Sask. highest retail consumption (or something, I will find out later, 11.8%, Alberta 8.4%, Ontario 1.4%)

Also, in reference to Saskatoon’s diverse economy/employers, ad on E10 or E11, stating Saskatoon holds 30% of Canada’s Ag-Biotech industry. I wouldn’t quote an an, except it was put in by SREDA. Sorry, quick post. Will be more specific later.

Thanks for the comment. We’ve come close a few times but this is the first time we’ve topped the 100 mark for comments on a post.

It really started to get difficult to find a house through late 2006. Everything was selling very quickly and inventory levels were way below what is normal.

Through January and early February some fairly modest “overbidding” started to happen. By the middle of February we were seeing about 25% of listings selling above list price by around $5,000. We are also starting to see a few of those really exceptional sales of 20-30-40K over.

By the end of March we’re seeing those numbers spike up to around 50% with overbidding averaging closer to $15,000.

April, May and June see percentages selling over list in the 70-80% range and average overbids exceeding $20,000-$25,000.

Things started to mellow out a bit in July with the average overbid finally dropping below $20,000 again but we’re still well above 50% of listings selling over list.

Since August, we’ve seen a fairly steady decline in both of those numbers. Most weeks in August show overbidding decline to around $15,000 on average.

So far in September, we’re down to about 30% selling over asking price and an average overbid which is just under $10,000.

It’s so obvious that greed is the only thing that drives this.

Nobody cares about the injustice of ruining what was one a very acceptable balance.

No offense, but I don’t think I’ll take investing advise from someone who thinks they can get oceanfront property on Vancouver Island for $300,000. Please show me an MLS listing from anywhere on Vancouver Island (Oceanfront, not a condo) that is $300,000. Moreover Duncan is in the middle of the island, not on the water. You’d probably find it a challange to come up with anything in the Nanaimo area for under $500,000.

Are you an investor?

My daughter could live there, over my dead body. Here’s an email I received from a “single mom” who lives in the area.

“Pleasant hill is not that great of an area to live in.But people like me on a low income are pretty much forced to live in the area where it is scary to go for a walk day or night.I lived in pleasant hill for 6 yrs and due to my landlord selling I moved into an apartment.The 1st week I lived in my house in p/hill I had a break and enter attempt while I was home in the late evening.I caought the perpratrators red handed and I went rt up to them asking what the hell r u doing they ran and I said dont come back.I thought i scared them.10 minuted later they were attempting to break into another house thats when i called 911 and they got caught.2nd break and enter attempt again I was home.I am a single mom just to let you know a guy broke my window and said if i dont let him in he was gonna kill me!!Again I called 911 the police came about 10 minutes later while this guy is trying to kick down my door the police came and caught him and then drove him home his escuse was that he was freezing.The guy lived 2 blocks away!!They let him go.Hookers would waslk right in front of my house and walk by and get picked up right on the street.Pleasant hill is not a good place to live.But if you cant afford to live anywhere else they say you get what you pay for so people on low income have to live in the dumps.That is my comment and now rent is so high there is gonna be no where for the low income people to live who try to make an honest living.”

Nice huh?

$10.00 an hour will qualify that single mom for a PIT payment of 520 per month. If it’s a condo, the condo fees have to work within that number. Not likely.

According to StatsCan, Saskatoon’s population is 202,000 people, and the “census metro area” is 233,923. Toronto’s city population is 2,503,281 and its “census metro area” is 5,113,149. Vancouver’s city population is 578,041 and it’s ‘metro’ area is 2,116,581. Montreal’s ‘metro’ population is 3,635,571. Calgary and Edmonton both have over a million.

There’s a real difference between the kind of economy — and housing market — that type of population can provide, and the kind of expectations that you can have of 233,000. Saskatoon’s more like, say, Kelowna, which is 162,276 but has always been an active tourist destination, or Sherbrooke, or St. John’s, or Windsor, all of which have between 300,000 and 180,000 people. Or even look at the larger secondary cities in Ontario, like St. Catherines.

You need to compare apples and apples, not apples and kumquats.

Also — a good place to retire? For those who are from Saskachewan and want to be close to their grandkids, maybe, but most of the retiring boomers are either going to want to move to a big city, where the action is and the good hospitals are, or to a nice mild climate where they can grow a garden from March to October. I’m not from here and I can tell you that the MINUTE I retire I am getting as far away from Saskatchewan winters as I possibly, possibly can.

No offence, Northstar, but if you *really* want to make money, go buy on the West coast of Vancouver Island — in Nanaimo or Duncan or any of the other little cheap friendly towns where you can still buy oceanfront property for under 300,000 dollars, and where there is no snow and little frost.

In my eyes, I think it’s a deliberate attempt to segregate by class. I’m not saying a 4 bedroom mansion. Heck, I’m not saying anything but a bungalow. What I’m saying is that the homes right now that get branded as starter also get branded as rental properties. They often need work, and I’m sorry – I was under the impression that if you were starting out the whole point was that you likely don’t have the money (or time?!) to dump into refurbishing a house – let alone an entire block with your good will.

It tends to be that those of us who are making less also have even less time to boot.

This is made worse by the fact that people seem to think that just because you own a home you’re required to completely overhaul it. Get out of planet TLC please. I don’t mean to say you shouldn’t be required to to maintenance. What I’m saying is that some people actually intend on living in their homes.

Some of you need to stop making assumptions about what I say and start to read into differences between reasonable and unreasonable expectations. What I’ve noticed is whenever I try and put forward that the homes will be lived in, most of you screw your noses up and get very confused.

If I can find the time over the weekend I’ll probably do a little breakdown of average prices ending 8/31 for both condos and single family homes.

The condo market is feeling rather flat right now. There are 170 units on the market and they’re not flying off the market.

For Jenn,

The cheapest 2 bedroom outside of Area 4 is $159,900

http://www.mls.ca/PropertyDetails.aspx?PropertyID=6125609

There’s a pretty good handful at $169,900 and I would think that there’s probably some room to move on those given the slow movement we’re seeing.

Jason,

I really think this entry level condo market was impacted most by “investors” who scooped them up at 100-125K as quick as they were listed. They were also a target for 1st time buyers who wanted to enter the market as things took off. Most of the seniors are probably ending up in something which is a bit more upscale with elevators, underground parking, etc.

Batman again,

I’m not sure that the “money lost to rent” argument really works. There is a monthly cost to occupy a home which you own as well, either interest paid or investment income lost. However, I agree with your premise that over the long run you’re probably far better off owning than renting. I like the benefits even if it doesn’t increase that much in value.

Affordability seems to be the name of the game here. I guess the flip side of your arguement is: can someone afford not to buy into this market right now? I’m sure there are lots of would be first time buyers sitting on the fence at this point waiting to see if the market is going to hold or crash. Meanwhile they’re burning $800 – $1200/mo on rent.

The market in Tucson is expected to fall 11% by the end of 2008 from it’s peak or “bubble” back in 2006 because of the real estate slump down there. Lets assume my family didn’t buy a $250,000 home because we didn’t feel the market could support that price back in 06. So we spent $1000/mo on rent for 3 years until the market bottomed out. Now the house we wanted is only $222,500, a savings of $27,500! But wait, we burned $36,000 on rent while we were waiting for our home to go down in price. Did we save money? Depends on how much would have been shoveled out for interest on the mortgage, size of down payment, etc. but I guarantee we didn’t save 11%.

Now I’m not saying Saskatoon is going to end up like Tucson, I just thought I’d use it as an example to point out the opportunity cost of rent vs. owning.

Just as with houses, it depends on the area and what you are willing to sacrifice.

Building equity is better than paying rent; especially in a market like this where rent is pretty much expected to pay the mortgage.

Speaking of condos, would it be possible to post some recent stats for the condo market Norm? I’m curious to find out if it has cooled down much since the last posting.

Excellent advice!

In my opinion, your move to get in small was much smarter than sitting on the sidelines waiting until you could afford something more. Just seven years later you’re already preparing for your dream home.

Thanks for sharing your experience with us. You’ve got a great attitude. I loved your pro small list and I hope that we’ll hear from you again.

You guys are great! Norm (thanks for hosting), Johnny, Northstar, Alex, Jedi, etc. I’m totally enjoying everyone’s comments and arguements. It’s so interesting to see what’s happened and where things might go. Thanks for contributing.

A little off topic…but here’s me.

I bought 7 years ago as soon as I could afford to (dropped out of university and got a job). I bought the smallest, dumpiest house in the nicest neighborhood I could afford (thanks to advice from Garth Turner columns in the SP), and have since gained some equity here in Saskatoon (and much plumbing knowledge). As the prices started to take off this spring, I guess I panicked (thought I’d be priced out of the market) and bought 10 bare acres 22 minutes west of town with the equity in my house (I always wanted an acreage, and at the time thought this might be my last chance).

Sometimes that gut feeling is worth following. I love my acreage, and have started some shelterbelts, and will build and move out there in the future, when I can afford it.

My advantage is I have always had a long term perspective and long term goals, and in the meantime, I will live in my small house, within my means.

I feel you really do have to start small, especially if you don’t have the income, or the chance of your income increasing much over time (City Banker’s estimate of 28$/hr blew me away). I live in a house that’s probably less than the size of the average garage, at 463 square feet. (A 1930′s gem, and don’t forget to seal off every single window with plastic for the winter and plug door drafts!).

So I’d just like to comment that there is really nothing wrong with starting small, and there will be time for a bigger house later in life. A small house is great, and so underated! Do you like to garden? The yard is much larger! Don’t like to clean? I can do the whole house in a few hours! You certainly can’t fill it with expensive furniture, or buy things you don’t really need, where would you put them?

In fact, you’ll live more within your means, probably gain equity (most of the time, especially in Saskatoon) and come out better off than renting, in my experience.

So the average house price is 250K, what’s the average house, 1000 square feet or more? Luxury. For those reading this blog, wanting to make your first home purchase but feel you can’t afford 250K, don’t be intimidated by small square footage. Buy what you can comfortably afford, and no more, and if you can’t afford at this time, don’t. But don’t give up. Markets turn, they go up then down, just try not to get in over your head when you do decide to dive in.

All IM(H)O!

Miss K

So glad to hear that your young is business working out well for you. Best wishes for the future.

Jedi,

Lol! That’s quite a prediction!

I agree with your thinking that every borrower must take full responsibility for the circumstances which result from the debt they incurred. Again, lenders must take some responsibility for the crisis which has been created by recklessly lending to too many deadbeats. These are two entirely different problems. They went too far in the US when they created “declared income” loans which didn’t even require income verifications from applicants.

Northstar,

You might want to double check the books to make sure that your properties are actually “cash flowing.” Thanks for being such a good sport.

Jason, good luck with your business and finding a home.

Regarding debt, I am not happy that it is rather easy to rack up a whole pile of it, but one could make an argument that many other substances/vises are accessible and people choose not to do them(excessive alcohol, drugs, gambling, so on). I can’t tell you how many people I have interviewed that have marks on their credit history. My biggest disappointment is that these people never seemed to be taught about credit reports, credit rating, and the impact it has on their future. At the end of the day people are responsible for the choices they make. If people have to have new cars, and the latest cell phone and blu ray dvd player and new ipod, then there is a price to be paid. Someone needs to educate people that you don’t have to keep up to the Jones’, that you can work your way up to owning a nice house or vehicles once you are established in your career. My friend’s grandparents have a farm on the outskirts of the city. Their original house still stands today and I am not sure it is a whole lot more than 300sq ft. The whole house. These people are quite well off today, but still pinch pennies to this day. People need to be educated to save, contribute to RRSPs and other investments, pay off their mortgages earlier, and be responsible with their money. I don’t know whose fault it is (parents, schools, society that demands excess, advertising, all of the above) but lenders don’t deserve to shoulder that blame for this.

PS My employment is not in any way connected to the practise of lending or financially related

Whoops, and I haven’t got in to the whiskey tonight either. Maybe next time I add 2+2 I should get my calculator.

“If you need to justify your struggles by blaming me then that’s O.K. I’ll take it.”

Awe!! You really are a great guy, aren’t ya?

“258,000 mortgage requires $28/hr in income total? So 2 people making $16/hr could do it.”

I think you’re probably a smart investor but your math skills are a little weak. 28/2=14.

Sorry, I couldn’t resist.

You’re correct that the report doesn’t address Q2 losses which I’m sure are accurate. It looks at growth over a one year period. I think the CREA graph would produce similar results. Yes, if you simply look at Q2, it looks pretty gross but I think that these types of numbers have to be viewed over longer periods of time. It’s like the “week in review” numbers which I publish. In any given week average sale prices can fluctuate wildly but when they’re looked at over longer periods of time they tend to provide more stable numbers which are indicative of market trends. Along the same line of thinking, it would probably be a stretch to say the job market is booming if Q3 shows an equivalent spike up to the downward spike in Q2.

This is me trying to sound like I know how to analyze the job market.

If you need to justify your struggles by blaming me then that’s O.K. I’ll take it.

Jenn,

You didn’t miss anything. Norm’s report covers the entire year as opposed to the other report that is just on q2. I tried to explain earlier but maybe I didn’t do a good job of it. Even though q2 was down 5600 jobs, the entire year q2 to q2 of 2006 is up 7000 jobs. Thus why I stated it’s in an up trend. If we see the next 2 quarters down then that trend will be over. If q3 report comes back as another increase in jobs, then the trend will continue.

City Banker,

Good to have you aboard!! I found out about the 80% rule today. $258,000 mortgage requires $28/hr in income total? So 2 people making $16/hr could do it providing good credit history?

Norm,

I can be a little cheeky sometimes

P.S. Where’s Johny? I miss him