But seriously – Would you call Kelowna or Fort McMurray “big” cities? Nope, but their housing prices are waaay up there. Conversely, do a Google search on Detroit real estate. More than three times the size of Saskatoon – but in crime-ridden, economically depressed Detroit, you can find houses for less than the price of a brand new econo car (and mansions for the price of a run-of-the-mill Saskatoon condo). Face it, house prices are a function of a) people wanting to live somewhere, and b) those same people having the income and optimism to fuel what is (probably) the largest purchase they’ll make in their lifetime. While you may or may not agree, many people think Saskatoon is a great place in which to live. Clean, safe, beautiful…and hey, some even like winter! Plus, if you ever think Circle Drive gets backed up, try driving in Calgary.

Oh, you might also be shocked to learn people are even moving here from other places – maybe returning from Alberta/BC, or moving from the US or Europe because of a great job at the university or Innovation Place. Which leads to the other tipping point for real estate prices – income (i.e. jobs). We actually have a good, diversified economy and low unemployment in Saskatoon. And the wages here (I’m talking real jobs, not retail cashiers, etc.) are only about 15 per cent lower than, say, Vancouver or even Calgary. Any wonder Sasaktoon real estate prices have risen a little?

Anyway, I’m getting dizzy up on my soapbox, so I’ll wrap it up pretty quickly. If anyone hasn’t already guessed, I think it’s great that we’ve seen enough optimism in Saskatoon to support a quick little bump in house prices. But I do want to pose the question – if a low income family can’t afford to rent or buy a nice 1,200 sq.ft home in Nutana or City Park, is it REALLY a housing crisis? I would argue it doesn’t. We should be glad this isn’t the kind of city where a couple of shacked-up retail clerks can afford the kind of house that, anywhere else, would take a much higher education and income. We should be glad things are going well – and if your own low income prevents you from living your desired lifestyle, well, there’s always university. Or, you could go to Detroit…

How do you really feel?

Hopefully by the time you finish school homes will once again be “affordable.”

“If I lived in Vancouver, at least there would be something there to offer in that city.”

Yes, you’d be close to the mountains and the ocean (though it would probably take you 2 hours to get out to either one). For 250K you’ll be lucky to find a bachelor suite (my friend paid 280K for one which is about 500 square feet and that was last year), it will take you hours to get to all those great places, and you won’t see the sun for weeks on end.

Best wishes and thanks for the comment.

If I lived in Vancouver, at least there would be something there to offer in that city. Saskatoon is a joke, and so is the housing market.

You sound like a gutsy guy. Best wishes with your investments.

Thanks for your comment. I have no idea what the “earning potential” is in Vancouver but there’s no question that Saskatchewan incomes have not increased anywhere near the rate that house prices have increased here. I know of no wage earners who have had a 50% increase in pay.

I’m a recent U of S grad and single parent buying first-time in this market–fresh from my crawl up from the “gap.” I’ve been consciously ignoring the perspectives of “Percy” and flame-fanners like him all my life.

Norm, thanks for opening the informative dialogue ;O.

If it wasn’t so politically un-correct, I’m sure he’d just accuse us of not making enough money. There’s a nice “hey, if I can do it why can’t you?” mentality going on amongst a particular class in Saskatoon.

No, I don’t think Dwight really had the right to say what he said, accuse people like myself of stirring up nonsense and claim that I should be happy for the current state of things.

A trip to http://www.policyalternatives.ca/ and their sibling site http://www.growinggap.ca/ does lots to identify the sorts of people Dwight is inclined to deny exist.

The fact that he has the ear of a newspaper and the way he abused that to make his point only makes it worse.

It’d sure be nice to see what people would tell him if Star Phoenix allowed comments on their news articles.

Thankfully Norm, your site seems to be collecting some opinions – which remember, not everyone comes forward with. Remember, if there are even a few people talking, how many aren’t?

J.

Frankly, I hope that Dwight is wrong about the average reaching $300,000 by next spring, buy c’mon, having an opinion which you don’t care to hear doesn’t make him the devil.

I don’t really know what more to say about Percy’s comments. I guess he showed us “frustrated first-time buyers”… hmm, I’ve been a homeowner for almost 10 years. I’m a frustrated saskatonian mr. percy, frustrated at the fact that I’m going to have to watch saskatoon struggle through the “correction” that will result from this speculative market.

Yet again, he didn’t show us anything in the form of concrete fact that was relevant to our economy. He basically said if we can’t compare the saskatoon real estate market to Toronto, then we’ve got to compare it to st. Johns…. huh? Good analysis Percy… we’d hate to actually see a comparison using statistical data (outside of housing prices from the extremes of the spectrum). It’s typical propaganda and very indicative of Percy’s motivation. The only crumby thing is that he’s got an audience in the starphoenix. He should feel a certain degree of responsibility to be analytical and objective. Instead he’s shamelessly pumping… when’s the dumping Percy? Maybe you could write us all another article telling us when you dump your stock in real estate and I’ll dump mine too. Nice manipulation.

People of saskatoon, and surrounding area, are the suckers in a very artificial and out of control scam.

J.

Dwight definietely sounds like he has something to lose in a real estate crash. I would gladly take an affordable home over the despair I experience knowing I can’t afford a home. When you think about it, he is arguing for nothing in my case – thanks but no thanks.

The market won’t self-correct and this theory based confidence has got to end. The market is finding the price point at which it can get the most money for as little as possible. No self-corrected market is affordable to the majority of people.

This “growth” is speculation and and artificial stoking of impressions. People are being mislead into thinking the high prices are in some way fair. Look at where they are now. $200,000 for GARBAGE! Junky apartments converting to condos for such high prices. Since when did renting out apartments become worse than selling them, think about it. This is just lots of greedy people cashing in at the expense of others, and the politicians – defend them if you will – are still sleeping.

Who do they represent? Those most like them.

http://www.canada.com/saskatoonstarphoenix/columnists/story.html?id=90c79b6e-602b-4496-8713-6cce6714948b

If anything, high housing is hurting the economy (as discussed above)… so what do the two have in common? Usually the high incomes come first, then the demand for housing. That doesn’t seem to be the case…

something tells me that you, Mr. Percy, might have a chunk of change in real estate and a vested interest in this type of nonsensical promotion of these high prices.

I’m not blaming the Premier, he’s merely an opportunist. I’m not blaming Albertans, they’re merely investors reacting to a speculative market. I am, however, blaming you and those like you for your irresponsible analysis of the saskatchewan economic situation. It is this type of analysis that feeds a frenzy, increases speculation, creates a bubble, and causes undue harm to an economy with an extremely high degree of potential.

It’s not sustainable Mr. Percy… and an unsustainable market typically has a domino effect when correction hits… we can’t dismiss the negative impact a market correction will have. I am worried.

J.

Friday, May 11 “Which Economy Do You Want?” – broadcast on CJWW Radio 600 at 8:34 a.m. – Dwight Percy

There is a great hue and cry out in the market right now about rising house prices. Most of this is coming from people who are lamenting the fact they cannot get into the housing market because it has become very expensive.

What I find really bothersome is that many of these same people are looking for someone to blame. They say “Pin it on the premier. Blame the real estate community. Give the blame to Alberta investors.”

Here is what they should be asking. Which would they prefer – a strong economy with lots of jobs and higher house prices, or an extremely weak economy that, as a result, has cheap houses?

There are only two things that can sustain a housing market at a particular level – incomes and equity. There is no doubt that incomes have not moved as fast as house prices in Saskatchewan in recent months. That just isn’t possible. But if prices get too far out ahead of either the incomes people earn, or the equity they have available, the market corrects itself – prices come down.

But here is the second part and I will offer these examples. In New Brunswick, the average house price is $137,000. In Prince Edward Island, the average price is $114,000, down from last year. In Newfoundland, the average price is $137,000, down from last year.

Guess what else these places have in common? Weak economies and higher than average unemployment. It is those weak economies that make houses cheap, because people don’t have the confidence, the incomes or equity to bump them up. This is attractive? I don’t think so.

I agree that “affordable housing” has always been one of many things that makes Saskatoon the great city that it is. I’ve also always appreciated the slow but steady growth that we’ve seen in this area over the years. I favour a market which is predictable and I start to feel rather uncomfortable when things change so suddenly and so rapidly. I recognize that there are consequences when housing prices increase so much quicker than incomes. I see that people are hurting and I don’t like it either. I’m also troubled by the fact that I feel uncertain about where this market is going and I long for the days when I could feel confident in advising a client. I wish there was some end in sight, but I’m not really seeing that right now.

Thanks again J.

Who is doing all of this buying, where are their jobs? I see a lot of Alberta plates lately, but what are their jobs?

There are no new buildings, expanding downtown cores, suburban IT offices… Something has got to give, the current state of Saskatoon is an unbalanced equation.

I agree, the province is firing on all cylinders. Relatively speaking, however, it’s still in its infancy. My comments were in response to all who base their projections by cross-referencing avg price in major canadian cities with avg price in sask and then articulate their projections in ways to imply the buyer will be missing out if they don’t buy now. Saskatoon is not a major canadian city. Neither its economy nor its job market are even close to the stride of the major canadian cities. That is what I love about saskatoon. It seemed to me that growth was being planned and managed responsibly and strategically. I’ve always been impressed with Sask’s R&D incubation and subsidies. affordable housing used to be the greatest selling feature when lobbying businesses to consider sask.

So now what? What has all of this speculation and over-extension/leveraging (40 year mortgages) done to saskatoon’s future? Remember calgary in the 80′s?

Anyway, I’m just very concerned that the government has not done their DD and considered how this boom/potential bubble might impact the market in the future. Interests rates? Oil prices? Grain prices? etc. I don’t mean to be a fatalist but I do hope that what seems to be unsustainable growth doesn’t impact or offset the progress we’ve made thus far.

J.

By the way, there’s a crazy rumour floating around that the Saskachewan economy is diverse, resource rich and firing on all cylinders. Some actually say that people are moving back to the province and that there are lots of jobs for them.

Now you look at saskatoon… where’s the mass migration? Where are the jobs? Where’s the rocket boom single market economy (AB) or the established strong and diverse economy (BC)? I believe in saskatoon, I love saskatchewan, I believe it has the potential and the foundation to be a solid and economically diverse economy but it’s not there and there’s no record cash influx due to oil (or whatever high demand commodity) coming in or even on the horizon.

What’s happening in saskatoon is a tragedy. The buyers are speculative investors that don’t live in saskatoon but want to flip-flip-flip looking for a quick buck. Banks are happier than pigs in pie locking in 40 and 50 year mortgages. Realtors… don’t even get me started… ofcourse reports from are going to read “300K avg by next spring”. And then everyone follows like sheep thinking they’re missing the boat. Debt, debt, debt, that’s all that’s being created here and the avg Joe family is paying for it with their futures.

This speculation is destroying my motherland.

J.

New builds which are currently listed MLS are priced from 220-280 per square foot including land. The challenge will be getting your hands on a lot as there is a pretty big shortage. I understand that there is a lot draw coming. Here is some info from the City on land.

http://www.city.saskatoon.sk.ca/org/land/index.asp

P.S. Don’t let your agent sell your current place before it is “finished listing on the MLS.” In that kind if market you want everyone to know it’s for sale before it sells. Good luck.