The Realtors Association of Edmonton is predicting the market will "normalize" this year to levels not seen since before the pandemic.
Sales, listings, and prices are expected to drop across all property types, Melanie Boles, RAE chair said, which will bring them in line with 2019 levels and previous years.
"When compared to long-term trends, 2023 will still be a strong year," Boles said in a statement.
The association held its annual housing forecast event Wednesday, where real estate agents and prospective home buyers and sellers can grasp market predictions.
According to the predictions for 2023, the market is expected to be balanced due to nearly equal supply and demand levels.
The report notes an increase in demand for apartments and condos, an increase in luxury real estate, and an influx of out-of-province residents.
The forecast shows detached home prices are expected to drop 2.9 per cent year-over-year.
Semi-detached homes are predicted to see a price drop of 2.4 per cent and for row and townhouses – a 1.4 per cent decrease is expected
The RAE is predicting a 1.1 per cent decrease in average price for apartments and condos compared to last year.
Boles said that compared to long-term trends, this year will be strong following three years of abnormal activity during the pandemic.
As for sales, detached homes are expected to drop by 11.8 per cent, while the semi-detached category could see a 9.3 per cent decrease. But, growth is expected for apartments and condos, with a 1.3 per cent increase from 2022.
According to the association, the average price for single-family homes in Edmonton hit a record high of $510,988 in April.
Jackson Cornelius, advisory director with Zonda Urban, an organization that tracks real estate, said the average single-family home price dropped to $457,000 in December, which he believes is the floor.
"We'll see housing values climb back up from December lows but probably be less than the 2022 averages," Cornelius told CBC.
Boles said rising interest and mortgage rates played a role in reduced listings and sales, as people may have decided not to list or buy last year.
The Bank of Canada raised the interest rate seven times last year to battle inflation.
Sally Munro, a real estate agent with Century 21 Masters, said first-quarter renewals will be hard on a lot of homeowners.
"I may not agree with the projections entirely, but there are a lot of factors that change the markets from buyer to sellers to balance and interest rates definitely have an effect on that and on the value of properties," Munro said.
New listings are forecasted to drop by 5.7 per cent for detached homes, with semi-detached homes falling by about 3.7 per cent and apartment/condominium listings expected to decrease by 2.6 per cent year-over-year.
"People are wondering what is the right time but every situation is personal. The right time is when you're ready. So don't sit back and wait for it to go up or down," Munro advised.