Saskatoon real estate: Week in review (August 11-15 2008)
New listing activity in the Saskatoon real estate market picked up again as the local MLS system welcomed 165 new listings including 157 properties in the single-family homes and condo categories. Total active listings pushed further forward and finished the week at 1,628, up significantly from 1,555 last week. At the close of business Friday there were 1,047 houses and 469 condominiums still looking for a buyer.
A total of 61 properties changed hands, up sharply from last week’s poor performance but still below the numbers that we might expect at this time of year. 58 of the 59 houses and condos which sold recorded sale prices below the asking price and overbid sales where nowhere to be found for the first time this year. The average underbid remained consistent with recent weeks.
The average selling price of recorded sales came in at just $269,802 taking a huge dip from the monster number recorded last week to finish the week at its lowest level since the week of March 10-14.
Many of this week’s sales produced fairly strong numbers but some of them stand out as better buys, at least in comparison to where they may have sold a few months ago.
Notable sales.
- 864’ bungalow in East College Park with a single garage sells for $249,000.
- 1,768’ Erindale two-storey split with a double garage trades at $410,000.
- 882’ condo in Forest Grove sells at $176,000.
- 875’ condo at Lakeshore Estates in Lakeview brings $180,000.
- 1,148’ Silverwood bungalow with a single garage goes for $310,000.
- 864’ Confederation Park bungalow with a single garage sells for $229,600.
Trish and I will be away on vacation through September 1. The “Week in Review” will continue through that time but that will likely be the extent of my involvement during that time. My assistant Pam will be moderating comments. Please take it easy on her and do your best to avoid nasty arguments. 
Once again, thanks so much for your contribution to our efforts. I look forward to joining the discussion again when I return.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
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.
Follow our daily updates on Twitter @SaskatoonHomes.
Norm Fisher
Royal LePage Saskatoon Real Estate
93 comments so far. We'd love to hear your thoughts.
April 28th, 2009 at 12:56 PM
Have a great vacation Norm!
April 28th, 2009 at 12:57 PM
Yes, have a wonderful time!
April 28th, 2009 at 12:58 PM
Unfortunately, I think some good people are going to be in finacial trouble. Not all who are building houses are evil speculators, many are families who thought they were/are doing the right thing for their family (move to a better neighborhood, closer to schools, family). I am building again but due in part to this blog and my own sense of the market I sold at the peak this spring. Even though that meant living in a rental for a whole year (they just started to dig now). Many thought I was nuts and said I should wait so I don’t have to rent. It worked out great and the nice part is my kids have not complained or felt sad about moving once. They actually like living in a townhouse, are meeting new friends and will eventually move to our new house that wil be close to their school.
However, I know of others with a family that are building again that have decided to hold on and now are building a new home while their old home is devaluating. What should they do? I say they should list now. It’s not going to get better for the seller later this fall or winter.
ps. I not saying they should get pity, it was their choice but I hope they don’t end up in financial ruin over it either.
April 28th, 2009 at 12:58 PM
Ken,
I definitely sympathize with your situation. I know a few people that have moved to a new (to them) house and have their older ones up for sale and are also worried. Now, being a person that has been long priced out of the market, but also as someone who has seen a lot of real estate postings and open houses, I’d say this… IF you have your old house in good condition, plenty of nice photographs, a good description, and a house that isn’t just ’60′s’ through and through I would say you shouldn’t have a problem selling (although it wont’ be sold in 4 days but may take a bit longer).
The amount of people trying to get top dollar for old things is quite high, and though it’s understandable, to me I would say that the house would sell a lot faster and at a higher price if some money was put into it to modernize some areas and show that there was some care put into it.
I think that the runup this past year or two has shown the effort into selling one’s home decrease TREMENDOUSLY, people not taking photos, not having anyting touched, the yard being in total dissarray and so on.
I’m a 30 year old non house owner, but as a 3rd party view of the market, that’s how I see it. I’m sure you’ll get many more responses on this. Glad to hear someone new on here.
April 28th, 2009 at 12:59 PM
Just wanted to ask for agreement or disagreement on these notable sales (if they are all notably high or notably low – or, by my guess, a little of both)
* 864’ bungalow in East College Park with a single garage sells for $249,000. (pretty low compared to recent months)
* 1,768’ Erindale two-storey split with a double garage trades at $410,000. (about what you would expect to pay over the past 6 months – no big drop?)
* 882’ condo in Forest Grove sells at $176,000.
(slightly lower than 6 months ago)
* 875’ condo at Lakeshore Estates in Lakeview brings $180,000. (slightly lower than 6 months ago)
* 1,148’ Silverwood bungalow with a single garage goes for $310,000. (slightly lower than 6 months ago)
* 864’ Confederation Park bungalow with a single garage sells for $229,600. (About what you would expect to pay anytime over the past 6-8 months)
April 28th, 2009 at 1:01 PM
While this is a great blog and really the only one I am intereted in reading I must comment on some of the things I have read recently. First, while it is fair to critisize the Merrill Lynch report for not releasing their methodology, I think it is wrong to dismiss their findings or to say well sure Saskatoon is a bit overvalued but so is Toronto and Vancouver. Excuse me!!!!! Please tell me Norm that you are not comparing living in Toronto or Vancouver to Saskatoon?
The bottom line, when you get past all the hype like “Saskatoon is just catching up” or “The SK economy is booming” there is one thing left over …..supply and demand. Just because the economy is booming does not mean that people are coming. SK is the oldest province in Canada and is terrible at attracting immigrants which all spells big problems for people who are now looking to sell. On top of that you have a housing prices that are on par with Calgary and Edmonton (ignore averages and look at comparables). I won’t mention the cold, the crime or the fact that SK isn’t hear an ocean or mtns. Opps.
Am I ranting….sorry. But I came here and took a higher paying job in 07 and thought my wife won’t have to work and we will increase our standard of living. I saw what was happening in the real estate mkt but thought clearer heads will prevail and by Sept. 08 the prices will come back down. Right? Wrong! Wrong! Wrong! Our standard of living dropped and my wife has to work.
We refused to buy a family house (bought a very small place) and in the process really inconvenienced my family but thought surely thigs will change. At times I thought I was crazy because all I heard from agents was the mrkt will continue to go up despite what I thought and almost everywhere else coming down.
Anyway…now we have decided to leave. Basically we conclude that the cost of living in this city is too high. With the property taxes being 50% higher than Calgary and with the prov. sales tax we calculate that it is actually cheaper for us to live in Alberta.
Don’t get me wrong….I like Saskatoon and we really wanted to give it a try but I refuse to pay Edmonton or Calgary prices for a similar house in Saskatoon. It just doesn’t make economic sense.
Good luck.
April 28th, 2009 at 1:02 PM
“SK is the oldest province in Canada ”
Wha?
April 28th, 2009 at 1:02 PM
@callum,
Taken from statscan 2006 census portrait:
http://www12.statcan.ca/english/census06/analysis/agesex/ProvTerr5.cfm
“Saskatchewan’s situation is interesting in that it has both the largest proportion of seniors (15.4%) and one of the largest proportions of children among the provinces (19.4%). This seemingly paradoxical state of affairs is attributable to several factors: higher fertility than any other Canadian province, a life expectancy that was until quite recently one of the highest in the country coupled with substantial losses of young adults migrating to Alberta, all of which tends to reduce the proportion of Saskatchewan residents between the ages of 20 and 40.
Another distinctive characteristic of Saskatchewan is that it has the largest proportion of very elderly people (80 and over) in Canada. In the 2006 Census, one out of 20 Saskatchewan residents was 80 and older. By comparison, only one Albertan in 36 was in that age group. The national average is one in 27.”
Best of luck G.
April 28th, 2009 at 1:03 PM
$65 oil coming?
http://finance.sympatico.msn.ca/Investing/JonMarkman/Article.aspx?cp-documentid=9400980
April 28th, 2009 at 1:05 PM
G
picking up a condo in Calgary could be a great deal from a year. 9 months of supply. Tonnes of selection. They have gone down quite a bit. http://calgary.ctv.ca/servlet/an/local/CTVNews/20080814/CGY_condo_080814/20080814/?hub=CalgaryHome
Or a house if you think they have not hit the bottom. I think they have quite a ways yet. ML says 25% more down. They will be close.
http://www.findcalgary.ca
http://www.canadian-housing-price-charts.235.ca/RoC_chart.htm
April 28th, 2009 at 1:06 PM
Got this from another blog from a RE guru in Calgary in 2006
Calgary’s market is many years away from any crash and six to 10 from a plateau. Here’s why.
1966 was the year the baby boom saw the largest number of births. The baby boom in general saw birthrates well above historical rates.
People aged 40 – 45 are in their big earning AND big spending years.Those born in 1966 turn 40 this year.
1972 was the next big birth year. Just as the 1966 group turns 45, the 1972 group will shortly be 40.
In and around those groups are the other baby boomers who are full of cash and spending it like water.
Calgary’s housing market cannot meet the demand for housing due to people moving here from other provinces and countries. Builders are out of their minds trying to keep up.
Alberta’s economy is the envy of the world. Our oil reserves are HUGE – moreso than those in Asia/Saudi: the US is looking our way as is China.
Alberta also has a huge, huge supply of clean coal – and Ontario is very jealous – and natural gas.
Alberta’s population demographic is huge in the 35 – 55 range – again, those are people with the most $$ to spend and they’re quite happy spending, too.
CMHC did projections with a 20% overage, which they now see as being an underestimate.
Richard Corriveau, who is CMHC’s chief economist was asked at a meeting two months ago, “When do you see this [growth] ending?” He replied (and I was there and wrote this down, word for word)”It’s so far down the road that it isn’t even on the table.
Part of the upward pressure on prices, additional to demand/low supply is the cost of wood, cement and drywall and of gas – due to the hurricanes and flooding in the US and abroad.
Yes, the market will stabilise the the days of 5000 – 6000 active listings are a long way off. Conservative estimates are that the market will flatten in 10 – 12 years, not in 18 months, unless there’s a war, which is always a possibility.”
Here is a blog in Calgary from 2 years ago. Some of you may remember it. Others will wish you saw it two years ago. Calgary prices are now back to 06 prices.
All gains from Dec 06 have been wiped out.
http://calgary-housing-bubble.blogspot.com/
April 28th, 2009 at 1:06 PM
Housesitter, I was all pumped to post the $65 per barrel oil link from hotmail! You scouped me!
Posted anyway, in case some one didn’t see your comment, agree or disagree, is food for thought.
http://finance.sympatico.msn.ca/Investing/JonMarkman/Article.aspx?cp-documentid=9400980
1,628 = a lot of listings, I am not surprised, in light of reductions, a few critical estimates actually getting some media coverage and a possible moderate population loss in Saskatoon, I think everyone will be cautious for at least the next few weeks, if not months, and take more of a wait and see approach to see what prices actually are for Saskatoon. I think personally I can see a $250,000 average by year’s end, a bit up year over year, but down from current and the “peak” earlier this spring.
And I would think this may be a second wave of speculators, and Johny Come Lately local 2nd and 3rd home buyers trying to get out now, after having made a little, rather than risk a big price drop.
Interesting as well, the local CMHC is still getting press in the Star Phoenix/Leader Post with their prediction prices will only go up! Sure, really a believable source!
I’ve seen some ads for $200,000 Kelowna condos and is kind of tempting – thinking about checking out the want ads for Kelowna. If value tanks there, I can always hold onto it for retirement.
April 28th, 2009 at 1:07 PM
Guy in Regina, the large proportion of children reflects the large first nations population in Saskatchewan, which while potentially a great asset, requires an active effort from main stream business and government to get them actively involved, and benefiting, from the provincial economy.
Huge potential, but also huge challenge
April 28th, 2009 at 1:07 PM
Been away for a while, but I just saw this absolutely excellent comment made on August 6th entry of greaterfool.ca that I thought deserved sharing (for those who have not already read it.
==================
Pete, here’s how it works with real estate board numbers (I’m a realtor):
Let’s say 100 houses sell in a bubbly real estate period. Fifty sell for $500K. Another 50 sell for $400K. Avg is $450K. Only the people who saw those houses know their condition, but I can tell you that in a bubble almost any manner of junk sells at full price.
By “full” I mean a listing price arrived at by comparing the listing with recently sold houses in the vicinity with similar attributes (sq ft, # BRs, # baths, etc.). Upgraded fixtures having absolutely nothing to do with anything, by the way. That’s HGTV fantasyland.
Then let’s say we enter the post-bubble phase. We get 120 listings. 60 at $500K and another 60 at $400K.
Of the 60 at the higher price, only 30 sell, but they’re the 30 that have been properly maintained over the years. The other 30 falling-down pieces of junk do not sell and the vendors, not wanting to believe the market has tanked, cancel the listing instead of reducing their price.
At the lower end, of the 60 listed at $400K, 30 sell to first-time buyers because in recent times $400K has represented the floor in prices and these houses are still better than living in a leaky condo or rat-infested basement. The other 30 falling-down pieces of junk do not sell because there aren’t enough buyers engaged in panic buying anymore. The vendors, who bought for a quick flip, cancel the listing and rent out the dump instead of reducing their price.
Avg: Still $450K.
So, we have listings up, sales down, but a steady average price that the board can spin in the media.
As the bubble completely deflates, quality property still sells, albeit at reduced prices, and junk doesn’t sell. So the average sale price goes down. But that STILL doesn’t tell the whole story.
What the public doesn’t see (but I do, having access to all listings for the past 20 years) is the number of cancelled or expired listings, where vendors reduced their price time and time again but could not unload their property.
These de-listed properties do not show up in any average because they aren’t counted as SALES. But the attempt to sell those properties was no less real for those vendors.
So an average sale price of $450K in a boom is not the same animal as an average price of $450K in a bust. One average represents the price on everything including junk that never had a dime put into it. The other represents the average price of houses that required an enormous amount of renovation and maintenance.
An average price decline of 40% (say) tells you that the BEST properties are off at least by that much. What it doesn’t show is that the average price decline for crappy houses can be infinity (no sale, no market value established). Look at the $1 house listings in Michigan for an example of what I’m talking about.
If the board wanted to publish numbers that offered a more honest insight into market conditions, it would publish the average LISTING price.
============================
Norm, is there any way to get that information (the average ‘listing’ price) from the Saskatoon board?
April 28th, 2009 at 1:07 PM
Bookrat,
You’re evidently not aware that the week’s average list price for Saskatoon is to be found in this post. (See top of page) Norm has been posting both the average list price and average sales price for years.
April 28th, 2009 at 1:08 PM
CMHC eh?
I tend to not believe a thing they say. I mean they won’t even update their site. But that’s just me. It’s like they are afraid to put things in writing, this way they can spin it which ever way suits.
April 28th, 2009 at 1:09 PM
Heading for a soft landing
http://www.nationalpost.com/life/homes/story.html?id=727849
Same thing the states were saying two years ago.
Bernanke: Housing market is headed for a soft landing
http://www.usatoday.com/money/economy/housing/2006-05-18-bernanke-housing_x.htm
A Soft Landing For Housing
http://www.forbes.com/home/business/2006/08/23/home-prices-sales-cx_jh_0823homes.html
April 28th, 2009 at 1:12 PM
So, my question – which I am not near wise enough to answer – is what does this all mean for builders and developers – do they need to adjust their prices for the market? Or are there always a percentage of people who are willing to pay more to build? And what about the new developments – when you look at the number of listings for Stonebridge, Hampton Village and Willowgrove – they seem out of proportion for the rest of Saskatoon – but is this always the case in a newer development? We live close to Stonebridge and took a bike ride through there – with a slowing housing market – who is building all of these new homes – and will it continue to be a dust bowl????
April 28th, 2009 at 1:14 PM
We’ve been wanting to get more space for a while now and move from our townhouse into a bungalow. We stopped househunting when the boom happened, there was no way we were buying a house without a home inspection! Insanity.
We were lucky enough to buy our townhouse before the prices went nuts. I am very sympathetic to anyone who is having to pay over twice what we did for a “starter” home.
We recently put a bid in on a house contingent on the sale of our townhouse. We figured that even if house prices are higher, with the equity we’ve built up, we’ll pay about the same as we would have years ago to upgrade from a townhouse to a regular home.
In order to afford the house though, our townhouse has to sell for a certain amount. We’re in a good position because if it doesn’t sell, we still have a roof over our heads and only one mortgage.
I feel horrible for the person we’re (potentially) buying from. She already bought another property and is trying to sell her house in a suddenly timid market. She might be stuck with two mortgages and two rapidly devaluing properties.
April 28th, 2009 at 1:14 PM
Inflation adjusted oil chart. Bubble?
http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
April 28th, 2009 at 1:17 PM
lack of knowledge,
Right now we have record inventory and we also have had a a record number of housing starts this year.
Most first time buyers and smart investors are priced out.
When you factor in that the Saskatchewan advantage with house prices over Alberta is long gone immigration is at best, a stand still, or we are possible losing people again.
This means there will be very few new owners entering this market in the near future. Inventory will climb and this will lead to huge declines in prices. Many builders and 2nd and 3rd property specualtors will HAVE to sell. Some will go under and others will be financially screwed. This has happened in the States and is also playing out in Calgary and Edmonton.
Take a look at this condo catastrophe in Calgary
http://calgary.ctv.ca/servlet/an/local/CTVNews/20080814/CGY_condo_080814/20080814/?hub=CalgaryHome
Stonebridge is a nice development in a great area but there is a problem there. The new developments in the states that were built at the peak of the bubble are now suffering. Some are now ghost towns. Not sure if that will happen to Stonebridge but it has mainly been developed during the peak. Not a good thing Speculation played the biggest role in these neighborhoods downfall. This downfall remains to be seen for Stonebridge.
April 28th, 2009 at 1:17 PM
lack of knowledge:
I am currently building a house(contracting it myself)and have been watching the market carefully, although I’m no builder, just a guy who has contractor connections. Here is my take to your questions.
Who is building these new homes? Some are like me. I’m on on third house (over ten year span). My first home I built was $88 k, then built for 160, now building a house in the low 400′s. However, my mortgage has remained pretty much the same. Even if the market goes down a lot we will still be in our houses. There are others who are building right now who haven’t sold their homes yet, they are the wildcards now. They are at risk for a big hit, at the very least may have to substantially cut back on the new house wishlist items.
The third and biggest player is the spec homebuilders – they are the ones that have a huge amount of money tied up in empty houses or land. They will be in big trouble I predict. I have heard that big builders mark up houses by 60-75k. My numbers seem to agree with that but I don’t know for certain if it is true. However, I just went and seen a showhome that was similiar to mine that was originally 455k, now below 400. I priced out his material list and I’m certain his margin is gone and just needs it sold. I have also began to hear rumblings about contractors not getting paid because builders have not sold their spec houses. The crazy thing is some builders are still pumping out the spec homes. They are fools and they will be out of business in the next year or two I predict.
If you are looking for a solid new neighborhood to live in, avoid spec home areas. Although an area with a lot of custom builders may not guarentee a full neighborhood, it would give me more comfort than an area where it seems you are the only one with a builders “sold” sign on it. On the flip side you might get a heck of a deal on a new house in about 6 months to a year from now.
Hope this helps
April 28th, 2009 at 1:19 PM
Jesse G: your bang on. Throwing a for sale sign on the lawn with the house all cluttered up, dings in the wall, weeds all over the place isn’t going to sell. Plain and simple.
btw: Thanks for the welcome
April 28th, 2009 at 1:19 PM
lack of knowledge,
From MY knowledge, builders are charging out the butt for anything these days out here. It doesn’t cost anymore to build a house out in Sask than in eastern canada, than in a small town, than anywhere else that has seen a ‘small’ rise in costs from builders. For instance, a place that has had a 5% gain in the past year, their charging an amount that is on par with the raise of the costs to be able to sell competitively. If the market goes up in Stoon by say 45%, well all of a sudden builders ‘adjust’ the prices to sell at the higher rate as well. It’s NUTS. At least that’s how i see it. That is the conslusion that I came to as for why the building costs are so high (when you get a builder to build it).
Ken,
Enjoy the blog, sometimes it can get pretty heated and sometimes even pretty petty, but all in all I think it’s a good measuring stick to see where people’s head’s are at in all of this.
April 28th, 2009 at 1:20 PM
George,
Does the inflation adjusted oil chart include the increasing demand from new oil pigs like China and India? The famous 20k cars hitting the road everyday link
http://www.treehugger.com/files/2007/04/china_cars.php
April 28th, 2009 at 1:21 PM
Armoth think a US recession might hit China pretty big? or India? That’s where they ship all there stuff. I heard, I think on this blog, that 9% of China’s GDP goes to Walmart. US recession equals less demand for China.
April 28th, 2009 at 1:22 PM
Bookrat, haven’t seen it mentioned here for a while, but Saskhouses goes by average listing price, and July had the lowest average listing price since January. Then again, they are infamous for people asking for way more than MLS, so key that they’re already back to January’s asking price this July, but the actual dollar figure doesn’t mean too much. August is going to be lower still, they’ve got stuff that actually looks almost reasonably priced now, and growing listings. If you look at the old saskhouses for sale sign in the garage of most open houses, their stuff all ends up on MLS after a few months of no interest these days anyway!
April 28th, 2009 at 1:25 PM
Dan,
Actually profits in WalMart have risen because of people now switching to discount stores instead of JC Penny and the Gap. Since Wal Mart is cheap I always shop there regardless if there is a recession or not but I notice now it is more crowded and now I know why every1 shops there now! ….oops dont forget Costco =o)
April 28th, 2009 at 1:26 PM
Well Armoth, have fun buying new Velcro shoes every month.
Point is, a huge chunk of China’s exports go to the US. And once the plasmas, and MP3 player sales start dropping at Walmart, China will feel the crunch from high end and low end demand. And Gap stuff is from India, or Pakistan or some none China 3rd world country, so some one is getting less US cash for their economic emergence.
April 28th, 2009 at 1:27 PM
just and FYI for those of you that have never been to China. Walmart is a high end shop in China. Most people looking for a “Walmart” like place to shop with low prices don’t go to Walmart but instead go to smaller places like RT Mart and all the other more local giant supermarkets. You’ll see people with more money going to Walmart in China.
What does that do for exports? I have no idea, I just wanted to point that out.
April 28th, 2009 at 1:29 PM
Eeesh for once I agree with Armoth….that’s it…the world is ending…
Basically I see wal mart like this. Why buy something made in china at Sears etc and pay 3x the price when they are getting it from the same supplier in China, when I can go to Wal mart and buy the same thing for a third and they got it from the same suppiler.
*i need a drink*
April 28th, 2009 at 1:29 PM
George said(in reference to Calgary) “All gains from Dec 06 have been wiped out.”
Some homes that sold in ’06 are re-selling now at lower prices. My data shows about 20% of them. http://www.bobtruman.com/Truman_index/page_2105508.html
April 28th, 2009 at 1:30 PM
Armoth,
just as recently as 2004, oil was trading at $28 a barrel. Your link was from 2002. China and India’s demand did not happen over night. It has only been an excuse to use by oil traders to justify the big spikes in price
http://www.oilnergy.com/1opost.htm#since78
Well, so much for a future of $200 oil
http://www.msnbc.msn.com/id/26061135/
Cramer: Oil’s Fall Is Econ 101
http://www.thestreet.com/story/10432794/1/cramer-oils-fall-is-econ-101.html
Break even oil price
Bahrain 40
Kuwait 17
Saudi Arabia 30
U.A.E. 25
Oman 40
Qatar 30
Canada’s oil sands 33
Oil coming down to 50-70 a barrel would be great for our economy for 3 big reasons. The province could still make money, inflation would finally be curbed and hopefully the price of gas would go down to realistic prices. Half of our economy is consumer spending. If people have to continue putting double into their gas tank compared to last year, that does not bode well for the economy and consumer.
April 28th, 2009 at 1:31 PM
Bob,
thanks for the link. You have a great website. I have just used averages in my analysis. Your index is way better.
I didn’t think it was a bad, but it is. Unless you bought in spring 06, you lost money. There are a few exceptions to this. And the people that did make money were the ones that renovated the property or finished the property. But again the money made is not as much shown.
When you factor in CMHC, closing costs to buy and sell, realtor fees, lawyer fees, operating costs for the house, and then capital gains if a 2nd property. The gains are not as much, and the losses are even worse.
I’d say the Calgary smart money was buy pre04 and gone 07.
Saskatoon smart money was buy pre 05 gone 07. If you were lucky to sell, 08.
April 28th, 2009 at 1:32 PM
Slow economy takes toll on household finances
http://www.globeinvestor.com/servlet/story/RTGAM.20080818.wcredit0818/GIStory/
When half of the economy is consumer spending, this is not good. When the media says one of the reasons Canadian RE will not go down like the States is that we don’t spend foolishly like them, should we trust the media?
April 28th, 2009 at 1:33 PM
Regarding the comments about when the smart money got in or out of a market.
From what I have learned (and heard) it is tough to be “smart money” and time any market that way particularly RE. When I was in Saskatoon last year I had Calgary’s history to draw from and thought perhaps Saskatoon was about a year behind. I was assured from several sources that it had peaked and was unsustainable at that level. As I was looking for a place to live in not for speculation I didn’t buy in then. Maybe I should ‘a maybe not. The point is that profitable investing is more persistence over time, research and making more good decisions than bad. Then you get “lucky” and look like “smart money”.
April 28th, 2009 at 1:34 PM
Ken,
I agree that profitable investing is better over time. Smart money is basically buy low sell high. But the smart money is made by only a few. At the time something is bought, you don’t know if it was smart or dumb. It’s an educated guess.
Alot of the buyers last year were speculators hoping to catch the gravy train. You never want to buy in a bidding war, its a sure sign the peak is close. Once properties could not be cash flowed anymore, it was only a matter of time before they come down.
This graph shows how we feel as markets flunctuate. Right now we are between anxiety and denial. You are right about us being one year behind Calgary, they are between denial and fear.
http://www.mississauga4sale.com/Market-Emotions-Cycle.htm
April 28th, 2009 at 1:35 PM
George;
I never understood the mentality of the bidding wars. I could never see myself getting involvedin one on a house but maybe I’m just cheap or too meanspirited to allow myself to contribute to someone’s financial windfall.
I made the “mistake” of making repairs on my place right through the craziness and missed it by weeks. So much for my “smart money” aptitude. Actually I have decided to rent it out. I gain a big cash flow simply because I’ve owned it so long. I also have the luxury of not being too negatively affected if I opt to leave it empty. Luckily I’m no where on that graph. But I think it was cause I’m patient and conservative…not smart.
April 28th, 2009 at 1:36 PM
George/Armoth, those $30 per barrel costs for oil sands are also very outdated, I believe expected costs from a few years ago, now I have heard far more to break even on Alberta’s oil sands, as well, as mentioned on this blog, I have heard on the news that oil prices of near $100 a barrel are required for Saskatchewan’s more remote, and lower quality, oil sands. No reference. Definitely more than $30 a barrel to produce, even in Alberta. $50 to $70 a barrel, and I would speculate that Saskatchewan oil sands are losing money, if they ever start producing.
April 28th, 2009 at 1:36 PM
Nick,
$100/barrel to break even in Sask?….that sounds crazy…since $100/barrel was unthinkable a short time ago. It would be nice to see the actual facts for sure though.
I would like to hear what the Shale Oil near Hudson Bay or other places would require to be feasible….I’m sure way lower than $100!!
April 28th, 2009 at 1:37 PM
Nick,
I know for the stock im invested in BQI they were saying a barrel of oil was $40-50 to produce. Im pretty sure about 99% that oil companies will not be selling oil at cost to average folk such as myself but if they do I would love paying 66% less for gas.
April 28th, 2009 at 1:38 PM
Who cares about real state prices in saskatoon the most some one is going to lose from peak to bottom is 100,000 to 120,000 tops. Hold on to your properties they will go back up again the world population is going to be up to staggering proportions sooner or later. The states a little different with tons of million dollar houses and losses far exceeding above saskatoons.
April 28th, 2009 at 1:38 PM
Armoth,
that link I had was from 2006, so it would make sense for $40-50 to produce.
Nick, I am no expert (Wesco is) on this, but I highly doubt it is near $100 for the Saskatchewan oil sands to produce.
April 28th, 2009 at 1:40 PM
George are you trying to say house won’t rebound after the slide or that prices will dip more than 120k? I wasn’t sure why you were disagreeing with Gary.
Which month/week had the highest selling average this year? Does anyone know?
April 28th, 2009 at 1:40 PM
George,
I’m no expert,
, however I do know that here in fort mcmurray its cost a barrel of oil to produce a barrel of oil, it doesn’t matter how you slice it or dice it. The plants up here are self sufficient and therefore their profits are always affected by oil price but operational cost is not. Sask oil sands is much different because they will be attempting to produce oil using S.A.G.D and therefore operational costs are going to be closely related to the price of natural gas and the price of water.
April 28th, 2009 at 1:41 PM
I didn’t say $100 for Saskatchewan oil/barrel, it does seem obscenely high, but I have yet to hear a recent or local number.
I heard (which I mentioned originally) that would be the cost for the far north oil sands, shale, GUNK or whatever you want to call it.
Regardless, it is far more expensive to produce from the remote north oil gunk, of Saskatchewan than higher quality stuff elsewhere.
I’d still bet that at $50 to $70 per barrel, the oil sands in north Saskatchewan don’t get developed or make much, any? money. That said, George was the one who dropped those prices. I would guess oil of $70 is about as low as I’d expect.
I’m surprised no one has produced an actual number, per barrel, of cost to produce in south Sask or Alberta, the Alberta oil sands and the more difficult northern Saskatchewan oil gunk. No extrapolations. An actual recent estimate of how much it will cost to develop the north, all costs in.
Not the 2006 for Alberta.
Oil prices go down, the first developments to go, are the most remote and expensive.
April 28th, 2009 at 1:42 PM
Ryan asked: “Which month/week had the highest selling average this year? Does anyone know?”
I have been keeping some of my own statistics and graphs (Thanks for the hard data, Norm!) to track things like this. Highest week this year was actually last week, but Norm took pains to state that this was because of one outlier ($1.1mm sale) Even without that one sale, though, it was still a good week ($308k).
Top 5 individual weeks for 2008:
Aug 04 to Aug 08 : $332,529
May 12 to May 16 : $326,544
Jun 02 to Jun 06 : $323,256
Mar 17 to Mar 21 : $317,470
Jun 16 to Jun 20 : $317,415
I also keep a six-week rolling average (total value of RE sold in that period, divide by # of properties) because I find it smooths off lumps, minimizes the issue of outliers, and shows trends better. From that set of data:
Jan 07 to Jan 11: $256,369
Apr 14 to Apr 18: $302,512 <– first time over $300k
Jun 16 to Jun 20: $312,843 <– highest value
Aug 11 to Aug 15: $292,392 <– current
So as you can see, we are definitely trending downwards right now (duh) and are off about 7% since the highest point on this chart, but we’re still UP 14% since the beginning of year despite that.
(And see my reprinted post above about how ‘average sale prices’ can be deceptive.)
So, I’ll throw in my prediction here as well, since everyone else is doing it: $260k average (6-wk rolling average) by year end, placing us right back where we started in January.
Don’t ask me where they’re going from there, though… I can see them levelling off, or falling to $230 by Dec ’09 if things are still bad. I doubt we’ll ever get back to $200k again, though.
So, does anyone already have those spaces on the board? Can I get my hat in the ring?
April 28th, 2009 at 1:43 PM
Walmart, oil, real estate in other countries – I have been reading this blog fora while and it seems people rehash the same over and over, they just provide updated links. I thought this blog is about all things real estate/housing in Saskatoon. “Lack of knowledge” and the people who replied are interesting. The big picture stuff that is presented on here can be found all over the net. I want local info such:
Anybody just buy or sell a house? what was your experience, any tips.
I see as lot of walk outs in saskatoon/martensville/warman. I do a lot of walking on trails and never see anybody in their backyard, if anything they are on the deck, not on the patio below. Therefore I ask if walkouts are overrrated? Anybody live in one that could comment?
April 28th, 2009 at 1:44 PM
I had a lot of people wanting our old house to be walk-out, as they are easier to suite. I think the availability to rent the basement would be a benefit in some areas, but definitely only some. Also, I think it’d be nice for kids to be able to go out as they please from the family room (which tends to be downstairs). Personally, I’d completely not care either way, but it may bring a little more light into the house. I certainly wouldn’t pay extra for it though. We did just buy a few months ago. All I can say is be fussy, and wait until you find what you want. Everything is going to need a few touches of your own to make it feel “yours”, but make sure the big players are in place for you, or in such disrepair that you could use it as a good negotiating point. When you find it, I found it helpful to speak to the seller’s agent personally. Don’t leave all that up to your own realtor. (we just went to the open house alone) The sellers agant can tell you if the seller really needs the house sold soon, or is able to wait. They can also give hints as to why the seller is leaving the house (if they’re leaving saskatoon, if they’re downsizing, if they’ve already bought something else or if they’re waiting until they sell). This information is all valuable because you can get a feel for how much negotiating power you will have. I’d also suggest walking the block at different times of the day – pay attention to barking dogs, messy yards, traffic levels, obnoxious neighbors. Even nice areas have some of those issues. I think you’ll find that you don’t need to panic when you’ve found ‘it’. Take your time. You’re not wasting your realtor’s time writing several offers if need be. You will regret feeling as if you over paid in the end. It gives me good peace of mind feeling as if we paid a fair price for our new house, and I had to do quite meticulous research in order to feel that way completely. Buying our previous house in a rush with little research on the neighbors and the area tought me a lesson. It was by no means terrible, but a days worth of hanging out close to the house would have given me a lot of information. Sorry for rambling. Good luck on your home search!
April 28th, 2009 at 1:45 PM
For what it’s worth, if anyone cares, I messed up above on entries 4 and 5. (Where’s the ‘edit’ button on these things?
)
Top 5 individual weeks for 2008:
Aug 04 to Aug 08 : $332,529
May 12 to May 16 : $326,544
Jun 02 to Jun 06 : $323,256
Mar 31 to Apr 04 : $319,639
Apr 14 to Apr 18 : $318,584
April 28th, 2009 at 1:46 PM
Ringo,
If the agent at at an open house is telling you anything about the seller’s motivation for selling, they are actually breaching their duty of confidentiality (unless of course the seller gave them permission to disclose that)…
Bill,
I’m not certain, but I think walk-outs are generally worth more. I think it’s worth it, because your basement feels a lot less like a basement… it provides more natural light, which makes that space more functional.
April 28th, 2009 at 1:47 PM
Ringo — That’s excellent advice; one of the benefits of the current glut is that buyers can take their time and be choosy. Although I’d still not buy now: prices are definitely going to fall.
I think walkouts are more appealing for light and space issues: they would make it easy to put in a suite, but it also means that your tenant has better access to the yard than you do. Privacy is an issue as well: you’ll be looking into their living room while you’re cutting the lawn.
You have to be in an older, more central neighborhood for a basement suite to make much sense: right now rents are high and demand is crazy, but I think that’ll fall off as more and more condos move to the rental market.
If a student has to live in a basement, they’ll usually want to be in walking distance of U of S, not out in the boonies.
April 28th, 2009 at 1:47 PM
OK another question (I am full of them!). With the housing slow down – is the city going ahead and developing the new areas (Rosewood ect)? Do they finish off the other new areas first or do they go ahead and start? Is this a city decision or a developer decision? (I just saw an add for lots in the Rosewood area)
April 28th, 2009 at 1:47 PM
Bill, was looking at places a month ago, Just stupid, So many places, but just as over priced as before, and people are all rattled their open house had so few visitors.
I’m sticking with renting, as horrible as $1,000 for half of a 2 bedroom town house is, $500 for me is a drop in the bucket wage wise, and with listings going up, the $6,000 in rent is definitely worth it to not deal with snotty and delusional home owners.
And there is just sooooo much similar stuff out there (was looking at 1,000 sq ft ish bungalows) and listings just increasing in number. Unless some how unique, will be two more like it in a couple weeks. At least my experience over the past few months.
And I can’t stand the horrible renos. So many people just painted over curtain rods, cupboards, doors, hinges, anything. Just caked it on. In fact, one place on Yale Cres stood out in my mind for looking far worse, with caked on paint everywhere, in person than on Sask houses.
April 28th, 2009 at 1:48 PM
$1,000 for the whole town house, my half of rent is $500, after the big 20% rent increase.
April 28th, 2009 at 1:48 PM
As a homeowner myself but not looking to sell, know a few people who are trying to sell and have not had any bites on there place. I suggest to them to lower their price below the average price. NOPE People are more interested in paying two mortgages then realizing the market is a different place. I imagine by November the market will be having a major correction as these people get a reality check and have to sell, rather then waiting for a baphoon to come in and give them 500 grand for a 350 thousand dollar home.
April 28th, 2009 at 1:49 PM
George,
Do you understand what inflation is? Higher oil prices are symptom of inflation not the cause. The only thing that causes inflation is an increase in money supply. If money supply is increasing then inflation increases. Just for the record if oil does come back to 50-70 dollars a barrel that would mean that all central banks around the world would be contracting the money supply, not likely. United states has negative real rates and Europe is about to cut.
Also just one point about the oil bubble. Try not to think of oil as in a bubble look at it from a U.S. dollar perspective. Oil has increased partially due to the fact that the dollar bubble has popped.
China/India when they finally realize that they don’t have to send the money they get from a trade surplus back to the U.S. in the form of buying treasures and therefore keeping rates lower than would otherwise be, and realize that if they use that money instead for their own consumption. When this happens China will not need the U.S. it already doesn’t. It just hasn’t realized that it should be subsidizing its own consumption and not the United States consumption. All in good time I Suppose.
Cheers
April 28th, 2009 at 1:50 PM
Bookrat is predicting a 60k drop by the end of 2009…just under 20% of current average.
This seems like a lot but it did increase faster than that.
Does anyone have predictions from the so-called “experts”?
April 28th, 2009 at 1:51 PM
Nate, no need to call people out on intelligence. I doubt oil went from $30 to $150 a barrel in a couple years based on inflation, or that it all due to a weak American dollar.
Sure, inflation makes stuff cost more. $70 is more than double a couple years ago. Oil is priced as a scarce commodity, with increasing demand and rampant speculation. Definitely drove up inflation. Now definitely falling, kind of like Saskatoon housing market, was under valued before, but fundamentals just aren’t there for the stupid high prices of earlier this year.
$70 oil is still good for Regina anyway, just not so good for crazy up north oil stuff.
April 28th, 2009 at 1:51 PM
Ryan, well Merrill Lynch says 50% over valued, so probably should be worth $200,000. $240 average seems more realistic with what sellers will come to accept to actually sell their places.
April 28th, 2009 at 1:53 PM
Nate,
Yes, I know what inflation is
In mainstream economics, inflation means a rise in the general level of prices of goods and services over time.
The relationship between oil and inflation
http://www.google.com/search?sourceid=navclient&ie=UTF-8&rls=SUNA,SUNA:2006-48,SUNA:en&q=oil+inflation
“As oil prices move up or down, inflation follows in the same direction. The reason why this happens is that oil is a major input in the economy”
This has not always been the case, though
What I am getting at is once the oil bubble is deflated, commodities will come down as well. ( This would be the loss of monetary supply) We will then spend less on food, gas, etc.
It is hard to not see a bubble in oil and housing after I knowing about the dot com bubble and what the US is going through now.
http://www.inflationdata.com/inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
Oil has crashed before, is it different this time?
April 28th, 2009 at 1:54 PM
Mike,
Ain’t that the truth. I know of some ‘double mortgager’s’ too, along with some that ‘upgraded’ and are trying desparately to sell thier places that havne’t been upgraded since the 60′s or even the 80′s….80′s is just as dated as the 60′s…oh yay everything fake oak..or even real oak..i just hate oak.. or all white cabinets… but i digress…
if it was me, and i had my old home paid for, why not lower it 35-40 grand below the others, it’d sell in a heartbeat, AND you’d still have come out on top beucase your house was worth 150 GRAND BEFORE….
but oh well. people will be greedy and face a great deal more hardship and maybe even fail. I mean come on people…whether the price is going to go up up up like the bulls say, or down down down like bears say, you want to sell your house don’t u? so sell it already.
April 28th, 2009 at 1:54 PM
I know this is a real estate board but let me indulge something i heard about oil a while back. I heard that one of the main reasons oil went up, wasn’t demand, wasn’t supply, but was the fact that China, india etc all were coming online, and people saw that as a GREAT investment to get into, millions to be made, so as the speculative part goes, everyone bought into the oil companies, into oil, raising the demand for oil stocks, raising the VALUE of them and that’s what really drove it way up.
It’s like if eveyrone wants diamonds, all of a sudden diamonds are $$$$$$..
*shrugs*
April 28th, 2009 at 1:56 PM
Jesse G and George,
The problem is industrialization and its need for oil. Im putting my money where my mouth is and am betting that oil aint gonna get cheaper anytime soon. I do agree for the $147 per barrel was mostly caused by fear like how bubbles and crashes are formed in anything that is of worth. But if you look at the facts global demand for oil is increasing the US of A isnt the center of the universe. Did anyone hear the latest news out of Venezuela? They are going to cut production along with OPEC if oil prices continue to drop. The good news tho is for our economy because of the oil sands and hopefully in turn we will see wage increases to match the house prices and affordability so we would truly have the best of both worlds.
April 28th, 2009 at 1:58 PM
Jess G, kind of funny you mention greed, in the end, a lot of sellers how could maybe sell now for 275,000 what they bought for 150,000 are holding out, because they saw a similar house sell for 300,000 back in March. Sucks for them that because they are too greedy to take the 125,000 gain now, they’ll be lucky to unload it for 250,000 once everything else falls to that level. And will be tough to feel bad for them, even if they only get 200,000 in the end. They had their chance.
And really, what is that 300,000 based on if they bought it for 150,000 3 years ago and they’ve done squat to change it? A lot of times the asking price just seems made up and everyone puts similar houses at that price. Well, if you’re not selling, you’re over valued.
Anyway, off to wilderness for a while, so unloaded on comments.
April 28th, 2009 at 1:59 PM
I read the article on “Saskatoon’s 50% overvalued” in the National Post Aug. 8 at the airport. I laughed ALL the way to Vegas!
While I still doubt things will correct THAT dramatically, 30% isn’t looking so unreachable. And to think ALL of this could have been avoided by just staying where we were. :’)
I agree with Crikey on how all of Canadian real estate is overvalued and all needs to see some correction. We’re not doing ourselves any favours by becoming unaffordable. Especially in a place like SK, it’s not like we have limited land like San Francisco. Just came back from there (BEAUUUTIFUL city – highly recommend visiting), the locals tell me there aren’t many houses that sell for under 1 mil these days.
Noticed the average selling price on these stats. It’s pretty low! Norm, you usually follow up such numbers with a statement of how it was skewed by condos or low valued properties in less desirable areas. Looks like a fair amount sold in Area 1 though.
Have a great vacation!
April 28th, 2009 at 1:59 PM
JesseG and Dan;
Saskatoon homeowners have the current situation in Calgary and Edmonton to look to as examples how falling market behaves. At the start a price that’s moderately lower than your comparables will really help get your place sold. As listings increase and buyers become more aware of their opportunity to wait and see it may be difficult to find a price that’s low enough.
I beleive Norm advised someone in an earlier post that selling sooner rather than later would be a better plan in this market. I beleive that was good advice.
April 28th, 2009 at 2:00 PM
Heather D. said: “Noticed the average selling price on these stats. It’s pretty low! Norm, you usually follow up such numbers with a statement of how it was skewed by condos or low valued properties in less desirable areas.”
Can’t speak for Norm, but I can speak to my own observations. The 191k average selling price in Area 3 this week was a COMPLETE anomaly. Average selling price in Area 3 is usually between 280k to 350k (combined houses/condos), so it must have been all condos (and small ones at that) in the north end this week.
April 28th, 2009 at 2:01 PM
Bookrat,
you’re right… it was MOSTLY small condos… and 2 houses. It was definitely skewed.
Ken and Jesse G.,
People are definitely still trying to get the top dollar out of the properties. Putting your property even 15K below comparable properties would be the smartest thing you could do in a market like this. What’s the harm in settling for a little less when you’ve still doubled your money?
In my limited experience, I think the biggest challenge seller’s are facing/creating is the temptation to “test” the market… They want to “try” selling at a higher price first, just to see “what will happen” (which is of course that it won’t sell), but don’t realize they’re actually just hurting their odds more starting too high.
April 28th, 2009 at 2:02 PM
My uncle’s “premium” realtor tried to test the water relisting the home they had for sale for $350,000 privately for a new price of $550,000. They didn’t have any offers or interest in the place at this price, so the realtor has now slice $150,000 off the price again. And now this “premium” realtor can’t figure out why people aren’t rushing to look at the property with the newly reduced price. Here’s a hint: If you cut $150,000 from the price of a property that has been on the market for under a couple of months, it shows people that you with all your “premium” experience are pulling numbers out of the air and are likely going to make further cuts as time goes on. I would assume a lot of the greed we see here with the high asking prices is likewise driven by the realtors desire to make maximum commission from a properties sale, whether it screws their client or not.
April 28th, 2009 at 2:02 PM
Actually, for the marginal increase in commission a realtor would get for trying to reach a higher listing price, it’s hardly worth the effort… a quick sale is a much better use of their time, so a real sleaze would try to (greatly) underprice the listing… ideally selling it to their own buyer. They only motivation to let a property linger on the market would be to host open houses, meeting potential buyers who don’t have representation yet. The way we sell houses in this country is really open to abuse by the unscrupulous. Buyers and sellers beware. Know the market yourself, and be sure to pick a great agent; they’re out there.
April 28th, 2009 at 2:04 PM
FrustratedRenter & Heather,
I think you’ve both got it a little wrong and a little right. I think that the overpricing we’re seeing is coming from both ends. I do believe that a lot of realtors are still “over-quoting” people on what they can get. But seller’s are just as eager to go for the higher price… and the seller does get the final say. As a salesperson you can only offer your opinion of value… and nothing more.
However, Heather, I don’t think anyone is intentionally underpricing. Underpricing looks just as silly as overpricing… It just hurts your reputation… and I’m pretty sure that’s grounds to get sued
April 28th, 2009 at 2:04 PM
Hey Heather,
Hope you enjoyed your vacation in San Francisco- it is a gorgeous city! I haven’t been there in over a decade- wow, time flies.
I’m on vacation now, with a little break in the action.
“I agree with Crikey on how all of Canadian real estate is overvalued and all needs to see some correction”
I’m sure you’re aware, but just to be clear, I don’t think that the current overvaluation is in any way unique to Canada- I think cheap credit fueled “asset” bubbles in many countries, such as the US, UK, most of the rest of Europe, Australia, NZ, etc. I also think the current culture of entitlement fueled this also (the “I deserve the best of everything and I deserve it now” mentality).
I read on the Weather Channel it was 37 in Saskatoon yesterday- is that true? Yeesh… I’m in a desert, and it’s not that hot!
April 28th, 2009 at 2:05 PM
Crikey…I heard 36 and a half so yes haha.
I agree with Heather’s comments for the most part. I’ve only sold 1 house in my life but my realtor was far more inclinded to drop the price than to keep the listing price as it was in hopes of a higher comission. The quicker it’s sold the quicker the realtor can focus on other listings. They in my opinion would far rather sell 2 or 3 at a lower closing price than 1 at a higher price. Besides if it’s listed too high it could never sell. And if there were a bunch of over priced houses that didn’t sell, then you could get into a situation where overpricing causes the inventory to rise from 400 to 1600 listing in a few months time.
A situation where buyers are backing off expecting futher price drops.
The only time they may shoot to high is to get the initial listing.
But that’s when you do your homework and check on what your competition is doing so you know if they are being realistic or blowing smoke up your….
April 28th, 2009 at 2:06 PM
Ken said “I bel[ie]ve Norm advised someone in an earlier post that selling sooner rather than later would be a better plan in this market. I beleive that was good advice”
Absolutely. Get out at near record prices for maybe 5% less than your competition. Or wait until everyone is down 15% and there are even more places for sale, or everything is down 33%?! Can’t see it, but then again, why not $200,000 average, still well above a few years ago.
April 28th, 2009 at 2:07 PM
Here is a great article about selling from Edmontons blog. Worth checking out if you are selling anytime soon.
http://www.edmontonrealestateblog.com/my_weblog/2008/08/subject-to-sale.html#comments
April 28th, 2009 at 2:07 PM
Last August there were 361 sales
Up to Aug 15th of this year 99 sales, probably finish at 240 I’m guessing.
Are prices too high?
Is the pool of potential buyers starting to dry out?
Or is it a combination of the two?
Sales have been in the 2004-06 range but seem to slowing
Housing starts in 2004-06 were probably in the 1000 range ( not sure about the exact number)
Housing starts in 07 were 2380 and up to the end of july 08 they were at 1789 for this year.
So heading into the fall we have slowing demand and increasing inventory to go along with already record highs in inventory.
With the type of market we are headed towards, listing your house is not a definite sale like it used to be. Looking to Edmonton and Calgary, the best advice before buying a home to upgrade or downgrade is to sell your home first. Too many people in those cities have two mortgages and some even have both listed ( a form of false supply) just to get rid of one of them. Others have become unwanted landlords at a loss each month.
April 28th, 2009 at 2:10 PM
Did any one see this story?
http://www.cbc.ca/canada/saskatchewan/story/2008/08/20/taxi-seized.html
Only in Saskatoon!
April 28th, 2009 at 2:13 PM
that is quite funny. sure adds some needed humour.
April 28th, 2009 at 2:16 PM
I.O.U.S.A. Movie trailer
http://www.youtube.com/watch?v=HBo2xQIWHiM
They are in trouble! Wow
April 28th, 2009 at 2:17 PM
Hey George,
Those are interesting tidbits about Phoenix… but look what’s happening to construction projects closer to home (Calgary):
Builder halts Beltline condominium project
http://www.canada.com/calgaryherald/news/story.html?id=4eb67305-3852-464e-ba11-eede18ff4022
April 28th, 2009 at 2:19 PM
Crikey, thanks for the link
almost 11,000 units under construction, almost 3000 listings on MLS, plus tonnes more on welist.com, many others are back to rentals. Only 535 sales in August.
Calgary condo market is toast.
I wouldn’t buy there for 5 years if I moved there.
Yesterday there was this announcement in Calgary, but I doubt it will get off the ground
Five-star hotel part of project in Eau Claire
http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=2d2c0ef2-a78b-4f4b-a7c1-7573080eb544
April 28th, 2009 at 2:20 PM
Crikey,
500 of the 650 units were sold in that place. Speculation was at least 30 to 40%. Builders know from the States experiences in the biggest bubbles, people just walk away from their deposit when the markets crapped out.
More and more people are starting to see the writing on the wall. The builders have seen it, ( and it is not the rising construction costs why they stalled, good one though, never heard that one before
April 28th, 2009 at 2:20 PM
At the height of the mania in Toronto
http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20071113/Condo_mania_071113?s_name=&no_ads=
Speculation has never caused a bubble before and in Canada we don’t have subprime, so we are ok
I wonder which projects in Saskatoon may not go ahead because “costs have gone up too much”?
April 28th, 2009 at 2:22 PM
George,
I would like to enroll your services to make every1 sad about BQI so I can buy more stock low and make another several thousand. You seem to be good at it here so I thought if you did the whole same bit of the world is ending for my stock I can pick up more for cheap….thank you
April 28th, 2009 at 2:22 PM
Armoth,
the world is not ending,but the Canadian RE bubble is ending. And I doubt that I make people buy or sell based on emotions. That’s almost as bad as Garth’s latest blog.
I used to be a bull here. But then I started researching. Here is my first post last fall.
“1st time poster, but I have followed this blog for quite some time. I bought my house in the summer of 05 before this boom. I really find it interesting to read some people say Saskatoon is overvalued while others say we have room to go. I believe both have good arguments. Personally I don’t want to see higher average prices (+300k), but what I want and what will happen are two entirely different things. I hope to one day build or at least move up, but if a new house is 450k or more I will not be able to do that. Nobody can really predict the future, but my feeling is that house prices will continue to rise and they may even rise in the spring 08 like spring 07 and here is my reasoning.
1. Our economy in Saskatoon is booming and will continue. I don’t have to post any links here to prove this.
2. The average price was under valued to the national average before the boom and as of right now, I think we are about 60k away. 250k to 310k. If the national average keeps going up so will ours. Our economy is one of the best so we will keep closing this gap.
3. Sales to listing is at about 90% right? So there is quite a bit of demand.
Inventories are pretty low (500) So there is not much supply. Econ 101 ( but I only 60% in this class, so take this for what its worth)
4. Interest rates will being going down (they just did) and probably in Jan or Feb another cut. Even though the western economy is booming, the east is hurting. Ontario and Quebec have been pleading with the federal government to lower interest rates so the dollar will go down. This is because their economy depends on a lower dollar. Also since the US Feds are lowering interest rates the BofC will also lower rates to keep our dollar from rising. Lower interest rates allows for cheaper money to be borrowed ( even though borrowed money is never cheap). This allows more people into the market. More demand, see #3.
5.I think one of the best ways to gauge how are spring will turn out, is to look west. This is where our demand will come from. If Calgary and Edmonton see decent increases next spring even 5%, our prices will definitely go up. The reasoning; we have lost many 20, 30 and 40 somethings in the last few decades to Alberta. ( 200,000+ Saskatchewan people in Alberta, I could be wrong about this) Some of them want to come home for many different reasons. Many of these people will not start looking here until spring because they have kids. These kids are in hockey, soccer, ballet or whatever. The parents do not want to pull them out of school midway through the school year and place them in a different provincial school system. They want to buy in the spring and move in the summer.
Reasons 1-4 are almost givens for next spring to allow for house prices in Saskatoon to increase or stay around 250k. But reason 5 is tricky right now. Calgary and Edmonton have dropped quite abit since spring. But if prices in Calgary and Edmonton increase in in the new year we could have another crazy spring here. If we get alot of demand; it will come from Alberta and we don’t have much supply right now. This will drive up the price.
April 28th, 2009 at 2:23 PM
George,
I retract my comment then you provided some good points but I hope our dollar does go south cause BQI is an american stock and ill get a nice bonus. Not only that but I hope our houses do go down abit and condo’s go down alot cause it makes no sense to me why some condos are going for more than my house did when I bought it before the boom. A lower dollar is usually good for our economy improving exports to the US and I believe if the slowdown continues not just with houses but with our economy it will only get better if the economic situation in the US gets better. K done my rant have a nice day =)
April 28th, 2009 at 2:23 PM
Armoth,
I don’t want people to lose jobs or their homes or their happiness. If some speculators get caught with their pants at the ankles, then good for them. But for the poor people that were told lies intentionally or unintentionally by media and the RE industry I feel sorry for them. Up to last fall I would have believed the RE industry and I would probably have been scared into buying. But I was fortunate and lucky buying when I did. It had nothing to do with brains, let me tell you
I wished we had never had the false boom here in RE. Affordable housing (buying and renting) was what separated us from Alberta. Now our affordability is worse than those bubble places.
Eventually this will come here. And this is just the beginning.
Job losses in home building in Calgary and Edmonton
http://www.canada.com/calgaryherald/news/story.html?id=01558d08-5353-4360-89bf-9cf1de8f0f5b
http://cgi.bowesonline.com/pedro.php?id=6&x=story&xid=414923
April 28th, 2009 at 2:25 PM
Thanks for sharing that original post with us, George.
I don’t usually put much stock in what Flaherty says, but it’s nice to see the “we’re different here” mantra losing steam:
Flaherty cuts economic forecast:
http://www.reportonbusiness.com/servlet/story/RTGAM.20080822.wbudget0822/BNStory/Business/home
“The global economy is slowing and Canada is not an island,” Mr. Flaherty said in a statement. “We are feeling the impacts of global economic factors beyond the control of any one individual or government.”
April 28th, 2009 at 2:25 PM
Here is an interesting article about oil
http://www.time.com/time/business/article/0,8599,1834888-3,00.html
April 28th, 2009 at 2:26 PM
George — I’d forgotten that you were a bull!
Not a very bullish bull, even from that post, but still, much more of one than you are now.
April 28th, 2009 at 2:26 PM
Crikey,
Are you still in the desert? I was in Nevada for a short while at 114F prior to California, that was pretty hot! Saskatoon this past week went from HOT to COLD then back to temperate, LoL.
I do agree that there are numerous markets around the world that have become overvalued. This downturn will not end without casualties, but is much needed. Things should never have gotten this crazy in the first place.
April 28th, 2009 at 2:26 PM
This Dunedin duplex home for sale which is a rare find since it is in a popular residential area and actually much looks like a single family.