Saskatoon real estate: Week in review (July 14-18 2008)
Total active residential listings on the Saskatoon real estate market fell just short of breaking the 1,500 mark and settled at 1,499 by the end of the week, a net gain of 38 units when compared to the previous week’s end. A total of 175 properties hit the new listings board, including 35 that were cancelled and re-listed during the same week, and about 20 condo conversion units that went MLS. At present, there are 961 single-family homes and 433 condominiums displaying the active status on the Saskatoon MLS. The balance of available units included vacant lots, mobiles, semi-detached and duplexes.
Unit sales in the single-family homes and condos category came in at 71. Overbid sales edged up marginally from last week with 5 homes selling above list, but the average overbid dropped substantially to reach its lowest level since the week of January 14-18. 59 buyers managed to negotiate a purchase price below the seller’s asking price with an average underbid of just over $10,000.
Average selling prices took a large jump from the previous week, up just a little more than $12,000 to settle at $304,254.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Follow our daily updates on Twitter @SaskatoonHomes.
Norm Fisher
Royal LePage Saskatoon Real Estate
133 comments so far. We'd love to hear your thoughts.
May 1st, 2009 at 10:49 AM
Where are all the supposed buyers trying to get in before changes in mortgage rules?
I’m kind of suprised prices aren’t down, with buyers refusing to pay full price with the impending weakened market after mortgage changes. That and there are so many places, supply is always greater than demand. Think that would drive prices down too.
May 1st, 2009 at 10:50 AM
The prices aren`t going down just yet. Sellers have just realized that the market is shifting. The large amount of listings with high prices is because they want to make the most of it before the new mortgage laws and low prices come to effect. It`s just plain greed in most cases if you ask me. If you want to sell because you need to move, you have no choice. It`s just that you chose a bad time. If you want to sell to make profit, that`s another story. In that case you are a bad investor.In either case, the prices will go down, like it or not.
Elli
May 1st, 2009 at 10:50 AM
I think there are still a lot of naive buyers out there.
I looked at a place about a month ago. I mentioned it on here. It was in pretty bad rough shape all around. Had linoleum throughout, probably because of the 6 cats, two dogs, 1 rabbit and something else hiding in the back of it’s cage. I looked for a partridge in a pear tree but couldn’t find it. Anyway…it was one of those places you just shake your head at as you walk away. I won’t get into more details, but we felt it was WAY overpriced. It sold, almost for ask.
My point? If buyers keep buying these overpriced homes then sellers will keep overpricing them.
May 1st, 2009 at 10:50 AM
Doug,
I believe that prices will go down, but to see a big drop, I believe that we need to see 3,000 on MLS ( 398 on saskhouses and others do not count, in my calculations) 3,000 on MLS will keep us on par with Calgary and Edmonton per capita. If that happens, I would imagine we will see the drops in price they have experienced. Using FSBO sites is not easy because sale prices are not mentioned. So I just leave them out.
There still is demand as there was 71 sales this past week. Inventory is growing ( slowly). There are some big question marks for this market in the near future.
Have most speculators listed their properties, or have we only seen the tip of the iceberg? This will determine much of the oncoming supply number.
Of all the new housing starts, how much are speculation? The new 50k city mortgage will help curb some of this speculation.
I really thought we would have higher inventory by now than we do. I know that houses are taking a long time to finish. This could be one factor. Maybe future speculation will be less. Time will only tell.
May 1st, 2009 at 10:51 AM
Hey Norm,
Can you let us know how many vacant properties are forsale right now. I am curious if this number is going up or down
thanks
May 1st, 2009 at 10:51 AM
Carl,
I see 236 vacant condos. This is just a guess, but I’d say 10% of those are listed pre-construction (not ready for occupancy) and about 50% are condo conversion inventory.
293 vacant houses. I would guess that 20% may be pre-construction and an additional 30% are new or near new.
May 1st, 2009 at 10:52 AM
“The new 50k city mortgage will help curb some of this speculation.”
What is the new 50k city mortgage? What is that all about>
Thanks
May 1st, 2009 at 10:52 AM
Bart,
From the City of Saskatoon website.
Do I have to live in the house built?
There is a four-year residency requirement for the purchaser, beginning from the date the lot is completely paid out. A $50,000 forgivable mortgage will be placed on the property and will be exercised for those not maintaining the residency requirement or the two-year construction requirement. The $50,000 mortgage will be removed from the property after both requirements are met.
http://www.saskatoon.ca/org/land/residential/lot_procedures/purchasing_lots.asp
May 1st, 2009 at 10:52 AM
Norm, a question:
Does the weekly supply listing statistic take into account multi-unit buildings that list only a single listing representing the lot of them?
For example, the Milroy building is showing only a few listings, when in fact there are dozens of units.
May 1st, 2009 at 10:53 AM
I think inventory increases will level off and will start dropping this fall. So far, inventory changes appear to be very seasonal if one look at the past. And no, I don’t see a crash anytime soonin Saskatoon.
May 1st, 2009 at 10:53 AM
Ryan,
The weekly stats only include properties that are on the MLS. In the case of the Milroy, only a handful of the condos are listed. Of course, those units won’t show up in the “sold” figures either.
May 1st, 2009 at 10:53 AM
Ryan — I thought of that, too. I think it has to have something to do with the fact that the Milroy and other like it are pre-selling units that will be renovated. They are quasi-presales.
James — well, inventory always does fall in the fall: people de-list in the fall and re-list in the spring. “We’ll rent for a year, and try next year when the market’s recovered”. I assume that most of the properties up on the MLS now will be re-listed next year — in addition to the stuff that will be newly listed then.
Calgary and Edmonton had two years of high listings before prices began to fall. If Garth Turner’s timeline can be trusted, it’s 9-18 months of steadily high inventory, followed by price drops, gradual at first. We’ll see what happens in Edmonton and Calgary.
May 1st, 2009 at 10:54 AM
Oh, and we certainly have 5 months of inventory now. 3,000 would be 10 months of inventory.
I think 5 months *used* to qualify as a buyers market, but the US realtor websites seem to be arguing that you need at least a year-and-a-half of inventory to qualify as a buyer’s market now.
Apparently, Phoenix, the Inland Empire and San Diego are “balanced markets!”
May 1st, 2009 at 10:56 AM
jrochest,
That’s a riot. If those markets aren’t buyer’s markets there’s no such thing.
May 1st, 2009 at 10:57 AM
Why are condos even considered as part of the units for sale I mean one building can have tons of them in it. They are not the same as as single family house with lot. There should be a seperate mls listing for condos I hate having to sift through them when looking for a house to buy. They should add trailers and moterhomes too lol.
May 1st, 2009 at 10:57 AM
So really, by the time all the multi-unit buildings, and saskhouses.com are accounted for, Saskatoon just may already be nearing 3,000 units for sale by some one somewhere in Saskatoon? No wonder why most stuff isn’t selling!
So, an interesting link from CBC about the current situation with the apparent $1 billion coal find near Hudson Bay Sask.
http://www.cbc.ca/canada/saskatchewan/story/2008/07/21/goldsource-coal.html
May 1st, 2009 at 11:00 AM
I actually live in Edmonton now, just thought that this link deserved to be on this sight. Where so many boosters get pumped up over any potentially positive news story, even though with Saskatchewan, they almost always end up being disappointing.
And isn’t oil down something like $10 or $15 a barrel?
If only you all had high paying jobs in an established city, where $300,00 still buys you a nice house … wait that’s Edmonton!
Anyway, I’ll be back the next time I have a “told you so” story. Maybe when the inflated potash inventory which may weaken prices becomes public knowledge. Or when the carbon tax makes dirty coal fired power more expensive in Saskatoon/Saskatchewan.
Anyway, no biggie for me, I got my house for $50,000 less than similar in Saskatoon, and screw $10,000, I make A LOT more than I did/would in Saskatoon.
Ciao
http://www.cbc.ca/canada/saskatchewan/story/2008/07/21/goldsource-coal.html
May 1st, 2009 at 11:01 AM
And this where we start talking down the market. Here ye, here ye, all those with something bad to say shall have their opportunity now … speak now or forever hold your peace:
May 1st, 2009 at 11:02 AM
Well said Callum.
There are a ton of good things happening in Saskatchewan. What is going on in Alberta or anywhere else really doesn’t matter except to give a reference for the chronology of the recovery.
And what recovery are we looking for anyway?
Anyone callous enough to be hoping for a return to wildly inflationary price increases year after year should go hide in a cave and cover your ears for a long while. Or at least shut up.
But eventually things will get stabillize life will go on and we’ll find other things in life worth talking about besides RE.
But thanks Norm for giving us a forum for our fixation.
May 1st, 2009 at 11:03 AM
Thats great news about Goldsource. Hopefully other hyped up ventures such as Shore gold and the Bakken Oil fields similarily fall dead in the water so that the Saskatchewan economy can tumble and we can return to pre-housing boom days when it was actually affordable to live here. Maybe then we can do things over properly, waiting for the economy to build BEFORE huge increases in housing and rent prices.
May 1st, 2009 at 11:03 AM
Armoth,
In an earlier post I mentioned that I am not one to post doom and gloom predictions. I try to give a balanced outlook on Saskatchewan’s future. Here is some more good news for industry in the province:
The Government of Canada Partners With Saskatchewan to Improve Foreign Credential Recognition.
http://tinyurl.com/foreign-workers
Speaking at the Saskatchewan Institute of Applied Science and Technology’s (SIAST) Kelsey campus in Saskatoon, Ms. Yelich announced an investment of $3 million for the Foreign Credential Recognition Support for Labour Market Needs in Saskatchewan project.
Through the federal government’s Foreign Credential Recognition program, SIAST will establish a system for verifying that credentials and job experience obtained abroad are equal to established Canadian standards. Immigrants will be able to obtain their certification before coming to Canada. The project will be piloted in Saskatchewan and target prospective immigrants from the Ukraine, the Philippines and Vietnam with skills and experience in the mechanical trades (welding, heavy duty equipment, and agricultural machinery).
May 1st, 2009 at 11:03 AM
Roger: hey, that’s interesting — why would you need to bring people in from the Philippines and Vietnam if there’s a huge rush of skilled labourers moving to Saskabush from Southern Ontario, Quebec and BC?
Wait for it…
May 1st, 2009 at 11:04 AM
Well I can’t see people from those countries buying any real-estate in Saskatoon any time soon. lol
May 1st, 2009 at 11:04 AM
I don’t think we’re waiting for Bakken to fall flat on its butt, I think we’re waiting for people to realize that Bakken in southern Manitoba and South East Sask, but mainly in North Dakota, is NO WHERE NEAR Saskatoon (4+ hours away) and other than increased provincial tax revenue, Saskatoon will not get benefit from the Calgary, Regina and Winnipeg oil companies, with potentially a regional office in Weyburn or Estevan or Regina.
If anything, Bakken will cause people to leave Saskatoon’s lower paying manufacturing or meat packing sectors (not too hot) and move 4 hours south to Estevan.
Didn’t some one from this blog just recently move to Estevan or Weyburn?
Agreed though, that once the hype is removed, Saskatchewan’s economy really isn’t much different than it was pre “boom”. Good fundamentals, but limited labour force, like jroch says, if looking foreign, likely not enough interprovincial in migration, and still relatively small place, with high crime, cold weather, and not appealing to the majority of Canadians.
May 1st, 2009 at 11:05 AM
jrochest,
My guess on the bringing in the foreign workers is so that our ‘wonderful’ employers in this province can pay them less and get them to work their BUTTS off…unlike us folk that are used to things such as i dunno….labour laws.
May 1st, 2009 at 11:05 AM
So Jim tell us what you really think. You seem to be intent on pounding it in that Saskatchewan is disadvantaged relative to Alberta and will remain that way no matter what.
I believe Calgary benefits from the industry in Fort McMoney as does the rest of Alberta. Lower taxes, betterjobs, etc. I think all of Saskatchewan stand to benefit from the inreased commodity revenues.
It will take time for Saskatchewan’s economy to absorb any new prosperity. But the government will no doubt see a need to continue to attract people by offering some of the benefits Albertans have been lucky enough tio enjoy.
Hopefully there isn’t any rush to become the “New Alberta”. There is something to be said for managed growth.
May 1st, 2009 at 11:06 AM
Wesco,
“Well I can’t see people from those countries buying any real-estate in Saskatoon any time soon. lol”
Why would that be?
“People from those countries” actually place a pretty high value on “homes.” One of my colleagues who is fluent in Ukrainian has helped nine families buy in the last year. They don’t buy $300K+ homes but they do buy homes.I showed a home to a family from the Phillipines this weekend (380K) and my associate just firmed up a deal with a Russian couple.
May 1st, 2009 at 11:06 AM
Jim,
To follow up on Ken’s point, why do you think that more people left Alberta for Saskatchewan, than left Saskatchewan for Alberta in Q1?
May 1st, 2009 at 11:06 AM
Just to clarify my position and possibly add to Norm’s;
I am a long time Calgarian from Saskatoon. I am in a very good position professionally, quite well paid and get multiple job offers evey time I send out resumes.
So yes Jim you are right; Calgary has quite an economic engine, there is no denying I’m not getting the same response from Saskatoon.
However I have been delaying a decision on accepting any offers because I have and offer with one company in Saskatoon and I’m waiting to see if the money gets close enough that I can sell my house here (don’t laugh it could happen) and go. You are right the money does matter and there are some financial disadvantages, but I am willing to concede some of that to enjoy what I would call the benefits Saskatchewan has to offer. And to be part of the exciting times to come. I’m sure there are others.
May 1st, 2009 at 11:06 AM
Norm,
Sorry about my insensitive comment. However what i was getting at was that the people that will be coming to work in Sask thru this new initiative are not in the top economic classes of their countries (strictly my opinion not based on fact). I’m sure the people who you are selling real estate too were from higher economic classes, otherwise it would be tough for them to be in Canada at all.
The “new Canadians” that they will be bringing in to Sask I’m sure will not have the resources to be able purchase 300K+ homes in Saskatoon when they arrive, however in the future I’m sure they’ll have just as much opportunity as anyone else.
May 1st, 2009 at 11:07 AM
Norm, I posted this a few blogs ago. More people leaving Alberta for Sask than the other way.
First quarter of 2008
Of 20,788 people arriving in Alberta:
• 6,374 (31%) came from Ontario
• 4,912 (24%) came from BC
• 2,506 (12%) came from SK
• 1,641 (8%) came from Quebec
• 1,426 (7%) came from Manitoba
• 1,241 (6%) came from NL & Lab
• 1,088 (5%) came from NS
Of 20,075 people leaving Alberta
• 6,871 (33%) went to BC
• 4,173 (21%) went to Ontario
• 3,558 (18%) went to SK
• 1,402 (7%) went to Manitoba
• 1,135 (5.7%) went to NS
• 1,074 (5.3%) went to NL & Lab
• 679 (3.4%) went to Quebec
Of 18,995 people leaving Ontario
• 838 (4.4%) went to SK
May 1st, 2009 at 11:07 AM
Wesco,
Just to clarify, I said that they are not buying $300K+ homes. These people that I’m talking about are all working in “blue collar” occupations. Ed tells me that almost all of them know how to save a few bucks and most of them want to buy a home. Many had homes where they came from so they’re not all coming here penniless either.
George,
Thanks for that. I knew it was around here somewhere.
May 1st, 2009 at 11:07 AM
Yup, Saskatchewan gained a whopping 1,000 people from Alberta. That’s almost 1/5 th the population of Warman, of course distributed across all of Saskatchewan, or 0.1% of our population!
May 1st, 2009 at 11:08 AM
Like Dan pointed out, we had a net gain of 1,000 ish from Alberta (2,506 left, 3,558 came), distributed across the whole province, and over this same period of time, sales are down and listings are way up. Not exactly time to start celebrating yet. 1,000 barely begins to replace the thousands who have left each and every year (up to last year) from Saskatchewan to Alberta.
And houses were a lot cheaper here back in January, now more expensive, with Alberta prices dipping a bit. Alberta just keeps getting more appealing for financial reasons. And also as is often pointed out on here (occassionally by me) Alberta’s wages spread the gap, and grew by more than Saskatchewan, after being higher before. With Alberta more of a lateral move house price wise, but a big step up wage wise, I think we’re about to see a large exodus of workers and new grads to Alberta. Again.
May 1st, 2009 at 11:08 AM
I also wonder with the whole Albertans coming to Sask in that period…is it just a blip? I mean i went thru the stats one time since 1979 and over a million people have left the province since 1979….i mean some have came in (obviously) but i wonder how much of a blip this actually is. One evening I will have to research this when i’m not working my other jobs lol.
I’m not purposely trying to be negative on this subject, it’s just i wanna know the facts and not just recent spin too not that i’m accusing anyone of spinning, but i just want the facts…
Also when people move, we don’t know the reasoning, both for leaving or for coming into the province. How many were big fish coming into the little sea of sask, and how many were legitimate people thinking wow, i like sask, lets live here… There are so many variables to figure into the equation rather than just saying WOW! MORE PEOPLE CAME HERE THAN WENT THERE!
The people coming into the province, were they already established (have money) people in thier careers so can afford the move? Were the people moving TO alberta starting thier careers out and TRYING to make money? We don’t know.
May 1st, 2009 at 11:08 AM
Lol! I love how Doug, Jim and the other bears love to make everything seem so gloomy in Saskatoon. Listening to you guys, you would think Saskatoon is the Detroit of the Prairies; a low income, depressed run down town with horrible crime. Hah! Crime rate! I live in Victoria and the crime rate is quite high here (shootings by the week) but that doesn’t stop us from having average prices approaching 2/3 of a million. I love how some of you fixate on one statistic – for example the net intake of workers from Alberta while ignoring everything else. I don’t think there is anything to worry about in Saskatoon. The sky is far from falling and there is simply too much money coming into Saskatchewan that will help every corner of the province. Similarly, I laugh at the suggestions about how the Bakken might “fail” like the coal project or about big inventories of Potash in the warehouses. Lol! The Bakken oil is already pumping out the best light oil and royalties like crazy for a fraction of the costs of the tar sands. So it is in Estevan! Big deal! The royalties the government takes in helps the entire province. I also seem to recall that the potash mines are close to the outskirts of Saskatoon. Potash? The price just went up this week to $1,000/ton, a new record and new mines are under construction. The warehouses, in fact, are empty, not full! I love how everyone then jumps up and down about oil dropping $10 a barrel. Hah! Last year it was about $70/bbl and now is almost $130. So it goes down to $90? Who cares? The Bakken oil is profitable at $80 or less and the companies are using economic assumptions of oil less than $100. I, frankly, have way more faith in the economy of your province than my province, BC.
May 1st, 2009 at 11:09 AM
Dan,
Sorry to break your heart. MLS is at 1487 today.
Jesse,
Maybe the better question is this. If Alberta is so rife with opportunity and Saskatchewan is such a hole, why are these guys continuing to live here, working for chicken scratch at the risk of being shot? I mean, c’mon! Let’s go west young men, let’s go west!
It’s kind of sad watching people who seem to have the answers to their own problems hang around and suffer. It’s like they’re incapable of helping themselves.
May 1st, 2009 at 11:10 AM
Norm,
I just think that there is more to the story than everything being peachy keene for everyone that’s all. I personally don’t know all the facts either even though i wish i did. So people pushing both sides of it really can’t say for certain (in fact at least) one way or the other including myself.
I’m a questioning person by nature, for example was out in alberta over the weekend and at a house where the one guy who has no education works at an eyeglass place as a manager of a retail store…yet afforded to buy a 350,000 place. Instead of thinking all ‘that’s great’ i wondered ‘how did he possibly afford that one when he can’t possibly make more than $20 an hour’…
I like hearing both sides but get annoyed when people tend to toss out thier insults as facts.
May 1st, 2009 at 11:12 AM
Jesse,
I’m not suggesting that everything is “peachy keene,” but Saskatchewan isn’t a loser province either.
I don’t have any problem with your questions. I do have a bit of a problem with the people who drop by to make irrelevant announcements in an effort to advance their own cause. Some of the worst kind of spinners that we have ever seen are showing up here lately. Absolutely nothing to contribute to the discussion except some “interesting links” that have nothing at all to do with real estate.
We’re not a bunch of idiots and it’s completely obvious that they are keenly interested in Saskatchewan or they’d already be gone.
I’m going to start cleaning up some of this BS propaganda.
and another thing!!
I don’t give a crap how many houses are advertised on saskhouses. Anyone that does give a crap is welcome to visit saskhouses to find out for themselves. I don’t need “Dan” dropping by daily with an update (sorry, not daily, but only on the days that they’re higher than the previous day). Man, they haven’t moved more than five units either way in about two weeks, but still, we get the announcements. Lol.
May 1st, 2009 at 11:14 AM
I feel for ya Norm,
Its getting harder and harder to come and read the forums with all of the same BS(i actually think its getting worse).I can t imagine how frustrating it is for you.Its pretty sad when people from other provinces are the ones that are standing up for saskatchewan.While the ones from here take pleasure in ripping it apart.Equally sad are the people that have posted on here everyday for the last 4-6 months with the same crappy attitude,get a life already.Maybe if you put as much effort in your job as you do posting the same comments over and over and links to “breaking news stories”you’d likely get a raise and could finally afford a house.Like Norm said why are you guys still here?If its such a terrible place to live,leave!Do us all a favour and take you s#$t attitudes with you.As for that 1000 person migration (from 1 province alone)in one quarter.(this isn t rocket science people!)in five years thats 20000.00 people from one province.thats huge.Last but not least I work for a large manufacturing company in the city(blue collar all the way and i can afford a 300k mortgage,sorry Westco not only pencil pushers can buy nice houses)we have already brought in close to 2 dozen workers in the last 2 years from everywhere.England,Scotland,Ukraine,Phillipines,Ireland,Bosnia,Iran,Kenya some leave but approx 75% stay and guess what.. most of them have bough houses their 1st year in Canada.Maybe you guys can spin this too,lets blame foreign miration on the housing boom! Then everyone will stop buying houses inventory will reach 3000, prices will drop 50% and you can all buy your dream homes.But wait…. then what are all you guys gonna do with your spare time?
May 1st, 2009 at 11:15 AM
Alright! Give em hell Norm!
I’m sticking to my gut feeling that the Saskatoon market is fine and will end the year with an approx $280k average price. I invite everyone to make their predictions and I’ll be here next year to eat crow or gloat, as the case may be.
May 1st, 2009 at 11:15 AM
Everyone here is full of answers so I have two questions to ask;
1) What do you want Saskatoon to be? Example: Are you looking for it to be like Edmonton, Calgary, Winnipeg or otherwise?
Me I would love for it to stay exactly the way it is. Small, friendly, clean, beautiful and a great place to build a family. I would never want it to become like Edmonton or Calgary, rude people, traffic and not exactly the greatest places to raise children.
2) What have recent events in the province brought to the city of Saskatoon in your eyes?
Positive: They have brought attention to the province and have brought people to the province. There is a Buzz up here (northern alberta) for Saskatchewan, many people i’ve talked to are very interested in the city and especially the province. It has brought money to the city and has aided in retaining quality individuals to stay and live in the province instead of leave. 90% of my graduating engineering class (2006) stayed in the province, professors were amazed at the amount of people that received employment in city/province and were especially amazed by the types of wages that were being offered to my class.
Negative: Affordability in the city has changed drastically in the last while. My parents both work for the department of social services in Saskatoon and they have mentioned to me numerous times of how the lower class of Saskatoon is really taking a beating. They are forced to live 2,3,4 families under one roof and that can’t be healthy for them health wise or emotionally wise.
Saskatoon is a wonderful city. If it wasn’t for money I would choose to live there over any other city in country. I’ve lived in Prince Albert, Toronto, Edmonton, Fort McMurray, Red Deer and Winnipeg and none of those places ever made me feel comfortable and happy the way that Saskatoon does………..
P.S. C.white it doesn’t matter what color your collar is in Canada everyone and anyone can makes lots of money. My brother is as blue collar as they come and he’s makes more money than me and has way more on the bank than im probably ever going to see.
May 1st, 2009 at 11:17 AM
Okay — what I’m doing here and why don’t I leave?
I’m a prof at the U of S, and I moved here 4 years ago to take this job. It’s a fabulous job, and good academic posts are hard to find: there’s about 30 positions in my field in Canada. So I’m happy to have it.
I can’t say I love where it is, but I love my career, spent a great deal of time and money getting the qualifications for it (two undergrad degrees, MA, PhD, postdoc) and am glad to be able to practice it. Saskatoon’s not my favorite place: the -40 weather I can live with, but the endless demands for loyalty oaths I could do without.
The problem for me and everyone like me that came from elsewhere is that I know what booming prosperity looks like, and Saskatoon doesn’t have it. And the sudden assertion by everyone and their dog that prices *should* be equal to those of centres ten times the size is disturbing, since it’s just not realistic. They can’t stay where they are — all bubbles correct — and thus won’t.
Even absent the lunatic runup of the last year, the track record of RE in this town is not a good one. I make $85,000 a year; I have about 4 grand a month after taxes and RSP deductions. I know that if I sign up to hand over 3 grand a month to buy Saskatoon real estate I might as well stack it up in a big pile and set fire to it — I’d wind up buying something I might be able to sell for a third of what I pay when I retire, and in the meantime have no money to leave, do research or see family and friends in other cities. Or, hell, buy a frinking car? Thanks, but I’ll wait.
I imagine that Crikey, who’s a doctor, feels about the same way. I make fine money, thanks, and ‘working harder at my job’ won’t get me a raise. But pouring most of it down a black hole is not an appealing prospect, particularly since I am, as I’ve made clear, convinced that RE will go down here as everywhere else.
And as for why I post here daily? I’m *writing* — procrastination is the staff of life.
May 1st, 2009 at 11:18 AM
Hi All,
I spent some time today looking at a variety of low cost index funds that have billions in equity. The main indexes I have looked at come from Ishares.ca and the strange part is that billions yes billions have been invested in Saskatchewan. Not just with Potash corp or Cameco but several oil sands projects near Axe Lake and also in the Bakkens. What does this mean for us you ask?
Simple the same advantages you have been head over heels for in Alberta will be here soon within 3-4 years mark my words. And also I have posted my story of how my family which is low income 45k can afford a mortgage of 230k. Anyone who questions is invited to go to ishares.ca and click on holdings on a variety of their funds.
May 1st, 2009 at 11:18 AM
Wesco,
If you have an undying love for Prince Albert which I think you do I invite you to take a 20 dollar bill and hold it out in your hand in front of Prince Albert’s Mall. As a man who visits P.A. regularly I will find it amusing to watching your robbery in your beloved city. And dont worry you wont have to wait long probably less than 5-10 minutes.
May 1st, 2009 at 11:18 AM
Wow I just realized som1 has made reference the infamous Garth Turner once again. Do me a favour and read his book he put out around 2000 he was preaching to take out your home equity and invest it into Tech stocks. Following his advice would have made you penniless and negative worth yet there is still some people willing to follow the advice of Canada’s village idiot. Sad part is he is now part of government which leads me to believe when you fail at life and at wealth you apply for the government.
May 1st, 2009 at 11:21 AM
jrochest,
Please know that my comment is not directed at you, Crikey, Jesse, Wesco or any other “bear” that makes intelligent comments. I hope that the exchanges you and I have had make it obvious that I value your contributions.
I am not threatened by anyone’s belief that a market correction is due and warranted. Those opinions are welcome.
All,
I will continue to use the delete button sparingly, but if the sole mission is to destroy don’t be surprised if the comment vanishes. This is my property. The front door is wide open to all who would like to step inside and share their point if view, but if you piss on my carpet while you’re here don’t be surprised if I ask you to leave.
I don’t think that I need to host a forum for some market spinner who just wants to drop by three times a week to say, “Saskatoon sucks.” There’s no value in that.
May 1st, 2009 at 11:23 AM
Armoth;
There aren’t a lot of places I would hold out a $20 bill and not expect to be robbed. How many7 places could you leave a bunch of chocolate chip cookies lying around unattended and not expect the same. I work with a guy from P.A. that would go back in a minute if he could get a job in his field.
I agree there will be a time when Saskatchewan’s prosperity will become apparent to all. For a few years the quality of life as it is there will be in balance; then all hell will break loose as the whole country sees an opportunity to make a buck.
Government is a perfect place for Garth Turner. At least we can ignore him.
May 1st, 2009 at 11:23 AM
Norm, I have a question for you. I know this isn’t your market.
Here in Calgary since about April the SFH listings on the Calgary Real Estate Board’s site have dropped from over 7,000 homes to below 6,500. That’s only good news because it’s a little better than terrible. The listings day to day are still fairly high; some days there are over 100(but seem to start low and build through the week). Sales are somewhat steady over a 30 period (1300-1400). But the total listings stay pretty much the same. With all the listing activity there is does that mean there are a lot of relists?
Possibly spec houses starting to reprice and relist?
Could this be our new stable market?
June sales were better than May which I hear is abnormal.But July’s will probably be down because no one does any thing during Stampede here.
May 1st, 2009 at 11:23 AM
Roger,
Thanks for the positive link sorry for being so mean =op I thought u were a diehard gloom and doomer but now I know i was wrong.
May 1st, 2009 at 11:24 AM
Ken,
Of course there are several ways that listings can leave the system and I expect that Calgary sees some of all of them. In a healthy real estate market 30-40% of listings will actually expire without a sale. These typically represent the sellers who are out of touch with the market and priced above other comparable homes. Then there are cancellations. People who have given up. As you suggest there is a lot of “cancel and re-list” action in Saskatoon and I suspect it’s probably the same where you are. Our system shows 46 new listing yesterday. There are also 17 cancellations, most of which are re-listed. They’re being counted twice as “new listings,” but of course, they only impact the “active listings” count once.
May 1st, 2009 at 11:24 AM
Norm,
I totally agree with you. Things that are frustrating on a board are the people that tend to throw out some kind of arrogance, insult, assumptious accusations of things they have no facts to back up besides their own thoughts.
I mean having thoughts is good, but to just have a thought to simply contradict a group of people whether it be for the benifit or the degradation of something without facts to back it up is just plain silly and gets peoples feathers whipped up in no time.
I’m with ya on deleting irrelevant postings, heck i don’t think anyone would blame you if you got to the point where you thought ‘hey, i’ve had enough of this’ and closed the commenting down.
Either way we all appreciate what you do for the Saskatoon (and Sask) RE sector with your site and blog.
May 1st, 2009 at 11:28 AM
Thanks Jesse,
I don’t think I would have as much desire to keep up with it if it was a comment free zone. Most of the good stuff comes through the comments section. Don’t want to go there.
May 1st, 2009 at 11:28 AM
Norm — I wasn’t responding to your exasperation, which I understand.
It’s the “Saskatoon, love it or leave it” crowd that’s yankin’ my chain. Seven months of winter is bad enough.
Armoth — Sadly for you, Turner’s right, RE’s a bubble. He’s not saying anything that Shiller and Thornberg and others haven’t said about the US market. I was reading his investment columns in the Toronto Star during the tech bubble, and he wasn’t suggesting that people buy tech stocks then. They’re all archived on the web, if you want to check.
He did suggest people buy RE back in 2001-2003, but that was good advice then, just as it’s bad advice now.
May 1st, 2009 at 11:29 AM
Well, since we’re all sharing…
I moved here a little over a year ago with my family from Vancouver, and frankly, we’re enjoying both the city of Saskatoon and the province far more than I would have thought we would. I do miss the ocean and the mountains, but am I willing to spend close to a million to buy an average house there? Absolutely not.
For it’s size, Saskatoon has everything we need, has many beautiful spots, and our financial standard of living has improved markedly since we moved here. I have found the people here incredibly friendly and helpful, to a large degree. I understand the city is less affordable than it once was, but I wasn’t here to experience that. That being said, I’m a firm believer that if you really don’t like something, stop doing it/living there. Life is too short to have huge regrets or to make yourself miserable. If you don’t like it where you are, by all means, leave.
Would I like to buy a home? Yes.
Can I “afford” to buy a home? Yes.
Do I think this is currently a good time to buy a home *FOR ME*? No. I hope it will be soon. Others are certainly not obligated to agree with me. Everyone’s circumstances are different.
I post here, largely because I feel many people do not put alot of thought or research into such a large purchase. This concerns me. Perhaps it shouldn’t, but there you go. I also believe that if you are buying a house for your family to live in (not property for renters to live in), it can be quite dangerous to think of housing as an investment. People should avoid thinking of it as one, IMO. If you are able to buy at the trough and sell at or near the peak, good for you. If you are able to do this, this is *probably* the result of luck, and not unusual genius on your part. If you’re buying your house as an investment vehicle, remember any thoughts about future appreciation are purely speculation. Leverage is great when it works in your favor, but it’s a killer on the way down. The economy may continue to “boom”, and maybe it won’t. Diversify- don’t put all your eggs in one basket, and all should work out.
I don’t think I’ll be posting here much anymore, as I’m finding it discouraging more than anything.
I would like to thank Norm for providing a forum on such matters, though, because it is important. I’m amazed that he’s as tolerant as he is.
jrochest,
Just to clarify, I work in the medical field, but I’m not a medical doctor. Sorry for any confusion.
May 1st, 2009 at 11:30 AM
Thanks Norm, I guess the point is we are still sitting with a huge inventory.
Your “out of touch homeowners” comment is interesting. After a run up like we’ve had it seems to take a lot for people to realize that regardless of what else is going on if your house hasn’t sold in a reasonable time frame it is probably priced too high. The market won’t absorb any of the reasons you think it’s worth where you’ve priced it.
May 1st, 2009 at 11:30 AM
Crikey,
Thanks for sharing your story.
“I don’t think I’ll be posting here much anymore, as I’m finding it discouraging more than anything.”
I am sorry to hear this. May I ask what you find “discouraging?”
May 1st, 2009 at 11:31 AM
Hello All,
I think an important factor that nobody seems to weigh is the federal political scene. If the Liberals get in with their ‘Green Shift’ it’ll be a cold wet blanket on our hot economy (remember NEP?). I personally give the Liberals a pretty decent chance of taking power next election – especially if it’s fought over the environment.
I think Saskatchewan is doing great right now and I’m glad (even though I missed the housing boat due to being in university). But there’s too much uncertainty and turmoil in the global economy for me to wear rose-coloured glasses.
Also, I’ve taken too many economics classes to completely discount the fundamentals of supply and demand (as some bulls have done). Crikey’s graph speaks volumes, IMO. I think there’s a housing bubble; and I’m certainly not alone.
I’m just starting out; but I make decent coin. If I can only aim for the very bottom rung of the housing ladder, then something is fundamentally wrong. I believe supply and demand are reflecting this anomaly. Economics is 80% psychological; just because you think a wartime shack in a questionable neighbourhood is worth 200K+ doesn’t make it so.
Best of luck all.
May 1st, 2009 at 11:32 AM
jrochest what part of the ‘boom’ don’t you see?
Is it the influx of people. Leading the country.
http://www.gov.sk.ca/news?newsId=8253064d-1f24-4a2a-b5de-31b872910d80
Or that Saskatchewan GDP growth is leading most of the country. Only NFLD has stronger growth. It is projected to lead until well into 2009.
http://money.canoe.ca/News/Economy/2008/05/15/5573661-cp.html
‘Saskatchewan’s GDP per capita was 10 per cent higher than the Canadian average last year, and that advantage could grow to 25 per cent by 2010.’
http://www.cbc.ca/canada/saskatchewan/story/2008/06/05/bank-report-economy.html
Or the plethora of Jobs. Unemployment is low; 3.4% in June. Welfare payments in the province are down by almost 1/3. Every professional organisation I talk to is looking for people; mine included. Trades may have led the edge of this boom, but it is being felt all over.
Saskatchewan wages and salaries are growing faster then any other province.
http://www.canada.com/saskatoonstarphoenix/news/story.html?id=af024171-bcba-4223-9c8e-25780bf4e614&k=90487
People that don’t want the boom, sell you homes and leave. You won’t get a much better deal then now and you won’t be missed.
For 40 years Saskatchewan watched its children leave. With this history it is absolutely disgusting to read how some people are hoping projects fail. You people don’t get it.
I travel all over Canada and we have it very good in Saskatoon. Our quality of life is excellent, our commute is non existent, and our houses are affordable (even now).
The only things that Saskatoon does not have is good airport service, IKEA, and an IMAX. Airport service being the only important issue which appears to be [slowly] changing.
‘RBC’s Affordability measure for a detached bungalow for Canada’s largest cities is as follows: Vancouver 68 percent, Calgary 40 percent, Toronto 43 percent, Montreal 35.4 percent and Ottawa 30.5 percent.’
Saskatoon’s was 33 per cent in June 2007. It is still well under 40 percent.
Don’t let the facts get in the way of all the pessimistic rhetoric. Much of the comments on this board would be comical if it wasn’t so disgusting.
Saskatoon is not going to see year over year increases in its housing market like we just saw. We had a correction from years of undervalued property.
Outside condos which are IMO overpriced compared to homes we will also not see a large reduction. Even in condos the correction is likely not much more then 10%. There is no crash on the horizon. The sky isn’t falling.
I sure as heck don’t want to see or hear any loyalty speeches, but a little perspective is in order!
May 1st, 2009 at 11:34 AM
Well, here I go posting again…
What do I find discouraging?
Although this blog incites alot of rational, respectful debate, I find the following “issues” quite discouraging, and they have been happening more often of late:
-Personal “ad hominem” attacks (attacking the person, not dicussing their ideas)
-Off-subject remarks made only to be provocative (trolling)
-Insulting, slanderous, obscene or offensive remarks
-Using the blog for propaganda, solicitation, or political purposes
-Lack of respect for another blogger, the administrator/moderator (namely, Norm).
I think the main issue of late is lack of respect: everyone is entitled to his or her opinion and no one is perfect. Do not post something that you would not like to have directed at you. I think this is pretty basic.
May 1st, 2009 at 11:34 AM
Guy in Regina, you are dead on that green shift would be very detrimental to our economy.
The odds of the Liberals forming a minority government are close to even, but the odds on a majority are slim to none. It is tough to say what a minority Liberal government could accomplish.
If the housing inventory continues to increase all year you’ll see your ‘bubble’ burst. In particular the buyable housing inventory needs to increase; there is a LOT of crap on the market. It isn’t likely. The province’s economic fundamentals don’t support it. Unless something like NEP2 occurs at worst it’ll be a soft landing.
May 1st, 2009 at 11:34 AM
Before I evaporate into lurking again.
Norm. Thanks for the blog.
Information is power…
May 1st, 2009 at 11:35 AM
@Ryan,
A little perspective,
Yes, SK is leading the country on a number of economic indicators; but don’t forget that much of the country is in a defacto recession, plus, SK was long over due for some growth.
So, Saskatoon is reasonably affordable compared to Vancouver, and Toronto eh? Well that’s comforting
Comparing these cities to Saskatoon is less than appropriate. Moreover, I find it disconcerting that housing in Saskatoon is less affordable than in Ottawa and probably Montreal as well.
But don’t let the facts get in your way
I think that property in SK was undervalued; but also that property elsewhere, Vancouver for example, is, and has been, over valued.
May 1st, 2009 at 11:35 AM
Ryan,
I read your comment and it made me look at the RBC affordability study ( its been awhile)
Until they come out with another affordability study we won’t know the exact numbers but it looks like Saskatoon has edged over the 40 percent mark this spring.
Currently there are only Vancouver, Victoria, Toronto over the 40 mark. Even Calgary has slipped under this number.
for anybody interested, here is the link. It shows up to the last quarter of 07.
http://www.rbc.com/economics/market/pdf/house.pdf
May 1st, 2009 at 11:35 AM
Read the first paragragh in this study.
http://www.rbc.com/economics/market/pdf/house.pdf
“Nationwide housing affordability deteriorated in every consecutive quarterthroughout 2007 to end up at its most unaffordable level since the housing bubble
peaked in 1990. Back then, soaring interest rates and a recession sparked much of the trouble. Today, however, a long upward trend in house prices driven by
sounder macroeconomic fundamentals like job growth is primarily responsible.Adding more fuel to this housing cycle is mortgage product innovation that has
expanded the market to more potential buyers since mortgage insurance liberalization began two years ago.”
The reason for the last housing bubble = soaring interest rates and a recession.
Today inflation is climbing, so will interest rates and we are on verge of a recession or close to it. (Not in the West, so far.)
And mortgage product innovation adding more fuel to this housing cycle? Do they mean the 0 down, 40 year and other mortgage products that will be no more after Oct. 15?
May 1st, 2009 at 11:36 AM
Crikey: Sorry about the slip — although I think I knew that already. Did your family move to Saskatoon because you could afford a house here? I think that’s been a big draw for many people.
My co-workers are also wonderful people, and this is a lovely, family-friendly town if you’ve got small kids. I don’t, though, and small town life is isolating: month after month of evenings spent with no-one but the dog gets old.
Ryan — Things are better than they have been, which is great. But “equal to Newfoundland” is not the same thing as leading the nation. Saskatoon lacks a good deal more than an IKEA and an IMAX.
What I’ve pointed out, consistently, is that people who call this a ‘boom’ are confusing a return to positive numbers with ‘explosive growth’. Saskatchewan now has the same population that it had in the 70′s, because people are moving “Guy in Regina”‘s point is sound: the east, which has all the manufacturing & export jobs, is in a major turndown, thanks to the dollar. High commodity prices are nice, but the residents and administration of this province have no control over these prices — global markets do.
If the resources of the province are the main source of revenue, why have they not been exploited over the past 80 years?
And most importantly — this is a real estate blog: we’re talking about housing prices. There’s something of an inventory problem, in case you haven’t noticed. Rising housing prices rarely *lead* booms. They usually follow them.
May 1st, 2009 at 11:36 AM
“Saskatchewan now has the same population that it had in the 70′s, because people are moving “…back from Alberta for cheaper housing, is what I meant to say.
Proofread! Proofread!
May 1st, 2009 at 11:36 AM
George the report you posted from RBC puts Saskatchewan right on the national average in March (during our peak housing shortage). 3% above Manitoba and Ontario. Right with Alberta.
Seems dead on to me. Unless jobs are scarce affordability should be similar; it is. We are at or near where we should be. We are not a ridiculously expensive market.
Of course we are definately not the bargin we used to be. If you want your kids to be able to have a job that is the price to be paid.
Guy in Regina, Saskatchewan’s indicators are strong in every area. A [near] recession in Ontario doesn’t mean nearly double digit growth isn’t a boom in here.
The RBC affordability study is not a direct comparison of property values, hence the name. The affordability study is precisely the way to look at and compare values in other markets.
Looking at actual costs of properties would not be. It also was not done…
With in the last 10 years Ottawa has been a great place from an affordability perspective. Can’t comment on Montreal.
May 1st, 2009 at 11:37 AM
jrochest, Saskatchewan’s growth is near Nfld’s. The rest of the indicators are much better.
Case in point unemployment; 3.4 vs 13%.
A boom is rapid economic expansion. 7% growth in GDP is precisely that. The reason for an economic boom is immaterial (re high commodity prices).
One can certainly argue on the longevity of this boom. To successfully argue that Saskatchewan is not currently in a boom would require a redefinition.
On population. People are moving back because there are JOBS and quality of life is better. re: no commute. Housing was ALWAYS cheaper… Still is, if much closer now. What changed? Job availability.
You are right about supply and demand with the housing. Prices have softened as supply increased. They’ll continue to do so if supply continues to increase. A bursting of the bubble will require demand to effectively disappear. re: Arizona
A softening does not equal a housing bubble burst. Perhaps hyperbole is the word of the day, but a bursting market results in prices halving (or worse). We WON’T see that. At least not unless are economy does something really unexpected and follows Windsor’s.
In the last 6 months demand hasn’t changed much. The big issue has been huge numbers of houses listed. I don’t see this continuing. If it does, then as above prices will soften further. Time will tell.
Enough banter from me. I have a BOOM to keep up!
May 1st, 2009 at 11:39 AM
I think of myself as a realist. It is my earnest belief that the fundamentals of the Saskatchewan economy simply do not support housing prices in Saskatoon at their current level.
If the fundamentals of the Saskatachewan economy rest on coal and oil, then we could be in an even bigger pickle than I anticipate. When T. Boone Pickens wants out of the oil business, the game is done.
http://en.wikipedia.org/wiki/T._Boone_Pickens
Exactly two provinces fail to realize this. In one the highlight of the cultural season is when drunken Hillbillies race wagons around an track and then euthanize the animals en masse. The other is sadly us. We are currently run by a political party whose desire is that we be more like the other province. We should be embracing any shift away from fossil fuel dependancy. Oil sands, coal fields etc. will just lead to a bigger crash a little bit further down the road.
Couple this fact with a glut of houses on an over priced (by any reasonable measure) market, increasing interest rates, tightening credit,and you have a recipe for a major price sag.
May 1st, 2009 at 11:39 AM
Ryan,
…and don’t forget retail spending.
“For the 11th straight month, Saskatchewan led all provinces in yearly retail sales growth, according to Statistics Canada’s report for May, which was released on Tuesday.”
http://tinyurl.com/67bo9h
If you own a retail outfit or a restaurant in Saskatchewan you are probably enjoying the best of times that we’ve seen here in a long, long while.
Crikey,
I thought that some of those things had improved in recent weeks. I will be watching the comments carefully. I’d ask people to try not to respond to that kind of crap. It makes it easier to edit the thread if people just let it pass. Hope we’ll continue to enjoy your insights.
George,
On the bright side, affordability is very likely to start improving now. I predict several quarters of consecutive improvement.
jrochest,
“If the resources of the province are the main source of revenue, why have they not been exploited over the past 80 years?”
One guess.
Sam,
“When T. Boone Pickens wants out of the oil business, the game is done.”
Oil and coal will continue to be important for the next thirty years even if we start to get smart about an energy policy tomorrow. That’s why we should pump it like crazy while it’s still worth something. In the long-term, demand for potash and uranium should increase.
May 1st, 2009 at 11:40 AM
Crikey,
There are definitely some people on here that try hard to provoke. I’ve (finally) learned to ignore them and just to converse with those who are actually interested in debate rather than games. I understand your frustration but if you refrain from blogging I’ll really miss reading some of the best thought-out posts on here! :’O
Besides, you just arrived. Take off your coat and stay awhile. ;’)
May 1st, 2009 at 11:41 AM
Norm,
“On the bright side, affordability is very likely to start improving now. I predict several quarters of consecutive improvement.”
I agree as well
Affordability is related to 3 factors, income, interest rates and housing prices
1.Wages are and will continue to increase, this is a plus for everybody. We have experienced the best growth is wages over the last year. The labor shortage is a good thing, it forces businesses to pay more to their employees.
2. Interest rates will unfortunately increase with higher inflation creeping in. How high they go, who knows.
3. So in order for affordability to improve that means housing prices will have to come down. This will be good for people who were priced out or immigrants.
May 1st, 2009 at 11:42 AM
Sam, if you read closely what T. Boone Pickens says which I’ve done, his view is extremely bullish for oil. Pickens thinks that oil is going to $300/bbl. That’s why he feels we need to invest in wind power if we are to maintain our present standard of living. He thinks we’ve reached the “peak” in oil production and it won’t be able to keep up with demand. Again, extremely bullish for Saskatchewan in the short and long run. The Saskatchewan oil sands and even Bakken have long, long lives ahead unlike the aging fields in Mexico, for example, which are in persistent productions decline. Boone Pickens also thinks the world needs to ramp nuclear power production which again is very bullish for Saskatchewan given that the province has 1/3 of the world’s uranium production. And that brings us to the so-called “Green Shift”. If Dion wins and implements his evironmental policies (which is a big “if”), there will be a huge demand for uranium as let’s face it, the only way to increase energy production without greenhouse gases is to ramp up primarily, nuclear and second, wind. Biofuels will likely see growth if we implement greenhouse gas targets as envisioned by Dion. Again, Saskatchewan will do just fine in that scenario with agriculture, fertilizer and uranium. The Saskatchewan boom is still relatively young which is why it has a while to go and that means steadily rising real estate prices over the next 2-5 years.
Now in BC, our boom is getting quite stale and is very long in the tooth after a decade of high growth. Our forest industry is in the tank and tourism is slowing up in a big way with the rising US dollar. Everything is way too expensive and much of the boom here is sustained by government megaprojects such as our billion dollar white elephant convention centre and our multi billion dollar freeway through the rocks to a ski resort for the famous. Our government is really hitting us with rising fees for everything (electricity, ferries, carbon tax etc.) and housing prices are out of this world. Only natural gas and some metal mining is really going strong. There is even talk here that the NDP will be coming back: our “free enterprise” , “liberal” but increasingly corrupt government is starting to rot in a big way with a new, outrageous scandal every week – which won’t encourage new investment here. In Saskatchewan, the NDP just left and things are off to a relatively fresh start.
I am an investor in Saskatoon property but I’m not flipping it as most people would assume out of province investors are doing. I’m holding steady for the long term and am happy to collect my rents in a good, solid economy. In BC, I’m reducing my real estate exposure a bit as I think the best days are behind us over here. So, please be happy to be in Saskatoon as there is a very bright future ahead for you!
May 1st, 2009 at 11:42 AM
Ron,
good post. I do not believe in the peak oil theory for our times right now. It seems everyday there is another oil find somewhere in the world. What I do believe in is in peak cheap oil. Which is probably right now.
It would be interesting to know what the costs are get a barrel of oil out of the ground on average. 15-20 bucks? I have no clue. But I know it isn’t close to 130 bucks a barrel.
May 1st, 2009 at 11:42 AM
Norm,
“For the 11th straight month, Saskatchewan led all provinces in yearly retail sales growth, according to Statistics Canada’s report for May, which was released on Tuesday.”
If I may, I wouldn’t necessarily argue that this is a good thing in all circumstances. Spending money you HAVE is a great stimulus for the economy, but spending money that you’re putting on an overmaxed credit card or draining from a home equity line of credit may come back to bite you in the butt. So to speak.
What did you mean when you said, “we should pump it like crazy while it’s still worth something”? I would think it would only be worth more as demand increases and/or supply decreases. And if supply is decreasing, might it not be best to conserve it a bit and/or reduce our consumption?
I’ve gotta say, potash looks good both short and long, and uranium looks good long-term as well. A nuclear power plant can take 10 years to bring on-line.
I’ve always thought that solar and wind power could be huge in this province, too- we seem to have an almost unlimited supply of both!
Heather D.,
Thanks.
May 1st, 2009 at 11:42 AM
Sam, as Ron explained T. Boone Pickens is bullish on oil prices. Since the US imports 70% of their oil he believes they need to switch to another source which doesn’t pour money into other countries. re: the greatest wealth distribution event in history
[leaving US shores]
Cliff notes, he is sick of sending US dollars to Saudi Arabia and Canada.
Crikey, wind and solar should definitely be part of Saskatchewan’s energy policy. Along with clean coal/co2 sequestration and compressed air energy storage (for variable sources like wind and solar). Nuclear depends on economies of scale so I’m not sure it is a good idea or not. We’ll see what Bruce Power’s feasibility study says.
May 1st, 2009 at 11:44 AM
Norm I think you mean 135, 235 or 335 for “310 Stillwater Drive, Suite 435″
It’s a 3 story building, both in your picture, and from experience.
Touche on admitting now worth 180′s, I had seen these listed at 210 a few months ago (at peak)
–
And I agree with Crikey, spending is good, but only if you can afford it. Wages aren’t up nearly that much, so it means Saskatoonians are spending more than they used to, maybe because they don’t realize their house value is going to actually go down a bit in the next few months.
May 1st, 2009 at 11:45 AM
“The Saskatchewan boom is still relatively young which is why it has a while to go and that means steadily rising real estate prices over the next 2-5 years.”
I assume this prediction is based on thinking that neither takes into account local housing market conditions, the international real estate melt down, the current banking crisis, the current recession in Canada and the United States, peak oil, as well as increasing interest and mortgage rates, but rather relies on the fact that a “hot” local economy will somehow sustain and apparently increase house prices in Saskatoon only, while the rest of North America circles the drain.
To my mind this is wishful thinking. But I suppose it is somehow conceivable that you may be right. However, I respectfully decline the invitation to join your hallucination.
“Probability is Everything” – Seneca
May 1st, 2009 at 11:45 AM
Roger,
The price of extracting 1 barrel of bitumen and processing it is $40 per barrel hence the reason Im investing in the oil sands and why the oil sands are good for everyone in Saskatchewan.
May 1st, 2009 at 11:45 AM
Sam Johnson,
Are you trying to say Fort Mac doesnt exist? Cause what u said is not going to happen is happening there year over year over year.
May 1st, 2009 at 11:46 AM
Crikey,
“If I may, I wouldn’t necessarily argue that this is a good thing in all circumstances. Spending money you HAVE is a great stimulus for the economy, but spending money that you’re putting on an overmaxed credit card or draining from a home equity line of credit may come back to bite you in the butt. So to speak.
”
I agree with you there and I think that there is a lot of “home equity” being dumped in the retail market. Spoke with a broker yesterday who said she was “swamped with re-fi app.” Yay! I just got a letter from my lender encouraging me to “take control of my hard earned equity” (apparently they haven’t heard that it actually fell into my lap) with a home equity loan. Even offered my a 40 year amortization.
“What did you mean when you said, “we should pump it like crazy while it’s still worth something”?”
Hopefully there will be a serious movement towards cleaner alternative fuels but even if we start today it will take a long time to get production to a point where it can meet the world’s energy demands. With any luck demand for oil will drop over time.
Jim,
4 identifies the building, 3 identifies the floor, and 5 identifies the unit.
There is one 2-bedroom listed there now for $205,000.
May 1st, 2009 at 11:46 AM
Crikey & Norm:
Oh, man, that’s good news for retail and bad news for everyone else. HELOCS are the ‘payday loan’ of home credit. There’s just way, way too much trouble people can get into; I think that a substantial proportion of the people who are losing their homes in the US got into trouble with refinancing, not first mortgages.
So dangerous. A long-term problem as a solution to a short-term problem.
And of course your home equity is ‘hard earned’, Norm! Your house worked really, really hard for it!
May 1st, 2009 at 11:47 AM
Jrochest,
Why do u feel the need to cut down every positive that is published in Saskatchewan? I bet you noone could post something positive without you finding some negative to it. If we found a new gold deposit im sure you would say its not enough if we found 1 billion barrels of oil just outside Saskatoon im sure you would say why cant it be 2 billion. I think you need to eat some chocolate and drink some good wine and enjoy some of the great things Saskatoon has to offer.
May 1st, 2009 at 11:48 AM
Armoth,
His point has nothing to do with Saskatoon. It’s just a fact that people will get themselves into trouble by borrowing against their home. Think about all the “re-fi” commercials you’ve seen on U.S. networks over the last couple of years. I’m sure there will be more foreclosures that result from borrowing against a home than from buying at the wrong time.
That said, healthy levels of retail spending is a positive sign. Like I said, many small business people benefit from it.
May 1st, 2009 at 11:49 AM
I know this is a real estate blog; just ‘bear’ with me please.
Dion hinted at a fall election:
http://www.theglobeandmail.com/servlet/story/RTGAM.20080723.wdion0723/BNStory/National/home?cid=al_gam_mostemail
He’s taken some pretty serious flak for threatning to force an election then chickening out. If he keeps up the sabre rattling he’ll have no choice but to go in the fall. If there’s an election the Liberals will do their best to run it on their ‘green shift’ plan.
Let’s say the Liberals get a minority; they’ll implement green shift and dare Harper to force another election over it. Harper will likely have no choice but to allow the Liberals’ to implement their election platform for a while – just as the Liberals had to bow to the Cons after the last election.
Well, what are the chances of a Liberal minority? I’ll agree with Ryan and say 50/50.
POINT?
I’m not buying until I see what happens this fall.
This is all speculation, of course. But I think the potential impact on RE makes speculating worth while.
May 1st, 2009 at 11:49 AM
Armoth: What Norm said. There’s nothing positive about debt.
People spending is only positive when they have something to spend; otherwise it’s exactly like taking out a payday loan, and has exactly the same effect on a family’s finances.
May 1st, 2009 at 11:50 AM
guy in regina said:
“Also, I’ve taken too many economics classes to completely discount the fundamentals of supply and demand (as some bulls have done).”
I guess that’s directed at me and my ilk… why do bears think they are the only who can read stats? Anywhoo, I don’t get excited/panicky over the daily headlines like some people do (in fact I would recommend turning off the TV and to stop reading the news for awhile, it does wonders for your peace of mind – all the bad news will still be there when you turn it back on) … I’m rowing a boat to China here, so to speak – this is a LONG term plan I’m involved in. It’s really the only way to think about RE.
May 1st, 2009 at 11:50 AM
Touche, My bad Norm
and
Armoth, I don’t think a big increase in spending, when wage increases were much less, are a good thing. Just means people are spending beyond their means. Is a measure of consumer confidence, but maybe our consumers are over-confident?
May 1st, 2009 at 11:50 AM
Jrochest and Norm,
When I refinanced it wasnt so I could spend loads of money it was to fix up my home and invest in the stock market using low cost index funds. Im not sure there is alot of people like me but I think that was a good use of home equity.
p.s.
Yes I did make alot of money!
May 1st, 2009 at 11:51 AM
Armoth,
I don’t think anyone was talking about you, but you have brought forward a couple of pretty legitimate reasons to do a re-fi. Borrowing to “fix up” a home is a good idea if the only other realistic option is letting the home deteriorate. Leveraged investing can also be a good choice but it certainly isn’t without its risks. It has obviously worked out well for you.
Payment of consumer debt can also be a good reason, but too many people get in this vicious cycle of accumulating consumer debt, to a point where it gets unmanageable. Then they go and re-finance their house to pay it off. They start fresh with a handful of zero balance credit cards and start the process over again. Re-financing to pay off debt can be a good idea, provided a person doesn’t fool themselves into believing that they can now afford more stuff.
I’m sure everyone recognizes that this is an individual choice. Unfortunately, it does open the door for far more financial woes, especially if a real estate market takes a correction. It’s just another way that people can find themselves in a negative equity position making it difficult to sell if they have to.
I would just say that people who are re-financing should try to avoid mortgages greater then 75% of value. Also, be very skeptical of the appraisal on a refinance. I’ve seen some that are easily 15% higher than actual market. Banks will bend over backwards to lend us far too much money.
May 1st, 2009 at 11:51 AM
Norm,
Sorry I thought u guys were talking about me as I think the world actaully revolves around me. I guess I was wrong that time and I have another question there was a house listed on Whelan that sold on my block did it sell for the 299k asking price?
May 1st, 2009 at 11:51 AM
Ahhh Fort McMurray, the rallying cry of the damned!
Yes I suppose that the real estate situation in that situation should give me pause to consider my economics.
My understanding is that the situation may be different in that burg as the issue there is with capacity. They are in exactly the reverse situation as Saskatoon. A market scarcity helped force prices up. The old bugbear of supply and demand. As well the Fort McMurray happened when peak housing idiocy was happening North America wide. I have no idea what the current housing market is there atm.
As well I continue to maintain that something very significant on a global economic basis is underway presently. A convergence of significant issues. And it is not a good thing.
May 1st, 2009 at 11:52 AM
Armoth — if you’re curious about the current value of your house, an appraisal by an independent appraiser (an AAIC) costs a couple of hundred bucks.
It’s worth it, if you want a completely disinterested professional opinion.
This is different from a sales estimate by a realtor, who’s usually telling you what they think they would be able to sell your house for.
May 1st, 2009 at 11:52 AM
So in today’s Star Phoenix, potentially part of the reason Saskatoon’s housing inventory is up to 1,500 homes for sale (on MLS alone)
“City population sinks
Estimate shows decline of 2,000 people since Jan. 2007
”
http://www.canada.com/saskatoonstarphoenix/story.html?id=4c0536a2-24b0-40d6-9cc7-e87c286159a9
Sure there are more cars on the streets, but like consumer spending, just means over confident Saskatoonians are out and about, because they THINK their house value will support their elaborate spending!
May 1st, 2009 at 11:52 AM
I saw that population article and it shocked me!
Does this jive with what you’ve been seeing in RE Norm? Are the bedroom communities booming while the city loses people?
Perhaps people with money have moved to Saskatoon; but more people have left because they can’t afford rent? Net effect = 2,000 less people.
Who knows.
interesting though.
May 1st, 2009 at 11:53 AM
I bet they cashed out at the peak, and bought retirement property in BC (Vernon is actually cheaper than Saskatoon!) or moved to a better job, but similar (we can agree on a vague “similar” right) priced place in Edmonton.
And I bet less grads stayed here, since no longer cheaper to live.
May 1st, 2009 at 11:53 AM
You guys are quick: I came here to cut and paste this, and lo & behold.
My take on it was exactly the same as guy_in_regina: this is a loss of tenants. And younger people, who are leaving the city, while those closer to retirement age are moving here.
Younger folks have less money: perhaps they’re more likely to move to Warman, but they’re also more likely to move away outright.
May 1st, 2009 at 11:53 AM
According to these figures, Dan, it’s not retirees who are leaving, it’s people between 33 and 44.
May 1st, 2009 at 11:53 AM
I love how at the end of the article it suggest that we just disregard the numbers, and instead trust our “gut feeling” that the city is growing. From my own experience, I am not the least bit surprised about the numbers. With rents and cost of living sky rocketing, combined with relatively stagnant income growth for those not involved directly with the natural resource sector, the last of the folk in my circle of peers who remained in Saskatchewan have now moved on to Calgary where rent is cheaper and there is far more opportunity than here in Saskatoon.
Maybe I’m just bitter though, recieving yet another rent increase on my lease renewal forms informing that my rent is going up another $120 come November to reflect the new market conditions. One thing that is a sure thing, besides death and taxes of course, is that if one chooses to live in Saskatoon you can be rest assured of sizeable rent increases every three months on the nose. This strikes me as almost criminal. I have to wonder if rental properties become more abundant and there is less of a squeeze for units, would the cost of rent will ever drop down again to sane levels? It just strikes me as odd that checking out companies such as Boardwalk and Realstar that rental units are much cheaper in centers such as Calgary and Edmonton than they are here in Saskatoon.
May 1st, 2009 at 11:54 AM
Jason,
I hear you brother. I’m getting another 100 dollar increase in October to ‘reflect market rent’ as well. I assume as October approaches there will be yet another one in January.
I also checked boardwalk recently to find that they had raised thier rents here as well…and yeah it’s cheaper to rent in vancouver, calgary, victoria, pretty much any other area of the country (except fort mac). It seems criminal beucase i’ve seen how people come up with thier rent increases….oh joe? he’s getting 300 more a month than me?!?! oh hey i’m gonna raise mine too! voila = market value.
May 1st, 2009 at 11:54 AM
I love how in Saskatoon we trust our “gut” everytime:
population is down by 2,000 people,
GDP/economic growth is slowest in Western Canada,
Saskatoon leads Canada in violent crime, 2006 and 07,
housing inventory is way up, week after week,
It seems busier? Maybe, like the increase in spending, because everyone is so hyped about the “boom” and their houses infinite value, that they are just driving around and buying stuff? The opposite of the USA, where as soon as recession fears hit, Starbucks took a huge drop in sales. Positive expectations = more luxury items, travel, driving around, new/fancy clothes. Even though population was actually falling the entire time.
Maybe this drop of 2,000 people in the population is indicative of young grads moving elsewhere, to make more, often with cheaper rent,
or
retirees, cashing out the family home near the peak, retiring to now cheaper Vernon BC! or Abbotsford, or now not so much more Victoria.
I think the Star Phoenix article is a wake up call to a lot of Saskatoonians who just ignored the big increase in houses for sale. These sellers had to be moving some where! Abbotsford, where a nice town house is $200 v. $250 – 300 for similar in colder Saskatoon? Florida, with nice condos for under $100?! Like that will stay that low for long! I just wish I was old enough to retire.
Like I always say, Saskatchewan has potential, has for the last 100 years, but 2,000 people leaving Saskatoon since January 2007 shows that CURRENTLY Saskatoon’s cost is greater than its reward!
May 1st, 2009 at 11:55 AM
Young people, especially young professionals in their early 30′s moving to Alberta for better pay and cheaper rent/housing, while they are still mobile is a good idea too.
May 1st, 2009 at 11:55 AM
What, no bulls?
I thought there’d be posts about how us bears are all doom and gloom and how the excess inventory will deal with itself in short order because Saskatoon is growing so quickly and is still ‘relatively affordable!’ Saskatchewan is, after all, ‘leading the country.’
Two words: housing bubble.
May 1st, 2009 at 11:56 AM
guy_in_regina,
I would also say that I was “shocked” to read that headline. If you’d have put ten statements about Saskatoon on a true and false quiz yesterday, “Saskatoon’s population has dropped by 2,000 since 2007″ would have been on of the gimmes.
I would love to see some pop stats from the bedroom communities, as I have to say that it definitely feels like there are more people on our roads. Perhaps their checking out at the end of the day. But then, the closer communities also seem to be extremely high priced.
May 1st, 2009 at 11:56 AM
Either that or more kids living with parents have cars. It also sounds like everyone is really ‘guestimating’; the people in TO have no reason to round up. The city does, of course.
And don’t worry, the bulls will be here in 5…4…3…2…
May 1st, 2009 at 11:56 AM
“I also checked boardwalk recently to find that they had raised thier rents here as well…and yeah it’s cheaper to rent in vancouver, calgary, victoria, pretty much any other area of the country (except fort mac). It seems criminal beucase i’ve seen how people come up with thier rent increases….oh joe? he’s getting 300 more a month than me?!?! oh hey i’m gonna raise mine too! voila = market value”
I’m very intrigued about how you got this information. There was an article about two months ago about how Calgary has the highest rent in the country and then Vancouver. Does it cost 1000/mth to rent a bachelor pad in Saskatoon or 900/mth for a 2 bedroom basement suite in the hood (not including utilities)?
May 1st, 2009 at 11:56 AM
I guess the rent vs a mortgage arguement is out the window. Since I bought my house there have been no rent increases and their wont be for another 5 years =’(
May 1st, 2009 at 11:57 AM
Vinny,
Check on bwalk.com. See the thing with articles is, they may not nessessarily have all information considered. I just know from what i’ve seen and found. Not just on bwalk.com but other sites as well, as well as friends i have living in vancouver, clagary etc.
May 1st, 2009 at 11:57 AM
Well Armoth how long ago did you buy your house?
If you bought it more than a year ago, good for you, but NOW buying is actually more expensive than renting, ie you will have trouble covering the mortgage with rent. Yes, we all should have bought houses 5 years ago, but we didn’t, so too late for that as an option.
If recently, you probably won’t be able to sell it for more (or the same?) as what you bought it for.
I actually think rent will get cheaper over the coming years, as all those condos that aren’t selling are rented out instead.
If one half (Norm’s number from a while back) of the available properties are vacant, 1/2 of 1500 = 750 VACANT places, just sitting out there, available for rent, if the sellers refuse to reduce their prices enough to actually have a chance at selling them.
May 1st, 2009 at 11:57 AM
My husband and I are moving to Saskatoon from Vancouver at the start of Aug. We have decided to keep our Vancouver property and rent in Saskatoon for a bit until the market settles. For the record, the two houses that we are very interested in purchasing in Saskatoon have both dropped their prices and have been on the market for about 3 months. So a 10,000 price drop and then closing deals coming in at under approx. 7-10,000 of asking – sounds like a bit of a correction to me. That said, we are going to “wait and see what happens”….
The reason for my post is in connection to the comments about rent in Saskatoon. We looked high and low for a “decent” place to rent in Saskatoon. We saw a A LOT of dumps, dark crummy basements suites, and some over priced new vacant condos. In my opinion, the rent in Saskatoon is higher than in many parts of Vancouver (not all parts) because the landlords do not include anything with the rent – the main thing being heating. Aside from a 35.00 per month power bill, most apartments in Vancouver include, heat, hot water, parking, gas, garbadge removal and in some cases cable. Boardwalk which owns a number of properties in Sask. is asking insane prices for the quality of property that you get. Plus, you need to pay for all of the utilities.
During our search, one landlord actually wanted us to pay the strata fee on top of the 1,100 per month for a one bedroom condo. Give me a break. I know for a fact that you can rent an apartment for a very similar price 3 blocks from the beach on the west side of Vancouver.
Finally, perhaps the saddest thing about our rental experience, was that we took a suite in a building downtown (1 bedroom) that is about 1050 per month not including parking. The building has been raising prices to match “market value” and seniors are being forced out of their homes. True they don’t own them, but a rental increase every 3 months of over 100$ per time is devastating to people who are on fixed incomes. As the property manage told us, they have been living in prime real estate at far below market value for way to long. I can’t help wonder where these people will go – dark crummy over priced basement suites perhaps.
Thanks to Norm for providing this site. I have been one of the many people visiting weekly for some time. The nature of the market in Saskatoon is one is which the buyer needs to be informed and you provide readers with some great resources.
May 1st, 2009 at 11:58 AM
Moving to Saskatoon,
That is exactly how it is and i’m glad someone from vancouver says it like it is. Last July i was searching for an apartment, the existing ones in the city were just garbage. I wanted a 1 bedroom place, in a decent area. I stumbled upon one in a nice area that was like a diamond in the rough compared to the other junkheaps…ones by the river, with holes in the walls, rent at that time for those were 800 for a 2 bedroom, or 750 for a 1…i found my place for 530 and moved in happily. Fast foreward to now, my rent is at 750, 850 in october for my 1960′s apartment. Market rent is what they claim. But again if everyone is upping their rents, hey then it’s market value. Every 3 months you get hit…maybe not with the small fry’s that own an apartment building but the bigger companies? oh yeah you’ll get hit with rent increases.
it’s nuts!
May 1st, 2009 at 11:58 AM
WOW!
If/when rent in Saskatoon is more expensive than Vancouver, there are MAJOR problems.
May 1st, 2009 at 11:59 AM
One more thing…has anyone else seen on CMHC’s website where it says average rent in saskatoon???
Just a WEE bit off….with u know…reality..
The average monthly rent for a two-bedroom apartment is $608. The average monthly rent for a three-bedroom apartment is $639.
I can see where people would think it’s still affordable here with sites and articles using bad information.
May 1st, 2009 at 11:59 AM
Moving to Saskatoon & Jesse –
Well, the companies are making hay while the sun shines. It *is* market rent — for the moment. But only for the moment, and my money’s on it being a pretty short moment.
As Jim’s said, the condo conversions are either vacant or being bought by people who plan to rent them or flip them. They’re not being torn down, which means they’re going to come back to the rental market in short order.
Unless there’s a massive flood of tenants to Saskatoon who are all willing to pay Toronto/Vancouver rents for the joys of Saskatoon, the low vacancy rate will go back to what it used to be — 5 or 6%? And rents will drop again.
The current shortage will very quickly change as soon as they come back into the rental market.
Tenants are pretty flexible, and so rent is pretty flexible. It’s always, always, always driven from below, by wages. People can’t pay what they don’t make, so rents adjust to fit. People adjust to fit rents, too — hence, all the basement suite and ‘roommate’ ads on Kijiji, some looking for “another couple to share the second bedroom”.
But overcrowding gets old quick, especially when you throw cabin fever into the mix. The low-income families start moving to smaller cheaper cities (PA? Moose Jaw?) and college and first-job kids get fed up and go to Calgary and Vancouver, and the seniors, however much they value their independence, move in with their kids because it’s either do that or shut off the heat and eat Fluffy.
Who do you rent to then?
So rents come back down, and the people who bought as “an investment” discover that yep, it costs 1500 a month to carry the apartment but it only rents for 600 a month, and they sell, but the only available buyer is a real landlord who will only buy properties that cash flow. So the only offer is 1/2 what they paid…
Forgive me as I drop a silent tear.
May 1st, 2009 at 12:00 PM
Jesse,
That’s pretty typical of CMHC’s stats. Think you could find a single two-bedroom apartment for $608 a month? I doubt it.
Jim,
I wish you wouldn’t quote me.
I never said half of the units for sale are vacant, and it isn’t so. I said half were either vacant or tenant occupied.
May 1st, 2009 at 12:00 PM
jrochest,
Dont you think its funny that we’ve been on this blog for so long and a variety of people are saying rent is gonna go down house prices are gonna crash just wait. Well its been over a year now and all I see is close to double the rent and more choices for buyers. If your gonna wait for rent decreases better prepare for a long winter cause its gonna take at least a couple years if it does happen.
May 1st, 2009 at 12:01 PM
Norm,
Yeah the prices are way out of whack. the website is dated July 2008 yet the average house price is stated as $160,577. Their vacancy rates are WAY out of whack too…
May 1st, 2009 at 12:01 PM
Armoth: Patience, grasshopper.
Two to three years is about what it will take. But when it happens it will be very, very permanent.
Norm: I think the last time you checked the ratio of owner-occupied places had gone up a bit, too.
Rents also include the long-term occupancies (which usually stay static, since landlords normally want to keep long-term tenants) as well as those currently on the market, though, one reason that CMHC’s figures are always crazy low.
But I think the last time I paid 600 a month for a two bedroom was 2006, which is a lifetime ago in Saskatoon terms.
I notice that in Toronto rents are maybe 100 to 200 bucks a month higher than the ones I’m seeing in Saskatoon ads. Which is *insane*.
May 1st, 2009 at 12:01 PM
jroch, this is absolutely hilarious
“But overcrowding gets old quick, especially when you throw cabin fever into the mix. The low-income families start moving to smaller cheaper cities (PA? Moose Jaw?) and college and first-job kids get fed up and go to Calgary and Vancouver, and the seniors, however much they value their independence, move in with their kids because it’s either do that or shut off the heat and eat Fluffy.
Who do you rent to then?
So rents come back down, and the people who bought as “an investment” discover that yep, it costs 1500 a month to carry the apartment but it only rents for 600 a month, and they sell, but the only available buyer is a real landlord who will only buy properties that cash flow. So the only offer is 1/2 what they paid…
”
Touche for keeping it light hearted!
May 1st, 2009 at 12:01 PM
Everyone keeps mentioning how out of date CMHC is, I agree. Wait, aren’t they the one’s always denying how the boom is over?
Maybe it wasn’t over a year ago (CMHC’s published numbers) but it sure looks like it is now – apparently 2,000 Saskatoon residents disagreed with Saskaboom too! And don’t say they all moved to Warman, I doubt it gained 2,000 residents last year. And even if they did move there (v. Edmonton or Vancouver), a house in Saskatoon is apparently not cool anymore.
May 1st, 2009 at 12:04 PM
Doug,
I seriously doubt that they’re in Warman. I don’t really think it’s any cheaper to live there. Add in the extra fuel costs and it’s probably higher.
On CMHC, you’ll recall that they predicted a 28% increase for Saskatoon early in the year, and a further 9% next year.
May 1st, 2009 at 12:04 PM
I must be totally out of touch with rental rates. Are houses even crazier than apartments then (they must be). I looked through the few property management companies’ sites I could quickly find. Are people seriously willing to pay 1100 a month for a 2 bedroom apartment?? A family friend is renting out several houses in decent areas at 7-800 a month. I thought that a little low, but I didn’t think 1100 would be standard for an apartment. We’re accidental landlords all of a sudden, and we were terribly surprised to find piles of people that wanted our 3 br house (plus garage to be fair) at 1250/month. We thought we’d be hard pressed to find tennants. Not the case at all.
Our only worry was losing the very nice tennants we did find to something cheaper. Perhaps we need not lose sleep over that?? At least our tennants can rest assured that no rent increases will be hitting them any time soon. We just don’t think that’s a fair way to treat people.
It’s a shame that so many landlords seem to think that tennants are simply money making machines. That’s not fair. If we could afford to rent it for any less, we would have. I certainly don’t agree with bleeding people until they can’t afford to feed themselves or heat the house. What would justify paying those ridiculous rates for a stinking shared apartment building?
I sincerely hope that the greed that seems to be rampant these days is somehow nipped in the butt. Maybe rent controls are something to be looked at? People renting their homes should not have to worry about these sort of increases every few months. Not fair, but what can be done?
May 1st, 2009 at 12:05 PM
Props to rinog for sounding like a decent landlord.
Why not say rent is not allowed to be increased without a year’s notice/or change in ownership, except in the amount to cover utility rate increases? Just because a place goes up in value, doesn’t mean it “costs” the land lord anything more, other than lost potential revenue from sale.
A yearly price seems reasonable, and landlords should need to have it costed out in advance. Forces them to be proactive, but gives tenants lots of time to find alternatives. At least 6 months notice.
May 1st, 2009 at 12:05 PM
6 months or a year sounds entirely fair as to notice for rent increases. There should be some sort of a percentage based cap on things like that too. (Perhaps no more than 10% rent increase per calendar year unless based on – included – utility rate increases??). So over the past 2 years a 700 dollar/month apartment would be max $850 now. Sounds more realistic that $1100. And some sort of protection for property owners when saskenergy hikes rates as is coming. Would be *better* for tennants trying to get by on a fixed income, and pretty good for landlords too. Less turnover = happier, more respectful tennants (hopefully), and less worries for landlord too. If only it were a fair society . . . *sigh*
May 1st, 2009 at 12:05 PM
“But overcrowding gets old quick, especially when you throw cabin fever into the mix. The low-income families start moving to smaller cheaper cities (PA? Moose Jaw?) and college and first-job kids get fed up and go to Calgary and Vancouver, and the seniors, however much they value their independence, move in with their kids because it’s either do that or shut off the heat and eat Fluffy.
Poor fluffy, cat taste like chicken, right.
May 1st, 2009 at 12:05 PM
Ringo, (my fave Beatle)
Your views are refreshing! Indeed it appears the landlords dramatically increasing rent are not doing so to keep their profits parallel to expense, but simply for the love of money and quite possibly to watch renters writhe in pain. They don’t actually care how hard pressed tenants are to pay for rent, groceries, transportation, electricity, phone, dependents, (forget about savings!) or they wouldn’t gouge like they do. It’s very cold-hearted and I don’t give a damn what some on here say about charging as much as the market will bear. Unprovoked efforts to make conditions worse for the lower class will push many over the edge, and even more will fall into that category. Further people will be unable to EVER afford owning their home.
I find it unbelievable how some homeowners mock those who aspire to be as rent continues to climb. It’s really twisted. I guess those people somehow feel they are more deserving? A caring individual (such as yourself) would see those who “have not” and show support towards improving conditions.
Also, parent’s in SK will NOT be rewarded by Saskaboom when their kids can no longer find affordable rent/real estate. The result: more years of cohabitation, kids moving out of SK, or using most of their paycheck for rent/living and not saving money for a future downpayment. None of those options sound appealing to me if it were my kid.
May 1st, 2009 at 12:06 PM
Jesse,
I check the rents in Calgary on a pretty regular basis. I don’t check boardwalk but I check many of the local sites and have several friends that rent. The reason I asked about 1000 bachelor suites and 900 basement suites in the hood is because that is the norm in Calgary. If Saskatoon has that, then the rents are similiar but I doubt it. Keep in mind I said 2 bedroom basement in the HOOD. In nicer areas that basement suite could run you 1300. Most of my Sask friends live in Regina and they say the rents are no where near Calgary but maybe Saskatoon is way more expensive than Regina?
Btw I do know some people renting in boardwalk condos in the hood and they pay 1200/mth for a two bedroom. Not sure how that compares to saskatoon.
Just make sure you are comparing Apples to Oranges. The rents vary greatly depending on the areas in Calgary. If you compare the expensive and new areas in Sask, the houses may cost much more than a suburb area in Calgary. As I said before stats were released a few months ago ( i can’t remember which article) but the highest rents are still Calgary, Vancouver and Toronto by far.
May 1st, 2009 at 12:06 PM
Ringo,
You sounds like a good landlord for sure. Someone that knows they have a longer term investment, and someone that isn’t just gouging people for rent. See as Jim pointed out, you could have rent increases every 6 months…every 12…every 18….but the thing is if there was no ‘limit’ than the bigger companies (like the ones that tend to MAKE the market value) could raise it triple what htey’d raise it if they could every 3 months… for instance…if they were only allowed every 6 months, the building i’m in, they could raise my rent by 200 bucks instead of the 100 every 3 months. or better yet raise it by 300 or more.
What they have to do is find the threshold of what hte rentalsmen will allow before doing bad publicity and that will be what they raise the rents… I know we’re talkign rent controls here AGAIN lol but in this fast (real or unreal) boom the greed factor has shot way up with the bigger companies beucase they KNOW there are no laws in place besides the 3 month notice item.
kudos for being a decent landlord and human being.
May 1st, 2009 at 12:06 PM
Vinny,
Thanks for the insight. This is what we need is insight from other places (as the vancouverite from before has shown as well). What my argument still says is that rents are far too high here with a vacancy rate that is far too low here. Glad to know Calgary is still overpriced but i’ll give an example of how calgary differs… I had a friend move out there i worked with in an Architectural firm. They were paying her (and i) $32,000 a year after 8 years experience. She went out there, and immediately started at $54,000 a year. That difference has ACRES of room for higher rent.
It’s nuts. Again Vinny, thanks for adding the Calgary view here too. It’s a bit hard to find credible information even in this day and age.
May 1st, 2009 at 12:07 PM
Just want to make it clear that there are two “Ryan”s posting now. Interesting enough, I am a bear and he is a bull. To avoid confusion, I will post my initial after my name.
May 1st, 2009 at 12:07 PM
Jesse G,
I believe what you are referring too is the lesson of supply and demand. I was kindly taught this by Roger and now I leave you with that helpful tidbit of why rent is so much.
May 1st, 2009 at 12:07 PM
A lot of potential rental supply is out there, a drive by University Heights with over a dozen for sale signs by their big condo hug, or the dozens in Lakewood, shows how many condos just aren’t selling. As soon as some frustrated owners refuse to accept a substantially lower sales price, and rent them out instead, the rental situation will rectify itself.
Also, all those condo conversions, which originally pushed people out of their appartments, are out there, many not selling, and probably a lot will end up re-entering the market as rentals.
And if another 2,000 people leave for higher wages and cheaper housing, then demand for rental units in Saskatoon will go down pretty quickly.