also saw signs of life in completely new neighborhoods.
“Many folks had their eyes on our new lake community, Jensen Lakes, one of only two lake communities in the Edmonton area,” added Storoshenko. “Lake access opened mid-summer, and the residents were loving it.”
Interest rates are up significantly from where they were at the end of 2021, just prior to the housing market’s six-month boom, raising mortgage rates and disincentivising would-be buyers. Accordingly, sellers enjoy a less favourable position than they did last summer.
Yet even in a less bubbly macroeconomic environment, there are plenty of deals to be made so long as each party enters the market with reasonable expectations.
“We are more of a balanced market now; we are holding a little more inventory and seeing some homes stay on the market for longer,” observed Storoshenko. “Nevertheless, in St. Albert, if your home is priced well, you will receive multiple offers quickly.”
“I still think 2023 will be a very strong year,” forecasted Cyr. “My phone was ringing on the first of January with people asking about listings and wanting to set up showings. Typically, January is a slower month, but my phone has been ringing right from the start. In talking to other realtors, I’ve been hearing a lot of the same thing.”