Canadian house prices see first quarterly drop in nine years: CREA
Posted by on July 16, 2008
Media release from the Canadian Real Estate Association yesterday.
“Over the past six months, easing sales activity and a surge in new listings caused the resale housing market to become considerably more balanced in many major housing markets. Vancouver, Regina, and Saskatoon were the most balanced major markets in June.”
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Norm Fisher
Royal LePage Saskatoon Real Estate
110 comments so far. We'd love to hear your thoughts.
May 1st, 2009 at 12:35 PM
Great… And I just bought one of Norm’s listings in May.
May 1st, 2009 at 12:35 PM
It has been a world wide housing bubble fueled by easy and cheap credit.
The States, UK, Spain, Austraila, Italy, France, the Netherlands, Israel…. do I have to type out 30 countries of the housing downturn? You get my point, I’m hoping.
Canada is now starting to enter the downturn in housing. Record listings with high prices and huge declines in yoy sales is a common theme in all these countries.
People who say that if prices drop lots that buyers will swoop in buy the properties. It is a nice theory but historically has never happened. Why?
The cause of the runup of prices in Saskatoon07 was that first time buyers were panicked into buying and speculators buying 2,3,or more properties. The bidding wars.
The only buyers out there are first time buyers now. Every other pool of buyers is tapped out.
There is starting to be less and less demand while supply keeps reaching new highs. I believe that housing starts were more this year than last while demand is substancially lower this year over last. It will interesting but scary to see where we will be next year at this time
May 1st, 2009 at 12:35 PM
First time, if you had read Norm’s blog, a lot of people, including Norm, were warning of over valued housing, low Saskatoon wages that hadn’t kept up, increasing inventory, decreased demand and the return of the Alberta Advantage (cheaper Edmonton housing, lower taxes, and $10,000 higher average wage).
[note: Norm did not share all of these opinions]
Of course prices are going to go down, when inventory is 5 times what it was at the beginning of the year, when mortgages are getting tougher to obtain and for lower potential max amounts soon, when sales are down, when neighbouring and higher paying Alberta house prices are going down – and students are back to leaving to Alberta, now partially because of cheaper housing! in some places.
Don’t worry though, your house will probably recover in a few years. As long as you bought it to live in, for a while, you’ll make your money back eventually. Hopefully. Tough to feel for the speculators (well the Johny Come Latelies) and investors who loaded up on houses this past year, at the expense of the everyday family man/woman who just wanted a house.
If you are the latter, blame the imminent drop in value on the speculators… after all, way back in April or May, Norm had pointed out that HALF of the places for sale were vacant. Tough to justify a housing “shortage” when there are hundreds of empty houses and condos, likely just there as an investment.
May 1st, 2009 at 12:36 PM
Alberta Advantage was no myth — it was a lie
http://www.canada.com/edmontonjournal/news/cityplus/story.html?id=40917585-2677-4d80-90d0-0fce98c3de77
I believe our government is doing a way better job than Alberta’s did during their boom.
May 1st, 2009 at 12:36 PM
Of interest
First quarter of 2008
Of 20,788 people arriving in Alberta:
• 6,374 (31%) came from Ontario
• 4,912 (24%) came from BC
• 2,506 (12%) came from SK
• 1,641 (8%) came from Quebec
• 1,426 (7%) came from Manitoba
• 1,241 (6%) came from NL & Lab
• 1,088 (5%) came from NS
Of 20,075 people leaving Alberta
• 6,871 (33%) went to BC
• 4,173 (21%) went to Ontario
• 3,558 (18%) went to SK
• 1,402 (7%) went to Manitoba
• 1,135 (5.7%) went to NS
• 1,074 (5.3%) went to NL & Lab
• 679 (3.4%) went to Quebec
Of 18,995 people leaving Ontario
• 838 (4.4%) went to SK
May 1st, 2009 at 12:36 PM
George that observation in the Edmonton Journal can be true of any city in Canada at the moment. All infrastructure is at their limits and Saskatoon is no exception, what about Victoria Bridge? Saskatoon downtown is looking pretty shabby, I don’t think that a run down city has anything to with the Alberta advantage. The Alberta advantage is higher wages, more jobs, more professional jobs and lower taxes, infrastructure has nothing to do with it. It going to look like Detroit? Come on that is so far fetched!! That writer is drawing a strings and must not have much to write about.
May 1st, 2009 at 12:37 PM
“Alberta Advantage was no myth — it was a lie”
I think “Alberta Advantage” is a fair statement, given that the wage/tax/now housing advantage is still true in Edmonton.
And Saskatoon is still working on starting a south bridge, has subpar bus service (ie no LRT) and only finally completed the College Drive overpass because the Federal Liberal Government gave them a pile of money.
And still has lower wages. Was overwhelmed back when Saskatoon was growing (during our year long boom). I’m sure if Saskatoon ever actually had a decade + boom like Alberta, our infrastructure would be behind too. And the province/no debt/surplus 8 times bigger than Saskatchewan’s (with no debt to spend it on) can all help them to catch up infrastructure wise, they just need more Saskatchewan residents to move there, for higher paying jobs improving Alberta’s infrastructure.
And remember, if housing in Edmonton drops in price, Saskatchewan grads have an even cheaper place to move to, while making a lot more money and paying less in tax than they would here.
May 1st, 2009 at 12:37 PM
Is it my turn to gloat over my predictions a year ago?
… I don’t, however, see the doom and gloom that so many on here see. There’s an obvious increase in inventory for sure. I think a lot of our inventory is those “flip-this-house” style apartment-condo conversions. Those will weed out in either a decrease in price or back to rental. One thing that surprises me is the relatively strong demand left in the market. I think there are most likely a lot of “wait and see”‘ers. In a slowing Canadian economy, is it fair to assume that migration to Saskatchewan will remain strong as jobs dry up elsewhere? I think so.
The sky is not falling, it’s just cloudy
J.
May 1st, 2009 at 12:37 PM
Johny,
demand is quite a bit less now than last year,
there are way more housing starts this year from last year
with mortgage lending tightening up there will be even less demand this fall
If we hit 3,000 listings, this market will be toast. I was not sure if we would every reach it, but once all the housing starts are finished by next spring, I wonder where we will be. Interesting, (scary if a speculator right now)
May 1st, 2009 at 12:38 PM
What were they saying in the US in 05-06?
No bubble here
http://www.deloitte.com/dtt/article/0,1002,sid%253D15288%2526cid%253D87952,00.html
Housing Bubble — or Bunk?
http://www.businessweek.com/bwdaily/dnflash/jun2005/nf20050622_9404_db008.htm
Bernanke: There’s No Housing Bubble to Go Bust
http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html
Are we different here? Or are we just a few years behind?
May 1st, 2009 at 12:38 PM
Now, after boldly stating this morning that economists rarely make predictions of consequence…
well, this is all retrospective, not necessarily predictive.
http://www.bmonesbittburns.com/economics/econofacts/20080715c/econofacts.pdf
In the table given we’re just below Vancouver in terms of declining YOY sales. What an honor…
May 1st, 2009 at 12:38 PM
Johny, “relatively strong demand”, new listings have far outstripped sales all but one week since February. We went from about 300 to about 1,500 listings in half a year. Add another 397 private on saskhouses.com, plus old school classifieds, for sale by owners, and other internet, and I bet we’re over 2,000 for Saskatoon alone. Likely nearing 3,000 places available if you include the bedroom communities. And mortgages about to get harder to get. Relative to what Johny?
May 1st, 2009 at 12:39 PM
I also think the key here is that Saskatoon house prices just took a little longer to start booming and are likely just a year behind in dropping. Alberta dropped. Edmonton is already cheaper and pays more.
And oil just dropped about $10 a barrel the past few days.
May 1st, 2009 at 12:40 PM
Mortgage crisis may be looming for Canada
http://www.canada.com/edmontonjournal/news/business/story.html?id=05a2f9cb-a5f5-46e3-98c3-4043344178e0&p=2
May 1st, 2009 at 12:40 PM
To All Bears,
Im quite disgusted by the way you guys are twisting the numbers to make it seem like things are worse than they are. Economic conditions, housing , sex lives, survivor, and any other things you guys can twist to get something cheaper for your own gain. Tell me this what makes you biased number crunchers any different from the speculators you call down so much if you can tell me please do….
May 1st, 2009 at 12:41 PM
It’s very easy to be negative. Takes no effort really (hence the popularity of drugs). Canada is currently talking itself into a recession, but I’m still of the opinion that it’s not going to happen. We’ll see soon enough, keep your eyes peeled to corporate earnings and job numbers, they’ll tell the story.
May 1st, 2009 at 12:41 PM
the potash mines in the area are all due for a decent raise. This is going to happen within the next 6 months or so. This will definatly stimulate the economy for saskatoon and area. I would bet there alot of people waiting to get the raise before the buy a new property/upgrade. Just something to think about.
May 1st, 2009 at 12:41 PM
Armoth and Callum,
In my opinion (and mine only), being on the negative side of things is on par with being a speculator or posi spinner i would say too…
Pushing that everything is on the up and up and all positive about the province ignoring the negative effects…the problem with that is that there is a drive up of everything by speculators and a few richer fields are causing hardship for a large number of people that can’t handle it becuase their wages in thier fields haven’t caught up to handle it… Sure nurses get a monster raise, potash probably too, uranium? sure, oil? sure…but what about the other HUNDREDS of careers in the province. Sure the average wages climb but by no means is the average person seeing that raise.
now trying to see a down trend in this crazineses is just the logic and disbeilef that everything is peachy for everyone beucase (and i’m assuming here) the ones that are on the negative side (myself included) are seeing NO positive effects…i think it’s the sign of the times here, our fuel is high, rents have syrocketed, housing where everyone’s parents before this generation seems to put the emphasis on ‘success’ as owning your own house and now a lot of people are left out on that…it’s a whole bunch of factors, and both sides are waist deep in their reasoning i would guess.
I guess my ramble is just that it’s not so simple for either side as the other side likes to think.
my 2 cents.
May 1st, 2009 at 12:42 PM
Yawn
May 1st, 2009 at 12:42 PM
Armouth,
I own my home. Higher house prices do not make me any richer. Lower house prices do not make me any poorer.
I would like to build one day, but if I look at building now compared to a couple of years ago, there is a 150k difference for the same house. The wife and I make good money but our wage has not gone up 50% or more in this time period. I have been researching this whole housing boom around the world since last fall.
What I have found is that EVERY market that grew ahead of the fundamentals in growth eventually came back down and corrected. Some have even corrected past the prices they started out. (Kinda like Saskatoon going back to 150k for an average house price)
Don’t think our economy (resources) will save us. There are many indicators that determine a housing market and economy is just one indicator of many.
I wanted to build but speculators have driven the price up beyond what I want to pay for a house. The bank says I can do it, but I’d be crazy to take their advice. Eventually the market will correct, how long and how far, I don’t know. But I have done enough research to know that for some neighbourhoods it won’t turn out pretty and for some families the dream of making some big bucks will turn out to be a nightmare.
I call it as I see it.
May 1st, 2009 at 12:42 PM
George,
I know you call it the way you want to see it and I’ll tell u the way I see it and several other economists and officials see it. You are FEARMONGERING for the lack of a better word.You dont know whats going to happen yet ur posting your crap like its a fact. Saskatchewan is the place to be right now even tho you love Alberta to death. Saskatchewan is the place to be right now even if you want to try to crash its housing market so you can buy a house here proving my point there is still demand. As for Sask economy there is several companies already drilling while I speak that ive invested in once they are pumping oil where do you think the money will go?
May 1st, 2009 at 12:46 PM
“You dont know whats going to happen yet ur posting your crap like its a fact
And you’re not?? Take a good look in the mirror, buddy.
Talking UP the RE market and the economy and putting people in the poorhouse because they’ve overextended themselves financially is a good thing, but tring to offer alternative point of view from the mainstream media and tring to save people from getting caught with their pantas around their ankles is not??
Please expain that logic.
If you don’t like it, ignore it.
May 1st, 2009 at 12:47 PM
Armouth,
Actually, I believe Saskatchewan is the place to be, I have said it over and over. Alberta is a one trick pony. ( But whatta pony!) Eventually I believe we will surpass Alberta, it will take some time. With that said our housing is TOTALLY out of whack with the fundamentals. I don’t believe we were undervalued a few years ago, everybody else was overvalued. We were probably where we should have been. Now sales and prices are starting to drop in pretty well every center in Canada. Sales have dropped big time in Saskatoon and prices will soon follow.
The housing bubble that has happened in the States and about 30 other countries in the world is here as well.
There are no indicators to suggest to me that housing will increase here anytime soon. Everything suggests a correction deeper than most are talking about on here.
All I am doing is FEARMONGERING? Why would I buy another house other than my residence? I believe we have reached a peak for house prices inflation adjusted that we will not see for a generation.
If I had money to invest( I don’t) housing would be the last thing I would sink my money into right now. I’d be better off in a GIC at the rate of inflation.
May 1st, 2009 at 12:47 PM
Armoth,
Fearmongering? Get your ideas straight. Fearmongering is what drove Saskatoon real estate to the levels they are currently at. That old phase, that was being repeated quite often over the last year and a half, “If I don’t buy now I will never be able to afford a place”, does that ring a bell (fear fear fear). It was speculators and “Boom” pushers (there’s no boom by the way, when thousands of construction workers move to Sask then you can call it a boom) like yourself that influenced people to way over bid on houses and essentially drive the market to very unsustainable levels.
May 1st, 2009 at 12:49 PM
Armoth & Callum –
Skepticism is “the same as speculation”, my left foot. (And furthermore, Armoth, who’s said anything about sex?)
George, Crikey and Wesco are all right: Saskatoon came late to the ‘housing boom’ party, and had a massive, unsustainable runup in a single year. Prices are too high for people to pay, which is why we have five months of inventory at current sales levels. All markets that had this kind of boom have reverted back to normal levels. Pointing this out isn’t fearmongering — it’s telling the truth.
I’m not shorting the market or anything like it: I’m saving my money, paying down student loan debt, and waiting for prices to return to sanity.
May 1st, 2009 at 12:50 PM
I try to be optimistic, but when Jim Flaherty (the Lou Costello of economics) says there is no housing bubble, you are pretty much guaranteed there is one.
It would seem that the issue is how much of a correction is coming to Saskatoon. I suspect it will be in the 20-25% level in the next year. House prices here are artificially high and I remain unconvinced that any influx of workers from elsewhere or potash workers getting a nickel more an hour will stop whatever sag in prices is coming. Saskatoon, as nice as it is, is a small city in a province with a small population.
Back in Toronto there is an accumulation of population and capital in a geographically restricted area that would tend to inflate house prices, but I remain skeptical there are any similar significant forces at play here.
May 1st, 2009 at 12:50 PM
Sam Johnson said:
“It would seem that the issue is how much of a correction is coming to Saskatoon. I suspect it will be in the 20-25% level in the next year. ”
I’ll take that bet right now.
“House prices here are artificially high and I remain unconvinced that any influx of workers from elsewhere or potash workers getting a nickel more an hour will stop whatever sag in prices is coming. Saskatoon, as nice as it is, is a small city in a province with a small population.”
Anyone who thinks wage increases (particularly in the trades and jobs directly affected by potash and uranium demand) are on the order of “a nickel more an hour” isn’t paying much attention. My engineering friends were buzzing last night at dinner at how CAD/CAM technicians, with two years of education and right out of school are being hired at 60k, as fast as one local mining/engineering company can get them.
Other industries won’t move as much or as quickly, but they will move. Articling salaries at top Saskatoon law firms moved up this year for the first time in recent memory.
May 1st, 2009 at 12:51 PM
Cad cam yes for those fields. other cad jobs for instance in architecture, most firms are still paying $17 an hour for people with 10 years experience…
it’s crazy out there…
May 1st, 2009 at 12:51 PM
Also, something’s been bugging me. As Norm has been pointed out, virtually every economist who’s looked at Saskatoon or Saskatchewan has predicted very mild decreases (or often, mild increases) for 2008-09.
Do those who are predicting drops of 15%, 25%, or 50% think that they are seeing something that these economists or not? Don’t you think they checked on housing start numbers, average incomes, and mortgage rates?
I’m NOT saying economists are infallible or even that they’ll be right this time. But please recognize that they have access to the same data you folks are seeing, and I have yet to hear one say that the sky is falling.
May 1st, 2009 at 12:51 PM
Armoth,
Everyone like to think that their city is somehow special and immune to real estate cycles. This belief is usually driven by unrealistic economic predictions, fear, market hype and crowd psychology, to name a few. The worst time to buy is when people say “It’s different this time”. Those that buy at the top of a speculative bubble get burned when the bubble pops. You seem to find statistics and negative comments unsettling so I suggest you take a look at this chart. http://tinyurl.com/saskatoon-bubble
Where do you think Saskatoon is at the present time??
May 1st, 2009 at 12:51 PM
lol, nice chart… very factual.
Jim, relative to before the boom. Inventory is higher than regular market conditions but don’t call last year’s inventory normal. Take a look at this board, I’d love it if everyone on this board would give an honest answer as to whether or not they’re here because they’re interested in buying a house. The simple fact that this board is so active is perfect proof that there’s still a whole lot of interest in Sask realestate and Sask in general.
J.
May 1st, 2009 at 12:52 PM
If some of you would kindly look at Crikey’s graph you would see the level of sales stayed steady with some increases and decreases but there was always demand. The only thing that changed was the listings amount which increased sharply. There is no housing bubble over time the listings will be absorbed like usual. The only thing i see happening is a slight correction and things will be back to normal again or worse if all the projects going on make earlier headway. If you would like to provide a graph listing the amount of bullshit you guys churn out relative to the price of houses I would also be interested in that.
May 1st, 2009 at 12:52 PM
Armoth,
There will always be sales in any market whether it be a seller’s, balanced or buyer’s market. However buyers are always the ones that set the selling price because they are the ones with the money and they determine the price that will be paid. Sellers can only set an asking price. The market value of a property is established by what a willing buyer will pay a willing seller at a given point in time.
What is happening in Saskatoon is that the pool of buyers is uncomfortable with the rapid rise in price and are stepping to the sidelines. Sellers respond by lowering the price especially with the rapid increase in inventory (i.e. competition).
So what lies in the future. Perhaps this picture will help you come to terms with your denial:
http://tinyurl.com/saskatoon-future
May 1st, 2009 at 12:53 PM
Roger,
So what your trying to say is if Im baking some delicious chocolate chip cookies and I have 300 cookies and I sell 300 cookies per day. Then suddenly I go crazy and make double the amount of cookies!!!…for 6 months and I have 1450 cookies staring back at me in the face. Your saying that my cookie business as well as the chocolate factory that makes my chocolate chips and the country that lives on my cookies is all doomed!!!!?!?!?!
May 1st, 2009 at 12:54 PM
1st of all avg house prices were 180,000 before they went up. 2nd albertas raises came in increments over 8 yrs so yeah we kind of had a big increase in 1 and a half years because we didnt move the last 8. A bit too much jan 2008 levels is where we should be. If houses go 150,000 hell Ill buy 5 lol thats under what empty lots are. If you cant afford a 250,000 house with even a lowly 40,000 a year for you and your spouse you should consider kicking the coke habit.
May 1st, 2009 at 12:54 PM
If the cookies go stale from sitting yes…. mmm now i want cookies dangit.
May 1st, 2009 at 12:54 PM
Ted,
where do you get your figure of affording a 250k house wiht 40k a year wage…when you take the amount they will approve a person for that’s only something like 30 something % age of your income…they won’t approve anymore…
May 1st, 2009 at 12:54 PM
Crikey’s graph shows a moderate decrease in sales as of late, similar to the end of last summer – when prices also dropped, what was it 10% Norm? or $10,000 drop? I remember a 10
And we need a general comments blog, for random stuff not related to the topic, but I find this interesting:
“Among the provinces, Saskatchewan once again reported the highest overall crime rate as well as the highest violent crime rate.”
On National news of course. I think this, added to low wages (below BC, Alberta and Ontario’s average), and expensive housing, still makes us a tough sell.
http://www.cbc.ca/canada/saskatchewan/story/2008/07/17/statscan-crime.html?Authorized=1&AuthenticationKey=2_50_a21dc73f-fade-454d-8495-cb333cc7fee9.8137957#socialcomments-submit
May 1st, 2009 at 12:55 PM
Just try’n to steady the sentiment Norm. I’ve been a homeowner for many years and wouldn’t take out a home equity loan if my life depended on it. I’ve found throughout the course of the year that the speculators have drawn up a buying frenzy and now the negative nelly’s are trying to scare everyone out of saskatoon just so they can get a cheap house. There’s way too much hyper-reaction goin on here. Our market is a lot more stable than people think.
If there’s one thing I hate, it’s propaganda and misuse of information for one’s own end!
J.
May 1st, 2009 at 12:57 PM
I meant both spouses making $40,000 Jesse. And Jim enough of the stats on sask having highest crime rate I am so sick of hearing that. If you took out a certain section of saskatoon we would have the lowest violent crime rates and they are most loser scum stabing each other after drinking to much household cleaners and sniffing paint. Cause they are to poor too own a gun which they use in most bigger citys.
May 1st, 2009 at 12:57 PM
Oh Jim,
Did you read the story about Saskatchewan having the “highest quality jobs” in the country?
http://tinyurl.com/saskjobs
Oh, and did you catch this one about Saskatchewan leading the country in manufacturing sales?
htto://tinyurl.com/saskmfg
Here are the MLS stats from last year. The average bounced around a fair bit between June and October.
Johny,
What the hell is up with you man?
Did you take out a big home equity loan? Buy a few condos?
May 1st, 2009 at 12:58 PM
Johny,
I was pretty sure you hadn’t taken out a loan.
I have always appreciated the thoughtful contributions you’ve made on this blog, and even though I have no idea who you are I have a high regard for your opinion. Your last few comments have left me wondering if you weren’t being a little inconsistent but your explanation opens my eyes to how consistent you really area. Thank you for clearing that up for me.
May 1st, 2009 at 12:58 PM
Of course Sask leads in sales, every home owner in the province ran out to buy a new BBQ, lawn tractor, and home improvement stuff the minute house prices went sky rocketing!
And sorry Johny, stable (after a 50% gain last year, which is good but not really stable) includes a 10% maybe 15% with mortgage changes drop in house prices from the peak. Afte all, starting 2008 at $250,000 and ending at $270,000 is pretty stable. Just a bit down from April’s 300,000.
And everyone here knows the crime sucks.
That’s why half my neighbours have been the victim of a break and enter at some point during life in Saskatoon. And why no one likes taking the bus down town! Especially after dark after that late night U of S class (which was previously famous for its rapes in the tunnels/washrooms after hours). We should really work on that crime thing. Not really important for a real estate blog, other than to agree it’s got to be a impediment to people moving here.
May 1st, 2009 at 12:58 PM
“If there’s one thing I hate, it’s propaganda and misuse of information for one’s own end!” J
Which is why I was so choked to see prices double when wage gains still trailed Alberta, especially after Alberta’s house prices started going down. All because television and real estate agents said “boom”. Well, boom’s over. Prices are already down a bit. Will be down more if sellers actually need to sell their places. Will be down even more when new mortage rules make it tougher for a lot of people to get one!
May 1st, 2009 at 12:59 PM
Dan,
I think it would be wise for you to move to Alberta since you love it so much. Your insane love for Alberta explains why you are on a Saskatoon real estate blog saying the prices are too high for you to buy a house here…..damn the irony.
May 1st, 2009 at 12:59 PM
“I meant both spouses making $40,000 Jesse.”
Oh for sure Ted. The numbers are right becuase i qualified for about 125 g’s just myself. Just checking
.
May 1st, 2009 at 12:59 PM
Armoth,
I will try and answer your question by helping you to understand supply and demand.
From Economics 101:
http://en.wikipedia.org/wiki/Supply_and_demand
After you digest this material take another look at your cookie example and guess what happens to the price of your cookies when you increase production (inventory) when you have the same or lower demand (sales).
Now take another look at Crikey’s chart and guess what happens to the price of houses in Saskatoon in a few months.
http://www.normfisher.ca/images/teamblog/crickeysgraphlarge.jpg
Clue: Norm has already given us the correct answer.
May 1st, 2009 at 1:00 PM
Roger,
I understand what your saying now. If I take the increased production of the negative crap you churn out it looks like Crikey’s housing graph which leads me to believe your words are becoming more worthless with each piece of biased information that you post.
p.s.
Thanks for the link I totally understand now
May 1st, 2009 at 1:00 PM
Armoth, the supply and demand argument with a bit of less demand, and way less supply makes sense houses should go down. Especially with even more cheaper supply elsewhere. And demand should go down with mortgages becoming shorter/costing more upfront.
All seems to point for a fall in house prices for Saskatoon (also Regina)
May 1st, 2009 at 1:00 PM
Not sure about Dan, but some of us are stuck here for various reasons. Myself, in a year if situation remains as is, with prices for some reason above Alberta, I am moving to Red Deer to make more and buy a brand new house (a friend out there bought one for a whole $50,000 more than his average condo in Saskatoon’s burbs).
If I wasn’t stuck here for another year, I’d move to Alberta tomorrow. For mobile people, it’s just the smart thing to do.
May 1st, 2009 at 1:01 PM
Armoth,
Thanks for your reply. I now understand how you make financial descisions and analyze the Saskatoon real estate market. You have made it very clear for me and the other readers of this blog.
P.S. I am glad you found the link useful.
May 1st, 2009 at 1:03 PM
Saskatoon is great, however that job thing is still a little B.S. Paychecks, bonus and perks are far above greater in Alberta. Believe me if I worked in Saskatoon and not in Alberta, I wouldn’t be pulling in $2,500 clear a week, free flights and have I mentioned that I haven’t paid for gas (business or personal) since I started working here over 2 years ago? I would like any company in Sask to try and compete with that, never going to happen.
May 1st, 2009 at 1:03 PM
Wesco,
I’m sure you’ll agree that your own situation is not typical for Albertans either.
May 1st, 2009 at 1:04 PM
I guess it depends in what industry and location your in, but I’m the lowest paid person in my office of 40 people
May 1st, 2009 at 1:04 PM
Wesco,
Again, I’m sure your “office” is not really representative of the average Albertans salary. According to StatsCan, it’s about $873 a week, which is certainly higher than average earnings in Saskatchewan ($751) but nowhere near $2500 clear per week, plus, plus, plus.
May 1st, 2009 at 1:05 PM
Hey Law Guy,
I will accept your wager.
Personaly I take little or no stock in what economists or real estate organziations who have a vested interest in high house prices and continued increasing sales have to say about the real estate market. To quote Gordon Gecko “analysts are sheep”
As for high wages in Saskatoon….I believe the employees at Cameco just got a 21% raise over 4 years. That is 5% and change per annum. If you were to factor in inflation and the increase in energy costs, my working assumption is that they are losing ground. And the employees one meets at corporate functions would not be indicative of the chap with the lunch pail and spade who would make up the bulk of the work force.
That being said my preference is for a lesser correction. But that is not what I forsee.
May 1st, 2009 at 1:05 PM
Saskatoon had a rapid runup in prices in one year. Many folks might wonder why. Here are some links that some might find interesting:
http://en.wikipedia.org/wiki/Economic_bubble
http://en.wikipedia.org/wiki/Real_estate_bubble
http://en.wikipedia.org/wiki/United_States_housing_bubble
Perhaps none of this is relevant because Saskatoon and Saskatchewan are different with a strong economy and an abundance of resources. However, I always find that reading different points of view allows me to make a more informed decision before I spend my money.
May 1st, 2009 at 1:06 PM
Economists who work for large real estate companies all say “hey! Real estate in Canada will never go down! It’s not like the US!”.
And economists who work for banks, most of which are up to their necks in mortgage loans and ABCP, are also saying “There will only be a small correction”.
But if you look at the numbers — unaffordable prices, rising inventory — and you look at what that led to in the USA, you can see a very different pattern developing. You don’t need to be an economist, you just need to have a certain measure of common sense.
To use Armoth’s ‘cookie’ analogy: if you regularly sell chocolate chip cookies for 1 buck each, and you sell 300 cookies a day to 300 people who have 5 bucks to spend on lunch, you have a happy, functioning cookie market.
If you then decide to market your cookies for 3 bucks each, and your target customer still has 5 bucks to spend on lunch, your cookie sales will fall precipitously. And your cookie inventory will climb precipitously.
Now, you may, if you wish, argue that your target customer *should* have 15 bucks to spend on lunch, you may point to economists who argue that they *will* have 15 bucks to spend on lunch in the future, you may argue that they have been seized with anti-cookie sentiment and are attempting to bring down the global cookie market for nefarious reasons of their own, if you like. But you still won’t sell many cookies.
And should you still continue to produce 300 cookies a day, you will soon have no money, no customers, and nothing but a great many — tough cookies.
May 1st, 2009 at 1:07 PM
The Dude thinks that half of the people on this blog are obssessed or at the very least, mildly insane. Therefore the Dude thought it would be appropriate to add his own rambling gibberish.
The Dude feels the Sask real estate levels were so far below value that they shot up like a rocket at the slightest good news about the economy. While the Dude realizes that Sask is now priced on par with the rest of the country, the Dude scratches his head at some on this board who complain wage is not going up as fast as the stggering growth in real estate.
The Dude’s reply to this is “Duhh!”. The real estate market moved way faster than the economy. The Dude would like to point out that this not rocket science.
The Dude feels the Real estate market is largely based on speculation (this case in particular). The economy is seperate from this to a certain degree and wages will take time to catch up, but it will happen. The Dude has already seen examples of this and the Dude feels it will continue.
The Dude agrees we had a “real estate boom”, but doesn’t think we are in a “booming” economy. The Dude thinks this is a good thing (the Dude would like to point out that the opposite of “boom” is “bust” for those not in the loop). The Duded feels we are doing very well and The Dude thinks this will continue for a very long time. The economy will not bust but will will sustainably grow.
What the Dude is try to convey is that what is happening in the real estate market right now is based primarly on speculation and the sudden increase in availability of land, not nessarly based on the condition of the economy. The Dude doesn’t think the economy and current real estate conditions are interchangeable.
The Dude says your welcome
May 1st, 2009 at 1:08 PM
Geez,
I’m seriously starting to regret having sent that inventory vs. sales graph to Norm. I meant it to be a nice visual representation of the information that was available anyway, not so people could figuratively bash one another over the head with it. You all are starting to give me anxiety symptoms.
YOY sales in June are down 32.7%, and YOY inventory for June is up 48.8%. Do with that information what you will.
Dude, the price of the “average” house historically has been *around* 3 times the “average” yearly total household income. Therefore, I don’t think house prices in Saskatoon were that undervalued prior to the near doubling of the “average” house price in the last 2 years. Do with that information what you will. You’re clearly right about the insanity thing, though.
jrochest,
Your response to the cookie analogy is a piece of art.
Peace out, everyone.
May 1st, 2009 at 1:09 PM
Sam Johnson said:
“It would seem that the issue is how much of a correction is coming to Saskatoon. I suspect it will be in the 20-25% level in the next year. ”
The most recent data we have is the week of July 7-11, which featured an average selling price of $292 185.
Since you stated a range, I propose we take the midpoint of that range- 22.5%- as our reference number.
A “correction” of 22.5% puts the average house selling price in Saskatoon, using the same MLS data, at $226 444 (I rounded up the dollar for you, cuz I’m a good guy).
So if, at the end of the week which contains July 11, 2009, the average selling price in Saskatoon is reported by the same data to be less than $226 444, you are winner. If it’s more, I am winner.
If you set up the remaining details (third-party fundholder, amount to be wagered) then we should have ourselves a wager. I propose that any actual money wagered be donated to a charity of the winner’s choice, but I’ll leave those details up to you.
May 1st, 2009 at 1:10 PM
jrochest,
I agree with Crikey. Your expansion on the cookie analogy is brilliant.
Crikey,
This blog is a breeding ground for mental illness. Welcome to my world. I learned last weekend that 19,882 people have visited this site more than 201 times. That’s just plain sick.
May 1st, 2009 at 1:10 PM
I would like to state for the record that I have (only) a case of mild schizophrenia.
My dear law chap, I propose you also pick a % correction/increase against my 20-25% estimate. We then see who had the best guess. We do not bet off of only my guess. In fact I would urge all my fellow mentally ill and challenged bloggers to join in and bet on a 5% range. Let us go July 18th 2008 to July 18, 2009. If on July 18th 2009, the average market price is not between 20-25% down, I will donate the princely sum of 5 Euros to the local retirement home for thrice married destitute pettifoggers.
My dear Dude: Can you recommend a good bowling alley hereabouts?
May 1st, 2009 at 1:10 PM
The Dude would like to respond…
Crikey: The Dude appreciates what you are saying and The Dude thinks that given time you will see the same pattern emerge, probably with a mix of increased wages and slightly corrected real estate market.
Sam Johnson: The Dude does not bowl.
May 1st, 2009 at 1:11 PM
RE: Guessing the drop in Saskatoon House Price
I predict 15 to 20% down by next July 18, from $292,185 now (already over $10,000 off peak). I had previously predicted based on $300,000 (ish) April, and thought that by next January 2009, the price would be down by 20%, to $240,000. (This guess was after announced mortgage changes, previously I had only been calling for a 10 to 15% drop in real estate prices from peak.
Maybe guess the price in January 2009 (guess +/- $5,000, so no Price is Right $240,001′s), still think $240,000. July is just so long to wait to say “I told you so” to those who are correction deniers. I think this is reasonable, as it is just $10,000 less than January 2008, though $50,000 off April, and the market is definitely muc more saturated with more ominous signs and tougher mortgage rules than in January 2008, so it follows prices should be down.
May 1st, 2009 at 1:11 PM
I like the exact price method too. I will guess that in January 2009, the average price (as reported by Norm’s blurbs) will be $268 000.
For July 2009, I’ll say $274 000.
I will be donating any losses to the Human Fund.
May 1st, 2009 at 1:11 PM
Guys,
Here’s the problem I see.
June 16-20 $317,145
June 23-27 $313,362
June 30-July 4 $299,301
July 7-11 $292,182
This week – $304,975 (not including today’s sales)
I think you’ll all agree that house prices did not go up by 4% in the last week.
These weekly numbers provide some interesting insights into trends over periods of time but they are not accurate measures of the markets average from one week to the next.
I would suggest that using a six-month rolling average would provide the most accurate result.
May 1st, 2009 at 1:12 PM
I think the problem is house prices don’t mean much now. Listings are way up. Sales kind of down. And reductions all over the place. Kind of a take what you can get scenario. Just guessing that by January people will be resigned to taking a lot less. It’s just a matter of time before some sellers start to realize after listing for 3 months with no serious sales, they have to go down to compete. Already seeing a bit, but sellers seem to be in denial, with $5,000 or $7,000 reductions. Look at that Buena Vista Norm sold a while ago. Serious price reduction, sold quick. Just a matter of sellers needing to actually compete to sell some houses. Just like any other product.
I predict $270,000 average by January.
I think that’s max, as the mortgage restrictions will likely drop the number of buyers even further.
May 1st, 2009 at 1:12 PM
Cricky
The average household income is 80,000 and its 3.5 not 3 times but thats still 240,000 but really its 280,000.
May 1st, 2009 at 1:13 PM
Norm said:
I would suggest that using a six-month rolling average would provide the most accurate result.
A 6 month rolling average is Ok if you are dealing with under a 100 sales (one area of town). When you have a large sales pool (citywide) you will see trends more clearly if you use a 3 month rolling average. This way you are not averaging over two sales seasons (i.e. spring and winter). BTW – CREA and Royal Lepage compute fixed quarter stats.
Here are some price stats from Victoria. The first link is a graph of the monthly published data. The second link plots 3 and 6 month averages on the same chart. You can clearly see the trend to a flat market in the 3 month curve.
http://photoshare.shaw.ca/image/a/0/7/128719/n7june.jpg?rev=0
http://photoshare.shaw.ca/image/a/0/7/128719/n8june.jpg?rev=0
It would be nice if someone with access to the data could prepare similar charts for Saskatoon (Crikey??)
May 1st, 2009 at 1:13 PM
Ted,
The average household or family income varies considerably depending on where you live.
Some examples:
Erindale: 91,243
Haultain: 55,639
Lawson Heights: 79,444
The complete list is available on the City of Saskatoon web site: http://www.saskatoon.ca/org/city_planning/profiles/index.asp
May 1st, 2009 at 1:14 PM
Roger said:
“It would be nice if someone with access to the data could prepare similar charts for Saskatoon (Crikey??)”
GAAAAAAAAHHHHHHHH!!!!!
Okay, that’s out of my system.
The main problem with rolling or moving averages is that they “lag”. It’s going to take a few months, perhaps, for price decreases to show up (if we do the 3 month rolling average). It might be best to wait for a couple more months’ worth of data to come in to show anything of consequence. Any thoughts?
lawtalkingguy,
May I suggest that instead of donating your future winnings to the Human Fund, you just save them up and give them to a needy family during Festivus?
The Dude,
Please rent “The Big Lebowski” (1998). It’s a hilarious film, and will clue you into the bowling reference.
May 1st, 2009 at 1:14 PM
Crikey,
In order to prepare a useful monthly price and 3 month average rolling graphs you need at least 2 to 3 years of monthly data. The rolling average is calculated as follows: May is average of (March&April&May), June is average of (April&May&June) and so on. Yes there is a lag but that is the nature of rolling averages. If you plot them on the same graph they look like this:
http://photoshare.shaw.ca/image/a/0/7/128719/median3avgjune5.jpg?rev=0
May 1st, 2009 at 1:15 PM
Roger,
I agree with your thoughts on 3 months vs. 6 months. That will at least provide a sufficient sample to be reasonably accurate.
I have access to all of the data.
FYI, the three month rolling average for all residential sales within the city of Saskatoon to June 30 is $305,912. Over six months, it’s $288,781.
May 1st, 2009 at 1:15 PM
I dont get it what is happening to the chocolate chip cookies!!?!?! People are still buying them at the same price even tho there is 1450….
p.s.
jrochest and others the cookie analogy is copyrighted by me if you want to use it please mail me money or a check for the low fee of $100 per reference to the cookies which are sooooo delicious
May 1st, 2009 at 1:16 PM
Armoth,
You have come to the correct conclusion.
You really don’t get what’s happening.
Thanks for finally admitting it in public. It’s a great relief to us all that you’ve become aware of it too.
May 1st, 2009 at 1:16 PM
Grrr,
Are you saying you want a cookie too?
May 1st, 2009 at 1:17 PM
I’d make the bet on the MEDIAN price, rather than the average. Less variance, and less likely to be thrown out of wack by one or two high priced properties.
If that thing that they want a million seven for sells, for instance, the ‘average’ will go up for that week.
And I think that perhaps in Saskatoon, the Dude would curl.
In any event, the Dude abides.
May 1st, 2009 at 1:17 PM
If any body does this ambitious study, mark sure you sell it first to the starphoenix and maybe even royal lepage!! It has to be worth something and I’m sure a writer or two could swing a few fresh lines in regards to this data. Also make sure to reference Norm’s Blog.
May 1st, 2009 at 1:17 PM
All I can say is read the book “The Greater Fool” by Garth Turner… it will open your mind and make you feel very confident in not buying into the current market. Alot of what he says and has predicted is happeninh now, and alot of the facts that he states make a huge amount of sense in regards to the market and what is happened. I wont go into details, but this is a great book about the Canadian market, with a true insight into our driving factors and what will bring it to a halt just like the US. Keep up the great work Norm, it is a great resource for keeping up with the Saskatoon market.
Thanks,
Brad
May 1st, 2009 at 1:18 PM
Brad,
Garth also runs a Web site:
http://www.greaterfool.ca/
Lots of interesting articles and commentary. The reader comments also make for good reading. One poster from Saskatoon referred to the city as the “Paris of the Prairies”.
May 1st, 2009 at 1:18 PM
Norm,
I see that you are quoted in today’s Star Phoenix: http://tinyurl.com/star-phoenix
“For the first time in nearly two years, buyers have decent levels of inventory to choose from and an actual chance to negotiate purchase prices,” said Norm Fisher, sales manager for Royal LePage in Saskatoon.
The article goes on to say:
In Saskatoon, the average price of a detached bungalow rose 21 per cent, to $340,375 from $281,250; a standard two-storey rose 27.2 per cent, to $388,000 from $305,000; and condominiums are up 15 per cent to $236,000 from $205,000.
Only Toronto, Calgary, Vancouver and Victoria had higher housing prices than Saskatoon in these categories, among the cities surveyed.
—————————————————–
My question to Norm and the readers of this blog is – Can Saskatoon prices keep pace with Toronto, Calgary, Vancouver and Victoria??
May 1st, 2009 at 1:19 PM
To add to Roger’s question, does it make sense for Saskatoon housing to be more than:
Edmonton, Regina, Winnipeg, the entire east coast?
Can we sustain higher prices than the majority of Canadian cities? 5th most expensive housing, yet lower wages than many of those places.
Especially when Edmonton pays a lot more.
It seems study after study pegs Saskatoon as more expensive than Edmonton, but we always find some reason to deny it.
May 1st, 2009 at 1:19 PM
Roger,
I’m a little lost as to what can or can’t happen. When I look at average incomes in any of the provinces, I’m at a loss to understand how prices are even close to sustainable.
Jim,
Do me a favour please? Since there’s been “study after study that pegs Saskatoon as more expensive than Edmonton,” why don’t you find just one of them and post it here? It should be a snap for you to find one of the multitudes which you say exist. Please keep in mind that any media piece which is arrives at this conclusion through the use of the Royal LePage House Price Survey data is incorrect. As the sole contributor to this survey from the Saskatoon area, I can tell you without any hesitation that this is an impossible conclusion to reach from the data that I provide. The Royal LePage House Price Survey examines prices for specific property types in specific areas of each city, and not all areas are surveyed within each city.
I’ll concede that we’re probably too damned close to Edmonton given the difference in incomes between the two areas, but until I see something convincing that prices are higher in Saskatoon, I will continue to deny it.
May 1st, 2009 at 1:20 PM
Latest stats from Edmonton Real Estate Board:
http://www.ereb.com/MarketActivity/July.html
SFD average selling price – month $381,384 -8.60%
SFD median³ selling price $365,000 -8.29%
Condo average selling price $262,365 -1.06%
Percentages are drop in price from 2007.
Other factors in buyer’s favor:
- No provincial sales tax
- Low income taxes 2K less on 75K income
http://tinyurl.com/tax-calculator
May 1st, 2009 at 1:20 PM
Roger,
I don’t believe that this is an affordability argument. Jim has, on more than one occasion suggested that house prices are higher in Saskatoon then Regina.
Saskatoon prices based on statistics gathered from the Saskatoon Regions Association of Realtors MLS sysytem for the same period, June 2008.
SFD average selling price – $339,548
SFD median selling price – $298,500
Condo average selling price – $248,641
As I said, “I’ll concede that we’re probably too damned close to Edmonton given the difference in incomes between the two areas” but no credible evidence exists to suggest that house prices are higher here.
Thanks Roger. I remain open-minded to anything that Jim might produce, but so far, I have been unable to find anything more than you’ve presented here.
May 1st, 2009 at 1:21 PM
Well,
I’ve got a graph of the median, 3-month rolling average price, and 6-month rolling average residential selling price. I used the residential average house price data that is available on this website. I’ll send it to you, Norm.
May 1st, 2009 at 1:21 PM
Norm,
I have been looking at the numbers between Calgary, Edmonton and Saskatoon for over 9 months and unless someone is lying, Royal Lepages survey is out to lunch. I have yet to any numbers close between Saskatoon and Edmonton.
The numbers Roger posted show that the difference in average price between Saskatoon and Edmonton is about
$42,000 for SFD average price.
$64,000 for SFD median price.
With a higher wage in Edmonton, I would imagine affordability is in the same ballpark between the two cities.
May 1st, 2009 at 1:22 PM
awww whats wrong bears cant find your numbers to support your outrageous claims =’( maybe Roger can send some links to some cartoons which support his theory of total doom for Saskatchewan.
May 1st, 2009 at 1:22 PM
Alright lets have a look at afford ability in terms of income tax between Alberta and Saskatchewan.
We’ll use $80,000 as our base income for the study:
Alberta:
($80,000 – $16,165(personal deduction rate)) x 10% (income tax rate) = $6,384 (provincial income tax paid on $80,000 in Alberta)
Saskatchewan:
($80,000 – $8,945(personal deduction rate)) x 13% (income tax rate for 80K/per) = $9,237 (provincial income tax paid on $80,000 in Sask)
There is a difference right out of your pocket of $2,853. Then on top of it you have to pay 6% provincial tax on anything you buy in the province. So assuming you may spend 30K a year on living expenses and taxable bills thats ($30,000)x(0.06)= $1,800.
In conclusion it costs, right out of your pocket, an additional $4,653 per year to live in Saskatchewan. Therefore a person in Alberta has an additional $387.75 per month to spend on a mortgage. Lastly wages are higher in Alberta, so there is actually a bigger disparity in Alberta in comparison to Sask in regards to afford ability.
p.s: this is a back of a napkin comparison and I’m sure they are many other factors involved in these calculations, but you can see the difference right?
May 1st, 2009 at 1:22 PM
Armoth…
Were you hitting the sauce last night?
Drinking and blogging can lead to unfortunate consequences.
May 1st, 2009 at 1:23 PM
In addition to this I went a check a mortgage calculator on ing direct and with this extra spending money you can qualify for an extra $62,000 (give or take a thousand) on a 25 year mortgage. Therefore for $64,000 for SFD median prices in Edmonton it is pretty comparable. But there is higher wages in Alberta therefore the Alberta Advantage is still there but maybe not as advantageous as everyone assumes.
May 1st, 2009 at 1:24 PM
Wesco,
These are reasonable arguments on the affordability end of things. Thanks for doing the research.
FYI, PST is 5% in Saskatchewan.
May 1st, 2009 at 1:25 PM
Wesco,
What I meant when I said affordability between the two cities is that they are probably at the same percentage of paying for housing
Saskatoon resident makes 70,000 pays 35% of income on housing
Edmonton resident makes 80,000 pays 35% of income on housing
Affordability is the same. This what I meant.
Norm had mentioned the average wage is only 100 bucks more in Alberta per week. With their higher house prices it seems to even out.
In conclusion, the only thing I see is that RE in both provinces are out of whack. Right now there is no advantage in either province.
May 1st, 2009 at 1:25 PM
Accidental Landlords (same thing has started here)
“A tormented real estate market has changed the paths of many people’s lives. For example, in the Condo Capitals of Canada – Vancouver, Victoria and Toronto – tens of thousands of Canadians who thought they’d be collecting profits from flipping properties will instead soon be collecting rent. Unfortunately, in almost all instances, it will not be enough to cover costs.”
http://www.nytimes.com/2008/07/20/realestate/20sqft.html?_r=2&ref=business&oref=slogin&oref=slogin
May 1st, 2009 at 1:26 PM
George,
According to StatsCan, at 4/30/08 the difference is actually $123 per week. Nearly $6400 over the course of year. With the added tax saving, it’s fairly substantial really.
That said, I think it’s probably reasonable to expect that Saskatchewan will become more competitive with Alberta, as far as taxes are concerned over the next few years. At least that’s one expectation that I have of the Sask Party government.
May 1st, 2009 at 1:27 PM
$100/week more in Alberta, that’s $5,000 a year, not bad ? I’ve seen numbers that say up to $10,000/year more in Alberta. And, aside from Calgary, housing in Alberta costs the same or less than Saskatoon. And that wage advantage is growing. The gap between Alberta wages and Saskatchewan widened last year.
And I respectfully disagree with Norm, I don’t think Sask can catch Alberta in taxes. The Alberta surplus is still bigger overall, and even per capita, compared to Saskatchewan. Saskatchewan just can’t afford to compete with Alberta on taxes. And the gap is widening.
May 1st, 2009 at 1:27 PM
“Please keep in mind that any media piece which is arrives at this conclusion through the use of the Royal LePage House Price Survey data is incorrect.”
So, prove Saskatoon is more expensive without citing your own survey?
May 1st, 2009 at 1:27 PM
So, to re-do Wesco’s calculation, keeping his assumptions, but taking into account 5% PST, and then adding in Norm’s income data:
Living in Alberta v. Saskatchewan
A person making $80,000 saves $2,853 in income taxes
Spending $30,000 a year, at 5% PST
A person in Alberta saves $1,500 a year
So, $4,353 in tax savings / 12 = $362.75 monthly
+
Norm says the average Albertan earns $123 more a week = $6,396 a year more income (Stats Can so I’ll accept)
= $533/month
So Alberta Advantage:
If you make the same, you save $362.75 in taxes
But on average, you’ll make $533 more a month
$895.75 total a month Alberta Advantage
=$10,749 a year
That helps to pay for a lot more house,
And continues after your house is paid off.
even if the well rounded studies still say Edmonton is still more expensive. And remember, Edmonton’s prices are falling!
(I did not recalculate taxes on higher income, so an approximation of savings but suffice to say similar and lower than in Saskatchewan)
May 1st, 2009 at 1:28 PM
Yes, Jim. I’m telling you that the Royal LePage survey does not make the conclusion that Saskatoon homes cost more than Edmonton homes. It reports on specific property types in select areas of each city. At best, one could say, “a detached bungalow in Saskatoon East costs more then the same home in Edmonton Castledowns.”
As I said before, area 4 is not even represented in Saskatoon. I note that Edmonton reports on six neighbourhoods. The media most often presents the findings incorrectly.
May 1st, 2009 at 1:28 PM
Armoth said:
Roger can send some links to some cartoons which support his theory of total doom for Saskatchewan.
————————————————–
Talk about putting words in my mouth. Try reading my posts before you respond!!
I believe Saskatchewan has a great future but that does not mean I believe in or support high housing prices. What do high prices for housing do for young people and workers that have only been in the workforce for a few years? Answer – nothing and drives them to other provinces where homes are more affordable.
Now here is my link for today:
http://tinyurl.com/saskatchewan-booming
Excerpt:
It’s a similar story across Saskatchewan, where record-high prices for oil, potash, uranium, wheat and canola are driving an economic resurgence built on commodities.
Saskatchewan supplies a quarter of the world’s potash and a third of its uranium and has a plethora of new coal and diamond discoveries to tap. It also produces half of all Canadian wheat and is now the country’s second-largest oil producer. Numerous forecasts say it will lead the nation in GDP growth in 2008, while also becoming an official “have” province — a contributor to equalization.
May 1st, 2009 at 1:29 PM
Well lets get some refineries going!!
and then i’m heading home permanently!!
May 1st, 2009 at 1:29 PM
Norm, area 4? That’s the ghetto. Not sure anywhere else in Canada has that bad a ghetto. If only houses everywhere else are considered, than it’s a fair comparison to other places.
A decent house in a decent area of Saskatoon costs a lot more than an average that includes the alphabet. Probably a good idea to only compare areas that people actually want to live in.
May 1st, 2009 at 1:31 PM
Dan,
That’s fair enough, but my point here is that the data is far from completely representing either market and it’s not possible to make the conclusions which are being drawn from it. Again, Edmonton is reporting six areas (at least one of which is sub-urban: Sherwood Park. Saskatoon reports no sub-urban areas) and a multitude of areas are not represented in the Edmonton survey either. It’s an apples to oranges comparison and I would think that it’s a little more reliable to be looking at the medians and the averages for the entire market areas.
I would think that you and Jim have enough accurate data to go on to make a strong case without spinning something out of nothing.
May 1st, 2009 at 1:31 PM
I think what you fella’s are forgetting is the extra insurance payments for a car in Alberta. Please calculate that unless u think every1 is gonna bus it.
p.s.
Thanks Roger for the positive link I liked it and thats one of the many companies I invested cash in =op
May 1st, 2009 at 1:34 PM
Actually insurance is quite a bit cheaper in alberta then what it is in Sk; if you’re a good driver. you just have to shop around. if you don’t believe just check out kenetix. insuring both of my vehicles is 600 dollars cheaper in ab then what it is in sk.
May 1st, 2009 at 1:35 PM
Armoth, car insurance is ONE cost, and not always more in Alberta, we’re not all 21 year olds with 2 accidents on our records. Calgary is warmer than Saskatoon, so heating costs are less. The 2 big things, wages (higher) and taxes (lower) are a lot better in Alberta. Even if it’s a couple hundred bucks more for car insurance because you’re young.
May 1st, 2009 at 1:36 PM
I think both the bulls and the bears have their points but I don’t think the sky is falling. In fact, I don’t even think we’ll see the price drops seen in Edmonton or Calgary. We might see a 5% price correction in the next year but after that, I see things rising steadily if not dramatically. Three years from now, prices will definitely be higher. The economic news is just too strong coming out of Saskatchewan and Saskatoon will benefit. While there may not be any Bakken oil wells in the Downtown Saskatoon, the whole province benefits when higher oil royalties are taken in by the government. Hiring and wages are increasing in the potash industry as well. In fact, serious mine expansion is occurring in places within a forty minute drive from Saskatoon. In the oil industry, the most exciting new projects are not in Alberta but in Saskatchewan. Wages may be lower than Alberta but that is bound to change and is likely changing as I write. It is a very exciting time for Saskatchewan.
May 1st, 2009 at 1:36 PM
Crikey’s Graph
Here is the graph that Crikey put together which charts the average selling price by month, three month rolling average and six month rolling average back to January 2006.
Includes everything in the residential category.
Click Here to View Crikey’s Graph
Thanks Crikey!
May 1st, 2009 at 1:38 PM
Ron,
Many people have argued that SK’s economy is so strong that it will keep our real estate value climbing. I’ll have to disagree on that. All because our economy is strong it’s not in direct correlation with the housing market. I think what we observed in 2007 was the housing “boom” happening ahead of the economic “boom”.
With inventory at 1500 and climbing, (most) people won’t overbid, the majority will continue to underbid and prices won’t increase. Until we start seeing a higher influx of people into SK and/or less leaving SK I don’t think the housing market will be looking “up” for quite some time.