Saskatoon real estate: Week in review (January 26-30 2009)
Saskatoon real estate sales sputtered some as just 46 single-family home and condo sellers reported a firm sale on their property, down from 69 sales the previous week, and 76 for the same week last year. Residential unit sales for the month of January will come in well below numbers produced last year. They’ll also fall short of claiming that “second best January” prize, but SRAR’s final report due for release next week should show home sales exceeding the five-year average for the month. All things considered, not a bad start to a year that should prove itself both interesting and challenging.
Eighty-eight houses and condos were offered for sale on the Saskatoon MLS this week, up just three units from last week and a gain of five properties compared to the same week last year. Additionally, twenty-one of thirty-four cancelled listings came back flagged as a new listing. The final week of January brought its share of expired listings once again and total actives dropped to 1,124 as the month closed. Currently, there are 688 detached houses and 363 condominiums for sale through real estate agents. That’s down about fourteen units from the close of December. I expect that the coming week will likely see a fairly significant surge in new listings as a good portion of this week’s expired properties come back to the market.
Click the image for a larger version of the graph.
Home prices picked up some steam on a year-over-year basis. The weekly average came in at $290,407, up from $268,072 last week, and up over $40,000 from the same week last year when an average sale price of $246,829 was recorded. This sharp change can at least partly be attributed to a number of high-end home sales including two units that sold for more than $500K and one that topped the $1 million dollar mark. The six-week average price remained stable compared to last week at $273,965, roughly $19,000 ahead of last year’s number of $253,008. The four-week median saw some slight gains rising to $265,000 from $262,000 the week before, and up from $250,000 a year earlier.
In addition to the price changes on the canceled/re-listed properties mentioned above, another sixty-four reductions were recorded this week. Townhouse prices took a bit of a blow as three projects adjusted prices by about $20K in an effort to move some inventory. These units (no longer available) had broken the $300,000 mark at one point and are now available as low as $247,000. A number of re-sale owners will need to give some thought to their price position in light of this change.
Click the image for a larger version of the graph.
Buyers played ball just a little harder last week. Only 22% of sellers managed a sale within $5K of listing price, compared to 35% a week earlier, while the $5,001 to $10,000 range grew from 22% to 30%. The $15,001-$20,000 range more than doubled to 13% this week and the $20,001-$25,000 saw some growth rising to 11% of sales from 8% the week before. Discounts greater than $25K were fewer, falling from 9% last week to 7% this week. “Overbidding” was nearly non-existent as just one property seller managed a sale above asking price. That Saskatoon condo seller priced 10% below the most recent comparable sale and buyers lined up for a shot at it. A bold move which delivered the desired result quickly, if not painlessly. Only one other seller managed to get full asking price.
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.
Norm Fisher
Royal LePage Saskatoon Real Estate
183 comments so far. We'd love to hear your thoughts.
April 17th, 2009 at 9:19 AM
“This sharp change can at least partly be attributed to a number of high-end home sales including two units that sold for more than $500K and one that topped the $1 million dollar mark.”
Weeks like this are when it’s really nice to have the median number. It’s possible to see that this week’s median is still significantly less (> $6k) than the the median price for the first two weeks of January, despite those weeks having lower average sale prices than this week. Thanks again for making this addition, Norm.
On a different note… what kind of a bull/fool/optomist/myopic twit buys a million-dollar home given current world events?
April 17th, 2009 at 9:19 AM
Norm, so it sounds like we ended January with around 225 unit sales? Interesting news for townhouses and condos: -$60k reduction on townhouses is well in excess of a 20% drop since the peak last year, and it sounds like condo prices are down about the same.
Bookrat, either someone not very market savvy or with money to burn (or possibly a combination thereof). I can’t help but wonder what some of the $1M McMansions will be fetching in a year’s time…
April 17th, 2009 at 9:19 AM
Jason,
213 residential units for January.
Not to split hairs but a $60K reduction on a $310K peak price is not quite 20%. Regardless, it’s a pretty significant change.
April 17th, 2009 at 11:28 AM
@ the old town house complex a lot of still for sale places – perhaps more telling, there are way less cars in the parking lot. Looks like a lot of vacant town houses, probably weren’t willing to accept only 100% price increase! When selling at peak would have almost tripled initial investment in 4 years.
Is funny though, almost like a ghost town. Was packed when I moved in 4 years ago. Wonder when all the investors are going to list and make some major price cuts to make the sale or consider renting?
April 17th, 2009 at 11:28 AM
Hi Norm
Really enjoy the blog. I have a question about asking prices in Saskatoon. Upon talking to listing real estate agents I find that many of the asking prices aren’t based on anything much more than what the seller wants in his/her pocket. I notice today the Saskhouses.com site mentions that asking prices continued to go up in January. Am I missing something here? I have lived a 4 cities previous to Saskatoon and I have never seen people so intent on trying to get an unrealistic price for their house and then letting them sit on the market for months and months. What gives?
April 17th, 2009 at 11:28 AM
Norm, sure ~20% (±0.5%). When it becomes interesting is when they start selling for under $247k… I guess from my viewpoint this is fairly significant because I’ve never seen a drop like this in my lifetime, let alone in 6 months.
April 17th, 2009 at 11:29 AM
G, denial.
April 17th, 2009 at 11:31 AM
Norm, what are your thoughts on the many new semi-detached places springing up on bigger lots in the older neighbourhoods? Do you think they will be treated, going forward price-wise by buyers, as townhouses, or as standalone units?
April 17th, 2009 at 11:31 AM
Jason,
It’s big all right. Like I said, I didn’t mean to be trite but you said “well in excess of 20%.” Probably would have remained silent on any number that actually exceeded 20 points.
G,
Jason hit it right on the head. “Denial.”
I have actually never experienced what we’ve seen over the past two years but isn’t this fairly typical when a market suddenly turns? I have to say that I’m quite impressed at the number of sellers who are getting it. Over the past two months we’ve maintained a pretty average number of sales 15-20% off of the peak prices. That strikes me as a fair bit of “reality” for six months time.
lb,
Those homes normally come in somewhere between town homes and single family homes. They can be a nice choice for the right buyer. Personally, it wouldn’t be my cup of tea. On the off chance that your neighbour turns out to be a complete loser it could be tough to keep the value up. They could literally let their side of the property rot away.
April 17th, 2009 at 11:32 AM
Norm, does it seem like we’re tracking fairly close to what new listings were last year? If so and this holds, February should see a net of about 200-250 new listings which should place us close to the 1,400 mark before the burst in March and then the deluge later in April. That downwards spike in sales must be more than a little unnerving for some sellers.
April 17th, 2009 at 11:32 AM
Jason,
“does it seem like we’re tracking fairly close to what new listings were last year?”
I’m going to guess that we’re a smidge ahead of last year. We’ll come back to 1200 units pretty quickly, which is basically where we’ve been at for the past month. I’ll be surprised if we hit 1400 before the end of Feb but I suppose it’s possible.
“That downwards spike in sales must be more than a little unnerving for some sellers.”
We shouldn’t draw too many conclusions from one week’s sales. If I had to sell I’d be far more concerned about the coming flood of listings than this past week’s sales. I’m finding sales to be rather encouraging, but even if we achieve an average number of units sold it’s likely to be a tough go.
April 17th, 2009 at 11:32 AM
Anyone heard from George? I’m starting to wonder what happened to him. Hopefully he’s just on a holiday.
April 17th, 2009 at 11:32 AM
G: it’s not really denial, just greed.
Denial implies that people really think their property is worth that much: greed, that they know it really isn’t but they just don’t care.
Denial can be cured by a strong dose of reality. Greedy people are stupid, and they hold onto their opinions no matter how often they are proven wrong.
April 17th, 2009 at 11:33 AM
One quick correction: I meant to say that greed *makes* people stupid. Even otherwise smart people.
April 17th, 2009 at 11:33 AM
“G: it’s not really denial, just greed.”
what do you know?
April 17th, 2009 at 11:33 AM
“G: it’s not really denial, just greed.”
Is it really greed when you don’t want to give up money you thought (at least briefly) you had? I’m guessing there’s a good share of denial out there, as norm says, and probably some hope too. you are living in one of the few cities in the country where the average price of a house is still up over a year ago and a city poised to lead the entire country in growth this year? On top of that, yes it is true, the average price of a house in Saskatoon is still below the national average and you have the lowest unemployment rate in the country. A fair bit of inventory, sure, but not exactly dim prospects.
April 17th, 2009 at 11:34 AM
jrochest, I think it depends on the individual. There was certainly a lot of greed with speculators but I think most people (including sellers) are in denial with (or perhaps oblivious to?) the current housing market, as a whole. Sellers haven’t yet adapted to the concept of “selling at a small loss”, and will most likely graduate to “failing to time the market” with honors in “learning to live underwater”.
April 17th, 2009 at 11:34 AM
Mark, no, it’s denial (see above). However, as any investor knows, it’s all academic until you lock-in your profit or loss. Anyone rushing to market now is trying to capitalize on a bubble that’s already run its course; all they’ll end up doing is further flooding the market, driving down prices and returning the housing market to some semblance of affordability.
I still refute the assertion that Saskatoon is poised to lead the entire country in growth this year. I just think it’s too overly optimistic and unrealistic given the ever-changing economic conditions all over the world. Unless I’m mistaken, we’re primarily an exporter, and exports and prices are in free-fall.
April 17th, 2009 at 11:35 AM
Has anyone been following the market in Regina lately? My brother lives there and is attempting to talk me into purchasing a rental property with him there that he would live in one suite and rent out the other (say upstairs/downstairs). Prices certainly seem cheaper in Regina, and he would be a live-in landlord which makes the tenant issue easier for me to swallow.
April 17th, 2009 at 11:35 AM
I miss George come back…….I liked all his posts even tho they were mostly negative kept my head straight even tho it made me depressed sometimes =o)
April 17th, 2009 at 11:36 AM
Jason_S, I would only pose this scenario: What if (after purchasing this property) you experience a drop in the property value? What if one or both of you become unemployed and/or transferred – are either of you prepared to become a long-distance landlord? And what if you end up having to rent the entire property out in less than ideal market conditions? (saturation, lower rental rates, etc.) I can’t speak as to the rental situation in Regina, but I know firsthand that a lot of property owners (and possibly even one or two developers) are going to become part of the growing segment of landlords this year.
April 17th, 2009 at 11:36 AM
“I still refute the assertion that Saskatoon is poised to lead the entire country in growth this year.” Based on what? That was an study examinining all the economic markets across canada? Would you rather have an auto industry in the province?
Jason S. I know the Regina market well and own a number of rental properties. Regina is one of the few places you can still own a cash flowing revenue property. If you want it to be a long term investment, it doesn’ matter if there is a short term drop – if the numbers work, in that the rent is going to cover half the costs and your brother is going to cover the rest, it may be a good move. Depends, of course, on the property. There are now and then some good deals these days in Regina, I think. Timing can play a role, and it’s an uncertain world, but owning property, especially rental property long term is the smartest financial move you can make.
April 17th, 2009 at 11:37 AM
Mark, cite all the studies you want, all indications are that we’re entering a depression, which means all bets are off. Not only that, but we’re starting to see serious deflation, which is never a good sign. Sometimes denial extends to an economic outlook, too…
I am curious (and I hope you don’t mind me asking) when you acquired said rental properties. Were these pre or post-boom? I’m sure you’d agree that any property acquired pre-boom is a fairly safe long-term investment as it would certainly retain some equity even in a severe market correction.
April 17th, 2009 at 11:37 AM
leading in growth during a recession?
not much of an honor really!
alberta still pays better and has no debt
April 17th, 2009 at 11:37 AM
realist,
Check out the earnings on alot of oil companies lately? I hope for my sake ur right and Alberta does still remain a powerhouse but from what just happened lately im glad i dont live in Edmonton rather than Saskatoon.
April 17th, 2009 at 11:39 AM
“Norm, what are your thoughts on the many new semi-detached places springing up on bigger lots in the older neighbourhoods?”
I think that a semi-detach can be good option, especially in that 300-325k range. They can get someone in a neighborhood or type of house that may not otherwise be reachable.
I know people who have lived in them in the past and have never heard a neighbor horror story. Not to say it couldn’t happen . . . but that potential scenario it wouldn’t be enough to stop me.
My 2 cents – love the blog Norm.
April 17th, 2009 at 11:41 AM
I’m with Armoth… we miss you, George.
April 17th, 2009 at 11:42 AM
Where’s Northstar?
April 17th, 2009 at 11:42 AM
“but we’re starting to see serious deflation”
not really yet, according to our central bank last week, which cited the risk of outright deflation in Canada as low. and regarding a recession, yes, it is everywhere, but i can assure you people are making their way to Sask. from places that are fairing much worse economically. don’t forget that extra billion our government is about to spend on our provincial infrastructure. plus, commodity crash? we’ve just lost the highs of late 2007, and early 2008. Wheat remains at or above what it was 2000-2007, potash remains high as ever, gold is as high as ever, and I assure you, oil will be back. from a housing perspective, i’d rather own here than in almost any other market in the country.
i bought most of my rental properties in the past 18 months, some in the last two months. but these are all houses under 100,000 for which the rent covers all costs, mortgage, taxes, insurance, maintenance etc. it doesn’t make a lot of sense to buy a revenue property that doesn’t do that unless you expect some price appreciation.
April 17th, 2009 at 11:42 AM
“leading in growth during a recession?
not much of an honor really!”
I’d sure say it is.
April 17th, 2009 at 11:42 AM
This one’s for you, Mark:
$500 million to keep economy strong, premier announces
http://tinyurl.com/c469jz
“SASKATOON — The Saskatchewan Party government is expediting infrastructure spending to provide a $500 million “booster shot” for the provincial economy, Premier Brad Wall said Monday.
Speaking to the Saskatchewan Urban Municipalities Association (SUMA) convention in Saskatoon, Wall said the money would start being allocated immediately. Of that amount, $100 million will flow to urban, rural and northern municipalities on a per capita basis starting this month through a new Municipal Economic Enhancement program.”
April 17th, 2009 at 11:43 AM
I miss George as well.
And in terms of growth, we have to be careful with taking these predictions as fact. For 2007, Saskatchewan was predicted to lead Canada in GDP growth and ended up trailing BC, Manitoba and Alberta, a whopping 0.1% above national average.
Saskatchewan could lead in growth.
But I’d be more confident in basing that on actual numbers instead of predicted ones.
Winnipeg, Edmonton and Regina all have similarly strong economies, and more affordable housing, and lower violent crime, so that might play into Ontarians decision on where to move if they come west.
April 17th, 2009 at 11:43 AM
I’ve been good about not repeatedly referring to this lately, but Mark brought it up.
“Saskatchewan’s Economic Growth Slowest in Western Canada
http://www.teamfisher.com/blogs/norm_fisher/archive/2008/04/30/saskatchewan-economy-underperforms-on-expectations.aspx
At 2.8% GDP growth, Saskatchewan was only 0.1% above national average, and below the Western Canadian Provinces’ GDP growth of between 3.1 to 3.3%. This was far below prior growth forecasts of 4 to 4.8% from private sector economists. However, Doug Elliott pointed out Statistics Canada [this data] is a more accurate indicator of how the economy is actually doing. (Reference above)”
We can justify all we want,
right now, Saskatoon is an overly expensive place to live, that despite all this “boom” stuff, still pays under Alberta and Regina.
April 17th, 2009 at 11:43 AM
Mark,
‘i can assure you people are making their way to Sask. from places that are fairing much worse economically’ and ‘I assure you, oil will be back’.
Don’t take this as antogonistic as I don’t mean to imply that I don’t believe you, but I’m just curious what has created your confidence. Is it based on some insider information you have, a gut feeling, or your analysis of recent market info?
April 17th, 2009 at 11:44 AM
“Is it based on some insider information you have, a gut feeling, or your analysis of recent market info?”
Market info, anecdotal evidence of people still arriving, and gut.
Regarding gdp growth, i was referring last week’s conference board of Canada reports about Regina and Saskatoon leading GDP growth among cities. The article suggested that would be three years running for Saskatoon in the top position. Maybe they are wrong, but to be honest, given reports like these, our unemployment rate, our surplus funded infrastructure spending etc, it’s truly up to the skeptics on this blog to produce their evidence of a big slowdown here, not the other way around.
April 17th, 2009 at 11:45 AM
Mark, what Nick said. It sounds like you’re fairly confident with your real estate holdings, and were I in the same position I might tend to have a more ‘bearish’ outlook. Please do appreciate, however, that some of us on the other end of the spectrum have a drastically different vantage point.
Crikey, I tend to cringe with the announcement of new government spending initiatives. I remember what the economy was like in the 80′s and 90′s thanks to huge federal and provincial deficits; this seems like more of the same. Rather than admit the party is long over we’re simply passing the tab along to the next generation.
Norm, please let us know if you see any unusual ‘rush’ of new listing activity this week, similar to what we saw in January.
April 17th, 2009 at 11:45 AM
“Crikey, I tend to cringe with the announcement of new government spending initiatives. I remember what the economy was like in the 80′s and 90′s thanks to huge federal and provincial deficits; this seems like more of the same. Rather than admit the party is long over we’re simply passing the tab along to the next generation.”
With one key difference, it’s not deficit spending. It’s surplus spending from last year. Our provincial debt went down this year, even in light of this infrastructure spending, not up.
April 17th, 2009 at 11:45 AM
Mark, sure it is. That’s like saying you have $2,000 in credit card debts and $500 saved up, but instead of paying down your debts, you go out and a buy a new Blu-Ray player. This government is in a position to completely wipe out our provincial debt this year (possibly a once-in-a-lifetime opportunity) which would free up several hundred million dollars in saved interest payments.
April 17th, 2009 at 11:46 AM
This brings up an interesting point… is Saskachewan currently running a surplus or a deficit? I can’t really figure this one out.
In mid-November I read this:
Saskatchewan forecasting $2.3-billion surplus
http://tinyurl.com/dlcvqt
Then, mere weeks later, I read this:
As resource prices fall, deficit possible for Saskatchewan
http://tinyurl.com/aht3va
I haven’t heard anything about the budget lately, but it’s certainly possible I’ve missed something. Conditions unfortunately haven’t improved since the last report, but does anyone have the recent scoop on this?
April 17th, 2009 at 11:46 AM
Jason,
Technically deficit spending would be adding new debt on top of old instead of using current revenues. By your definition, Sask or Canada haven’t had surplus budgets at all for the past decade, since they still had outstanding debt in the background. Not exacly how it is defined on a year to year basis.
April 17th, 2009 at 11:46 AM
‘does anyone have the recent scoop on this?’
no idea, and you are right, it can only be worse.
April 17th, 2009 at 11:47 AM
I think we’ve all forgotten about the Federal Conservatives now $85 BILLION in DEFICIT spending over the next 5 years, $35 Billion this year alone, after Harper promised surpluses.
Saskatchewan is obviously in better than average shape (no Alberta though…) but almost sounds like they are using this year’s surplus of $500 million to spend next year. To me, that is still $500 million in deficit next year. Though granted, obviously making a surplus when the province as a whole owes money is not a “deficit” though making less than you take in the Next year is (remember the Sask Party’s outrage over the NDP’s creative balanced budgets and rainy day funds?)
Tough call on whether spending is warranted, when paying off Debt is the gift that keeps on giving. With low interest rates, infrastructure seems like a good idea IF it’s on Essential stuff that was going to be built/improved anyway. Ie. might as well twin Highway 11 a few years earlier or getting that sand out of Saskatoon’s water treatment plant, new rec centers and curling rinks not so much.
April 17th, 2009 at 11:47 AM
Interesting this is there was something like $12 Billion in a Federal Structural Deficit – that is if they spent NO ADDITIONAL money they still would have LOST $12 Billion this year alone. A move their own expert blames on Conservatives strategy over the last 3 years.
Point is we’re all on the hook for this too.
1/30 th of $85 Billion is almost $3 Billion that Saskatchewan tax payers are on the hook for after our 5 years of Federal Conservative Deficits
April 17th, 2009 at 11:47 AM
I’m back from a trip and an absence from blogging here. 3 weeks away from blogging here and on other blogs and I feel light years behind in what is going on in the world and here.
Can’t say that I will be able to blog like before, as I will be quite busy the few months, but Nick, Crikey etc and you to Mark, do a fantastic job.
April 17th, 2009 at 11:48 AM
George!!
We’re glad to see you back, and I do hope you’re well rested. Did you read all your fan mail?
April 17th, 2009 at 11:48 AM
George,
Welcome back. Hope you had a good break.
Chris,
“Where’s Northstar?”
Another guy who I miss. Haven’t heard from him in a long time.
April 17th, 2009 at 11:48 AM
I am transferred back to the Calgary office due to down sizing. I was unfortunate enough to have bought a condo in Saskatoon roughly half a year ago when I was initially transferred here. There are certainly many more condos for sale, and some similar to what I own are currently listed for a full 30% below what I paid. At the time, my real estate agent had assured me that it was a good deal.
I will take this one on the chin, but in retrospect, as I flip through this and other websites trying to aggressively price my property for quick sale, I see that even a year ago, there were signs of an over priced unsustainable market and I am a bit peeved that none of this informations was mentioned, at all, by my real estate agent. I believe that current prices will still fall a substantial amount, and I have decided to price below the competition and take my loss, as it will be less than if I sat around at a similar price and waited for the competition to decrease their sales prices.
People in Saskatoon have to wake up.
This is not the time to enter the market,
especially for the first time.
I don’t understand how Saskatoon justifies prices anywhere near Alberta, including Calgary.
I don’t understand how people like me are naive enough to buy on blind faith, because a few realtors tell us the market it picking up steam and severly undervalued, when in fact it appears to be one of the most over valued markets in Canada! And that is after the market seems to have lost around 15% from when I purchased. At least Calgary’s prices seem to be down by at least as much, and I will actually get a raise from consolidation, though I doubt most will be as lucky.
I will take this as a lesson.
Never trust a sales person.
Never trust the city to give accurate information on itself.
Never trust optimistic predictions, they just want us to spend to delay them from the inevitable recession.
Will do independent research from now on.
Thank you all for listening to my rant.
April 17th, 2009 at 11:49 AM
Nick: your comment on the structural deficit doesn’t surprise me, but I’d appreciate a citation if you have one. Thanks.
April 17th, 2009 at 11:52 AM
Expat again,
I’m really saddened to hear about your experience. I think many people are in the same boat, although I realise that’s not much of a consolation to you, I’m sure. Thank you for your post, as hopefully it will be not only a lesson learned for you, but for others as well.
I thank you as well for stark reminder for all of us why blogs and other media such as this are so necessary and needed.
April 17th, 2009 at 11:52 AM
And the SRAR propaganda machine kicks into high gear again…
http://www.thestarphoenix.com/Homes/Average+home+price+Saskatoon+rises+slightly+January/1248702/story.html
“According to Harry Janzen, SRAR’s executive officer, the increase indicates continued demand for homes in that range.” (this ranks up there as probably one of the most blatantly misleading and inaccurate quote from SRAR)
I think the 29% drop in sales (year-over-year) and 1,156 units on the market indicate where demand really is. Using the same ‘average’ price that SRAR is so fond of using, the price in January is still down over $55,000 from the peak in 2008 (that’s a 15%+ drop in under 6 months).
It’s my sincere (and optimistic) hope that buyers will start doing more independent research and asking hard market questions of their realtor instead of relying on the news media and press releases.
April 17th, 2009 at 11:53 AM
Jason,
That ain’t the half of it. You might want to check out the entire release on the SRAR website.
http://www.srar.ca/docs/February%202009%20Media%20Release.pdf
I think I’m going to take a pass on monthly stats this go round.
“this ranks up there as probably one of the most blatantly misleading and inaccurate quote from SRAR”
Truth is, demand has been remarkably strong over the past 60 days, but it is a story which is incomplete, and potentially misleading without some thorough discussion about the supply side.
ex pat again,
So sorry to hear of your unfortunate situation. I hope you able to recover from this terrible setback.
Thoughts: will your employer help you through this? I’m no tax expert but talk to an accountant and see if some of these losses can be written off against future income. I know there are some provisions for work moves but I’m unsure if it applies to losses.
Best wishes.
April 17th, 2009 at 11:53 AM
I really do not know how many people are playing game in this market. Last October, I put an offer to a house with about 30 grand lower than the list price. The owner did not even want to discuss about the offer, and two weeks later it was marked as sold. I saw this same house listed again last week and the asked price is now 30 grand more than last year’s list price.
What are they thinking about?
April 17th, 2009 at 11:54 AM
ex pat, thank-you for sharing your experience. You will be able to write-off a considerable portion of your moving expenses, including (but not limited to) real estate commission, legal fees, cost to maintain your residence (if you move prior to the sale), traveling expenses, etc.
http://www.cra-arc.gc.ca/E/pbg/tf/t1-m/t1-m-08e.pdf
One option (definitely run this by your accountant): increase the real estate commission by the amount you propose to reduce your list price. The net proceeds to you from the sale would be the same but I believe you would be able to claim the higher real estate commission as an expense (you cannot write-off any actual loss on the sale of your home). Depending on your tax bracket that may save you an additional 25-40%. And it could provide a lucrative incentive for not only your agent (but another agent) to sell your condo first since (since they could essentially earn double commission on an exclusive sale or full commission shared with another agent).
I think I that’s a smart move to price below the curve in any event; best of luck with the sale of your condo and your relocation to Calgary.
April 17th, 2009 at 11:54 AM
Norm, and wow, you weren’t kidding, either. I actually had to read it twice, because I was fairly incensed after the first reading…
“This represents an increase in units sales over the last three months.” (You mean an increase over the slowest 3 months of the year? Wow, I’m totally taken aback over this stunning revelation).
“Listing inventory remained steady with home buyers having 1156 homes to select from at the end of January. This number is down substantially from September 2008 when inventory levels peaked at 1,748.” (What? Inventory always drops at year-end. And since when has starting the year at over 1,000 listings ever been a “good” thing?)
“REALTORS® are receiving numerous inquires of buyers from other provinces and the USA looking to move to our province.” (Norm, this one I particularly liked; I gather your phone has been ringing off the hook from prospective buyers in BC, Alberta and warm, tropical places like California, Nevada, Arizona and Florida?)
“Markets are cyclical and the market in Saskatoon is at a low point and should begin to return to normal in the next few months. As a result, now is a good time to purchase a home or investment.” (Sorry, but this last statement is complete and utter bullsh*t! Mr. Janzen also has a bridge for sale for those interested…)
April 17th, 2009 at 11:55 AM
Jason,
When I said I might pass on the monthly stats, I was thinking I didn’t want to repeat this here.
I just don’t get it.
April 17th, 2009 at 11:55 AM
Poor expat — you sound like the poster child for the Bubble. You’re doing the right thing in pricing your condo low: it’s smart, if painful, and will save you money in the long run.
I agree with Jason & Crikey: it’s a loss connected to a work relocation, so you should be able to write at least part of it off.
The SRAR press release is richly amusing: it’s practically the definition of ‘spin’.
April 17th, 2009 at 11:55 AM
ex pat again,
So sorry to hear about your situation. You played the situation as you saw it at the time; no dishonour in that (on your part, anyway). It’s easy to get sucked into all the hype and spin (a.k.a. the “sh*t abyss” – to quote the Trailer Park Boys).
I’d like you to know that I take your lesson to heart. There was a time when I was all distressed about “missing the housing boat.” But now, thanks in large part to this blog and hard lessons learned by others, I’m glad I wasn’t in a position to jump in head first. A person definitely has to be careful who, and what, they trust.
This situation will pass. All the best in your endeavours. Oh, and hey, enjoy the Rockies for me!
April 17th, 2009 at 11:56 AM
“REALTORS® are receiving numerous inquires of buyers from other provinces and the USA looking to move to our province”
As a person with rental properties in Regina, and a few open in the past few months, I have received many calls from people out of province coming here and looking for a place to live. Some from overseas. Remember, we have opened the door to some 3000 immigrants (plus their families) to the province this year, all with jobs lined up before they arrive.
April 17th, 2009 at 11:56 AM
Mark, there’s a clear distinction between moving here to (rent) and moving here to (buy). So while I’m not disagreeing with you, the quote I lifted specifically referred to “buyers”, not “renters”.
Norm, I don’t get it either. I’m not sure why the real estate community continues to do itself a disservice with this “spin”. Why not report the facts and market conditions as they are (and not how we could like them to be) and let buyers and sellers make the determination for themselves? In fact, why not make the focal point about all the positive benefits of utilizing a professional real estate agent for both buying and selling (such as experience, ability to negotiate, broader access to potential buyers, etc.).
April 17th, 2009 at 11:56 AM
Mark,
There is a good case to be made for demand and our bearish friends (not speaking of anyone in particular) often cross into their own land of spin with “nobody is buying” propaganda. Sale numbers over December and January have been quite reasonable. I can’t imagine that we could expect any more given all that is going on. That said, inventory is nearly 400% higher than it was at this time last year. Personally, I don’t think that “normal” is anywhere in sight. Even if demand remains strong and above average it’s going to be a very interesting year.
April 17th, 2009 at 11:56 AM
Jason,
It seems we cannot help ourselves. Too bad we can’t learn the lessons of those who have gone before us. I mean, does anyone in the world actually even care to hear what NAR has to say?
April 17th, 2009 at 11:56 AM
Holy smokes.
Another residential sale above $1 million dollars today. Can’t deny that there are some big dollars demonstrating some big confidence lately.
April 17th, 2009 at 11:57 AM
Norm, so it would seem. Those that fail to learn from history are destined to repeat it. I can’t believe we’ve seen two $1M+ residential sales in less than a month. I’d be curious how much they could have saved by waiting a few months.
April 17th, 2009 at 11:57 AM
Norm, when you said you might skip the monthly round-up, I hope you were just talking about the comment on the SRAR press release, and not your own home-spun statistics? It would be a real shame to go a month without those.
If the SRAR press release is to be believed (and it’s usually completely factual, if not completely honest) then there were eight sales of $500k or more in January. As mind-boggling as that is to me in the current market (see comment #1 in this entry), I cannot help but agree with Norm that there’s some big money voting in favour of ‘here is where I want to be’.
Now, whether that represents confidence or ignorance, I suppose we’ll never know.
April 17th, 2009 at 1:13 PM
Bookrat,
“I hope you were just talking about the comment on the SRAR press release, and not your own ‘home-spun’ statistics?”
home-spun statistics?
Is that a shot?
Look, I’m a little busy celebrating the bottom of this market (drinking alone – heavily). Can I get back to you on that?
April 17th, 2009 at 1:14 PM
Hey Norm, are those million dollar properties out of town, acreages on the river or something?
April 17th, 2009 at 1:18 PM
I’d rather trust your “home-spun” stats than the SRAR’s press releases, Norm.
April 17th, 2009 at 1:19 PM
“Is that a shot?
”
If I was shooting, you’d feel the impact as the barbs struck home.
I just meant that you usually make two month-end posts; one with the SRAR press release, and then one with your own stats. I can understand if you would want to bypass the former (“If you can’t say something nice…”) and TBH it would likely not be overly missed. My concern was that you would not skip out on the latter, as your monthly stats are a much-needed and much-appreciated dose of spin-free realism.
In short: data good, hyperbole bad. Keep up the good work.
captcha: going learning
April 17th, 2009 at 1:19 PM
Well Mark, despite all these “calls” demand is down, slightly, and inventory is still way up, I believe Norm’s 400% increase in inventory, and as an investor with money in property, I can see why you’d want to hype the heck out of anyone who asked who property investing was going.
SRAR
“REALTORS® are receiving numerous inquires of buyers from other provinces and the USA looking to move to our province.” sound anecdotal, probably always happens, where’s the number to compare to previous?
Norm, I feel for you, the blatantly boosterish Realtor releases are wrecking the street cred of your profession.
The $12 Billion worth of deficit being “structural” and before any spending increase/tax cut was on television news, CBC or CTV I think, can’t track down right now. Will find a citation some where for you all. Really makes sense, as the Conservatives were running the occasional Monthly deficit back during the “boom” and cut the GST to 5% which was a big revenue loss.
April 17th, 2009 at 1:21 PM
Jumper,
They are all in the city. We had five last year and two so far this year. 3 of the seven are Saskatchewan Crescent properties which look to the river. One each of the balance were in Briarwood, Lakeview, Erindale and Willowgrove.
Bookrat,
Kidding, of course. Yes, I have every intention of doing my regular “Closer Look.”
Nick,
Thank you for feeling sorry for me.
To the credit of the Star Phoenix, the story is rather tempered compared to the release itself. No mention of all of those out of town callers, no mention of what a great time it is to buy and invest, and a fairly reserved approach on the price increase. They called it “slight” and they were careful to point out that it was affected by a large number of high end sales.
April 17th, 2009 at 1:21 PM
“as an investor with money in property, I can see why you’d want to hype the heck out of anyone who asked who property investing was going”
It doesn’t matter to me that much. Less investors in my market today is less competetion. Only trying to point out what I think is true. Don’t get me wrong, I’m not buying 200,000K plus houses in Sask as rental properties or investments. But I can assure you that when you can buy a 50,000 to 75,000 dollar two bedroom house that rents for a minumum of 800, then you have a stellar investment. Even if you have to drop rent to 500 some day. On your 15,000 dollar downpayment, the immediete yearly return, and long term return, is very, very strong. The math is easy. Actual market value of the house up and down in the short term doesn’t matter that much. If someone has 15,000 to invest, they can put it in the stockmarket if they like.
April 17th, 2009 at 1:23 PM
Mark: I don’t think you’d get much argument from people around here that a price-to-rent ratio of 100 to 1 ($80k for $800/mo rent, or $50k for $500/mo rent) is a good deal, and a reasonable investment. You seeing a lot of $50-75k houses up for sale these days?
I think that’s the point. It’s great (for you) that you got in pre-runup, but not everyone has been so lucky. Even your argument just strengthens the point that prices are way out of whack right now and due for a correction.
April 17th, 2009 at 1:25 PM
“You seeing a lot of $50-75k houses up for sale these days?”
Yes. More now than a year ago. I bought four of them 6 to 10 weeks ago. All the rest purchased in the last 12 months. The price to rent ratio on most of these is much better than 100 to 1. I mentioned 500 rent as a worst case scenario if the economy tanks. I don’t think Saskatoon has quite the same pricing, but I’m sure if you were to watch daily, the odd deal will come up.
April 17th, 2009 at 1:26 PM
“Just out of curiosity, I did a MLS search for purchase properties between $50K – $75K (with no other criteria than the price), and found 0. The lowest I found was $90K on Ave Q.
It sounds rather “slum-lord”ish to me”
I’m in Regina. And the best deals don’t last long. I got in a bidding war last month.
What do you mean by slum-lordish? I clean houses up if they need it and rent them to the best tenants I can find. The last place went to a couple with government jobs. A slum lord runs down a property over the years and doesn’t address issues. Unless you’re just slamming neighbourhoods in general. By the way, even low income families need landlords. Depends how the landlords act I think. Anyway, I think these neighbourhoods are improving in both Regina and Saskatoon and will only get better because of the rise in prices in surrounding neighbourhoods. I think they are good investments, especially in Regina. Saskatoon may have already had it’s run up there. But not to say your alphabet streets won’t rise over the next few years, even as higher end houses decline.
April 17th, 2009 at 1:27 PM
http://www.thestarphoenix.com/news/Good+time+funds+economist/1251117/story.html
Mayve this explains some of the out of town interest in housing, rental or purchase.
“However, the construction industry has been anticipating increased infrastructure spending and has been trying to prepare for it, said Saskatchewan Construction Association president Michael Fougere.
“Our larger general contractors, as an example, are hiring people from outside the province to come in, currently from Alberta, British Columbia and Manitoba, and even from Ontario. So we’re seeing people come into the province because there are opportunities here,” Fougere said. “Same with the sub-trades — there are people coming in, starting their own business or joining other companies, too.”
I’m sure someone here can point out how this isn’t likely to affect housing or rental rates in Sask.
April 17th, 2009 at 1:27 PM
Mark,
“What do you mean by slum-lordish? …A slum lord runs down a property over the years and doesn’t address issues…Depends how the landlords act I think.”
You are absolutely right. No slamming intended, just seems like $50-$75K properties don’t exist in Saskatoon. And even if you did buy one at that price, I can only imagine the $$ you’d have to put into it to make it livable – no matter what tenant demographic you choose to rent it to.
Norm, with your inside-scoop, are there actually properties for this price for sale in SKN that aren’t being shown on MLS for investment opportunties?
April 17th, 2009 at 1:28 PM
cyn_d
You’d be surprised that sometimes places just need paint and new carpet.
I also think that the good deals are likely gone in a day or two when they do pop up. Bank owned properties are sometimes a good deal too when they appear, which isn’t that often. Banks usually just want properties off their hands.
April 17th, 2009 at 1:28 PM
Mark, given that this is a Saskatoon RE blog, you can understand the confusion that people are assuming that you are talking about SASKATOON Real Estate.
I did my own search for properties under $75k in Saskatoon, and came up with exactly one — a $38k mobile home. (The next cheapest was $90k.)
A similar search in Regina showed a dozen actual houses — true starter homes — under $75k, and another 25 between $75 and $100k. Winnipeg showed 70 under $75k.
Heck, I did a quick run-through of a couple of US places for homes under USD $50k with 1+ bedroom, and came back with 76 in Norfolk Virginia, 150 in Denver, 460 in Minneapolis/St. Paul, and 780 in Houston.
So I agree that the $50-75k properties exist… elsewhere. But we’re talking about Saskatoon RE here, are we not?
April 17th, 2009 at 1:28 PM
Bookrat-
You must admit, we do veer off the “Saskatoon RE” topic quite frequently. I can understand your point, but I do appreciate Mark’s point of view. He sounds like he knows what he’s doing, he’s repairing and restoring properties, giving people a place to live, and hopefully making money in the process.
And with the “it’s okay to be off topic” mantra firmly in mind:
Credit card losses soar
http://tinyurl.com/bp8hv8
“Amid fresh evidence cash-strapped Canadian consumers are taking longer to pay off their credit cards, another major financial institution has moved to tighten up its lending practices.
Amex Bank of Canada said in a note to cardholders recently that the rates of interest on some American Express cards will rise between 1 and 3 percentage points to as much as 21.99 per cent, effective Feb. 11.
The move comes as a new report projects credit card losses in Canada could climb by as much as $800 million this year if present trends continue.”
April 17th, 2009 at 1:29 PM
“So I agree that the $50-75k properties exist… elsewhere. But we’re talking about Saskatoon RE here, are we not?”
I’m guessing deals pop up there in that price range now and then too. They just sell quickly. Maybe I’m wrong. Norm could probably tell us how many houses under 100,000 have sold there in the past six months. Someone truly interested in buying revenue properties there would be wise to get a realtor, get to know that market, and act on deals.
Also, I’ve mentioned I’m in Regina several times. Sorry, didn’t mean to send you guys down the wrong path. I do think our cities are pretty similar, despite slight differences in average price.
April 17th, 2009 at 1:30 PM
Housing starts are way way down…and pent up demand is going to hit the markets soon. There are a lot of buyers who have been holding out with the ‘wait and see’ approach.
Once these buyers realize prices are no longer dropping (probably come spring) I think we will have a another steady year ahead of us of modest gains.
I’m worried that the builders are going to accidentally cause the largest new home housing shortage we have seen in recent history. The shortage could really hit the fan in fall 2009. Housing starts and permits are way down, builders are not breaking ground, and they are dumping ’08 property and it is going fast.
Jason, you are a pessimistic person on this blog? Are you a home owner and/or do you hate Saskatoon? Every economy needs bears…but you remind me of those who might have got stung from the recent gains in the market and are still holding their breath for 05′ prices.
April 17th, 2009 at 1:30 PM
one more comment…rent in Saskatoon is still increasing and is now reaching levels where it costs more to rent than buy in most areas of the city. Obviously not everyone can buy. But to me, I see rent being the first indicator of where housing demand is truly going, and rental demand is still high and increasing.
April 17th, 2009 at 1:31 PM
Crikey: I appreciate Mark’s POV as well, and was not trying to disparage it. It’s definitely interesting to hear that people are still investing in RE, and still doing well… as long as they stick with the fundamentals (e.g. 100:1 own/rent costs) and don’t fall into the speculator traps.
(With that in mind, I’ll ask Mark directly: as someone heavily vested in low-end RE, what goes through your mind when you hear of houses selling in Saskatoon for $1M?)
And I’m well aware that we get off topic… I guess my point is that it’s usually relevant *somehow* to people in Saskatoon. (Even your link could be relevant to me, if I have an AmEx card.) Saying that $50-75k houses are a great investment seems rather hollow and pointless, though, when such a thing no longer exists Saskatoon.
I guess it does serve as one more indicator of just how out of whack things still are in this city, though, compared to many others.
April 17th, 2009 at 1:31 PM
Loki I have todisagrre with you. Are you speaking about pent up demand to sell or to buy????? Because “I” believe there is more people waiting to list and re-list their properties than there are people lining up to buy property in the city. But only the future (say about 3-4 months from now) will tell
April 17th, 2009 at 1:31 PM
Mark,
There are 12 Saskatoon single family home sales recorded below 100K in the past 180 days. 3 of those were under 80K. One was marketed as “land value only” and the other two stress “sold as-is” in the comments.
April 17th, 2009 at 1:32 PM
“what goes through your mind when you hear of houses selling in Saskatoon for $1M?”
My gut reaction is that houses like that will most likely lose some value in a two year time frame. But then again, maybe not. Maybe those are even more immune than 400,000 dollar houses to a big correction. Million dollar homes are probably pretty unique, and command a premium of sorts.
Either way, anyone buying that kind of house can likely afford it. And can afford to lose some on it. They are rich I’m guessing, probably make 400,000 a year, and at least a few of them didn’t get to their position in life being complete idiots.
April 17th, 2009 at 1:32 PM
Norm, wow, that surprises me. I guess our low end markets are quite different. I bet Regina’s number is more like 100 sales in past 180 days. Maybe more.
April 17th, 2009 at 1:32 PM
@Mark: “Also, I’ve mentioned I’m in Regina several times.”
You have. I felt a little stung and stupid for not remembering it when I posted originally.
Those sub-$75k houses might ‘pop up’ and are ‘snapped up’ in Saskatoon… but as Norm just posted there were only a dozen of them in the last six months, whereas there’s a dozen of them *sitting on MLS* in Regina right now. I agree that the two cities *should* be similar, but that right there speaks of some differences that exist right now.
Loki: In case you missed the announcement from pretty much every political and economic leader in the world, we’re in a recession right now, and possibly the worst financial crisis since the 1930s, or even 1887. Yes, Saskatoon *may* fare better than many places, but I am honestly curious as to where you think this ‘pent-up demand’ will come from. Are you really thinking that people are (still) in a hurry to rush into the biggest debt obligation most of us will ever have?
April 17th, 2009 at 1:33 PM
Rents are not increasing in Saskatoon, but decreasing. I have received rent increase notice in Dec 2008 (effective on July 1st 2009) which was quickly canceled early January. On top of that few days ago I received another letter from management offering me $50 reduction in price if I sign 6 month lease or $100 reduction if I sign 12 month lease. Compared with current prices that is almost 2 month of rent free.
April 17th, 2009 at 1:33 PM
Mark,
You’re close. There are 99 recorded sales for the same price range in Regina, over that same period of time.
April 17th, 2009 at 1:33 PM
I guess I know my market:) Btw, thanks for digging up info on that stuff.
April 17th, 2009 at 1:34 PM
DobDob,
Very interesting! I’ve also heard other anecdotal stories of rents stabilizing and/or decreasing. It would be nice to get some hard data on this sort of thing.
Bookrat,
I no way did I think you were trying to disparage Mark. I’m totally with you on the view of overoptimistic speculation in this market may get you financially slaughtered, but Mark does seem quite practical and sensical about the whole thing. I did think the “slumlord” comment was way too much, but I do realise that didn’t come from you.
April 17th, 2009 at 1:35 PM
Loki, I’m a realist, not a pessimist. I was (until recently) a homeowner, so no, far from being stung I actually did quite well (considering my house was built and bought in 1999). And no, I don’t hate Saskatoon (having lived here all of my life). I don’t have a problem with optimism, but I do take exception to “blind” optimism.
I’m currently opting to rent because not only is it more affordable than ownership, but I won’t be “underwater” or risk losing any equity when the market shifts. And when the correction, I’ll have essentially saved my 10-20% down payment in the course of simply waiting for the right opportunity.
In fact, rental rates will continue to decline as a result of surplus inventory (think of the hundreds of apartment-conversions and speculative properties that will fail to sell) and the fact that or order to attract tenants, rental rates need be priced below the cost of comparable home ownership (which will continue to see declines this year).
April 17th, 2009 at 1:36 PM
Hi Norm,
Interesting stats. The Edmonton real estate market has seen a 30-33% drop in sales volume over previous years our last two months of December and January. http://www.realestateinedmonton.blogspot.com
Although, our market has been gaining speed and activity as the year goes on. On the supply side, our inventory is thankfully lower than last year and is not building up at a high pace like 2008 did. Speaking of rents, does Regina have a high percentage of vacant properties for sale? Here in Edmonton, close to 50% of the condos for sale are vacant and 38% of the single family homes for sale are vacant.
April 17th, 2009 at 1:44 PM
Here’s a gem for you:
In a Republican committee meeting regarding passing further “stimulus” legislation, Senator John McCain blames the financial crisis on the housing market crash/recession (I take issue with that statement in and of itself, but I digress). Then he poses this question to the three economist panel that was present:
“What do we need to do to stabilize home values?” (Again, pre-supposing that stabilizing house prices will in any way help the market, but again I digress).
The economist responds that it might be helpful to portion some of the TARP money to help people with underwater mortgages (ie. owe more on the mortgage than the asset is worth).
McCain responds, and I quote: “The response to that is, by some, is nobody knows who owns the mortgage”.
And he blames the market for the crash, when you can’t even identify the mortgagee on many American mortgages? Good grief! Way to go Mortgage Backed Securities . . . and people wondered why these things became valueless.
April 17th, 2009 at 1:45 PM
2 things
First, SRAR is announcing continuing increases in mid priced housing, UP 7%… unfortunately their Star Phoenix comment fails to mention it’s really [UP 7% from this time last year, but well down from March since]
Second, 400 new residence spots at the University of Saskatchewan to be started in 2009 and “we currently house about 6 per cent of our students on campus. The university’s goal is to add at least 1,700 additional residence beds on campus by 2012″ That is 1,700 new spots for people to live, within the next 3 years, in a city that has a glut of non-selling cheap condos.
1,700 new spots for students by 2012??
Remember, university enrollment has been STAGNANT at the U of S (and actually DOWN 1,000 @ the U of R since I graduated back in the day) over the past few years. I think that 1,700 residence spots on campus will further weaken the rental market, and new, respectable dorm rooms, will seriously weaken the low end condo/sharing town houses with frat buddies markets. Good news for affordable, close housing for students. Bad for condo re-sale and rental markets in Sutherland and Lakeview/wood. Bad for appartment/condo investors, as starting this year, 400 new competitors.
More reason to cut your losses, sell now, and move to Regina?
April 17th, 2009 at 1:45 PM
Jason “the supply side, our inventory is thankfully lower than last year”
You’re kidding right?
Inventory is down from a couple months ago,
Year over year (as all realtors cite ad nausuem for price gains) inventory is UP 3 to 4 times last year!
If you want to play the monthly game,
Prices are Down 15 to 20% on comparable houses in the last 6 months alone!
April 17th, 2009 at 1:53 PM
Finally, one $1,050,000 house on Sask Cres means one rich guy bought a house … nothing more, nothing less. It’s one house.
April 17th, 2009 at 1:53 PM
“1,700 new spots for students by 2012??”
I’d be more confident in basing that on actual numbers instead of predicted ones. — to quote you above Nick.
You’ll pour water on any expansion plan or prediction as nothing more than a plan, until one suits your purpose of course. If we’re talking expansion plans, I have one — how many thousands of jobs in your area for Potash on the way?
April 17th, 2009 at 1:56 PM
Nick: Jason Thomas is a realtor from Edmonton. Click his name to go to his RE blog, which shows listings vs. sales (but not much else, really). If stats are accurate, then the EDMONTON market has lower inventory over same time last year.
I already walked into the ‘assuming the poster lives in Saskatoon’ trap once today… don’t follow me into the pit.
April 17th, 2009 at 1:56 PM
I notice average price for residential has been pretty steady in Edmonton the past six months. 327,000 last August, 317,000 at the end of January. Likely less per square foot stuff going on as well though.
April 17th, 2009 at 1:57 PM
Mark, this was a definitive announcement from the University of Saskatchewan about 400 new dorms to be built immediately, with the 1,700 yes “planned” for completion by 2012.
And despite all we hear about Potash expansion, all we have to show for it to date is roughly 2,000 lay offs from the two big local potash producers. That’s a lot of laid off potash workers.
Touche bookrat, not sure why Jason a realtor from Edmonton needs to come onto the “Saskatoon Real Estate Resource Center” to ask about Regina? Norm, would you say a full Half of condos for sale in Saskatoon are vacant? Is that an over or under estimation? I still quote your number from a couple months ago with 600 total vacant properties for sale. I still wish we could figure out actual vacant properties, as was at the old town house complex a few days ago, and looks at most half lived in, though actually less for sale than early this fall.
Assume most (Lakewood) were just withdrawn because they wouldn’t sell with the massive competition from something like 40 neighbours in a few blocks all selling similar/similar priced Lakewood/Briarwood/and Lakewood posing as Briarwood to increase value condos!
April 17th, 2009 at 1:57 PM
You can call it blind or whatever you want. Even the best economists in the world didn’t see the financial problem coming so you are just as blind as I am for starters.
Secondly, Saskatchewan is in a unique position. It was in the midst of a ‘late’ boom while the US was deep in housing problems. I think our boom money will easy carry us forward a few years to where the rest of the world is back on track.
Thus, I see modest gains happening again this year.
April 17th, 2009 at 1:57 PM
Jason Thomas,
Please excuse that rather rude reception. I appreciate your visit and the comment.
The situation is somewhat similar here. Unit sales have certainly been down but last year was really quite extraordinary. If I was to charts sales over the past 5 years current levels would look more normal and last year would actually look quite out of place. October and November were rather “abysmal” but December and January were both well in line with the five-year average. Inventory is very high, in fact, more than three times what we had at this time last year so it’s a challenging market for sellers. I expect we’ll see it climb as we move into spring. We also have our share of vacant properties. 58% of listed condos and 33% of listed single-family homes are showing as vacant. Regina is not quite as high. They’re showing 48% fro condos and 34% for SF.
Best wishes. Hope you and your clients do well this year.
April 17th, 2009 at 1:57 PM
Nick,
There was a second +$1 million dollar sale reported this week so actually, two “rich guys” bought houses, if you don’t count the eight others who purchased above $500K as “rich.” I don’t think anyone intended to make a big deal of that. Just some general comments that this much action in the upper end market was unusual and interesting.
Also, interested happenings at PCS. A friend of mine who works there said that they had new men starting (underground) as early as this week. In case you missed it, they also announced about a week ago that most of those served layoff notices were going to be offered positions related to their “expansion” plans. They said they felt that they could keep them employed at that through the layoff period. Try not to worry though. I’m sure you can count on some other things going bad.
April 17th, 2009 at 1:58 PM
Loki, actually, some of the best economists in the world did see this coming. However, at a time where even your dog could get approved for financing, their views and cautionary tales were casually disregarded. Except by some of us, who were in fact paying very close attention to what they had to say.
Your second comment reminds me of this phrase: “Always remember you are unique. Just like everybody else.” I appreciate your optimism, but there are a lot of external (global) factors working against any economic recovery, and the boom years are over for the foreseeable future.
I wouldn’t be at all surprised if we break 2,500 MLS listings with an additional price reduction of 15-20%.
April 17th, 2009 at 1:58 PM
the 400 new dorm rooms right away is good news, and will definitely put a dent in rent prices
was thinking about buying a crappy bachelor pad, but might opt for crashing on a couch for a year and staying in some nice new and close digs
April 17th, 2009 at 1:59 PM
Senate Advances Tax Break for Homebuyers
http://tinyurl.com/cqgjz9
“The tax credit would give buyers 10 percent of the price of a primary residence bought within one year, up to $15,000, and is intended to stabilize plummeting home prices, which caused a wave of foreclosures and led to the near collapse of the financial system as Wall Street firms wrote down billions in mortgage-backed assets.”
May you live in interesting times.
April 17th, 2009 at 2:05 PM
Got to love how the American government’s solution to people buying homes they couldn’t afford is to … try to spur people on to buy homes with tax credits, likely to appeal to those who otherwise couldn’t afford them.
The sad thing, is Harper will try to follow like everything else
April 17th, 2009 at 2:06 PM
If we reach 4000 listings, that is roughly 5% of the total inventory in Saskatoon. What kind of ratios are are places like Florida, Arizona and Nevada sitting at?
Here is why I think that the average home price will hit bottom at around $210,000:
-Builders break even has to higher than $210,000 on a $90,000 lot.
-90% of the homes in Saskatoon were purchased before the average home price reached $210,000.
-3 times the average income is around $210,000.
-At $210,000 I think you could rent the place out and remain cash flow positive.
April 17th, 2009 at 2:07 PM
Crikey,
American politicians seem rather reluctant to find out what the bottom looks like, but perhaps something like this is needed. I mean home prices have fallen so much that “affordability” is at its most reasonable point for a long, long time. In most places, current prices should be supported by the “fundamentals.” Maybe this is just the kind of thing that’s needed to get things going again? I don’t know, but I would rather see this than another half trillion divided up between the banks.
Charles,
It’s a real crapshoot to be sure. Just a few months ago I would have doubted that we’d ever see $210K again. Right now, anything seems possible. The scary thing? As i understand it, boom and bust cycles have a tendency to overshoot. We could end up below what really makes sense before things turn around.
April 17th, 2009 at 2:07 PM
That is exactly what I am saying. We are unique. The Bank of Canada and RBC also believes that and is expecting decent GDP growth for Saskatchewan in the midst of everyone elses nominal growth or retraction.
April 17th, 2009 at 2:07 PM
Some of economists (it is hard to claim who is best, I guess in this case these guys are and all others, proclaimed so by mainstream madia, are not really…madia here is on purpose) like Nouriel Roubini and Peter Schiff were pretty much bang on…and still saying that bottom is no where near yet. I won’t post any links, don’t want them to be understood as biased, look them up yourself. Problem was (and still is) that mainstream Madia is not independent and reports what is ordered and their claims were (are) not popular with “orderers” and even if they get any air time it is on 2 PM, when nobody is able to watch.
As for being unique…even if true, that is not necessarily good thing…Sask economy is largely (not entirely, but almost) based on commodities and exports. While that is really good in self sustainment worst case scenario (we can have our own gas, food, water etc) it is not if you rely on exports in such times as exports (are already, but not nearly as it will be) will be hit very very hard because one of things that will happen around the globe is to raise customs taxes and fees in order to protect as much as possible local productions. We are just seeing initial moves (“buy American”) which are mostly advisory now, but will be mandatory within this year. Boom times are over for a while now. Example is oil…even when price goes up where it should (around $60 ) it will not go over as there will be no speculative investment for a while, until people forget again, speculative money will go somewhere else, whoknowswhere, maybe water ?
Another thing is potash….many here (and on other places) claim, as mantra, “food is not an option”.
Of course it is, like everything else. Same way you can chose not to buy a car and go to where you need by bus or walk sometimes, you can also choose to by cheaper food and a less of it. Nowhere in the world is more food wasted than here (in North America), west Europe and Australia and as times get worse and worse that will change. Impact on potash prices (and stock prices too) will be severe. Of course, PCS has earned and saved a lot of money recently and can afford to operate for now, but diminished demand will change their mind. Remember, only way they make money is by selling product and with 3 mines not open for production (and that is after 3 mines were on strike for almost 4 months recently) means only one thing…they can’t sell it. All this will have big influence on Sask economy, and being unique might not be as great as we would like it.
Uhhh, to much from me this time ….
April 17th, 2009 at 2:08 PM
L.oki,
Some of those clowns were insisting that Canada would escape recession as late as October 2008.
RBC is predicting that Saskatchewan will outperform all other provinces but the rate of growth is predicted to be 2.8%. Good, but actually below our “growth” over the past 5 years on average. So, while our economy will be better than most we will likely under perform based on averages. Those average years managed to leave us with a surplus of housing supply.
Housing starts are down and that will help some for future supply. Our builders seem to have “gotten it” very quickly. Still, to clear out the existing inventory, much of which probably isn’t even listed right now we will need to attract people from other provinces. Before they can buy here they need to sell in what’s likely a fairly depressed housing market. If they manage to get here at all, they’ll be coming in a little beat up. They’re also facing tighter credit conditions with lesser home equity and a brand new job.
The average selling price for 2008 was 287,777. A stellar spring that lead us to a peak of $310,000 was largely responsible for that. Prices have been declining since that peak. Our best case scenario has us well out of this year’s peak selling season before inventory could possibly be back to normal levels. I would think that this is a buyer’s market through the first two quarters, at least. Even “modest gains” seems pretty optimistic.
April 17th, 2009 at 2:08 PM
Okay get ready for a long email…
I agree Norm, we have had strong declines since spring ’08. Correction following gain. December was a good indicator of this. However, I still hold by my speculation. Did you see housing sales were up 6.3% in December in the states? Combine this with the fact the nearly all recessions last 2 quarters and Saskatchewan is just coming off a boom with lots of money hitting the market. Consumer confidence is still high is SK everyone seems to have money to spend. The only thing hold us back is the media. I don’t know about you but alot of people made some very good money in the past couple years. Think of realtors, trades, home builders, car dealerships, all posting record numbers. Many trades are still getting paid better wages in Saskatchewan than in Alberta. The influx of money into our economy combined with influx of people is offsetting the damage of the stock market. The media has everything all hyped up, yet there is a huge labour shortage in Saskatchewan, planned commericial construction (in Saskatoon at least) is already higher this year than last.
In fact, commercial construction will likely keep going things rolling nicely this year.
To add to all this optimism, the states and eastern Canada has been in recession for months & months.
April 17th, 2009 at 2:08 PM
L.oki,
If you are refering to unique position as in Saskatoon having the most over-valued RE in Canada… then ok. My question: how long can a roof stay above one’s head while the walls are caving in? I’ll side with Jason on this one and wish you, good luck!
April 17th, 2009 at 2:09 PM
L.oki,
I wouldn’t argue that Saskatchewan doesn’t have a lot of good stuff going for it but some amazing things would have to start happening really quickly, here and around North America for Saskatoon home values to increase in 2009. I don’t think that the problem is so much that people don’t have money, but that they might be a little scared to part with it. This recession will outlast the spring real estate market for sure.
I did hear that U.S. home sales were up in December. Prices were also down at their lowest levels since their correction began. Hundreds of thousands of Americans also lost their jobs.
April 17th, 2009 at 2:09 PM
Loki,
What are these MANY trades that make more cash in Saskatchewan than Alberta???? I beg to differ. Just about everyone that I know who works in the trades (a couple hundred) all say there is more money in Alberta and for 2 reasons; 1. being that their rates are higher in Alberta and 2. There is significantly more overtime offered in Alberta than there is Saskatchewan;. So I don’t know where you get the notion that trades are higher paid in Saskatchewan, but please provide some evidence that proves my first hand experience differently.
April 17th, 2009 at 2:10 PM
Wesco,
Residential Framers
SK – $8-11/sq.ft.
AB – $5-7/sq.ft.
Trades here think they get paid less because that is tradition, but talk to the alberta trades who have recently moved here and they will tell you different
Heather,
Saskatoon isn’t the most over valued RE in Canada. That is absurd. Obviously you haven’t considered the replacement cost of a house and the fact that Saskatoon was horribly undervalued for 10+ years compared to the rest of canada. We have historically always has very slow growth followed by infrequent jumps in RE prices to catch up to the rest of Canada.
p.s. right now the media is making it so easy to pick on the optimist, as you can tell by this forum, remember if it wasn’t for them people would part with their money and we wouldn’t even being having this discussion.
p.p.s now I know a pessimist is going to discuss how unaffordable housing is…they are the same people who want granite countertops and 3 bedrooms in their first house. We need to get real and see that if you want fancy houses, affordability goes down. Have you seen how they built houses in the 40′s 50′s and 60′s??? Quite a difference from today’s extravagance. Affodability is not a good measure of where the market is going. You have to look at replacement cost.
April 17th, 2009 at 2:11 PM
Norm, I apologize for my optimism, it is turning your forum into a battleground!
April 17th, 2009 at 2:11 PM
Don’t worry Loki, I’ve got your back.
April 17th, 2009 at 2:11 PM
Thanks Mark!
April 17th, 2009 at 2:12 PM
L.oki,
I’m sorry to hear that you feel picked on. From my perspective, I see people with different points of view having a discussion. seems quite polite to me but maybe I’m missing something. Anyways, nice to hear your thoughts.
April 17th, 2009 at 2:12 PM
Residential Framers? Are you kidding me??? LOL!!! For one there getting paid more in Sask because they are not unionized and their projects are based on supply and demand; i.e builders backfilling basements in Alberta and houses going up like crazy in Sask; And Loki, like I said before, I have talked to many tradesmen that have worked in both provinces and know many that live in Sask but work in Alberta, do you think that they would travel to Alberta to make less money?? If you want to look at “REAL” tradesmen wages, have a look at the union agreements for all trades in both provinces and then please come to a knowledgeable and informed decision on where tradesmen make more money.
Also I am not a pessimist just a realist, like most of the very informed people on this blog. A pessimist see’s the worst in everything, while a realist anylizes the situation and bases their opinion on facts not personal uninformed opinion.
April 17th, 2009 at 2:12 PM
L.oki, I do think we will see more of a correction, but I don’t think we a in for a huge housing crash like some seem to be promoting. 90% of the homes in Saskatoon were purchase prior to the boom and I don’t think we will drop enough in prices to motivate massive amounts of owners to default on there properties. As long as the builders stop building spec homes/condos I think we will be alright.
April 17th, 2009 at 2:12 PM
Loki,
“Obviously you haven’t considered the replacement cost of a house and the fact that Saskatoon was horribly undervalued for 10+ years compared to the rest of canada.”
So if housing was undervalued here for so long, were the homebuilders losing money on each house they built and sold? Or was the rest of Canada overvalued?
Many places in the States( Phoenix) had the “catch up effect” in 03-06 because they were undervalued compared to other places in the States. Now they are in meltdown mode. Not saying that is the case here,but using the undervalued theory does have some holes. And I just don’t buy into it.( We won’t end up like Phoenix)
Over the long term, house prices are measured by affordability and the cost to build a house. But there are times when the market will deviate from both.
April 17th, 2009 at 2:13 PM
“Many places in the States( Phoenix) had the “catch up effect” in 03-06″
George, do you know of a good source for information on the Phoenix housing market?
April 17th, 2009 at 2:13 PM
The problem with realists is that they view themselves as having a “realistic view” which can only mean one thing…All other views are inherently non-realistic. How can two you believe in realism?
Economic predictions are one giant crapshoot, you are either a bull or a bear. Either an optimist or a pessimist. Realism and economics is like trying to predict the future.
Now that I got that off my chest…
Just wondering Wesco if you could direct me to where I can find such information on union agreements for trade workers for Alberta and Saskatchewan that you are talking about?
I think it is safe to say that most residential & commercial construction trades are not unionized. So I don’t think looking at only unionized data will be very accurate. But I do agree that our industrial trades in farming and resource sectors have some ground to cover as far as wages are concerned. These industries are booming right now so I feel wages should follow suit. But than again, you look at the trades working for potash corp and other large unionized companies and they are making very good coin.
April 17th, 2009 at 2:16 PM
Another example of our unique situation…Best buy closes several stores in states, opening one in Saskatoon
http://www.thestarphoenix.com/Technology/Bridge+City+getting+Best/1256987/story.html
April 17th, 2009 at 2:17 PM
Loki:
I always love the ‘undervalued’ argument: prices were lower here because wages were lower, demand was lower and the province has had roughly the same population for most of the 20th century.
The realists on this blog have been arguing for a very long time that RE prices were lower than they were in larger urban centres for good reason. And they’ll drop back to a very similar level because very little has changed, in terms of population, jobs and salaries.
Quite frankly, if you have to import people for jobs that means that you *don’t* have population growth: centres that are growing don’t have to recruit, because people relocate to them of their own accord.
I love the name, but I assume it says something about your intentions
(Loki’s the Norse trickster god, for those who don’t know)
April 17th, 2009 at 2:17 PM
“Quite frankly, if you have to import people for jobs that means that you *don’t* have population growth”
Or….you are growing faster than ever. Excuse me, but that’s a pretty unusual definition of population growth. Say I live in Ontario, and I see an ad for a job in Saskatchewan, and I take it and move there, I don’t really count as part of the population growth? Gee, I guess only people who come here first, then get a job, count. By your definition, the first settlers who came out responding to ads for free land don’t count as population growth either. I’m willing to guess that quite a bit of Alberta’s growth has been job growth driven as well. Exhibit A: All the people in Saskatoon who apparantly moved there to take jobs. Or did they have to move there first, then get a job, to count. Come on, that’s pretty absurd.
April 17th, 2009 at 2:17 PM
“And they’ll drop back to a very similar level because very little has changed, in terms of population, jobs and salaries.”
Doesn’t every single economic stat of the past few years show exactly that population, jobs and salaries have changed in Saskatoon? I know you’ll say not enough to justify house prices, sure, they overshot, but your city is growing, bigger, and wealthier, no doubt about it.
April 17th, 2009 at 2:17 PM
Loki, not to seem like we’re picking on you, but only about a third of foreclosures are currently listed in the US; banks are apparently holding on to the other two-thirds for fear of flooding the market. And the Alt-A, etc. resets are slated to start this Summer and run for at least the next 2 years, and from what I understand these could generate defaults higher than the sub-primes.
And no offense, but the bears have had their run; now it’s time for the bulls. If people still subscribed to your level of optimism, imagine the housing crash we’d be in for next year…! Thank heavens some degree of sanity is starting to set-in out there… And on the topic of affordability, I think that anything that has the potential to fall 20% or more in value is (or should be viewed as) “unaffordable”.
Norm, yes, I’d say “scared” is an accurate assessment. The US is starting it’s second year in recession. And as a depression is defined as three years of a recession, abnormal increases in unemployment, restriction of credit, shrinking output and investment, numerous bankruptcies, reduced amount of trade and commerce as well as highly volatile relative currency fluctuations (mostly devaluations), I’d say we’re almost there.
April 17th, 2009 at 2:18 PM
You’re quite right, Mark: people travel to places like Calgary, Edmonton or Fort Mac to find jobs or to take them. They hear, through the grapevine, that there’s work, and they travel to find it. There’s no need for recruitment programs, or retention programs.
But regions that have to actively recruit and import people (the way we’ve had to import nurses from the Philippenes) tend to be smaller centres — like small towns that need to offer bonuses to keep doctors or tax rebates to keep businesses. Places that naturally attract a constant flow of people don’t need such programs.
Think about it: in Saskatchewan, Saskatoon and Regina don’t need to work to attract population, but smaller centres do. That’s what I mean by ‘importing’ people.
April 17th, 2009 at 2:18 PM
Mark, the study they did last year indicated the population actually dropped by several thousand in Saskatoon (there was a rather lengthy discussion on this forum). Whether this has changed since is anyone’s guess.
Unrelated, just wanted to touch base on the subject of affordability. All the studies used 2007 (or 2008) income levels, but has anyone considered that with almost certain wage freezes, future layoffs and probably more full-time positions converted to part-time, that the average household income could actually drop this year? Wouldn’t that actually make current housing prices even *less* affordable than they currently are?
April 17th, 2009 at 2:18 PM
Loki FYI:
Alberta:
http://www.clra.org/docs/agreements/Wage%20Summaries/Wage%20Summary%2007-11.pdf
Saskatchewan: http://www.hrsdc.gc.ca/eng/labour/employment_standards/contracts/schedule/saskatchewan/north_southwest_zone/schedule.shtml
If you peruse both legitimate sites you will very quickly see that Saskatchewan labour rates are much lower than Alberta’s some upto $10 lower in Sask than Alberta.
Seconldy the argument between union and non-union wages:
Union wages actually set the bar for non-union wages. The benefit of using union contractors is that the trademens are 100% certified and work to higher standards of safety (supposedly – one selling point of union tradesmen). While non-union contractors set the wages of their employees randomly and very seldomly do the non-union contractors pay their employees higher rates than a union contractor. The inherent benefit of using non-union contractors is that they are cheaper than union contractors, so therefore it is easy to reason that non-union workers have lower wages than their union counterparts regardless of their skill and experience.
April 17th, 2009 at 2:19 PM
jrochest:
I have read many, many articles about BC and Alberta importing workers, or at least debating their options, due to labour shortages in key areas. BC at one point was looking to Mexico. Is this because those provinces aren’t desirable destinations too? I guess not enough people taking up jobs through the grapevine, which tends to not be the best way to hire when you need people fast.
captcha: Border Tours
April 17th, 2009 at 2:19 PM
“Mark, the study they did last year indicated the population actually dropped by several thousand in Saskatoon (there was a rather lengthy discussion on this forum).”
Yes, and I believe the conclusion was that study wasn’t very reliable. Do you really feel that Saskatoon’s population has dropped in the past few years? I keep reading reports from CIBC, Conference Board, etc that cite strong population and employment growth. Are these all wrong? Seriously, do others think you haven’t had strong population growth the past few years?
April 17th, 2009 at 2:36 PM
I’m willing to believe the population of the city has risen (as Jason says, there’s been one study that suggests a drop in population but others have suggested a small increase). But I’m not seeing the kind of massive in-migration of the sort that Kelowna or Calgary saw in the last decade: the population has not doubled, risen by a third or even a quarter.
For the change in RE prices to be based in population growth, the city would have to have experienced the kind of explosive growth that Calgary underwent. Crikey, Wesco and I have all said, many times, that we know what a boom looks like and Saskatoon doesn’t have one. Times got good, the decline stopped, and people happily spent money: but 25,000 or 50,000 people haven’t moved to this city.
April 17th, 2009 at 2:37 PM
“Wouldn’t that actually make current housing prices even *less* affordable than they currently are?”
Most unaffordability studies we’ve seen lately use prices from six months ago. You are already more affordable today than then. It would take quite a drop in wages I’m guessing, or quite a rise in house prices again, to get to that 4.5 rating.
April 17th, 2009 at 2:37 PM
I’d call leading the country in GDP growth two years running, and a predicted third coming up, pretty boomish. Hey, plus you’re finally getting a Best Buy I read today. All grown up now. I guess we’ll have to wait till the next cencus in 2011 to really see how much you’ve grown.
April 17th, 2009 at 2:41 PM
Leading the country in GDP growth isn’t hard to do when
a) your economy has been stagnant for most of the previous decade.
and
b) you are selling commodities (Potash, oil, gas) at the highest prices in 40 yeas.
A Best Buy, and a new mall, doth not a booming economy make.
Captcha: “resale clean”
April 17th, 2009 at 2:42 PM
Mark,
I’m willing to believe that we’ve had two years of stellar population growth, above average job growth, excellent wage growth, above average GDP. In spite of all of that we are unable to sell the massive surplus of homes that exist and property values have dropped 15-25% from the peak. I’m just saying that realistically, all of these indicators will be slightly weaker, not stronger in 2009 so I think “price growth” in real estate for 2009 is “optmistic.” I’m not predicting a massive U.S. style crash but the old “prices are on the way up” drill seems a little out of place to me.
April 17th, 2009 at 2:42 PM
Don’t get me wrong, I don’t think house prices are about to rise in Saskatoon. Probably not for a couple years. I think they’ll probably stay stable for a few months, and maybe drop another 5 or ten percent over the remainder of 2009 and 2010. I just think that Saskatchewan isn’t doomed to return to its days of population loss and zero job growth. Just because that’s the way it was. Places do evolve. I think Saskatchewan is going to become a very wealthy province over the next 15 years. The next year or two might be flat, but probably not too recessionary, but few places on earth have the diversity of resources that we have. I’d bet everything I have that demand for wheat, oil, potash, gold, and uranium will all continue to rise strongly over the next decade.
April 17th, 2009 at 2:43 PM
“Leading the country in GDP growth isn’t hard to do whena) your economy has been stagnant for most of the previous decade.”
So we were playing catch up. Finally, you admit it. Kidding, of course. Kind of.
I was kidding about the Best Buy too.
captcha: residence Hated
Man, I’ve never had any captcha’s that were in anyway relevant before today.
April 17th, 2009 at 2:44 PM
“Catch up” implies that the GDP will not drop again, Mark.
April 17th, 2009 at 2:45 PM
GDP growth will drop sure, but I don’t think the city’s GDP will drop. In other words, I don’t think your economy is going to shrink relative to other city’s economies. In other words, if your economy in Saskatoon drops 3.2 percent, I’m guessing the majority of other cities are fairing worse.
April 17th, 2009 at 2:45 PM
I do think Saskatoon will keep pace, relatively speaking. If house prices keep dropping, I don’t think your prices will drop steeper and further than most other major cities.
April 17th, 2009 at 2:45 PM
Westco, those documents you linked are not relevent. The Saskatchewan one indicates wage minimums, i.e. “pay not less than”.
There is no was to compare the two provinces based on those charts.
My point still is that there are many sectors where Alberta pays more, and many where Saskatchewan does. That old ideology of Alberta is better and pays more no matter what doesn’t work.
Jason I wasn’t here for the last post about dismal population growth. But I did pay close attention to that article. It was from a think tank in Ontario and was horribly misleading. There is no accurate method of recording population growth during a migration and housing boom. However, if in fact there was a couple less people in Saskatoon it was because Martensville, Warman, Clavet, Dundurn, Langham, and the greater Saskatoon acerage population all went through the roof.
April 17th, 2009 at 2:51 PM
Mark/jrochest, re: Saskatoon’s population growth, it certainly didn’t feel like Saskatoon was growing in the latter part of 2008 (sorry, I can’t recall offhand which time period that study covered). I believe that the city did utilize them for several years prior and were apparently happy with the projections (up until that point, anyway). It definitely does not feel as though the city is growing at the present time, though.
Mark, re: affordability. Yes, I think you’re correct that we’re probably a few points off that 4.5 ratio (I haven’t heard of any recent changes in household income). re: GDP, we (SK) arrived to the part late, but in good spirits. Glad you were kidding about Best Buy; we need another electronics outlet like a hole in the head. Why can’t we get an Ikea instead so I can stop trekking to Calgary? re: Price drops, I think Victoria will be a good comparison city. re: Housing trends, myself I see 2 years of decline (maybe more), followed by at least 3-5 years of negligible price changes.
Loki, yes, I believe that was the consensus of the study, that a lot of the net migration went to the area surrounding Saskatoon. Never really heard anything after that; think most people just dismissed it. We’ll probably have to wait until later this year to find out how accurate (±) they were. re: Alberta, on the whole, you make more money, pay less tax (even with the reduction in SK this year) and have about the same cost of living. The largest complaint seems to be trying to get anything done, ie: the length of time it takes, waiting, etc.
Out of curiosity, what’s the whole “captcha” thing (must have missed the memo)?
April 17th, 2009 at 2:51 PM
Does anybody know any details on the new student housing to be built for the U of S? Specifically I wanted to know if they were planning to build apartments or simple dorm rooms.
http://www.gov.sk.ca/news?newsId=f7c6445a-cd62-4769-a0d7-f1dcc76a46df
If they are going to be building apartment units then that would provide some credence to the condo market in particular being wildly over valued. The university press release states that the project will cost $15 mil and create 400 new “beds”. $15 million / 400 beds is $37500 per bed. Assuming 3 bedrooms per apartment, which I believe is how the other housing in the area, sieger wheeler is laid out, that’s $112,500 for a new 3-bedroom apartment. An apartment a block away from the university and very close to the river and downtown.
Now the construction numbers don’t include the cost of land which spread over 100+ apartments might add $20 or 40k to the theoretical cost. So that is $130 to $10k per unit. These are also low-end apartments which I very much doubt are going to see granite, hard-wood floors, or any other finer touches. Still the cost difference is remarkable compared to what is on the market.
Compare these units to the new luxury condo’s going up on college drive for the “very affordable” prices of mid 400k’s to low 500k’s. http://www.realtor.ca/propertyDetails.aspx?propertyId=7714369
I realize those condo’s will be of considerably higher quality and perhaps slightly larger but really, how much does this stuff cost when you are only doing 1000 sqft? What could you possibly stuff into an area that size to add $300k+ of value? The disprepancy, in my opinion, can only be explained by speculation (that prices will only rise), and marketing.
April 17th, 2009 at 2:52 PM
Latest StatsCan stats show Sask income growth continues to be stronger than most provinces – 4% year over year (I believe this is the latest).
http://www.statcan.gc.ca/daily-quotidien/081222/t081222c1-eng.htm
Employment growth pretty strong at 2.8% year over year.
http://www.statcan.gc.ca/daily-quotidien/081222/t081222c1-eng.htm
Population? Not bad. Certainly the best in years.
http://www40.statcan.gc.ca/l01/cst01/demo02a-eng.htm
Active residential listings over the past eight years courtesy of my friend Troy.
http://www.normfisher.ca/images/teamblog/troysgraph.jpg
Jason,
Captcha is the little word game you have to play to get your post up. ‘large mignon’
April 17th, 2009 at 2:52 PM
Matt,
$15 million from the province.
Total cost is $34 million for 400 beds or $85K per bed.
4-bedroom units.
http://tinyurl.com/cqrko7
They should definitely go with granite counter tops.
April 17th, 2009 at 2:52 PM
I’m surprised no one has posted this piece of news yet:
Amid cooling market, 150 lots returned to City of Saskatoon
http://www.cbc.ca/canada/saskatchewan/story/2009/02/05/saskatoon-housing.html
Is there any chance the city will lower the price of the lots if no one wants them?
April 17th, 2009 at 2:53 PM
I think the City can just sit on the lots. Can’t imagine that they will cost them any real amount of money.
Given my years and years of student residence experience (grad school, so many years of grad school) I can say that a residence room in an apartment style unit is about 6′ by 8′, with communal kitchens and bathrooms, and a tiny ‘sitting room’ that nobody actually uses.
Trust me: utterly unlike a standard rental apartment.
Granite countertops are not the norm.
April 17th, 2009 at 2:53 PM
jrochest, well, that’s over $14.2M in lost revenue for the city (short-term). Anyone want to make a bet that the city planners didn’t budget for 150 lots being returned this year? 20% of the lots sold being returned isn’t insignificant…
April 17th, 2009 at 2:53 PM
L.oki,
I think expecting moderate growth for SK this year is absurd. :’)
April 17th, 2009 at 2:54 PM
Matthew,
Great find! Wow, I didn’t realize 150 lots were returned in total.
I wonder if the city is in debt because of their promiscuous misconduct? If they paid workers “x” amount of money to service these lots, and they are waiting for “x” amount of dollars from sales… Perhaps the city will lower prices to get the money back quicker. I think they’re making a profit and have room for adjustments. Serves them right for spoonfeeding builders and not giving individuals an equal opportunity.
April 17th, 2009 at 2:55 PM
Heather,
k, now you are picking on L.oki.
“I wonder if the city is in debt because of their promiscuous misconduct?”
The city has budgeted many millions for further land development through 2009. Serviced land is durable and will last a long time. Yes, it’s money out of revenues for now but it will be sold eventually, even if at half the price you paid for yours.
I think it’s important that we have some reasonable supply of land ready and available when our supply does begin to run short.
April 17th, 2009 at 2:55 PM
Wally Mah, in speaking about small builders, “When that market cools off, who are the first people that flee? They are the first people that flee, and they don’t have the ability to sustain carrying three or four lots at a time,” he said. “That’s why there’s a large return of lots.”
As he himself hands back nearly 7% of all returned lots. Funny one Wally!
Anyone hear anything about how the late January lot draw went? Did they sell any?
April 17th, 2009 at 2:56 PM
Canada’s Economy Loses 129,000 Jobs in December
http://www.canada.com/Business/Canada+economy+loses+jobs+January/1260456/story.html
Highlights… Unemployment rate now 7.2%… over 3x higher than estimates of 40,000… record single month total… 2x the comparable number of jobs lost in the US… BC, QC and ON led the provinces (silver lining for SK and AB).
April 17th, 2009 at 2:56 PM
StatsCan Labour Force Survey
http://www.statcan.gc.ca/daily-quotidien/090206/dq090206a-eng.htm
April 17th, 2009 at 2:56 PM
Re: Canada’s Economy Loses 129,000 Jobs in December
Good news in Sask on that front. We’re the only province that saw our unemployment number drop in January. From 4.2 to 4.1. Saskatoon’s edged up from 4.0 to 4.2, Regina’s dropped from 3.6 to 3.2
April 17th, 2009 at 2:57 PM
Thats right mark. Lets hope our ‘unique’ situation that I mentioned earlier lasts.
April 17th, 2009 at 2:57 PM
Loki,
Opun further review you are correct in terms of the Saskatchewan. However I am not able to find an equal dicument to the one laid out for the Alberta Union Agreements. You pretty much would have to find each individual union trade agreement to get the desired information. Cheers
April 17th, 2009 at 2:57 PM
Sask. unemployment rate drops, thanks largely to part-timers
http://tinyurl.com/ao24zq
“Statistics Canada’s Labour Force Survey, which was released Friday morning, shows Saskatchewan’s seasonally adjusted unemployment rate dropped by 2.3 per cent from December 2008 to January. The majority of the job growth in that one-month period came in the form of part-time jobs, which grew by 4.6 per cent from month to month. Employment in full-time jobs, meanwhile, dropped by 0.6 per cent from December to January.”
Could the increase in part-time jobs be partially explained by people hiring for the holidays? It says the data is seasonally adjusted, though, so I’m not totally sure what to make of it.
April 17th, 2009 at 2:58 PM
Sorry, I just *had* to share this headline from Bloomberg:
“Stocks in U.S. Climb on Speculation Job Losses to Spur Action on Stimulus”
Are we in bizarro world, or what?!
April 17th, 2009 at 2:58 PM
House in Toronto on sale for $1.
MLS # E1553514
Norm (or anyone else), what’s the purpose there – simply to generate as many offers as possible, and possibly a bidding war? Is the person desperate to get rid of it at any price?
(I know you can’t know specifically… I’m wondering if you have any ideas about why this is done generally/historically.)
I wonder if he would take a lowball offer of fifty cents?
April 17th, 2009 at 2:58 PM
It’s an attempt to generate a bidding war
TO real estate traditionally works by starting with an unrealistically low asking price. It’s stopped working now, but it got really bad in this cycle: properties were selling at 100k + over their asking prices, in many cases. Recipe for frustration for the buyers.
The property is just a little north of Leslieville, a recently gentrified neighborhood, and one that used to be very shabby. It really sounds like a flip (granite counters, full gut job, etc) that someone wants to sell quick.
April 17th, 2009 at 2:59 PM
Sorry to answer a question directed at Norm, but I lived in TO for so long, and watched so many friends suffer through the buying/bidding process….
April 17th, 2009 at 2:59 PM
I agree. Thanks Wesco.
April 17th, 2009 at 3:02 PM
Hello all, I generally just read these blogs (and enjoy them quite thouroughly), but I just need to make one quick comment on the tradesmen make more in Saskatchewan than Alberta. My knowledge is not based on stats canada or any other hard facts, It’s based on experience in the field and every friend I have that works in trades profession. Just over the past couple weeks I’ve had 4 friends, all trades workers, move to Aberta due to either lay off’s here or just plain better wages in Calgary. I find it hard to believe Saskatoon is trying to recruit tradesman while handing out lay off slips to 10 year employees. Also if housing starts are on the extreme decline, where are all these tradesman working?
April 17th, 2009 at 3:04 PM
@jrochest: I said “Norm (or anyone else)” so you definitely qualify. Thanks for the insight!
April 17th, 2009 at 3:04 PM
Dont know if Alberta is such a safe place for tradesmen right now the classic, “grass is greener on the other side. ” So much craziness in the headlines is making even a perma bull like me uneasy so now the end result is me having 3 jobs yes 3 and using the excess to pay down debt and keep my annual investing regime into the index in check. Now I ask you guys have you changed anything recently expecting the worse for the entire world? Lately ive been avoiding the internet and trying to avoid this blog but its too tempting!!!!!
April 17th, 2009 at 3:14 PM
Armoth,
Oh, no!
I’m looking for a good opportunity to get back to cash for awhile. Other than that, I get up, go to work, stay happy.
Burton,
My builder tells me he is getting calls from guys looking for work. Right now, you could probably have a basement dug and poured, and the house framed in a month. Sounds like non-residential is going fairly good though. Perhaps some of these people can find work there.
Bookrat, what jrochest said. Seen the general idea used many times, though never at a dollar. Seller is basically saying, “you tell me what it’s worth.”
Crikey,
Amazing stuff. Same thing in Canada. Worst job report in ever, but the TSX rallies nearly 2%. I’m frightened.
April 17th, 2009 at 3:14 PM
I got an electrician buddy in S’toon that says basically the same thing as Norm. Residential is really slow – framers are building decks. But commercial is still pretty good. Although, my buddy figures that’s gonna slow down too if things keep going like they are, which I think they will. I think we’re in for a long, deep and widespread recession.
But don’t get too worried Armoth. Israel might strike Iran in the next 4 months.
This story ran 8 months ago:
http://www.telegraph.co.uk/news/worldnews/middleeast/israel/2212934/Israel-has-a-year-to-stop-Iran-bomb,-warns-ex-spy.html
That’d spike the price of crude
April 17th, 2009 at 3:21 PM
Norm,
I was simply returning her wording. So unless I was being picked on first… ? I’ll agree it’d be wise for the city to keep more lots on hand to avoid another “situation”.
April 17th, 2009 at 3:22 PM
guy_in_regina,
Do you think the index will be up from this point 20 years from now? Thats all im concerned about =p
Norm,
Wouldnt this be the best time to invest? Worse case scenario if it falls horribly from this point when it already lost 35% its like falling from 2 stories where before it was like falling from a skyscraper =p Ide rather invest now than later. I do see the points about home ownership now might not be the best time but then again noone really knows what the future will bring whether it be 140 dollar per barrel oil or $40 per barrel oil or a 250k average house price or a 100k house price.
April 17th, 2009 at 3:22 PM
Armoth,
What you say makes sense and I do agree. Funny though, about three months ago I was talking about what a great deal Royal Bank was at $40. Dividend at about 5%. Cheap, cheap, cheap! Over the past two weeks I’ve purchased it at $31, and once near $28. Right now, the only thing that seems certain is that confidence will give way to despair, and despair will eventually turn to confidence. It seems to be happening over and over again. I realize that at some point that will change and I may be caught in, or out, as the case may be, but for the time being I’m slipping in and out as I feel the changing tide coming. Probably very stupid, but hey, it’s only money right.
April 17th, 2009 at 3:22 PM
The job numbers on closer inspection show that Saskatchewan’s total gain is really a gain in part-time employment, with thousands of full-time jobs lost.
April 17th, 2009 at 3:23 PM
Bookrat, can’t mention name of controversial private Saskatoon housing website, but I have seen many prices artificially low, @ $1, just so they show up @ the start of a search.
I refuse to buy a car that doesn’t have a price on it, same for fake priced, or fake neighbourhooded houses.
April 17th, 2009 at 3:23 PM
Crikey, I would wonder if increase in part-time is those who lost full-time jobs need two + part-time jobs to make comparable income?
April 17th, 2009 at 3:23 PM
Could be, Nick. We have a fairly large number of students in Saskatoon, though, and I’m thinking it could be a holiday thing. That’s just a guess, however. I think next months’ data might give us a clearer picture of what’s going on.