Saskatoon real estate week in review – Sept 28-Oct 2 2009
Following the first week we’ve seen in months where sales were down on a year-over-year basis, the Saskatoon real estate market rebounded again recording eighty-five house and condominium sales, up eighteen properties from last week, and finishing thirty-three units ahead of the same week in 2008.
New listings continued to decline for a second consecutive week falling to one hundred and four homes, four fewer than last week and sixteen units behind last year’s production when agents added one hundred and twenty properties to the Saskatoon MLS system. A good number of this week’s listings were properties that expired at the end of September and were quickly relisted for another go at the market.
Click the image for a larger version of the graph.
After hovering in the 1,080 to 1,090 range for four consecutive weeks, month end expired listings pulled the active residential real estate listings inventory lower to finish the week at 1,029, fifty-nine properties behind last week’s total, and six hundred and fifty-one properties fewer than we had at the same time last year. Today, there are five hundred and ninety-four single-family homes for sale on the MLS and three hundred and fifty-four condos. Last year at this time there were 1,054 Saskatoon houses and five hundred nineteen Saskatoon condos for sale.
Canceled and withdrawn listings gained a little steam climbing to thirty-three units from twenty last week. Forty-two home sellers adjusted their asking price over the past week.
The average selling price of a Saskatoon home took a small upward bounce moving to $277,938, up about four thousand dollars from last week. The six-week average moved lower by about seven hundred dollars week-over-week, but was almost fifteen thousand dollars lower than it was for the same week in 2008. The four-week median slid thirty-five hundreds dollars from last week and stood just five hundred dollars higher than it was at the same time last year.
Click the image for a larger version of the graph.
The average underbid on a Saskatoon home fell roughly one thousand dollars from last week to $9,236. The percentage of sellers who were successful in selling within five thousand dollars of their list price recovered, moving from 25% last week to 41% this week, most of those gains at the expense of the $5,001-$10,000 category. Overall, five percent fewer sellers managed a deal within $10K of their asking price this week.
Map displaying the boundaries of Saskatoon real estate areas
Data collection and calculation for our statistical reports
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Norm Fisher
Royal LePage Saskatoon Real Estate
20 comments so far. We'd love to hear your thoughts.
October 5th, 2009 at 7:30 AM
It seems as though the Saskatoon market is very similar to Calgary real estate market at this time. I have two sellers currently in Calgary that are relocating to Saskatoon so it looks as though they will be able to purchase a new home for a good price.
October 5th, 2009 at 10:41 AM
Hey Miranda,
Interesting. We’ll take them as long as you guys would like to keep sending them.
For our Regina readers: Sounds like your city is cooking. This from CREA this morning.
This is the first time September monthly sales have surpassed the 300 mark and the highest number of sales ever for the month by exceeding the previous high of 289 recorded in 2007. It also marked the seventh consecutive month that sales have been above the 300 level – the longest such streak in the history of the MLS® System.
October 5th, 2009 at 11:13 AM
Norm, “the longest such streak in the history of the MLS® System” (this was for Saskatoon, yes – or Canada-wide?)
October 5th, 2009 at 2:18 PM
Jason, that was for Regina, not Saskatoon. Norm was quoting from the Regina CREA report that he hyperlinked to.
October 5th, 2009 at 3:08 PM
Miranda, can you enlighten us on what you mean that “the market is very similar to Calgary”. Is the Calgary market downtrending or uptrending?
Calgary’s market peaked in July07 at $505920, hit a lower high in May08 of $474513, and for Sept09 it looks to be another lower high of $459085.
Overall, I graphed out a downtrending Calgary market over a two year period. The downtrend makes sense to me with western canadian commodities such as wheat, potash and oil declining in price.
October 6th, 2009 at 10:54 AM
“western canadian commodities such as wheat, potash and oil declining in price.”
Steven, I’d actually thought they’d been remarkably stable since May. Perhaps you’re referring to a different time period than I’m thinking of. Barring another credit crisis, why do you think commodities will decline in price?
Speaking of commodity-rich countries, it’s interesting to see what Australia has done:
Stocks, loonie surge on Australia rate hike
Australia’s surprise interest rate hike, the first among the Group of 20 countries, set off a wave of optimism that rippled through currency and stock markets Tuesday. The Canadian dollar surged by more than one cent to a one-year high of 94.62 cents (U.S.) Tuesday, lifted along with other currencies after the Reserve Bank of Australia raised its benchmark interest rate by 25 basis points.”
Nice to see you again, Bookrat!
October 6th, 2009 at 5:00 PM
Thanks Jen/Crikey. Been here all along, just haven’t had much to say on matters. Said it all before, and didn’t see the need to repeat myself much. But I’ll do it now, just for old time’s sake.
After talking to a few people who have recently purchased or considered purchasing houses, I grow ever-more convinced at the general populace’s inability to see anything other than ‘carrying cost’ when determining how much house they can afford. This says to me that all-time interest rate lows are what is driving the market — after all, a 5 year VRM is under 2.5% now, which means that $1200/mo can carry over $300k. Set that rate to 5% (which is still low, historically) and you can only afford $225k. Set it to 7.5% and you’re down to 175k. What do you think happens to house prices then?
I am of the opinion that bond rates are going to go up in the long term — and perhaps even in the short term, as Australia shows; how long until other countries start to match the rise? — which is going to bring house prices back down to earth since mortgage rates are linked to bond markets. When they do, reality will hit hard in the Canadian housing market.
I believe it was you that said of the September numbers: “Record sales with historically low interest rates but prices stay essentially flat. … Nahh. Not at all concerning.” I share your observations, but come away slightly more optimistic, because sales and interest rates should have led to bidding wars and all-time highs as they did elsewhere in Canada. MHO is that the Alberta pump-and-dump capital has mostly left the city, so the market is reverting to its true Saskatchewanian ways of long-term stability and thrift. Unfortunately, it seems that many sellers don’t ‘get that’ yet, and are still reaching for last year’s sale prices…
Phew! That’s enough verbiage for one day, I suspect.
October 6th, 2009 at 7:27 PM
Bookrat,
That’s the way I see it to. However we can probably count on the Federal or maybe even the Provincial Government to come riding to the rescue with mortgage rate subsidisation as the Grant Devine government did back in the 1980′s. At that time rates were at 18 or 19% and they subsidized them back down to 12%. Logical predictions seem to be a wasted effort, the Fed’s simply step in and bailout or backstop whoever they feel will provide them the best chance to remain in office. As far as I know we have become a credit economy with Ottawa leading the way, I mean does anybody really believe that the Fed’s will ever be debt free. I rest my case, I guess.
October 6th, 2009 at 10:17 PM
Bookrat,
For what it is worth, I think interest rates will rise very slowly. If they were to rise quickly, then as your calculations show, it would crush the consumer. This in turn will push us immediately back into recession, which will trigger interest rates to go down as government intervenes and investors seek the relative safety of bonds.
I think a little bit longer term, over a period of years, you are right and will start to get inflation again. Probably due to currency deflation relative to Asia and other less credit dependent economies.
Rick,
I am on the same page with you, it is just impossible to predict anything with governments stepping in. When they start to collaborate like the G-20 are with their anti-recession spending initiatives, it becomes even more difficult to predict anything. It almost appears that as long as everyone toes the line, they CAN get away with it. For how long, I can’t say.
For instance, the US government’s interventions should have by all rights triggered some kind of side-effect. Many people, myself included, were predicting a huge decline in the US Dollar. This has not really happened, I was wrong. The reason though, as I alluded to, is just about every other country is cutting rates and increasing spending so on a relative basis the US is really not that much worse.
So it’s not even, what will happen if the government takes out more debt? Now it becomes what will other countries do as our country takes out more debt? How much debt will they take relative to ours? What will they do to their interest rates, relative to ours? Will they let their currencies follow natural effects or intervene? How will investors respond given stock market returns look so dismal. It goes on and on and on.
October 7th, 2009 at 9:24 AM
Peter:
“Many people, myself included, were predicting a huge decline in the US Dollar.”
It’s coming. The USA has been sheltered from its own policies of the last 20 years to a great degree by the fact that the USD enjoys status as the world’s reserve currency. As a result, there are a lot of transactions all over the globe that are done in US Dollars… whether or not the USA is one of the people in the deal. But make no mistake – the USD is slipping.
The US Dollar Index (USDX) is an index or measure of the value of the United States dollar relative to a basket of foreign currencies. Take a look at the USDI over the last year: http://quotes.ino.com/chart/?s=NYBOT_DX&v=d12
The USDI hit an historical low in mid-march 2008, at a level of about 71, then started a run up to 89. This surprised many people, beacause (like you) they figured that the USD was toast due to the horrible economic news from the states. The dollar’s status as a world reserve currency was a huge factor in this upwards run, though, as many people had to liquidate assets to pay debts… and those assets were held in USD. It’s been on a pretty much unbroken slide since March 2009, though, and is getting nearer to that historical low again, currently trading at about 75 or 76. (Notice how the Canadian dollar is getting ‘stronger’? It’s not – the USD is getting weaker. We’re not any stronger relative to the Euro or the Yuan… we’re just beating up on the USD.)
There were speculations in the MSM (mainstream media) just this week about countries wanting to switch to ‘a basket of currencies’. Of course the talk was quickly disavowed, discredited, and thoroughly quashed… but even this idle conversation led to a decline of the USDI. Various well-read economic blogs have been discussing this same topic for several years, and if you look at all the underlying signs of how the power balance is shifting in the world I would say that is pretty much a foregone conclusion… but it took 60 years to get things to this point, and changing it will not be an overnight process. I would be very surprised it the USD was still the sole world reserve currency by the end of 2015.
I know that this is way off topic for a saskatoon RE blog… sorry Norm.
October 7th, 2009 at 9:53 AM
Since I’ve dragged it off topic already, here’s coverage of the above story in the mainstream press.
http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html
(Not American press, mind you, but still coverage. Don’t expect this to get a lot of play in US media.)
October 7th, 2009 at 11:16 AM
Bookrat… now you’re reminding me of why I’ve missed you here.
“general populace’s inability to see anything other than ‘carrying cost’ when determining how much house they can afford”
I think you’ve nailed it there. The dangers of maximizing the amount of house (or whatever) you’re carrying when debt is the lowest it’s ever been is lost on many people. It’s difficult to find anything in the MSM about how to predict your carrying costs into the future, and/or how to possibly prepare for this eventuality. In the last couple of weeks I’ve seen a couple of blurbs in the MSM about how to avoid “refinancing shock”, but I do imagine 3-5 years from now we might see some fairly significant blowback from this if interest rates are even hovering around historically normal. A clear uptrend in employment and incomes would be our only saviours here, and I’m not terribly optimistic about those for most of the country. I hope to be wrong about this.
The Fisk article is very interesting, isn’t it. It’s not at all surprising that the world is reexamining the status of the dollar as global reserve currency- most specifically those countries that produce commodities, as they are priced in USD. Nominal prices don’t mean much when there is fear of currency debasement.
You may have already seen this article, but there it is nevertheless. A very interesting discussion about global debt-to-GDP ratios, currencies, and ability to finance debt.
http://tinyurl.com/y872xdh
Captcha: Signed lasagnas. It doesn’t get much weirder than that.
October 7th, 2009 at 6:45 PM
Even if you guys are right and rates do start to rise, what concerns me is the government stepping in to help homeowners when the rates start to rise. Rick mentoined the sask gov subsidizing rates in the 80′s, what’s to stop that happening again? It seems if you follow the pure path and trim your debt you are going to get the shaft (in a relative fashion), by missing out on all these government subsidies.
They have a program in the US right now where homeowners who are delinquent, and have their mortgage thorugh fannie/freddie, can get a subsidized rate of 2.25%. So if you pay your mortgage well you’re a sucker you pay the full rate, if you don’t pay your mortgage you’re one of the good guys and the government has your back.
Or look at Japan where they are talking about an actual moratorium on interest and principal on loans. Imagine how ripped off you would feel if you paid your mortgage off and then some genius who never paid any principal doesn’t have to pay their debt.
The government has made things very clear, like our criminal system it is the offenders who are the real victims in their minds. If you have debt, poor you, we will see what we can do to help. If you are a saver, we will take your money you greedy fool.
We are in opposite land people. Watch your ass—ets.
October 7th, 2009 at 8:35 PM
“We are in opposite land people.”
Lol. That’s so true! We are living in opposite land.
Bookrat! Thanks for being seen. I miss you as well.
October 8th, 2009 at 9:28 AM
Wow, nice to feel missed!
Norm, I miss your days of more-frequent comments… but I saw the one where you explained why you were burned out, how you felt like you were getting tired of trying to keep things ‘fair’, and that you were less willing to attach your public name to blog predictions. I understand all that, but I can say that I miss the lightheartedness that those posts brought; seems like the overall ‘tone’ has gotten more serious since they stopped. I guess you do all your ‘fun’ in Twitter now, eh?
Anyway, I just came back here because I saw a good article today on why there might be a dollar rally in the near future on the ‘Of Two Minds’ blog, by Charles Hugh Smith.
http://www.oftwominds.com/blogoct09/dollar-rally10-09.html
I enjoy his blog a lot, and this was a very thought-provoking post. I particularly liked this point: [L]et’s look at a chart of the dollar from the point of view of basic technical analysis. Charts have the distinct advantage of not even pretending to reflect the fundamentals–whatever they might be.
His point is that whatever the fate of the dollar over the long run, basic human psychology will not let something decline in a straight line. People will always buy when they think that things have found ‘the new bottom’, which will cause a rally. So regardless of the long view on the USD, the short view (in his opinion) is that we could see a run-up in the near future like we had last year, where it gained 22% in four months.
Can’t fault his analysis… might just look around for a USDI fund myself as a short-term strategy… as long as it’s money I can afford to do nothing (or decline if I’m wrong), and I’m willing to take a ‘good’ return rather than get greedy and miss a peak. But that’s just my strategy.
October 8th, 2009 at 10:37 AM
Bookrat,
I guess I have to stop taking things so seriously. Five or six months ago I took on a couple of projects that proved to be absolutely exhausting and I suppose I wasn’t having much fun of any kind while those things were on my mind. I’ll try to lighten up a bit.
Dollar: I will check out the post.
If you were taking a trip to the U.S. in a few months time would you get you dollars in order now, or would you wait a bit? I have a large bill I can pay any time between now and January 1.
October 8th, 2009 at 11:07 AM
Bookrat, (from your link) “Let’s also recall one of the themes of this site: there is no absolute value, only relative value. The dollar could tank against gold and be rising against one currency even as it drops against another. The way to increase purchasing power is to be on the right side of a trade which is about to reverse big-time.”
So if the US dollar is poised for a rally, what’s the currency that stands to be offset the most?
October 8th, 2009 at 1:08 PM
Financial Post’s Diane Francis wrote an interesting op-ed titled, “U.S. Commercial real estate next to feel chill.” Could potentially be another round of the credit crisis.
October 8th, 2009 at 9:05 PM
Trying to follow this dollar thing *is* like attempting to predict the next move in a game of 3-D chess:
Asian banks step in to bolster dollar: http://tinyurl.com/yc4h3cv
“Asian central banks intervened heavily in the currency markets on Thursday to slow the slide of the US dollar amid growing concern about the potential impact on the region’s export driven economies. Traders said most of the Asian central banks had been buying US dollars, with the Bank of Korea among the most active following a round of intervention by Seoul earlier in the week.”
October 9th, 2009 at 7:07 AM
Canada’s unemployment rate falls to 8.4% as job growth exceeds expectations.
Saskatoon area population tops 250,000.