It is nice how trades people are now suddenly available! Our house possession date is March 30th, and the basement just got dug last week. I heard in 2007 some people were waiting 2 years for a completed house.

Pam,

My advice is don’t get into any contract right away. Many of the larger builders are overpriced ($220/sq ft before lot) and it may take them a while longer to feel the need to compete for business.

3-4% like it has always been historically but I think house prices for Saskatoon will increase at 5-6% because of lowering taxes and increases in the median wage but who knows maybe ill be wrong =o)

http://vreb.org/mls_statistics/current_statistics.html

Seems I am confused. The person whom I thought I had heard this from said this builder is carrying over $30 million in mortgages. They build houses and condos and may have well in excess of 50 units for sale between the two categories.

We have met with several builders and they are SLOWLY adjusting their prices. We are debt phobic and so are very, very cautious about what we are willing to spend (no consumer debt, only 1 tv in the home – and it’s not a big screen) I see nothing wrong with having the things you want – but only if we can pay for it with cash. We have been watching the house prices drop and maybe we will be able to buy rather than build and still be able to afford what modifications we need.

Collapse of automaking industry would crush U.S. economy: study

http://www.canada.com/vancouversun/news/business/story.html?id=3ee58fb8-577c-495b-afda-3bc9ada52b6e

In a report released Wednesday, the Center for Automotive Research in Ann Arbor, Mich., outlined what would happen in two separate scenarios if General Motors Corp., Ford Motor Co. and Chrysler LLC were forced to scale back or shut entirely.

If all three Detroit manufacturers were to cease operations, the U.S. economy would lose 2.95 million direct and indirect jobs in the first year. Governments would lose at least $156.4 billion US in taxes over the first three years.

GM’s U.S. auto volumes dropped 45 per cent in October. The automaker, burning through more than $1 billion US a month.

Chrysler U.S. sales fell 35 per cent in October. It is “very likely” the company will file for bankruptcy protection if it does not find a buyer or alliance partner,

Reasons for the slow down in housing:

First, it was the land transfer tax, then a big dump of snow and now “Ms. O’Neill blamed media reports from the United States for “unduly” affecting confidence in the local market.”

No mention of houses being unaffordable.

Building is a better idea now compared to the last 2 years. Prices are coming down and trades won’t be as hard to get as the last 2 years.

I would suggest not going into too much debt though. And if you expect to use the equity from your house, budget for at least 10% less than the value of it now.

Building or buying a home is going to be the biggest financial decision you will make. So it won’t hurt to shop at some of the builders in town. See what you like or do not like. Take your time. Ask for references. Negotiate the price. Things are slowing down big time, some builders will possibly offer encentives for your business. Good luck

We’ve been considering building new rather than buying – Not a McMansion – but our family has some unique needs that we are struggling to meet with an existing home. Any comments or suggestions from anyone? Has anyone built new and have words of wisdom to share with us?

Thanks,

Hey Norm, curious is this a condo or townhouse project?

It’s a tough gig, no doubt.

Heather,

Have a look through the Point2 listings in Willowgrove. You’ll find at least 20 properties that appear there three times. Yes, same address, same exterior photo, same property.

I’m not saying that there isn’t lots of property for sale. I heard one builder has over 50 spec homes at various stages of construction. Ouch! I’m saying that the guys who dig basements probably have time to dig one next week, where you might have had to wait two months at this time last year. These builders don’t have their head in the sand. Nothing new gets started without a purchase agreement and a hefty deposit.

On MLS, there are 76 single-family homes in Willowgrove, 46 in Stonebridge, and 49 in Hampton Village. It appears that about 20% of them are just bare lots at ths time. Total sales across the three areas in the past 60 days is 46. Around seven months of inventory, six if you don’t count the ones which are not started. Not great, but not a catastrophe.

I don’t know that it’s possible to tell how many new spec homes are currently under construction. I’m just stating what I’m seeing. Drive around Willowgrove and there’s a GAZILLION “for sale” signs in windows of partially finished and complete houses. It’s also pretty interesting that on Point2Homes Willowgrove has the most listings above and beyond all other areas, sitting at 144 – almost triple to Specubridge! I’m sure some of the listings are homes not yet built, like you say. The city is sure going to have an OOGLE of lots on their hands come next lot draw! (new AND returned) Anyone who can afford to build will have their pick of the litter.

This is evidence I’ve seen with my own eyes. When people tell me oh ti’s just becuase you have this or that when i don’t…I think back to that fun moment of cleaning the basement that opened my eyes of what it’s like to work in the province here… fast foreward, I’ve worked my BUTT off and have paid debt down, still pay ever increasing rent here, ever increasing bills, and just can’t manage to save much. It’s not that i’m overspending, or that i’m frivolous…when you take exact examples of incomes, factor in all the bills one paid, costs, etc…we’ve fallen and fallen and fallen. At least to me.

Regarding real estate outpacing inflation, I think you might need to define what time frame you’re talking about. Someone in Vancouver who bought homes at the market top in 1980 had to wait approximately 26 years just to recover their inflation-adjusted principal back.

It’s all in the timing, hey?

I know what you mean everyone wants everything now. I am only 26, but grew up in a house that if we did not need it we did not buy it. If we did not have the cash for it we did not buy it.

I personally look forward to seeing all of the baby boomers working a McDonalds and serving me my hamburger and fries. I guess when you rape the earth for 40 years that is the price you pay.

Babyboomers still think that there pensions will be there for them and that they can cash out on there houses. They will not be able to.

Pathetic really.

I filled it out and took it to the lady to get the slip to fill out my name for a chance to win.

She looked at the form and said I see here that you are a renter why would you throw your money away everymonth.

My head was swirling of different ways to tell her off. Instead I sucked it up like a usually do and said “I am not ready to buy yet.” She followed it buy saying that home prices were going to rise by 12% this year. I just said I was willing to wait. As I was walking away I heard her use the same thing on somebody else. Except they were like “REALLY?” They bought into the B.S. The pressure people face to buy is brutal. My wife and I save and invest like crazy. We pay 915 dollars a month in rent. We both walk to work and only drive the car on weekends for groceries or entertainment.

I see all of my 20 something friends buying houses and then having no money but justifing it by saying their house is going up in value. They have no retirement savings a maxed out credit cards, they owe on their T.V., fridge, stove, freezer, couch, bed, and kitchen table. They have a credit line that is maxed out. They have 2 car payements. It is crazy and not sustainable.

My wife and I on the other hand buy only when we have cash for it. I don’t have 50 inch plasma T.V. Do I want one yes, but I am willing to wait. The housing bubble is just getting started. People are in denial. Afterall housing is just a ponzi scheme.

I don’t feel bad for anyone that bought a house for investment purposes or bought too much house. A house is a place to live not an investment.

Demographic trends here are terrible, and across Canada for that matter. It just makes no sense to buy here. Where are all the people going to come from to buy these houses.

Armoth,

It is interesting that you think housing will outpace inflation slightly. Can you tell me what inflation is going to be?

Housing is dead as an asset class. Dead money just like the Nasdaq. Dead money. Anyone buying a house now is crazy.

Nix

I think it is safe to say there are thousands in this country who are underwater in their mortgage and this is just the beginning.

On another note, something I was thinking about when making comparsions to other times like the 80′s.

Growing up as a family in the 80′s, we had a 19 inch tv with rabbit ears, a VCR and one telephone.

Now think about the monthly electronic bills people have.

40 inch LCD, ipod, iphone, surround sound, security system, computer, internet, cable, playstation etc. Real income has not changed since then. Actually I think we are poorer compared to then.

This is one more reason why people do not save and are in debt so much.

http://www.greaterfool.ca/wp-content/uploads/2008/10/debt-to-income.jpg

Ouch indeed. A 38% decline in units can’t be easy to take. Not quite as bad as Vancouver but a pretty big hit.

“(NATIONAL POST) City of Toronto existing home prices plunged 13% in October from a year ago and are now even lower than two years ago, the Toronto Real Estate Board said Wednesday.

The average price of a home sold in the city was $376,896, down from $434,022 in 2007. But the figure was also down from the 2006 average October sale price of $386,807.

In the greater Toronto area, the average price of a home sold in October was down 10% from a year ago to $352,974. GTA average prices were off 1% from October, 2006.”

Average price in the GTA is now below where it was in October of 2006.

Ouch.

http://www.financialpost.com/story.html?id=935307

I too look forward to your report. You call em as you see them and this allows buyers, sellers and agents to get a clear picture of what is happening in the Saskatoon RE market.

When SRAR puts the numbers in their stats machine and sets it to “spin cycle” you don’t get useful output.

http://www.yourhome.ca/homes/article/530671

This is in Ontario, where the “experts” do not expect much of a drop.

My pleasure. I’ll be doing that same report for October over the next couple of days and I expect to see some changes. If you drop back towards the end of the week it should be posted.