I mean I think it’s a long shot that you would make any money doing it. There’s a good chance that your builder may be selling new homes for less by the time they finish building yours. Not a good time.

Thanks for your feedback Norm!

I would say that the odds are fairly long that you’ll come out ahead on that at this time. Check out George’s comment (Flipping gone bad?) in this thread.

http://tinyurl.com/6r44pg

The red line represents “active listings” (currently for sale) and therefore there is no duplication.

These numbers might start to mean something if you started to account for relisted properties, property types etc.

Personally I would be interested in seeing the graph for single detached houses with relisted houses taken out of the mix as there are a number of them being relisted prior to expiration that are resulting in a doubled count. Too bad there is no metric for crappy reno’d flips that are over priced and saturating our market.

The difference is, even a few months ago, when people overpriced their house, it sold any way.

Now, over priced houses aren’t selling, because there is so much selection and most Saskatoonians seem to expect some level of drop in housing prices.

More of a drop with changed mortgage rules.

Add on to that the very high number of condos being listed at the moment and the comparison from house listings to houses sold are not as far off as they are made out to be in that graph.

Sell your house while you still can.

The housing numbers coming out of the states are horrible. Year over year increases in foreclosures of 50% and banks taking back property increase 171% year over year.

I repeat sell your house now.

Things are so out of whack. I have friends in there twenties they all own houses or I mean rent them, because there is no difference with zero down and 40 your amortization. Some of my friends own 3 houses. Why? Because housing prices always go up. It is a bubble that has been created by the Federal Reserve, Bank of Canada and all other central banks who thought they could endlessly print worthless fiat currency without repercussions. They were wrong.

Also, to all the smug people over the last few years who thought they were so smart buying a house. Guess what it was largely dumb luck. That is what bubbles do make dumb people look smart. During the tech bubble everyone was getting rich off of tech stocks. Not because they were good stock pickers, but because it did not matter, just like housing.

Tulips=housing

“This probably won’t really sink in until next spring & summer, though. There’s alway a seasonal drop in prices in the Fall: sellers will pull their properties and relist when ‘prices go up in the spring’. It isn’t until Spring 09 comes and prices don’t rise that things will really begin to sink in.”

That’s what I have been saying for 2 months here.

A decline will happen, but it wont happen quickly.

All the media is still reporting “strong home sales” and “booming economy” and “in-migration”. Consumer sentiment is still very strong and people will pay for homes if they feel like the future is sound.

That is why I think things will take time to turn, unless of course sellers start dropping prices en-mass, which they are not doing yet and probably wont for a while yet IMO.

http://www.cbc.ca/canada/saskatchewan/story/2008/07/08/home-invasion.html?ref=rss&loomia_si=t0:a16:g2:r1:c0.209947

And why buy at $20,000 off when you risk it dropping another $20,000 after? Those who can’t afford at current aren’t going to be helped by minor price drops, and will be best to stay renting, as they are the ones who can least afford a drop in house value, as it may be their only investment.

And getting rid of 40 year mortgages, will mean most of these buyers won’t be able to come up with the 5% ($15,000 ish? now) down and pay off over 35 years. Far from increasing buying now, I bet it drops sales and causes a big spike in listings, as sellers will try to sell now, even at a drop from what they would have expected a weak ago, to avoid the inevitable drop in qualifying buyers and decreased demand, come shorter amortization and mandatory down payments.

Touche Mithan, Regina does have much higher paying jobs, guaranteed crown corp jobs, Ipsco (which benefits from any industry in Sask doing well) and the Oil Upgrader/Oil companies … and cheaper housing … and slightly lower violent crime … and a CFL team

this is off topic but I wanted to answer your comment/question you posted about Genworth.

To recap: The Feds have pronouced that a new maximum Amortization period of 35 years with a minimum of 5% down takes effect in Oct.

To your question: I think Genworth will fall in line with this new mandate. I doubt they would still offer a package for 40 years – it wouldn’t make sense.

I would ask your opinion on how you see this affecting young professionals or anyone else, in your community with lots of cash flow but no down payment.

In my town I foresee that this will have an impact on the $1,000,000 plus homes which means almost every property on the west side.

BTW hell of a graph!

Thanks for your patience everyone. Back to regular progamming.

“There’s alway a seasonal drop in prices in the Fall”

One would think this makes sense. I only have four years of monthly data in front of me, but since 2004 prices have always peaked in the fall. Strange, but true.

I think things will work out differently this year.

And Mithan, don’t forget the condo conversions: they’re not new housing starts, but they’re still fuel to the inventory fire. There’s lots of stuff scheduled to come on the market in the next 12 months.

Bergo: Unless by “tonnes of people” you mean literally thousands and thousands, enough to absorb all this inventory in a month or two, I don’t think this will be the case. Even if you return to the berzerker bidding wars of last summer, the sales rate will still top out at 600. And there are nearly 1500 properties on the market — that’s two and a half months at unsustainable levels, or 4 at normal levels.

When prices start to fall, people tend to wait and see how low they’ll go — especially if there’s a big inventory just sitting there.

This probably won’t really sink in until next spring & summer, though. There’s alway a seasonal drop in prices in the Fall: sellers will pull their properties and relist when ‘prices go up in the spring’. It isn’t until Spring 09 comes and prices don’t rise that things will really begin to sink in.

http://www.canada.com/reginaleaderpost/news/story.html?id=cb75c3f1-f243-47dd-bf30-bb4d84a48fca

You guys had 1600 home starts in 2008!

Damn, I agree. Saskatoon is screwed.

At least Regina is 30% less priced (average home) had way less housing starts, has a bit more going for it in the short term (Inland Terminal, IPSCO construction, the Refinery Construction, etc).

Oh, and we make more per year…

Thank you!

Mithan,

“probably go up a full 1 to 1.5% in 2009.”

You can almost bank on it. That’s when my mortgage is due.

I think this will certainly be true. a lot of the people (including myself) who feel priced out of the market will likely jump on the opportunity to “save” 20-30k over the summer prices come fall (if there should be a decline). I’m presently looking outside of Saskatoon right now (Thanks Norm) and there are still reasonable (comparatively) priced homes out there (if they’re not all sold by the time you get to them).

Makes you wonder huh.

Or maybe there are tonnes of people in the wings waiting to buy that start jumping in the second we show a small $20-30k decline, that eventually hold prices steady at a 10% correction rate.

As well, the last RBC article I read said that Interest Rates are predicted to stay flat in 2008 (unchanged), but probably go up a full 1 to 1.5% in 2009. I think that might affect people somewhat.

I would like to thank Norm personally and publicly for giving me both the time and the forum to post this graph. I truly appreciate the professionalism that he has shown in all my interactions with him to date.

Thanks Norm!!

Seriously though, a good visual of the big increase in listings and weakening in sales from April’s peak. Interesting, as we see that last April, 2007/May 2007 was a bit of a peak as well, with a drop off in the summer/fall sales. With such a substantially greater inventory, I would think a drop off would be even more dramatic price wise, as I seem to remember prices actually falling last August.

From 2008 looking back, sales are set to be lower,

and listings are already far higher than August 2007. If there was a drop in prices last August, it stand to reason we will see at least as much a drop ($10,000 drop in prices last August) or potentially more, as inventory is up, and percentage wise, a $10,000 drop doesn’t mean as much now as it did last summer.

The 10% or $30,000 drop in average sales prices may come by August, instead of the often predicted 10% drop in prices by year end (from current, not from January 2008 when prices were lower than now)

All the more reason to hold off on buying till after it sorts itself out.