Saskatoon real estate week in review–November 16-20 2009
Sales of Saskatoon homes picked up the pace this week with a total of sixty-one condos and single-family detached houses being reported sold to the local MLS system, an increase of nine properties from last week, and a gain of six units over the same week last year.
New listings also came on a bit stronger as Saskatoon real estate agents brought sixty-nine properties to the market, up from fifty-nine last week, but fewer than were offered up during the same week last year when seventy-eight new listings entered the multiple listing service database.
It’s definitely feeling like a fall real estate market but relatively speaking, November appears to be shaping up to be another strong month for residential real estate sales in Saskatoon. As of this morning, one hundred and ninety firm sales have been reported for November, already ahead of last November, which finished with just one hundred and eighty-one sales, and within easy striking distance of the five-year average of two hundred and twenty-nine properties.
You’ll notice on the sales and listings chart above that new listings have consistently been below last year’s level since the end of February, while units sold are above last year’s levels pretty consistently since the middle of May. Naturally, these trends have been pushing residential inventory lower since the end of May. This week was no exception, though the drop was very modest. Active listings fell by just four properties from last week to eight hundred and eighty-two, down from fifteen hundred and thirty-seven at the same time last year. Currently, single-family home inventory sits at just five hundred and sixteen, five fewer then were available last week but well off of last year’s number of nine hundred and thirty-two. At this time there are three hundred and seven condominiums for sale in Saskatoon, about the same number as last week, and below last year’s level by more than two hundred units.
Cancelled and withdrawn listing increased over last week to forty-eight homes with eighteen of those returning to the system as a “new listing,” most at a new lower price. Additionally, thirty-three price changes were recorded through the course of the week.
In spite of two single-family home sales that together accounted for $1.3 million in sales volume, an abundance of lower priced sales including condominiums and a large share of area 4 homes caused the average selling price of a Saskatoon home slid sharply this week to just $255,460, down over fifty thousand dollars from last week when it approached the weekly peak for 2009 reaching nearly three hundred and ten thousand. The six-week average fell six thousand dollars from last week, and from the same week in 2008 to $277,734. The four-week median came down two thousand dollars week-over-week to $275,081 remaining up over the same week last year by roughly five thousand dollars.
Month to date, the average residential sale price for the Saskatoon area sits at $280,106, about the level it has been at most of the year, and just slightly ahead of last November when it sat at $278,495. If the average sale price manages to maintain this level through November this will be the second month this year where we see a slight gain over the previous year.
Click the image for a larger version of the graph.
As is often the case when lower priced units trade at these levels, the average underbid slid out of the five-figure range to $9,113, nearly two thousand dollars lower than last week. As a percentage of the selling price, the average discount on those homes that sold for less than the asking price was 3.4%, the same as it was the week before. The percentage of homes that sold within five thousand dollars of the list price jumped to account for nearly half of all sales.
Map displaying the boundaries of Saskatoon real estate areas
Data collection and calculation for our statistical reports
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.
Real estate geeks can follow our daily updates on Twitter @norm_fisher.
Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.
Norm Fisher
Royal LePage Saskatoon Real Estate
34 comments so far. We'd love to hear your thoughts.
November 22nd, 2009 at 11:14 AM
For those debating mortgage options, it looks like we are moving back into inflation territory.
“Canada’s annual inflation rate ended a string of four months in negative territory as it hit 0.1 per cent for October, Statistics Canada said Wednesday.”
http://www.cbc.ca/money/story/2009/11/18/inflation-october.html
November 23rd, 2009 at 1:03 PM
“looks like we are moving back into inflation territory”
Technically yes, Peter- practically, not so much. Deflation as a threat is definitely looking less likely (certainly less likely than this time last year), but weak labor markets and unemployment rates will act as a restraint on how high companies can raise their prices. As your article points out, much of the headline CPI had to do with YOY fuel prices. Year-over-year fuel prices are going to improve into the early part of 2010, since the international price of oil appeared to bottom in early 2009. Core CPI has actually remained remarkably stable throughout 2008-2009.
November 23rd, 2009 at 8:31 PM
I agree that it is very much a technicality but so it was when we dipped to -.1 and -.2 deflation levels and people on this board were lighting up about it. Just wanted to point out that that phase, as weak as it was, is at least temporarily over.
I think the fact that core CPI has managed to stay positive through the deflationary hurricane we just went (are going?) through says an awful lot about what to expect. If we are still having inflation now, however mild, what is going to happen when the economy actually starts to grow at a reasonable rate?
November 23rd, 2009 at 11:14 PM
Peter, “Just wanted to point out that that phase, as weak as it was, is at least temporarily over.” Emphasis on ‘temporarily’ (we’re not out of the woods, yet). “If we are still having inflation now, however mild, what is going to happen when the economy actually starts to grow at a reasonable rate?” I would theorize that everything (except) housing will become more expensive. Don’t forget the inevitable property and income tax increases, too, now that we’re running a deficit for the foreseeable future.
November 24th, 2009 at 9:53 AM
Apparently, Lobsinger is just “One signature away” from having all the money he needs to proceed with River Landing…
http://www.thestarphoenix.com/news/Lake+Placid+finds+some+support/2259061/story.html
I had to laugh at the quote from Penner – paraphrased: “I agree that we gave Lobsinger a drop-dead date of October 31st, but that was the LAST council. We’re a different council. That is to say, we’re all exactly the same people, but we’ve been re-elected now, so we’re totally different. What that group of people — that is to say, us — said back then cannot be considered binding on this group of people — that is to say, the exact same group doing the exact same job — at this time. It just doesn’t work that way.”
(Yes, he really said that. Read the article if you don’t believe me.)
Meanwhile, Garth Turner turned his sights on a Saskatonian in his column today:
http://www.greaterfool.ca/2009/11/23/extreme/
Savaged the guy pretty hard too. Can’t say that I disagree with his logic or his conclusions — MHO is that people like this, who are are leveraged to the hilt and think that RE landlording is a path to easy money cause many problems for themselves and others — but I do think that had Garth moderated his tone just a little he might have gotten his message across better. Can’t be easy hearing the same stupid stories day after day, though … I recall an earlier column where he said that he got about 30-40 different emails along those lines every single day. How many times can you give the same advice in a moderated, reasonable tone before you start to get angry and start shouting at people?
November 24th, 2009 at 10:33 AM
Bookrat,
Thank you for posting that quote from council- I was in need of a good belly laugh.
Interesting EI data out today from StatsCan. Nationally, EI recipient numbers are up month-over-month after a couple of months of reprieve. http://bit.ly/4o877P
StatsCan EI numbers: Up nationally 66.9% YOY, up 7.1% MOM.
Saskatchewan EI recipients up 73.6% YOY, up 12.3% MOM.
Urban area numbers: http://bit.ly/4Lt6UF
Saskatoon’s EI recipient numbers up 130.0% YOY, Regina’s up 73.1% YOY.
November 24th, 2009 at 11:33 AM
“Can’t be easy hearing the same stupid stories day after day”
It’s hard for me to imagine that there is enough denseness out there that 30-40 people a day actually ask Turner his opinion on whether they should buy a home, but it does make for interesting reading.
I won’t minimize the potential seriousness of the housing situation in Canada, and I expect that Turner is probably closer to right than he ever has been but I can’t help but wonder what he’d say to the many he convinced to sell their homes in a hurry last fall, only to watch the Canadian average climb 20%.
River Landing: The “we’re almost there” thing is getting a bit tiring, and yes, council did say that the October 31 deadline was the LAST, but it’s more common than not for people to say things that they ultimately go back on under these types of circumstances. I see it daily in my business. “The buyer is non-negotiable on this item.” No, not really. Now that we’re officially out of this deal with Lake Placid we should be moving forward to explore other options but as far as I know there are no other apparent options that would put a shovel in the ground anytime soon. If Lobsinger produces the cash and a continued willingness to invest $200 million at River Landing, I say, “let’s make a deal” and get on with the show. He needs to be able to satisfy Saskatoon that he’s ready to start and prepared to finish. I don’t see anyone else chomping at the bit to get to work down there.
November 24th, 2009 at 11:36 AM
Jen,
Thank God we’re immune to this thing in Saskatchewan.
November 24th, 2009 at 11:41 AM
Bookrat, this seems like a thinly-veiled attempt to ascertain how desperate the city actually is for this development, and kind of an implied threat at the same time: “He indicated he would enter another bid if another request is sent out by the city, but said other cities have shown an interest in his company building a similar project.”
Can’t say as I could fault Garth with his logic on that article, either. I’m not sure that people are really interested in a ‘moderated’ message, to be honest. This one (reader) comment gave me a laugh… “Joe, I don’t think there is any problem with your decision.” — !! And if you believe that, I have a bridge to sell you…
Jen, “The number of beneficiaries receiving regular benefits excludes claimants receiving training, job creation and self-employment benefits as well as other employment and support measures benefits.” So what’s the real unemployment number then?
November 24th, 2009 at 11:59 AM
Norm, “I don’t see anyone else chomping at the bit to get to work down there.” And with an expectation to invest $200M in capital, I suspect you won’t. Ken Ach had apparently expressed an interest in developing something, but not anywhere near on that scale. With what they’ve done for the developments in Broadway (Luxe) and downtown (King George), though, I’d like to see what their ideas are.
“I won’t minimize the potential seriousness of the housing situation in Canada, and I expect that Turner is probably closer to right than he ever has been but I can’t help but wonder what he’d say to the many he convinced to sell their homes in a hurry last fall, only to watch the Canadian average climb 20%.” For many who were stretched financially or speculating, it probably wasn’t a bad exit point, and it certainly could have been worse. After all, we’re talking averages: in Saskatoon, you’d still be up YOY if you sold last Fall and bought or built this Fall. Real estate in cities like Toronto and Vancouver is a gong show, anyway.
November 24th, 2009 at 12:25 PM
I’m still weighing mortgage renewal options and have looked into ManuLife One as a possible option. Can anyone offer any views on this, good ,bad or otherwise. Thanks.
November 24th, 2009 at 6:39 PM
Read this quote the other day in a real estate newsletter:
“You think you own your house, but you have to pay rent [property taxes] to the government, or else; if you don’t pay rent to the government, you’ll find out who really does own your house very shortly.”
November 24th, 2009 at 7:10 PM
Al, we’ve had the manulife one account. If you’re VERY disciplined about your cash and expenses, it can make sense. There’s only 2 ATMs you can use in saskatoon without paying extra fees (they say you should just request cashback at retailers to get around this). Also, if your employer won’t do direct deposit, you could have issues getting your money to manulife. All in all, it was a decent product – you can pay as much as you like down on principle whenever you want, and every time you withdraw money, you’re directly borrowing against your equity, so it really makes you think twice about hitting the ATM. In the end, we would up with a vairable rate that was better than what they were offering (straight prime variable with manulife), and we liked NOT having 80% of our equity “tied up” on paper. If we hadn’t moved, we’d likely still have it though – it’s decent as long as you’re ULTRA motivated to pay it down. Otherwise, your house turns into an ATM very quickly – could be very tempting to a lot of folks. Canadian tire was offering the same product when we had ours (check website) – I don’t know if their fees were any better – I think ONE was $14 a month or something. Good luck to you!!
November 24th, 2009 at 7:12 PM
Jason,
Re Ken Achs: “His company has made three different proposals on the site that “were more practical than grandiose,” but has no more interest in developing there, Achs said in an interview Thursday”.
“After all, we’re talking averages:”
I agree, and on average, people who have followed Turner’s advice have lost.
Again, I’m not suggesting that his logic is unreasonable. I am skeptical about those who are most certain about their opinion, and those who seem to take pleasure in characterizing those who disagree with them as defective, ignorant, greedy, evil, etc. After many years, I am pretty much convinced that his insights are as limited as any other economist.
Al,
I can’t speak about Manulife but I can’t think of any reason why one shouldn’t consider going with them. When I did my last mortgage I told my broker what was most important to me and let him do the groundwork to bring me the best product that suited me.
What are the factors that one might want to consider? I’d say rates and pre-payment privileges. Anyone else have any other suggestions?
November 24th, 2009 at 9:09 PM
“Australia’s economy has entered a “new upswing” that will last for several years, helping the nation’s households fund mortgage costs, said Ric Battellino, deputy governor of the central bank. ”
…
Battellino said today that Australian households have a larger capacity to sustain higher hose prices when compared to incomes than households in countries such as the U.S.
“Australians seem to spend less of their income on non- housing consumption than is the case for U.S. households, with a significant part of this difference explained by lower health costs,” Battellino said. They “therefore have greater capacity to service housing loans.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=amhLLcmS807I&pos=6
I view Australia as a decent proxy for Canada’s economy given how closely tied our two economies are to commodity prices. Now we are specialized in very different commodities, Canada is much more oil-based while Australia’s biggest export is iron but nevertheless commodities as a whole tend to move together. Hopefully we can ride the next wave with them.
November 24th, 2009 at 9:59 PM
Thanks Ringo and Norm for your insight. I can certainly see that the Manulife option could put a certain amount of people in deeper than they already are but it seems to make sense for us. Of course we are in our mid 40′s and not in our mid 20′s or 30′s. I’m not sure if I should be happy or sad about that! Again, thanks.
November 24th, 2009 at 10:48 PM
Hey Peter,
I mostly agree with what you’re saying. Canada and Australia’s economies are both commodity-based, but there are some key differences in key trading partners, which will in likely mean some key differences in how their respective economies both weather the recession and come out of it. I came a cross an interesting site lately, which explains some key points in their differences here.
“Remember – only 3% of Canadian exports go to China; 75% head for the U.S.A. By way of comparison, 24% of Australian outbound shipments are destined for the hot Chinese economy while only 6% go to the U.S.A. In other words, relative to Canada, Australia enjoys 8x the Chinese exposure and has only 1/12th of the orientation to the much softer U.S. consumer market.”
There’s more information in the original newsletter here.
November 24th, 2009 at 10:51 PM
“Just one signiture away” This whole Lake Placid thing was starting to sound real flakey about nine months ago but now I’m starting to wonder why the whole cast isn’t starting to feel embarrassed. I’m further surprised that Ken Ach’s company is continuesly being mentioned as the heir apparent, obviously Ken is a great developer with a lot of imagination and a flair for reno and redevelopment, but this project does’nt seem to fit his modus operendai, not to mention it just seems to be a little out of his league. As far as I can tell their is only one company that has everything it takes to develope this type of property (Remai Developments) and their not interested, and when their not interested that means only one thing, the math does’nt work. As for the Mayor, nothing personal, but I sense this is the beginning of the end for him, he had a good run though!
November 25th, 2009 at 12:30 AM
Norm, that’s not entirely accurate: “Our particular appetite (for risk) would say we wouldn’t gamble on that size of a project,” he said. So for $200M, definitely no.
Well, I think there’s been enough propaganda from the RE and finance community to more than warrant an opposing viewpoint from someone like GT. I won’t disagree that the message or delivery is sometimes harsh, but maybe that’s occasionally what people really need to hear. There were a lot of people that really needed to sell (who did), and probably a lot of people who waited to buy (and probably continue).
There’s more to real estate than speculation. Or at least there should be, with a house being a home first and an investment second. When the concern becomes ‘what is the monthly cost’ vs. ‘what is the cost’, I think that speaks volumes. It’s one thing to gamble with your own money; it’s entirely different to be gambling with someone else’s money for the next 35-40 years.
Rick, I think Meridian is the only other company that’s expressed any genuine interest, probably for many of the reasons you indicate. Embarrassing would be a mild understatement. In some cultures, ritual suicide would be appropriate; but perhaps political suicide is sufficient here.
November 25th, 2009 at 6:37 AM
Jason,
“Norm, that’s not entirely accurate”
No? I copied and pasted it from the SP story, but it’s entirely possible they have mischaracterized what he said. “No more interest in developing there” seems fairly clear to me.
“There’s more to real estate than speculation.”
Exactly!!
November 25th, 2009 at 7:45 AM
I don’t believe any local developer would commit to anything on such a grandiose (risky?) scale, nor would the city necessarily entertain anything less at this point, having staked such a large investment of both financial and political capital to realize the River Landing development. And I can’t imagine that having had many of their proposals rejected that other developers would be at all interested unless the city changed their criteria and possibly ‘dialed down’ the scope/vision.
An equally good question to be asked, though, is where the (current) ~$1M estimated annual operating budget for River Landing is going to come from starting in 2013?
http://tinyurl.com/ykf7ye2
City manager Murray Totland laid out a somewhat bleak financial picture for River Landing, including the concession that some of the $1 million needed to maintain the site annually could hit the mill rate in 2013.
The River Landing project is intended to be cost-neutral for taxpayers with parking and property tax revenue paying for the year-round maintenance of the site. The operation of River Landing, including grass cutting, sweeping and snow removal, is paid for through the city’s capital reserve until 2012.
With delays in getting private-sector investment in the site, some of the $1 million in operating costs will inevitably effect the property taxpayer in 2013, Totland said.
Should have built the casino.
November 25th, 2009 at 12:25 PM
Here’s a great example of poor reporting. CREA recently adjusted their forecast for unit sales for 2009, up 6.6% from the original estimate. Today, GlobeInvestor reports, “With prices set to gain 6.6 per cent in what was supposed to be one of the worst in Canadian real estate history, there is clearly some money to be made.”
…and you’ll love the Realtor quote at the bottom.
How does this crap get published?
November 25th, 2009 at 1:09 PM
I honestly have no idea what’s happened with journalism, only it’s become a joke compared to the once respectable profession it was viewed as. Maybe it has a lot to do with advertising, or lack thereof. I’m surprised though, that the glaring contradiction in the same article slipped past their editorial staff: Unit sales of 6.6% is later revised reflect a price increase of 6.6%.
“Even in tough times, property holds on to its value.”
Perhaps in its value as a ‘home’, but not always in a monetary sense. Still, this has to be better than “Now has never been a better time to buy!” or “You’re richer than you think!”.
November 25th, 2009 at 1:43 PM
“I honestly have no idea what’s happened with journalism”
I think the net and the desire to be first has led to some sloppiness. Statements like, “With prices set to gain…” are just plain stupid.
November 25th, 2009 at 3:09 PM
Here’s another hum-dinger of a story: Housing affordability slides
Try reconciling these choice tidbits:
A) “Housing will likely get pricier in the coming months”
With
B) “The housing market still faces obstacles, as mortgages have become more difficult to handle for many Canadians amid challenging labour conditions. This is likely to persist until the economic recovery is well established and job creation is sustained next year.”
Huh?
November 25th, 2009 at 6:47 PM
“Try reconciling these choice tidbits”
You keep forgetting that we’re living in Backwardsville now, where all things are possible and nothing is likely. Silly goose!
November 26th, 2009 at 9:13 AM
Property tax cut evaporates. And with many school divisions now running a deficit, we’re going to see a combination of program cuts or additional property tax hikes.
Promised tax cut up in the air
http://www.thestarphoenix.com/news/Promised/2267668/story.html
“Further education property tax cuts promised by the Saskatchewan Party under a new funding system for school divisions may not happen in 2010, a casualty of the government’s financial woes, Education Minister Ken Krawetz said Wednesday.”
November 26th, 2009 at 7:32 PM
In regards to the Turner article, I don’t think the guy’s plan quite works, but I certainly don’t think he’s a complete moron. According to my super-quick chicken scratch calculations, assuming he can rent out his suites, if his interest rates went to 7% he’d be paying $1800 a month out of pocket with the rest coming from rental income – way too much for me, but not completely inconceivable. Considering the tax he’ll pay on the rental income I think he’d be in trouble, but again I don’t think the line of thinking is completely moronic.
Bookrat
I’d be interested to hear what problems you think landlords create for themselves and others.
Even using credit, even at these prices there are opportunities in which you can get back your inital investment within a year (plus have the mortgage covered), and pull in twice your mortgage in rental income going ahead. So for now you’ve significantly increased cash flow, and when interest rates go up you’re covered. If you’ve established good credit and you can make something out of nothing – pay it back within a year, increase your income and build equity in a home I think that’s intelligent.
November 26th, 2009 at 10:05 PM
Jeremy, reckless and ill-advised is probably more appropriate. The only way it works is if interest rates remain artificially low indefinitely.
2.25% ($50k +$41.5k rental -$26k taxes -$26.4k mortgages -$7.2k p.tax/insurance = $31.9k)
3.75% ($50k +$41.5k rental -$26k taxes -$32.7k mortgages – $7.2k p.tax/insurance = $25.6k)
5.25% ($50k +$41.5k rental -$26k taxes -$39.7k mortgages – $7.2k p.tax/insurance = $18.6k)
7.0% ($50k +$41.5k rental -$26k taxes -$48.6k mortgages -$7.2k p.tax/insurance = $9.7k)
November 27th, 2009 at 11:36 AM
Jason, I agree – as I said factoring in all that tax puts it into the realm of impossibility.
The guy did seem a bit Schizophrenic in his reply – it seemed like he may build a new house and rent out the current one or do away with his “plan” altogether, sell his current house and simply rent, very concerning considering the “wood is already on the ground”. I certainly didn’t mean that his plan was intelligent.
November 27th, 2009 at 1:03 PM
Jeremy, I mean, he could certainly do it… but it’s unlikely he’ll be able to get the full rental rate all the time nor achieve 100% occupancy. I can’t speak for the costs of living as a single parent, but I think anything under $25k would be tight (utilities, food, car payment, plates, insurance, fuel, RRSP/RESP, savings, etc.) Not too mention he’s really just making the interest payments on the house; I can’t see a lot of room here for any principal repayment. Plus there’s maintenance and upkeep, which can easily add several thousand per year (per house).
I think his best bet would be to keep his existing house and apply whatever he receives from rental revenue (lower suite) towards his mortgage (he only owes $230k). I think that if he worked at it by the time he had to refinance in 3-5 years he could have it paid down by 25-50%, which would place him in an excellent financial position.
November 27th, 2009 at 2:15 PM
Jeremy said:
Bookrat: I’d be interested to hear what problems you think landlords create for themselves and others.
Jeremy, take the entire quote from context: MHO is that people like this, who are are leveraged to the hilt and think that RE landlording is a path to easy money (emphasis added) cause many problems for themselves and others
If you need me to go further on that statement, please let me know, but I think that it’s pretty self-explanatory. I consider ‘contributing to a societal viewpoint that RE only ever goes up, and that houses should be looked at as investments and not dwellings’, ‘driving up the average price of houses beyond where the average income can afford them’, ‘contributing to a global RE crash’, and ‘forcing other taxpayers to share the pain of a risk they didn’t take through government bailouts via CMHC or Fannie/Freddie’ in the category of “causing problems for others”. Your mileage may vary.
November 28th, 2009 at 12:50 PM
Jeremy, this statement of yours certainly got my attention.
“Even using credit, even at these prices there are opportunities in which you can get back your inital investment within a year (plus have the mortgage covered), and pull in twice your mortgage in rental income going ahead.”
I certainly agree that there are still opportunities for a RE investor but this seems hard to believe. I am very much an amateur at RE investing so perhaps there is some whole segment that I might be missing. Could you provide any more details? Are you talking about Saskatoon real estate?
November 30th, 2009 at 9:58 AM
Bookrat, gotcha, I basically agree with everything you said.
Peter, perhaps I should qualify that statement a bit. First of all I should say those types of opportunities don’t come along everyday, and if you find one, that is obviously an ideal outcome which doesn’t always happen either. Basically I’m just talking about a decent home fairly priced with multiple revenue streams (something with at least one legal suite) in a decent area, bringing in decent rent. From what I’ve seen/experienced, to be responsible with your money and “add” something to the community in the form of a decent home at a decent rent with a good responsive landlord that actually cares about his tenants – and make this work financially, it’s not “sluml-ording” (you can bring in high cash flow, but it certainly comes off to me as predatory) but it’s not buying a $300,000 east-side home either. It has to be affordable but in an area that attracts stable renters.
Also, when I talk about getting your inital investment back I’m talking about buying a home as a primary dwelling, so if you wanted to, (to the shagrin (spelling?) of many) currently you could put just 5% down and then turn the home into a rental some time in the future and start to get your deposit back. Although this comes with hoops and inconveniences you have to be willing to go through, and there are of course unexpected expenses that may arise.
So, as with anything, a risk, (buying a new furnace will certainly put a dent in you cash flow) and not realizing that, but just thinking its “easy money” as Bookrat said can certainly lead you down the path to trouble.
But I think a well thought out decision in the right situation can give you something close to the ideal situation I outlined before.