“Sigh. Then you aren’t really living are you?”

While I don’t mean to offend anyone it sure seems to me that the only people who think that the present cost of houses in Saskatoon is justifiable are those people who have lived the majority of their lives here. Is that true? Is there anyone who is relatively new to Saskatoon who thinks that it makes sense that a home in Saskatoon should be as expensive as a home in Calgary? As for the cost of living in Calgary compared to Saskatoon, from the perspective of someone with children…..it isn’t even close. Property taxes, and pst make an enormous difference. All other costs you mentioned Mark are relatively the same although if you look for them you will find restaurants much cheaper in Cowtown. PS: by the way even if it was equal or Calgary was a bit more expensive….you get to live in Calgary…by the rockies!

The house my husband and I are building is costing us $350K total including lot ($96,500). It’s 1289 sq ft bilevel. This is a “reasonable” price in todays market, but things will come down. Most builders might already be feeling the pinch, many by fall will be hungry for new jobs. That’d be a great time to start asking around for quotes. Although materials haven’t come down much there is WIDE profit margin for builders to start cutting into. My builder has even admitted to making a pretty penny.

There were MANY lots returned from the last lot draw – the demand will be even less now. There may even be lots available for first come first serve once the draw has ended.

Thanks for the link. Some interesting thoughts on the study. I don’t know if the author’s motivation is really that important, and to some extent I agree that the study really is a statement of the obvious but it doesn’t hurt to bring some focus to the whole issue of affordability. At the end of the day, Nick’s use of the survey to compare the cost of home ownership in one city to another may be where its greatest value is. As far as how this applies at home, it really isn’t rocket science but simple math. Median price divided by median incomes. We don’t have to wait for the next Demographia study to know if we’re improving or deteriorating.

“and I can’t believe that this company would be the only one like that.”

Face it pal! You’ve been screwed.

Having left a job where I was up to 4 weeks vacation to move to this company, I *really* wanted to keep that if I could, but I was told that it’s non-negotiable, and doesn’t matter if you come in as a manager or a line worker… 2 weeks vacation for the first two years. I don’t expect it would be any different in Alberta, and I can’t believe that this company would be the only one like that.

I don’t know what it would cost right now but 3 years ago you could have got a house of that size done for $150k or less and the builder would still make a profit. It depends of course on the extras you want. You could easily drive the price up 30, 40, 50k if you want all the nice touches.

Wages have certainly gone up since then but materials haven’t changed much at all.

I have also heard rumours that the builders make over $100k for a typical house in the new developments.

http://housing-analysis.blogspot.com/2009/01/demographia-again.html

Looks like median household income, with some adjustment upward, seems reasonable

page 41

“Median household income data is generally estimated using national statistics bureau

generated base adjusted to a current estimate by the best available indicator of median income

growth. In some cases statistical agencies recalibrate year to year data, while in other cases more reliable conversion factors are identified. Some median income data is estimated based upon

historical conversion factors. Because of data variations and alternative estimation methods, caution

should be employed in making definitive time-series income. The most relevant comparisons are

between overall categories of housing affordability”

By a simple and general method Saskatoon is unaffordable. Not really much of a surprise, but gives us an objective number to say Saskatoon, given median income, is more expensive to buy property than most other Canadian and North American cities.

Granted, would be nice if provided some more information in the study. Might be nested some where in the substantial 50 + pages.

Median total household income is a good measure of what the average person makes, $55,000 seems like a reasonable number across all of Saskatoon. Regina, as usual is higher, Edmonton/Calgary higher still.

Median House Price/Median Income is a nice quick comparison of markets that applies to everyone

After that we can decide if Saskatoon (or Phoenix or wherever) has specific factors to benefit us personally, although @ 4.6 years income to buy a house, Saskatoon needs a lot of other things to offset its steep housing costs.

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Mark, if you also enjoy wine, Alberta’s private liquor stores have much better selection and are much cheaper. Many wine snob friends will go there to buy cases @ a time.

“Perhaps the median income among working households, those who might potentially buy a home, is actually higher than the numbers we’ve been working with”.

I think Mark brings up a lot of good points, and I find it ironic that “Demographia” essentially ignores demographics (although they have buried a footnote somewhere in past reports about correction factors for certain markets that could be used, though they don’t apply it). The index is certainly an indication of affordability, I don’t doubt that Vancouver is less affordable than Saskatoon. However, by virture of the number of cities this report examines, a simplistic approach was taken. I’d like to see a ‘basket of jobs’ compared with the ‘basket of goods’, which would include comparable styles of houses… that might actually say something truly meaningful that could be used to compare between cities. All I’m getting out of this report is that Saskatoon is less affordable than it was last time the report came out, but we already knew that. It can’t tell us (conclusively, at least) that Saskatoon is more or less affordable than other cities with a fairly similar rating, since it is too much of a generalization of both the population and housing styles (i.e., a city like Oakville, for example, is a sea of 2000 sqft+ luxury houses), and it ignores all the the other affordability determinants people here have mentioned, like taxes and daycare costs.

Sorry, I just haven’t had time to take a good look at this report yet. Probably shouldn’t be commenting. I have another wild day today but I’ll get through the report over the weekend.

Q3 median for SFH is $296,250 CDN. Median for all residential is $276,950.

I don’t wish to tell the folks at Demographia how they should do their survey, or what measure of the median income they should use. I only want to understand the how and why of it.

Nick,

I’m not thinking so much about being able to compare Calgary to Saskatoon as I am about being able to compare Saskatoon at Q3/08 to Saskatoon at Q1/09. If we knew how this was calculated it would be easy to see exactly where we’re at today. If the appropriate median is $50,000 as you’ve suggested above, we’ve lost half that much value since Q3 which would mean that it now takes around 4.1 years income. One could see that Saskatoon would likely be back into “moderately unaffordable” territory quite soon. If the median is actually $70,000 converted to US dollars, the impact is not nearly as great. Nick, my question is not at all about taking issue with the survey. I trust it. I just want to understand it.

Mark,

You’re probably right that these surveys can not be used as a predictor of what might happen in a market. They’re only good for letting people know how median income compares to median house prices. It’s more a question of how does average Joe fit into this community as far as housing goes. We know he can’t afford a house in Vancouver. Can he afford one in Saskatoon? If affordability continues to erode, where does Joe eventually end up?

I mean who owns all that property in Vancouver? How can it maintain such an unaffordable status long term if something else isn’t at play beyond the notion of median households buying median homes?

Sigh. Then you aren’t really living are you?

I guess it all depends what we like to spend on. I like to eat out and go for drinks at least once a week. Also, like I mentioned a month ago, I have two kids in daycare. I spend 1000 a month for two spots. In Calgary, that would be closer to 1800 a month, or so I’ve heard. 800 a month extra. That’s a lot of cash. Can I save 800 a month in pst, gas, and provincial income tax. Doubt it. But then again, I’d like to see a good comparison.

Any Home Depot, Superstore, Canadian Tire, Future Shop etc flyer has all the locations on the back – Alberta, Sask, Toban that it covers

Gas is cheaper in Alberta

Income taxes are less

No PST (so 5% savings on everything at Home Depot, Superstore…)

Will cite a new study for cost of living the minute it becomes available – back when I graduated (about 5 years ago) Edmonton was recruiting at the U of R with a study showing it was cheaper to live there than Regina or Saskatoon (based on some basket of goods) Save for housing, which 5 years ago was MUCH more in Edmonton than Saskatoon – given that Saskatoon’s housing is now LESS affordable than Edmonton’s, I would imagine the cost of living difference has widened

I will post a link to any new cost of living study the minute it is out (like I did with this housing affordability study) but until then check the Sunday Sun flyers – sure they all have an Edmonton location on the back

The larger numbers (married couples only DO show a clear Alberta advantage) but looking ONLY at OUR market, the median of ALL house holds is $49,000 (bookrat’s number) so suddenly …

$250,000 (ish) property/$50,000 = 5 years

Yikes

I stand behind using ANY median income to compare cities, as ALL show Saskatoon trailing Regina, Edmonton, Calgary by a lot in income.

But Bookrat’s $50,000 household median is probably a better measure to include ALL Saskatoon residents.

Point is 4.6 years of income in Saskatoon v. 4.2 in Edmonton and 3.5 in Regina, with Saskatoon “seriously unaffordable” when compared with consistent methods to OTHER Canadian cities (and other world wide cities)

For the 1.1 years of median income left over in Regina, you could all buy a water cooler and not worry about the gross tasting tap water – and then cities are pretty similar. Or @ only 3.0 years income, move to Winnipeg and send kids to cheaper and bigger university with more programs.

The only ‘gotcha’ I see in that approach is that you don’t know what they counted as a ‘house’. They talking about SFH, or all residential dwellings including condos? (I’d guess the latter…)

Goes back to the fact that it is adjusted to USD, and the exchange rate from Q3 2007 to Q3 2008 was wildly different.

Look at my numbers above: the average income was fictional and rounded for ease of calculation, but the USD/CAD exchange rate was not that far off reality for those sampling periods. So even though my fictional average wage increased by $5k IN CANADIAN DOLLARS from 2007Q3 to 2008Q3, it showed a $7k decline WHEN CONVERTED TO USD. Does that help make it clearer?

Also check the METHODS section (page 41) for a bunch of general information on where they get the median income data.

And remember the quote I pointed out: “Year to year

income data is … not comparable.” They re-jigged the income numbers for Canada between the 2008 and 2009, so they are saying specifically that you can’t compare one with the other.

Having said all that… *I* dispute the $80k median household income for 2008, because I also dispute the $76.6k number for 2006. I have never really gone looking for the numbers before tonight, but now I have, and they aren’t nearly as good as everyone is claiming.

http://www.canadaimmigrants.com/saskatoonliving.asp – shows 2005 median family income as ~$67k

http://tinyurl.com/b97wfq – the Saskatoon Community Profile page on the StatsCan website, showing the 2006 numbers they collected for 2005. Here are four median income figures that could be germane to the discussion:

1) all private households: $49,313

2) ALL census families: $65,268

3) married-couple families: $76,295

4) couple households with children: $84,611

Seems to me that #3 is the one that has been bandied about here, but how reasonable is it to pick such a limited subset? I think one should either go with all families (#2) and drop the ‘married’ requirement, or all private households (#1). Wouldn’t surprise me if Demographia picked #1, which might explain the discrepancy.

A moderately generous 10% adjustment over 3 years puts these numbers at approximately 54k, 72k, 84k and 93k respectively. So which of these numbers do you want to pick?

I agree with your points, about the oil price and how production weighed so much higher than costs. This boom kind of got cut off short due to the global recession.

But really every electrician and pipefitter that was employed in Alberta was getting double digit raises year after year since 2002 plus the OT hours were on top of that.

That really should be the same around here with the potash plants expansions, but the fact that oil plummetted means no one has to pay anyone 50+ hour weeks to get trades to work on their sites and I doubt the unions will be pushing for big raises anymore.

I can agree, to some extent at least that the income measure doesn’t matter in comparing one market to the next, provided that the measure is applied consistently. I have no trouble believing that Edmonton, Calgary, and Saskatoon are all more or less equally unaffordable. Here’s what I’m getting at. If you buy the idea that 3 times median income to buy a median priced home = affordable (and I do) then you really do need to know with a degree of certainty what the median income is, and what the median price is. If you don’t know either you can’t do the math. If you do know, then it would be fairly simple to understand how it is changing from one month to the next. You wouldn’t even need a Demographia “study” to tell you. It’s really very simple math. We have discussed this affordability measure many times, usually using the $76,600 number from 2006 and taking a wild ass guess at how that may have changed since 2006. An $80,000 median hasn’t really been contested. That would make $240ish “affordable” Clearly, if the median income is actually $55,900 we have a bigger problem then I realized for sure. We would need to be at $168,000 to be affordable. That appears to be a fairly big difference to me.

That said, I’m still “confused” how the survey pegged our median income $5,000 higher in 2007 than in 2008.