Saskatoon home sale numbers down and average selling prices up: SRAR
The Saskatoon Region Association of REALTORS® (SRAR) released the residential real estate statistics for August of 2010 today, accompanied by this release.
Saskatoon REALTORS® assisted 313 buyers with the purchase of a home in the month of August. This number was down 20% from August 2009 when 392 homes were sold. Year to date, 2527 homes have changed hands, down 6% from 2009 when year to date numbers stood at 2696. The increase in new home sales has somewhat impacted the resale market.
Click the image for a larger version of the graph.
Increased sales activity in the mid to upper price range homes contributed to the 8% rise in the average selling price in August which stood at $305,866. The average selling price in August 2009 was $282,320. The year to date figure stands at $292,323, up 5% from 2009 when it was $278,193. The highest sales activity remains in the $300,000 to $350,000 price range.
Click the image for a larger version of the graph.
645 properties were placed on the market in the month of August, up 25% from August 2009 when 517 homes were listed. The year to date listing number stands at 5033. Home buyers had 1355 homes to select from at the end of August, on par with last month when 1334 homes were for sale.
Click the image for a larger version of the graph.
In areas surrounding Saskatoon (Warman, Martensville, Delisle, etc.) unit sales were down 6% with 90 properties selling as compared to the same month last year when 96 homes sold. The average selling price was $259,338, down 4% from August 2009 when it was $270,488. Listing numbers were up 25% in the areas around Saskatoon with 248 properties being listed compared to 199 in August 2009.
Residential sale numbers are expected to remain on par or soften slightly for the remainder of the year. Interest rates are favourable, confidence remains strong in the local economy and new home sales continue to build momentum. These are all necessary components to maintain a stable market environment.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Norm Fisher
Royal LePage Saskatoon Real Estate
20 comments so far. We'd love to hear your thoughts.
September 1st, 2010 at 6:36 PM
While average sale prices did increase on a month-over-month and a year-over-year basis, the comment about “increased activity in the mid to upper price ranges” contributing to the increase is absolutely correct. In fact, the shift may be completely responsible for the gains (Hold on a moment – This is, in fact, not absolutely correct – See my next comment for the details).
Interestingly, the average size of the single-family homes that traded in August of this year were 1,394 square feet. That’s about as large an average as I can ever recall. It’s 180 square feet larger than the houses that traded last August and 271 square feet larger than the homes that sold in July of 2010.
On a cost per square foot (CPSF) basis, prices in August of 2010 ($242) were lower than they were is July ($271), and lower than they were in August of last year ($252). We do expect CPSF to decline in larger houses but I still expect that a large portion, if not all of the gain can be explained by a shift in the types of homes that are being sold. I think you’d be hard pressed to find anyone who might try to claim that Saskatoon homes were more expensive in August than they were in July.
September 1st, 2010 at 6:54 PM
Earlier in the year, there seemed to be a cutoff at around $400,000 – $450,000, where anything priced less than that was moving briskly, but higher priced houses weren’t selling nearly as well and high-end inventory was building up.
I saw that as the canary in the coal mine, a sign that housing had reached the limits of affordability in Saskatchewan. Now that higher end sales have picked up again, I’m not sure what to think.
September 1st, 2010 at 7:28 PM
Spy, we’ll see what happens with the trend after 8-Sep.
September 2nd, 2010 at 8:31 AM
I’m going to have to correct myself here. In my comment following the post I said, “the comment about “increased activity in the mid to upper price ranges” contributing to the increase is absolutely correct. In fact, the shift may be completely responsible for the gains.”
Spy Hill’s comment got me thinking a bit more about this statement. See, the $400K plus price range is still a pretty tough slug. There are 321 active listing in that range. Based on last months sales, a near seven month supply exists, roughly where it was at this time last year.
So, it occurs to me that the higher average may actually be driven by a decline in sales of lower priced homes, as opposed to an increase in sales of higher priced homes. Turns out, when actually crunching some numbers that it is the former. Here is a breakdown of sales in $100,000 increments for August 2010, August 2009, and July 2010.
When you examine the categories at $301,000 and higher you can see that there has been some increase, but it’s pretty marginal. There were 140 homes sold in that range last August and 145 this August, a difference of just five units.
Looking at the lower priced ranges, we can see that sales at $300,000 or less have declined from 250 in August 2009 to 168 in August of this year, a difference of 82. So, in fact, a decline in the sale of mid to lower priced homes is driving the increased average selling price of a Saskatoon home.
An entirely different story, isn’t it?
September 2nd, 2010 at 8:33 AM
With a slowing down low-end market, I’m not sure if it is wise enough to buy before sell. But this trend can probably last longer than a couple of weeks if the 5-yr fixed rates continue to be this low or even lower. There are always people happily put themselves into something more than they can afford, even if what they got is a “good deal”..
September 2nd, 2010 at 8:44 AM
Norm, great job! Saskatoon home buyers and sellers are so lucky to have you,
.
September 2nd, 2010 at 2:37 PM
Oh, aren’t you kind? Thanks Cindy!
September 2nd, 2010 at 3:19 PM
First time buyers and investors are shut out. Prices don’t make sense for them. Only buyers with equity can do it sign of market that will fall. First sales collapse then prices. I might be monkey but even I can figure where things r headed.
September 2nd, 2010 at 6:47 PM
Thanks for the great analysis Norm. A different story indeed.
September 2nd, 2010 at 9:18 PM
“Average” selling price would seem to be a less than useful stat here: what is the median doing? If you come out and say, “Increased sales activity in the mid to upper price range homes contributed to the 8% rise in the average selling price in August” but then the SRAR doesn’t give any information that doesn’t compensate for the skew, what’s the point? The fact they may not even get what is really contributing to the skew is kind of scary, but perhaps I’m reading too much into that. By the way, thank you Norm for the break-down by price range- *much* more enlightening.
September 2nd, 2010 at 9:21 PM
Correction:
If the SRAR comes out and says, “Increased sales activity in the mid to upper price range homes contributed to the 8% rise in the average selling price in August” but then they don’t give any information that compensates for the skew, what’s the point?
Too much cutting and pasting. Sorry!
September 2nd, 2010 at 10:46 PM
Hey Jen,
The median is also impacted fairly significantly by the loss of 82 sales at the lower end of the market. It jumped from 274,500 last August to 293,000 this year. It’s a little easier to buy than the swing in the average.
September 3rd, 2010 at 2:26 PM
Bubble Busted said, “First time buyers and investors are shut out. Prices don’t make sense for them.”
Amen brother. That is where my husband and I have been for the past 3 years. We just can’t justify it. No matter what anyone says.
September 3rd, 2010 at 3:42 PM
For anybody watching the number of sales from Canada bubble and greater fool.
(unofficial numbers)
Vancouver is down 36% yoy
Victoria is down 45%
Fraser Valley is down 44%
Calgary is down 36%
Edmonton is 29%
Toronto is down 22%
Montreal is down about 20% ( this is approx)
Saskatoon is down 20%
Every market was up in median and average price except Calgary. Listings are up yoy in each market.
September 3rd, 2010 at 3:59 PM
Doug,
You’re awesome! Thanks.
September 4th, 2010 at 1:29 PM
Just an observation: I’ve been regularly watching this blog for the past three years. Every week, it seems, there are at least a few comments that the “bubble” in Saskatoon is about to be busted. Surprise, surprise, though, the Sask housing market still seems to be going strong. So perhaps all this prophetization of bubbles needs to be busted? Clearly there is something else going on here.
September 5th, 2010 at 8:35 AM
Sask guy,
As long as I have been in the business, at least some percentage of the people we’ve met felt that Saskatoon house prices were ridiculously expensive, even as they were ridiculously cheap.
It makes some sense that there could be a drop in prices as the dynamics of the market change. Unfortunately, not much seems to work as it should anymore.
September 5th, 2010 at 9:44 PM
Interesting, looks like 2010 is the 2 nd weakest year in the past 5 in terms of sales for a few months in a row. How are you all different out there again? Because your sales are “only” down 20%?
September 5th, 2010 at 11:46 PM
SaskGuy, yeah – it’s called “denial”. Anything’s possible with creative financing (35-year mortgages with 0% down…); it’s when interest rates rise and mortgage terms return to some sense of normalcy (25-30 years, 10% down minimum) that you’re going to see that bubble firsthand. The only safe investment in housing going forward will be in retirement condos, homes and communities – because boomers are going to be downsizing and selling en masse.
September 6th, 2010 at 4:38 PM
BC,
I hate to break it to you but 20% down and 40% down (like most of BC) are actually quite “different.”
Different again, Regina was apparently just five percent below last year’s numbers.
“Inside the city there were 294 sales, a decrease of 5% from 310 sales in 2009.”
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