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Surplus residential real estate creating a buyer's market

In the film 'Field of Dreams,' the main character hears someone speak the (oft-misquoted) words, "If you build it, he will come." That must be on what Edmonton residential real estate developers are banking. The latest statistics show an emerging surplus of new housing in Alberta's capital, turning the local market into a potentially appealing one for buyers.

Numbers recently released by Intelligence House show a noticeable increase in the number of so-called "spec" homes going up in Edmonton and the surrounding area. Spec homes are houses built before they are sold. This phenomenon is often seen in new subdivisions. 

During the winter of 2016/2017, the number of spec homes rose to 2,430, up from 2,156 last summer. During that same period, sales dropped by around 20 percent. Although the volume seems significant, estimated at a 2.3-year supply, a spokesperson for Intelligence House does not feel the situation is critical. Buyers may see added incentives from builders in the form of discounts, deals and inclusions. While the oversupply should reduce to 2 years in the next few months, the market is unlikely to change significantly, according to industry insiders.

Even in a buyers market, potential buyers are cautioned to use good judgment, and to align themselves with trusted professionals. A residential real estate transaction is an exciting event, but it can turn from dream to disaster if legal matters cause a deal to unravel. By having an Alberta real estate lawyer inspect the contracts to make sure everything is in order, a buyer may be assured that he or she is making the right choice in a new home.

Source: Edmonton Journal, "Excess supply in Edmonton new housing market, research shows", Gordon Kent, June 5, 2017

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