A closer look at the Saskatoon real estate statistics for September 2008
The Saskatoon Region Association of Realtors recently reported September results for the entire residential category, which includes single-family homes, condominiums, semi-detached properties, duplexes, mobile homes and vacant lots. Unit sales totaled 246 properties across all of these property types, and an average sale price of $297,836. Let’s have a look at how houses and condominiums did.
Average sale prices for Saskatoon houses and condos both took a jump during the month of September following some pretty hefty declines during the months of July and August. It’s worth noting that the average size of the properties that traded in both categories also increased fairly substantially, so while buyers paid more on average, they also bought more real estate with their money.
The average price of a Saskatoon house came in at $319,596 for September, up from $306,095 in August, and $245,363 in September of 2007. The average size of the houses that traded was 1,224 square feet in September of 2008, 1,136 square feet in August and 1,107 square feet in September of 2007. Price per square foot declined to $261 in September of 2008, from $269 the previous month, but finished well ahead of the $221 per square foot recorded in September 2007. The average cost of a house on a per square foot basis peaked at $280 in May of 2008.
Unit sales in the “house” category climbed to 183 units in September from 150 units in August but finished the month 11% lower than September of 2007 when 206 houses traded in the Saskatoon real estate market.
This graph tracks both the average and median selling price for a Saskatoon house back to January of 2007. Click the image for a larger version of the graph.
Average prices in the Saskatoon condominium category also increased through September and settled at $242,040, up from $225,311 in August, and just a smidge higher than the average for September of 2007 when condos traded at $236,220. Again, the average size of the condos that sold took a significant leap to 1,008 square feet in September, up for 933 square feet in August. The average unit size sold in September 2007 was larger at 1,045 square feet. The price per square foot remained fairly stable on a month-over-month basis finishing at $240 compared to $241 in August, but still up from $226 in September 2007. The average cost of a condo on a per square foot basis also peaked in May of 2008 at $262.
Unit sales in the “condominium” category took a substantial beating declining to just 48 properties, down from 62 units in August, and down even further from 84 units in September 2007.
This graph tracks both the average and median selling price for a Saskatoon condo back to January of 2007. Click the image for a larger version of the graph.
Listing inventories continued to grow, though somewhat more modestly through September. This graph shows the total number of active listings at the end of each month for the house and condo categories versus the number of sales transacted during each month. Click the image for a larger version of the graph.
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Norm Fisher
Royal LePage Saskatoon Real Estate
14 comments so far. We'd love to hear your thoughts.
October 11th, 2008 at 12:31 PM
Very informative, Norm — thanks!
Despite the decrease in sales and increase in listings, it really does look like prices have stabilized rather than dropping much, especially in the condo market. Time to get off the sidelines and buy, perhaps?
October 11th, 2008 at 1:19 PM
Shane,
I don’t know. Condos certainly aren’t up much year-over-year. As we head into winter I think we can expect the see demand drop some as we usually do. Inventory remains pretty high at close to 1,700 units so it seems reasonable that prices could continue to slide some.
One of the agents in my office is looking for a new house and he is starting to shop right now. I suggested that December might be a better time. Most sellers won’t be getting much action at that time and the thought of a pre-Christmas sale might really have them feeling motivated. That said, there probably are some sellers out there who are willing to sell at a decent price right now. Really depends on where you see things heading.
October 11th, 2008 at 1:49 PM
Norm, thanks for the stats.
Shane,
in any normal market prices do not stabilize when sales decrease and listings increase. Prices go down. With tonnes of condos coming onto the market within the next year( housing starts for multi units are still very high) prices will come down.
I wrote in the last post why prices will not go up but down and this is not even factoring the world wide credit crisis.
For anybody being on the sidelines I would wait until at least spring. Prices will have come down quit a bit and hopefully this credit crap is over with or at least we will know what the carnage is by then. I would be scared of adding debt for the next few months.
October 11th, 2008 at 2:46 PM
Norm,
Those are great graphs. Thanks for taking the time to put them together. I hope that you can post the revised version every month. A few comments:
- The average price will have a lot more monthly variability than the average due to high end sales. Therefore it is not very useful for trend analysis.
- The median price is a reasonable substitute for a Housing Price Index. You can see that the trend is down for houses in Saskatoon.
- If you plot a 3 month rolling average you will smooth out the monthly variability and can clearly see trends. Click my name to see some graphs for Victoria using this method.
It is a shame that these types of graphs are not published in the press and by the real estate board. It really lets buyers and sellers easily see market conditions.
October 11th, 2008 at 4:02 PM
All those spec homes now on the market are probably decreasing the average cost/sq ft. 2 story houses in the newer areas are HUGE! (1400+) But alas, no double attached garages, and way too many stairs! :’)
Shane,
This is just the beginning. There is always a LOT of resistance from sellers to lower their price when they think of what they “could” have gotten for their property 6 months ago. The only thing that would stop prices from dropping further is for inventory to get eaten up. Until that happens it’s a buyer’s market, and when it’s a buyer’s market prices need to be competitive if you want to sell.
October 11th, 2008 at 5:07 PM
Roger,
Thank you for the suggestions. I’ve added the three month rolling average to the graphs, and you’re right, it does add something pretty interesting.
I do plan to update the graphs each month and include them with this particular report.
Thank you again.
October 11th, 2008 at 5:37 PM
Heather D. said:
“This is just the beginning. There is always a LOT of resistance from sellers to lower their price when they think of what they “could” have gotten for their property 6 months ago.”
I read an article about this price resistance mindset a while ago. The author postulated that homeowners watch house sales in their neighbourhood and mentally lock-in the increase as “profit” during rising markets. When it comes time to sell if the market value of their home has dropped from the last lock-in they view the difference as a “loss”. This is in spite of the fact that they may have bought the property years ago and are realizing a large capital gain when they sell. This emotional reaction may end up costing the homeowner a considerable amount of money because they start reducing the price too late and end up chasing the market down.
Norm – In your sales experience have you seen clients with this mindset??
October 11th, 2008 at 5:56 PM
Nicely done, Norm!
Love the graphs. Do you think you could run listings vs. sales over the same time period every one in awhile? Every 3 to 6 months?
October 11th, 2008 at 6:31 PM
Roger,
“Norm – In your sales experience have you seen clients with this mindset??”
Absolutely, and the article that you’ve read accurately outlines the cost of “chasing the market down.” If you doddle at the wrong price for thirty days, you’ve cost yourself some cash.
Example: $300,000 is a price at which the home is marketable. Seller opts to price the house at $325,000 reasoning, “we can always come down.” Nobody bites in the first thirty days. The right price is now $280,000 and the seller reduces to $300,000 about thirty days too late.
I’m looking at a house that was originally listing in May for $479,900. It has been cancelled and re-listed five times since then, most recenlty at $399,900. My sense is that they are finally priced right and the house looks attractive at this price. Had it been listed at $439,900 in May, it probably would have found an eager buyer, perhaps even an overbid.
That said, I have to say that many sellers have shown that they get it. That’s why we’re still managing to sell 200+ properties each month.
Crikey,
Thanks. I’m feeling like I have something going here for this particular report.
I was just finishing up a sales to listing graph when you asked the question and it has been added to the post. You may need to refresh your browser to see it. I’ll include an updated version of each graph every month.
Thanks for the feedback.
October 11th, 2008 at 6:40 PM
IMF warns of financial meltdown
http://fresh.bnn.ca/reuters_story.aspx?story=2008-10-11T210834Z_01_TRE49A36O_RTROPTT_0_CBUSINESS-US-FINANCIAL3.XML
What the heck was last week then?
October 12th, 2008 at 9:09 AM
It seems strange to me how oblivious the local real estate market is to the turmoil in the financial markets. Stocks are down 50% from their highs, oil is down 50%, pretty much everything with liquid trading is down (except maybe gold) but if you look at the new listings on mls you would have no idea. Just business as usual in the real estate market, not to worry be cause housing prices never go down, right? Yeah right.
A massive drop in commodity prices, slow down in exports due to recession/depression, freezing of credit markets, all of this will be extremely destructive for the local economy. All of the factors that causes the local boom are being reversed. Anybody who seriously needs to sell their house, you need not take my word for but I strongly recommend you look at the link George provided and in general educate yourself on what is happening in the world right now. This doesn’t look at all like a short-term event but rather may preceed the next depression. It may sound like an overreaction on my part but the fact of the matter is, the level of government intervention right now has not happened since the great depression. In fact, based on the levels of debt currently held by western countries we are headed into this in even worse shape than in 1929.
October 12th, 2008 at 11:14 AM
Roger,
It’s an interesting and unfortunate phenomenon. You’re right, lots of these sellers will still make decent equity if they bought in 2+ years ago. A tough lesson for those chasing the softening market.
Norm,
I think many clients rely on you as a realtor to give them a fair price estimate. Yourself being a reasonable individual tells them they need to have a competitive price on their house or they won’t likely sell it. People selling their own properties are going to most likely be the chasers. I’m sure too there are always some stubborn ones who insist their property is still worth what it was “6 months ago”.
SomethingDoesntAddUp,
It does seem like a strange time to be making one of the biggest decisions of your life…
October 14th, 2008 at 2:13 PM
*Seven* houses in Area 3 for all of September.
Wow.
That’s half as many as August (which was a pitiable month for sales in general), and about 1/4 as were sold in each of May/June/July.
Methinks that a lot of those expired listings came from the north end of town…
October 14th, 2008 at 3:07 PM
Thank you for the graphs. Makes it clear that sellers are very unrealistic about what they can get now (and for while for that matter since thats how it’s been since all summer). Doesn’t anyone realize “supply and demand” usually drives prices in the right direction. If the houses are not selling, that means there is no demand (at that price at least). There may be some people willing to buy some of these homes but with the possibility of rising interest rates and job losses because of economic slow down, I’m not one of them. Looks like lots of other people are thinking the same way. Plus it looks like there is actually a LOW DEMAND for these homes at those prices. Maybe there was a strong demand a year or so ago and house prices increase substantially. But it’s no longer the case and that’s very clear from the graphs.