Saskatoon house prices level off after peaking in first half of 2010: Royal LePage
The Royal LePage House Price Survey released today showed softening price appreciation across most housing types surveyed in Saskatoon. The modest year-over-year price increases reflect strong activity at the end of 2009 and beginning of 2010, but market activity slowed down considerably in the third quarter of this year. Overall unit sales for the third quarter were down 18 per cent from last year.
“Along with this slowdown in activity, we have seen a considerable increase in inventory compared to last year,” said Norm Fisher, Royal LePage Saskatoon Real Estate. “Buyers are not feeling a lot of pressure to act quickly right now, so demand is dropping off.”
Detached bungalows led the way with year-over-year price gains of 5.5 per cent, selling for an average of $328,750 in the third quarter. Standard condominiums sold for an average of $230,000, up 4.5 per cent from last year, while prices for standard two-storey homes were up 2.7 per cent year-over-year, selling for a third-quarter average of $350,000.
“It’s not clear why detached bungalows experienced the strongest price gains, however lower priced properties are always most in demand,” explains Fisher. “We’re beginning to see prices level off after peaking at the beginning of 2010.”
Detached bungalows and standard condominiums showed the greatest sales volume decreases for the third quarter, with single family homes under $400,000 down 30 per cent and condos under $250,000 down 25 per cent from last year. Multiple offers are rare, except when properties are priced below market value. Houses typically sold below asking price.
“With this softening of the market, sellers need to price their homes accurately,” says Fisher. “However, Saskatoon’s population is growing steadily as our employment rates are among the best in the country – so buyers are definitely out there.”
Nationally, Canada’s residential real estate market saw year-over-year growth in the third quarter as fears of a double dip recession or a housing bubble faded. House price appreciation slowed to a more modest five per cent in the quarter, which is historically typical of balanced real estate markets.
“Most Canadian housing markets cooled in the third quarter. In fact, the year is unfolding much as we predicted, with the unusually active first half of 2010 giving way to slower markets in the later part of the year. Helped by very low rates in a competitive mortgage financing market, the third quarter was slightly stronger than anticipated, on new demand fuelled by improved affordability in many regions,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. Looking ahead, it is very unlikely that the period from now to year-end can keep pace with the activity levels posted in the overheated market of the final quarter of 2009.”
In the third quarter, the average price of a detached bungalow in Canada was up 4.6 percent to $324,531, compared to a year ago. Over the same period, standard two-storey homes rose 4.4 percent to $360,329 while standard condominiums rose 3.9 percent to $226,481.
“House price growth now sits just below the long term annual average of approximately five per cent, but once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track. Canadian homeowners will be pleased,” said Soper.
10 comments so far. We'd love to hear your thoughts.
October 19th, 2010 at 10:54 AM
For anyone who may be interested, here are my very balanced notes and the key messages that I hope to convey during any media interview that I might get today.
October 19th, 2010 at 1:14 PM
Bank of Canada leaves interest rates unchanged until Spring and possibly late 2011. While good news for those looking to borrow or refinance, as this was heavily influenced by the US economy that may not bode well for an economic recovery in Canada, either.
http://www.canada.com/business/fp/story.html?id=3693546
October 20th, 2010 at 11:48 AM
Solid info, thanks Norm.
The discussion in today’s Globe about debt loads is rather freaky:
http://www.theglobeandmail.com/report-on-business/economy/household-debt-levels-excessive/article1764981/
I think we’re being a bit over-optimistic – as a whole – about SK’s economic prospects when the rest of the world is broke. Speculative and shorter-term real estate investment in this province does seem to have a lot of risks at the moment.
Regardless, my advice is to “buy now or be priced out forever!!!”
October 20th, 2010 at 2:53 PM
J Tramiel,
Some interesting times ahead of us, no doubt. Hopefully people can get it together and take advantage of this extended period of low rates to pay down some debt like they’ve been doing in the US.
October 20th, 2010 at 7:00 PM
Hi Norm,
Americans have not been paying down their debt they just stopped paying. Seriously the only debt that has decreased is credit card debt as a result of people not paying there mortgage debt. The whole world has gone crazy. Spend when times are good and spend when times are bad. This is the new mantra. Housing affordability, interest rates, and debt levels all point to a market that is simply unsustainable. It is time the Bank of Canada started to reward savers and punish debtors. Instead they have chosen inflation. People think that high inflation will make housing a great investment and protect them. Your house is a liability(unless you own it outright and even then property taxes are a liability) and the inputs to run your house are a asset. Assets will increase at a rate faster than your house will appreciate. So if your house doubles in value and the inputs triple where does that leave you?
Nix
October 20th, 2010 at 7:20 PM
Nix,
I don’t know. The Globe and Mail says US debt peaked at 160 percent of income, that they’ve been paying it down and are now around the same level as Canadians, 146 percent.
October 20th, 2010 at 11:31 PM
Nix is correct. The average US consumer has been defaulting en masse on various debts (particularly credit cards), which have typically been written down or off completely (consumers have been using the financial desperation of companies as leverage to obtain ridiculous settlement offers). While there has been some legitimate debt repayment, this is the exception rather than the rule.
October 22nd, 2010 at 10:31 AM
http://lovelylisting.icanhascheezburger.com/
Given Norms interest in having excellent webiste photos’ thought people might enjoy this site.
October 22nd, 2010 at 11:57 AM
Sally,
Thank you. Lovely Listing can be lots of fun. Appreciate the link.
October 22nd, 2010 at 9:58 PM
From the Globe and Mail
The long shadow over Canada’s housing market
http://tinyurl.com/34fcz23
Housing prices and personal debt over the years
http://tinyurl.com/37cfdx7