What is a Housing Bubble and How Does it Affect You?
You have heard the term "housing bubble", but what does it actually mean, and is Edmonton experiencing one? Whether you already own a home and waiting for the right time to sell, or are considering buying another property in the near future, it is valuable to know whether to buy and sell in a housing bubble and how it may affect you.
A housing bubble happens when the price of homes rises quickly, at an unsustainable rate. Typically, a price-growth rate that’s in the high single-digits is considered to be healthy and sustainable. Under healthy conditions, homeowners continue to earn equity over time, sellers can make a profit on resale, and buyers can still afford to get into the market. This has been the trend in most Canadian provinces except for Alberta over the last decade where Alberta house prices have plateaued and in some places dropped dramatically.
What Usually Happens When a Housing Bubble Bursts?
During a housing bubble, homes become overvalued. When the bubble bursts, prices fall. Homeowners who have no intention of selling are unlikely to feel the direct impacts of the bursting bubble. However, these market conditions often indirectly impact other aspects of the economy, so to call homeowners who aren’t selling “free and clear” would be misleading. The Homebuyers who purchased a home during a housing bubble likely paid considerably more than it is worth.
Is Canada in a Housing Bubble?
The Canadian housing market took a surprising upward turn during the COVID-19 pandemic, after coming to a grinding halt in mid-March. The slow-down was short-lived, and what followed through the remainder of 2020 was a spike in demand for homes met by a shortage of supply. With 2021 well underway, there appears to be no end in sight. There are a number of factors that indicate we’re not experiencing a bubble caused by market speculators, contrary to some media reports.
A recent online survey of RE/MAX brokers and agents in Western Canada, Ontario, and Atlantic Canada found that speculators are not a factor in the Canadian real estate market at this time. In fact, more than 96% of RE/MAX brokers and agents supported this finding, confirming that the majority of homebuyers are end-users. Speculators tend to wait out hot markets, buying when prices are down and selling when they’re up again. The short-term investment opportunities they’re generally looking for are hard to find under current market conditions. Bully offers and bidding wars are commonplace, and we continue to see demand outpacing supply with the release of the monthly housing market data. These factors are generally inhospitable to speculators and investors.
For a housing bubble to burst, there needs to be a steep incline in inventory and new listings, and a decline in demand – neither of which is likely to happen any time soon.
The Canadian housing market is still feeling the impacts of the pent-up demand from 2017 when the government introduced the foreign buyer tax and the mortgage stress test as a means to cool the overheating market. These policies prompted many homebuyers to move to the sidelines, opting to wait and save, with plans to re-engage in the housing market in a few years.
Now fast-forward a few years to 2020. COVID-19 had a similar impact on the market, whereby many homebuyers delayed their purchase plans due to pandemic-related uncertainties. That pre-existing pent-up demand for homes continued to swell. With Canadians subject to stay-at-home orders with nowhere to go and spend their hard-earned money, they collectively saved historically high sums, which was injected back into the housing market once consumer confidence returned. The spending came in the form of record-high home sales and for those who were unwilling to face the competitive resale market conditions, renovations to existing dwellings. In fact, Canadian real estate was said to be the driving force behind the Canadian economy in 2020. Savings, low-interest rates and low inventory continue to put pressure on the housing market.
What is Happening to Edmonton's Real Estate Market?
A housing bubble can happen as a result of non-organic growth like it did in January 2006 to June 2007 and the average single-family detached house rose by $200,000. This happened due to our job surplus and supply and demand of real estate. Basically, people were moving to Edmonton and the surrounding area for work and there was a shortage of houses to buy.
Edmonton house prices hit the high point at the crash of economic stability in the summer of 2007 and the real estate market crashed fast when the bubble burst and the ripple effect of a bursting housing bubble flooded Alberta. Several homeowners were holding more than one property which resulted in lower asking prices and foreclosures. There were fewer buyers to due to the loss of jobs, economic instability, and uncertainty, a surplus of housing choices, and anticipation of a more housing prices drop.
Is Edmonton in a Housing Bubble?
The answer is "no". Edmonton is one of the few places in Canada, where house prices have not changed for the last decade, making it a great place to a home. Although in the last few months, Edmonton's real estate market has picked up a bit and there have been a few more multiple offers, we are not anywhere close to our last real estate bubble. Edmonton's increase in real estate activity has been due to the low-interest rates and not the economic factors. We currently have some of Canada's best-priced real estate making Edmonton a great choice for investment.
Is now a good time to buy in Edmonton?
The answer is yes. With low house prices, low-interest rates, and an inviting international real estate market, Edmonton is a fantastic place to buy a home.
Is now a good time to sell in Edmonton?
It depends. If you are a condominium owner, expect to take a loss on your property if you have purchased it in the last ten years. If you are selling a luxury home, the demand is beginning to increase especially near Canmore and country residential. For those who are selling detached houses in Edmonton, prices are stable, and asking prices need to be at "fair market value" to receive an offer within a reasonable time period.
If you would like to know more about Edmonton's real estate market, feel free to contact our experienced, professional Edmonton Remax Realtors who can guide you through the buying and selling process.
"Home Sweet Home" & Covid 19
During the pandemic, Canadians' homes became offices, movie theatres, classrooms, gyms, and "staycation" destinations. As Canadians spent more time at home out of necessity, renovations, additions, moves, and upgrades soared.
According to a recent survey conducted by the Royal Bank of Canada, 40 percent of respondents renovated their property or intended to during the pandemic. And 30 percent intended to purchase significant items for their home
Here is how we have reinvented our houses in Edmonton indoors & outdoors:
Home offices became essential workspaces and online schools. Backyard sheds, spare bedrooms, and attics were remodeled into home offices and schoolrooms. Garages and basements were converted to home gyms. Gardening became a new trending hobby for many Edmontonians and RV became a hot item for nearby camping.
The demand for new homes with potential basement suites and side entrances skyrocketed. Houses with triple garages and acreages within a half-hour of our city also became hot items with the trend still continuing. Another increase in Edmonton home sales is near our river valleys in the Riverbend, Terwillegar, and Riverview districts.
Condominium owners fell short to make a profit in this pandemic in Edmonton and unless your condo was priced to sell, it sat on the market for a long period of time. Many Edmonton condo owners chose to rent out their units and take advantage of the low-interest rates to purchase a single-family detached house with still acquiring some residual income.
Welcome to our Griesbach Edmonton Condominiums
Griesbach is unlike any other north Edmonton community with its identifiable architectural character. Below is an information summary on each Griesbach lowrise apartment condominium. There are a total of six lowrise condominiums in this desirable community - Connaught at Griesbach, McCrae Estates, Valour Condominiums, Veritas, and Victory Point. To learn more about the history and development of Griesbach Edmonton - click here or view all of our Griesbach homes for sale.
Connaught at Griesbach
Connaught at Griesbach at 560 Griesbach Pr NW is a lowrise apartment condomium complex with 160 units. The building amenities in the Connaught at Griesbach include a large gym, social room, car wash bay, two elevators. In-suite laundry and utility rooms with efficient Geothermal heat pump system with central A/C and underground heated parking.
Connaught at Griesbach features one to three-bedroom units and suites range in size from 712 to 1333 square feet with open concept floor plans with 9' ceilings, a modern kitchen with soft-close cabinets & drawers, Quartz countertops, stainless steel appliances, and LED lighting throughout.
McCrae Estates is located near the Chartwell Griesbach retirement home at 4450 McCrae Avenue and has a total of 59 units. McCrae Estates is a desirable adult building condo in sought-after Griesbach with in-suite laundry and storage, plus a storage cage in the heated parkade. It is steps away from amenities and many conveniences, as well as Lake Beaumaris and walking trails. The building amenities include an air conditioner, exercise room, guest suite, visitor parking, and a social room.
Valour Condominiums, built in 2016, are located at 504 & 508 Griesbach Parade near the south entrance of Griesbach Edmonton near Patricia Lake walking trails. There are 62 units in each of the two buildings. This modern, professionally managed, and well-kept Griesbach building offers a sprinkler system, brick frontage, fitness facility, party, and social room, storage units with underground parking.
Each Valour Condo unit comes complete with the usage of the amenities, spacious balconies, hot water baseboard heating, and in-suite laundry. The kitchens in these Griesbach condos feature an open concept to the bright living rooms, quartz countertops, large islands, stainless steel appliances, and a pantry.
The Veritas located at 528 Griesbach Parade Road in Griesbach Edmonton are new condos and feature nine feet ceilings, guest suite, in-suite laundry, and exterior patio fiber cement. This north Edmonton condo building showcase one, two-bedroom, and two-bedroom plus den condos, many with lake views. The one-bedroom open concept floor plans start at 763 square feet, two-bedroom floor plans range from 1047 square feet to 1199 square feet and two-bedroom plus den suites range from 1348 square feet to a spacious 1390 square feet.
Victory Point Griesbach homes are located at 1003 Gault boulevard beside the Connaught at Griesbach condos across from Patricia Lake. Victory Point low-rises have a fire steel frame and feature 150 units with brick and stucco frontage, a communal gazebo in the courtyard for common use with BBQ hook-up, rooftop patio, gym, and board room.
Living in Victory Point offers Griesbach homeowners air condition, laundry in-suite, sprinkler system, underground titled parking stalls, and open floor plans, and lots of natural light. There is a no pet policy in this north Edmonton complex. The Kitchens features granite countertops, loads of cupboard and counter space, pantry, S/S appliances, and a center island with a breakfast bar.
Living in Griesbach Edmonton
Griesbach homes are situated on the former site of the Canadian Forces Base in north Edmonton which has now won the best community award on the local (CHBA Edmonton Region), provincial (BILD Alberta), and national levels. Congratulations to Griesbach developer Canada Lands for winning “Best New Community” for Griesbach at the national level! Canada Lands has won awards at the local level for the neighborhood, but to be singled out amidst all neighborhoods in Canada at the Canadian Home Builders’ Association National Awards for Housing Excellence is an astounding achievement. Congratulations to all residents for making this a beautiful community to live in.
The Griesbach community has an identifiable architectural character that has been established to keep a consistent
image throughout the mix of real estate uses. The theme is communicated through Architectural detail, massing, and color palettes that emphasize a combination of Heritage contemporary design with warm tones and accent colors at specific locations. There is an emphasis on stone or masonry finishes is encouraged on selected building elements. Griesbach has dedicated 26% of its land use to green spaces, retention lakes, and natural habitats.
Throughout the Griesbach community, there are several statues representing our Canadian Military heritage. Learn more about each of these Griesbach statues below:
Major General Griesbach Parade
The Griesbach Edmonton community is named after Major-General William Antrobus Griesbach, a veteran of the First World War, Second World War, and the Boer War. Major General Griesbach stands to watch over the community named in his honor through a statue located on Griesbach Parade and Gault Boulevard. He is depicted riding a horse as he played a key role in establishing a militia cavalry unit based out of Edmonton called The Loyal Edmonton Regiment.
Griesbach was born in Fort Qu'Appelle in the North-West Territories, the son of Henry Arthur Griesbach, a North-West Mounted Police officer who was transferred to command Fort Saskatchewan in 1883. William Griesbach left the rest of the family in 1891 in order to attend St. John's College in Winnipeg. Upon graduating in 1895, he returned to Edmonton and worked in a law firm and the Imperial Bank, then to study law.
Griesbach enlisted with the Canadian Mounted Rifles in 1899 to fight in the Second Boer War. During his service, he was awarded the Queen's South Africa Medal and received four bars. Upon his return in 1901, he opened a law office of his own.
Griesbach's first bid for political office took place in the 1903 Edmonton election but was more successful in the 1904 election when he was elected to a one-year term as an alderman to Edmonton's first city council placing eighth. He resigned as alderman one year into his term in order to run for mayor in the 1906 Edmonton election. Griesbach was victorious, collecting more than sixty percent of the votes, becoming the youngest mayor in the city's history.
In 1906, Griesbach was commissioned as a lieutenant in the 19th Alberta Dragoons. He was promoted to captain in 1907. When World War I broke out, the Dragoons volunteered as a unit. In December of that year, Griesbach was promoted to major assigned to command the 49th Battalion. He was able to recruit 1000 men in eight days in January 1915. The unit served in various engagements, including the Battle of Vimy Ridge, the Battle of Arras, the Third Battle of Ypres, and the liberation of Mons.
In 1917, Griesbach was promoted to Brigadier-General and assigned command of the 1st Canadian Infantry Brigade of the 1st Canadian Division. Griesbach was awarded the Distinguished Service Order twice and the Victorian Decoration for long service and during World War II, Griesbach was made Inspector General of the Canadian Army for Western Canada and was promoted to the rank of Major-General. He retired from that position in 1943.
William Griesbach was elected to the House of Commons of Canada as a Government member for the riding of Edmonton West in the 1917 election, defeating incumbent Laurier Liberal Frank Oliver. He served until 15 September 1921, when he was appointed to the Senate of Canada, which he served until his death.
Patricia Lake & Park
This Griesbach park site was created to honor one of Canada’s most accomplished military regiments – The Princess Patricia’s Canadian Light Infantry. It was created in memory of the almost 2,000 soldiers from (PPCLI) who have given their lives in the service of the regiment over the past 100 years.
On May 8th, 1915 the PPCLI (Princess Patricia’s Canadian Light Infantry) was attacked at Frezenberg and Bellewaerde Ridges. By the end of the final German assault, the Patricia’s were reduced from 554 to four officers and 150 men. The Memorial is a replica of the original monument to the Patricia’s which is located near their heroic stand at Bellewaerde. The original monument includes the inscription “Here 8th May 1915, the originals of Princess Patricia’s Canadian Light Infantry commanded by their founder Major A Hamilton Gault held firm and counted not the cost.
Canada’s first soldiers died in Afghanistan in April 2002 when a “friendly fire “incident killed four and wounded eight members of the PPCLI. The four trees that surround Patricia Park represent not only the four Edmonton soldiers but all those killed and injured in Afghanistan and are a tribute to their sacrifice and courage.
A time capsule containing regimental artifacts and items of significance is encapsulated in a specifically designed cavity in the Patricia Park Memorial with the intent that it will be retrieved from the memorial and opened on August 10, 2064, on the occasion of the 150th Anniversary of the Regiment. The artifacts represent the first 100 years of the service by the regiment. Also inside are three letters from Pte. Cole Lisowski, Pte. Mark Brushett and Pte. Dylan Renaud, three of the youngest members on active duty with the PPCLI, was given the task and honor of returning to the site 50 years from the unveiling to open the capsule.
The dedication of Patricia Park, in the community of Griesbach, offers Patricia’s and civilian citizens a place to reflect on both the achievements and sacrifices of the PPCLI, with over a thousand names of those Patricias lost because of active duty etched on a wall of honor. “This memorial will pay homage to that same courage and sacrifice of Patricias through the last hundred years and the next hundred years,” said Laurie Hawn, member of parliament representing Edmonton Centre.
In early August 1914 as events that led to the First World War unfolded, Andrew Hamilton Gault (named for the main road in Griesbach) conceived and organized a new military regiment for rapid mobilization to Europe. He spent $100,00 to raise Princess Patricia’s Canadian Light Infantry(PPCLI), which was composed entirely of experienced military men. As Major Gault, he becomes second-in-command. Gault was seriously wounded in the Battle of Frezenberg. He was the first Canadian in the war to be awarded the Distinguished Service Order for gallantry in the field. Lieutenant-Colonel Gault brought the regiment home as its commanding officer in March 1919 and he proudly led his men on a final parade through the streets of Ottawa. During the Second World War, Gault commanded a Canadian army reinforcement holding unit, and he was promoted to Colonel in 1940 and to Brigadier- General in 1942.
WWII Bailey Bridge
The Baily Bridge located near Kapyong Avenue in Griesbach is a type of portable, pre-fabricated, truss bridge used during WWII for the invasion of Europe by Allied forces. It was primarily designed and created by Canadian military engineers and is credited with much of the invasion's success as it permitted forces to advance rapidly on Nazi positions, despite the enemy's great destruction of regular bridges in France during their retreat.
This replica was constructed by members of the 8th Field Engineer Regiment in 2005 as a project to commemorate Alberta’s Centennial. It was built with “some” original components harvested from Bailey bridges used during the WWII invasion and transported to Canada from France. A Bailey bridge had the advantage of requiring no special tools or heavy equipment to assemble. The wood and steel elements were small and light enough to be carried in trucks and lifted into place by hand, without a crane.
Griesbach Bedford Basin
The Griesbach Edmonton Bedford Basin pays tribute to Canada’s Navy. Bedford Basin is a large enclosed anchorage forming the northwest end of Halifax Harbour in Nova Scotia along Canada’s Atlantic coast. The basin is very deep and the solid holding ground on the basin floor made it an ideal anchorage and protected location for battleships during WWI and WWII.
There are a few more monuments in Griesbach Edmonton. Be sure to stop by and visit this fantastic north Edmonton community.
Top Benefits of New Home Buying
From lower upfront maintenance costs to design flexibility, new construction can provide opportunities for homebuyers navigating a low inventory market. While some homebuyers are holding out for the right house to become available – one with historic charm, outdoor space, square footage, or whatever they’re seeking – others are skipping the search and going straight to new construction. Not only can buyers customize the home to meet most or all of their needs as well as their wants, negotiating the contract can be less complicated. For Edmonton new home buyers struggling to find their dream home in a current low inventory market, Our RE/MAX real estate agents share the top benefits of new construction home.
Less bidding wars when purchasing an Edmonton new build
One of the biggest advantages of new construction is that homes are sold on a first-come, first-served basis. That means no bidding wars – and no need to waive an inspection, appraisal, or other contingencies to make an offer stand out. Appraisers often look at what similar homes in the area have sold for in recent months to help determine a home’s value. That means if it’s been a while since another home has sold in a particular neighborhood, an appraiser may be using outdated information to price a listing in the resale market. Because multiple units are often sold in a new build development section at once, appraisers typically have several recent comparable properties to consider when setting a price for a new construction home.
New constructions homes are more energy-efficient and require less maintenance
An important consideration in any real estate purchase is how much maintenance the buyer is interested in taking on. DIY-enthusiasts may enjoy making an older home their own, while some buyers would prefer something more turnkey. Although all homes in Edmonton will require maintenance at some point, new construction usually requires less upfront work when it comes to upkeep. A new built should come with an Alberta home warranty.
New construction can also offer the advantage of new technology and energy efficiency. Some enhancements can be added to older houses, but it may take more time for the homeowner to recoup the cost of the updates.
Your new Edmonton home will check all the boxes
What I love about new construction is that for the most part, clients get exactly what they want and don’t have to settle for the resale dwelling that didn’t have that extra room or the countertop the way they wanted. Many builders offer a base model with several options for customizations and enhancements. Sometimes buyers may be able to change a layout of a room by moving a wall or adding windows for more daylight.
Although most Alberta builders don’t negotiate the price of design elements, a Realtor can advise which features are worth paying for upfront, and which ones can be upgraded at a later date. Builders will rarely allow buyers to bring in their own contractors during the construction process, but it still may be less expensive to update features – such as flooring – after closing.
You can still leverage the guidance and expertise of our Remax Realtors
A new construction project can differ from purchasing a home on the resale market in several ways – but the value our experienced Realtors can bring to the transaction remains the same. The benefit of having an experienced Edmonton Realtor in new construction is having someone to fight on your side when construction isn’t going like it should and knowing your real estate agent is working on your behalf and NOT the builders. A new build purchase has many of the same milestones as an existing home purchase – such as the appraisal, inspection, and, of course, closing date.
The most important thing to keep in mind when purchasing new construction is patience. Although some builders have completed properties ready for move-in, buyers looking for a custom new build home should plan on at least 8 months to a full year for construction completion. But while a buyer is waiting, their current home could be already growing in value. Once a new development sells out one section of homes, they often sell the next group for a higher price.