32 comments so far. We'd love to hear your thoughts.

• Alex
  April 7th, 2009 at 2:03 PM

  Norm & All,

  I just came across an interesting blurb while reading up on news this morning:

  http://www.saskatoonhomepage.ca/index.php?option=com_ezine&task=read&page=9&category=21&article=6329&Itemid=86

  It supports my observations that there has been very little to no job growth in Saskatoon. Only an influx of investment and workers who fly out to do their job.

• Sunny
  April 7th, 2009 at 2:03 PM

  Alex I’ve been reading your posts along the way and have totally agreed with you! Saskatoon is not growing enough to be able to maintain this housing boom. Even builders are agreeing with that. A friend is in the business and said that most builders are expecting this to level off by next June/July and are trying to get houses sold as fast as they can be built. I think we have a bubble here right now and this bubble just may burst in the near future. If the Chamber is worried, then I think we probably should be worried too. I also agree that our wages here are not even close to what we need to sustain the housing prices in Saskatoon. Maybe if you are a nurse or doctor, but if you are an average Joe…

  Norm love reading your stats! My husband is addicted.

• Jason
  April 7th, 2009 at 2:03 PM

  Lies Alex, lies! The economy has never been doing better, Lorne Calvert said so himself!

  Seriously, during this past “boom” I have seen more of my friends move out of the province than ever before. I’m sad to report that I’ll be following suit in a couple months, leaving to start a new job in Portsmouth, New Hampshire. It pains me think that I won’t be able to take my morning walks down broadway or the river bank, but the huge rent increase notice I received this month combined with my frustration at the current market situation has forced me into this position. I had looked at trying to find a new place here in town, but made the hard decision that it would be in my best interests in the long run to start anew in a different location. It took a long time, but the province wins – I’m out.

  Best of luck to all you in your search for a home. I’ll still keep on tab on Norm’s blog here as I am quite interested to see how the market will unfold over the next couple of years. Here’s hoping

• Alex
  April 7th, 2009 at 2:04 PM

  I regret to say this, but I certainly hope it doesn’t come to that for me as well.

  If January comes around and I can’t get paid SUBSTANTIALLY more money…I’m out as well. My landlord is a greedy slimebag and I’ve no doubt that the people renting out places are using this opportunity to squeeze Saskatoon dry.

  Worse still is the indignant attitude that nothing wrong is going on by all three layers of the government. The shortsightedness is setting Saskatoon (dunno about the rest of Saskatchewan) up for a big tumble. I mean, how many hands do you have to have in the cookie jar before you realize a society has become completely polarized?!

  Greed has run rampant in such a way that should not have been allowed in Saskatoon.

• Norm Fisher
  April 7th, 2009 at 2:05 PM

  Alex,

  Thanks for the link. I know this is the kind of “detailed analysis” which you appreciate.

  Sunny,

  Thanks for joining us and sharing your thoughts. It’s hard not to agree that things can’t continue at this pace forever. I am all for a more moderate market and it can’t come too quickly for me. I just hope we don’t see a “crash” but things have got to slow down. It can’t be healthy over the long term.

  Jason,

  Sorry to hear that we’re losing you. I have had a very strong listing year, and sadly, too many of my clients are bright young people seeking opportunities elsewhere. Perhaps we’ll turn out to be the next Kelowna rather than the next Calgary.

  Alex,

  January? You’re far too patient. I think you should demand that raise by next week.

• sam
  April 7th, 2009 at 2:05 PM

  Alex, to blame the government for their short-sightedness is simple minded at best. Did YOU predict that there was going to be a housing boom caused by the provincial government promoting the province? It sounds obvious enough now but I really don’t think it occurred to anyone. The fact is, we had shortages of numerous trades people, we were losing them to Alberta and the government tried to put a stop to it. They succeeded in that goal.

• Alex
  April 7th, 2009 at 2:05 PM

  I don’t think they did. I think a lot of the growth in Saskatchewan was irrelevant to their promotion of the province.

  The only thing used to measure growth in this instance is the increase in house prices. That’s it. As the article notes, there has been no job growth.

  So, has it been a success? I think you’re just cheering for something that benefits you. Try to be a bit more objective.

• Todd
  April 7th, 2009 at 2:06 PM

  Alex, you still haven’t said where it is a better housing market for you to buy into. According to all the affordability analyses that have been done, Saskatoon still ranks well among the other cities. So, where are you going to go to get a better break? Let’s see some of that detailed analysis you like.

• sam
  April 7th, 2009 at 2:06 PM

  Actually there is solid data from stats can that there is a net migration from Alberta. Have a look at the link:

  http://www.statcan.ca/Daily/English/070628/d070628c.htm

  ‘Saskatchewan’s population rose 0.23% as it continued to receive people from Alberta. Saskatchewan recorded its highest first-quarter interprovincial migration net gains since 1976.’

• sam
  April 7th, 2009 at 2:06 PM

  In regards to the sustainability, I also wanted to throw in a reference to what is happening to our agriculture industry:

  http://www.newfarm.org/columns/saskatchewan/2007/031507.shtml

  ‘However, the pain will not be evenly spread. After being a basket case for years, Saskatchewan will lead the country in realized net farm income in 2006 and 2007, due to higher crop prices. Ontario, Quebec and Manitoba will suffer, in large part because of falling returns from hogs as feed and input prices continue to escalate.

  The increase in crop prices is the reason for the good news in Saskatchewan. This is being driven by crop failures in some major exporting countries and a continuing draw down of world grain stocks. It is being impacted even more by the rapidly expanding global ethanol industry. Corn in the fuel of choice for ethanol production, and corn acres are projected to increase substantially in the U.S. this year. This will take acres away from crops like wheat and soybeans, and will propel prices for these upward. ‘

  Saskatchewan is mid-way through a huge commodity boom. What is happening in real-estate in the cities will eventually move to the farmlands as the US ethanol drive continues. Can I prove this? Well I can probably prove it as well as you can that prices are going to collapse.

• Sunny
  April 7th, 2009 at 2:07 PM

  Okay Sam you must not be involved in the farming industry to actually believe that. My family is actually living through this ‘increase’ right now. That article is wrote from an economic standpoint, not the farming standpoint. My family couldn’t get out to the fields to seed this spring, then got wiped out by rain, hail, etc. Down south they are hurting for rain and are afraid that there will be a drought. Also most grain farmers have cattle, so they are being hit by the lower cattle prices. I don’t think Sask can just rely on farming to lead the economic growth in Sask. And .23%? Well that’s Saskatchewan wide, not just Saskatoon, so obviously our housing boom is not just from that.

  I still agree with Alex. Yes the Lorn Calvert advertised Sask to the world, but this just opened us up for investors to come in and buy our houses, not particularly for people to move here and join our workforce. I have people that I deal with in business as me every day if I know someone that they could get in to work for them because they can’t get anyone. If we had so many people moving into the province why are we still having a work shortage?? I have friends who are still moving out of province because they are not making enough money and now have to pay a huge amount for rent and can’t even look at buying a house in Saskatoon. I think we would be naive to just rely on house sales to think that Saskatoon is booming. We need to see higher wages and more professional jobs to acknowledge that it is.

• Alex
  April 7th, 2009 at 2:07 PM

  Thank you Sunny, I think this blind “what’s good for me is good for you” attitude has gone on long enough.

  People need to see that current activity in Saskatoon is fueled by opportunistic greed and nothing else. There’s a reason why “a quick buck” is hard to make, yet Saskatoon seems to have left the doors wide open.

  Sad that only the rich can cash in on the opportunity.

• sam
  April 7th, 2009 at 2:07 PM

  Sunny, you agree with Alex and yet you provide contradictory evidence. You are giving a first-hand account that there is job growth in the province and a shortage of workers. The unemployment rate, by the way Alex, also indicates that things are improving here.

  I really don’t care that some farmers have cattle and some get hit by bad weather conditions. That is just part of farming. The new realty is that crops are in and farmlands are going to be booming, weather permitting. Weather should even out across the province over the long-haul. The fact is crop prices are through the roof and are predicted to keep going up.

• Sunny
  April 7th, 2009 at 2:08 PM

  LOL Sam like I said you have not been involved in farming community obviously. You talk like someone that is looking for outside in. There have been so many years of no growth and bankrupcies that they will need at least 5 years to climb out. Also what that paper wasn’t telling is that only certain crops are incresing in prices, not all crops. A farmer has to rotate the crops to prevent disease and help out the nitrogen factor in the soil. So not all of their crops are going to be worth more. Just maybe 1/4. Also with the prices going up in the marktet the fertilizer, spray and gas prices are on a constant rise too. The fertilizer bills from last fall to this spring went up 30%. So the farmers are not rosy right now. Get to know a few farmers and talk to them about how they feel about the ‘price increase’.

  Also I didn’t say there was job creation. I said that people are moving to AB (or wherever) and leaving their positions open. Meanwhile employers are hard pressed to find someone to fill the position because there is no one to fill it. So how is that showing that there is more people moving in??

• FSBO
  April 7th, 2009 at 2:08 PM

  Hey Norm,

  I’ve noticed a pretty big slowdown in sales on saskhouses over the past couple of months but most notedly in June. I’ve got a friend who listed his house a couple of weeks ago and hasn’t received a single bid. Is this because more sellers are looking to Realtors? What are your thoughts in general (I guess unbiased on private selling?

• Sam
  April 7th, 2009 at 2:08 PM

  FSBO, I am certainly not an expert on real-estate but I do have my doubts about the sask-houses slow down. I have been watching it for awhile and many of the prices are high, higher even than the numbers you see on MLS. I really don’t think a lot of the private sellers have done their homework and came up with a reasonable price. Case in point, there is an east college park, 2-bedroom bilevel, 812 sqft, going for $275K, that is insane!

  Is it possible that your friend is listing too high?

• Norm Fisher
  April 7th, 2009 at 2:10 PM

  FSBO,

  Is it possible to get “unbiased” advice from a Realtor about selling privately? That’s like asking a Baptist preacher for unbiased advice on whether Jesus really died for mankind.

  I’ve always said that “a monkey can sell a house, given the right circumstances” and today’s market certainly increases the odds that a seller may be successful. The question in my mind is always, “for how much, how long will it take, and how much will it really cost to be represented?”

  Having been involved in hundreds of real estate sales, and having over 35,000 hours of on the job experience, it’s difficult for me to accept that I’m no more effective at selling a house than the average Joe. Add to that the incredible effectiveness of the MLS system to expose a property to a large base of buyers, I’m inclined to think that the cost of being represented is at least somewhat less than the “fee” which appears on the listing form.

  I could cite several examples of successful experiences this year where we were able to help a FSBO exceed their own expectations after failing in their own effort. Most recently, a sellers best offer as a FSBO was $250,000. I sold the property for over $300,000.

  Naturally, there are some people who can be very effective representing themselves. Others should probably not even try. Just as some agents are more effective than others.

  Having said all of that, as Sam suggests, price can often be the culprit. This is less of a factor now than it is in other types of markets but one is still better off to error on the low side than the high side given the potential for “overbidding” which exists today.

  The first week of July showed slower sales than June, but June was a very busy month and most of what was offered on the MLS system did sell.

  http://www.teamfisher.com/blogs/norm_fisher/archive/2007/02/22/it-doesn-t-take-a-rocket-scientist-to-sell-a-house-in-this-market.aspx

• Alex
  April 7th, 2009 at 2:11 PM

  A good agent is worth hundreds if not thousands of FSBOs. The differences are too many to name.

  But it has to be a good agent.

  In your mentioned scneario, have you considered the image conveyed by someone who is doing an FSBO approach?

  Also, don’t forget to think about what agents do for the buyers! While right now for first time buyers in Saskatoon, their advice should be “don’t do it!”, in a more affordable market they are essential guides.

  The subject of how much they get paid is another discussion

• Sunny
  April 7th, 2009 at 2:12 PM

  I’m sorry but, no offense Norm, I think if you do your homework, fix up your place right and represent yourself right you can sell your own place and do well. We did. We bought our place privately too because it was easier in this market. We tried for 2 1/2 month with a realtor and finally found a house through a private sale. It seem that privately they are willing to call you to counteroffer which makes it easier to be able to ‘fight back’ LOL We were frustrated because the bidding system that the real estate agents are using gave you no chance to counter. Not that I blame the realtors, I know it’s people wanting to get a higher amount helping it along. We let counter offers in on our sale and got 21,500 above our asking price, but we offered to let people counter offer if they wanted to give them a chance. Some people thought we were greedy, and I didn’t do it for that reason but to give some people a chance. I would agree with the rest… I think your friend may be going too high. But I have noticed that house sales are declining on Saskhouses too. Houses are putting bids into the descript. as much and they are sitting longer. Maybe it’s summer and people are busy??

• Norm Fisher
  April 7th, 2009 at 2:12 PM

  Sunny,

  I didn’t mean to imply that a FSBO can’t do well. That’s why I said, “Naturally, there are some people who can be very effective representing themselves. Others should probably not even try. Just as some agents are more effective than others.”

• Norm Fisher
  April 7th, 2009 at 2:12 PM

  Alex,

  I think you can expect to see real estate fees continue to decline over time. As technology continues to make competent agents more effective the population of agents will decrease, and so will fees. In my opinion the largest issue right now is too many agents. In a market like Saskatoon which might see up to 4,000 MLS transactions in a year, you don’t need 350 agents to do them. With some support staff and an ability to leverage technology, a good operator should be able to handle 100 transactions smoothly. With that kind of volume an agent should be able to charge less and still make a good living. We need to trim the fat, and really, it starts with the consumer putting more thought into who they will trust with their home. As you said, “it has to be a good agent.” Why would anyone settle for any less?

• Jonathan
  April 7th, 2009 at 2:13 PM

  Who would of thought we would be charging fellow sask people moving back home outrageous house prices and calling it a boom.Thats what people are trying to get away from and you guys are creating the same scenario in saskatoon.

  HELLO how long do you honestly think this going to last!!

  READ THIS BELOW!! for a little taste of reality again!

  Written by Evan Wright – 600 Action News-Local First

  Saturday, 07 July 2007

  At the half way point of the year, the Saskatoon Chamber of Commerce is expressing concern about the lack of job growth in the city.

  Only 400 new jobs are available to date, well short of the 8-thousand required for the city to maintain every high school graduate.

  Chamber Executive Director, Kent Smith-Windsor says Saskatoon still fairs well when competing against centres like Edmonton and Calgary, given the steady cost of living just outside city limits.

  But Smith-Windsor remains optimistic, given last year’s job growth really didn’t spark until the latter half of 2006.

• sam
  April 7th, 2009 at 2:13 PM

  Jonathon, while I agree with you in principle you really have no idea how long this will go on or how much higher prices will go before it turns. Now, I don’t know what will happen either but if you examine the evidence, such as the US, it can take years before housing prices correct. In the US prices went up by 15+% per year, for 5 years before they turned. Saskatoon hasn’t seen that same amount of overpricing. Saskatoon is riding the tail of a wave of resource investment and until resources turn, Saskatoon will likely at least stay steady.

  Also, who are you blaming? It is the out of provincers who have caused the whole mess. You can’t blame the seller for accepting high bids. When you start throwing blame at specific groups, to me you just sound bitter.

• Jonathan
  April 7th, 2009 at 2:14 PM

  Hi Norm,

  Saskatoon is not riding a wave of a tail of resource investment!

  Whats really happening is people moving there are coming from alberta and BC because things have gotten so out of hand there.Its too expensive to live.

  And in seeing that,many people are taking advantage of this current situation and raising the costs of housing to make a quick buck.

  This type of behaviour has been witnessed all over including places like Grand Prairie for example.Where homeowners were raising rents to 4000 a month because there are jobs there.

  Thats pure greed.Our albertan people have been fighting to get legislation for rental increases capped.

  The real definition of a strong economy is when there is enough resources for full time employment for EVERYONE.Not just a few houses being built.To sustain a strong economy, a stabile high paying employment situation must be established without knocking out the poor and middle class citizens.And without leading potential homeowners into financial ruins.

  The article that I previously pasted in this blog proves from your own city that there is not enough resources to maintain enough employment for your own graduates this year alone.To me that sounds like an issue that really needs attention.

  Dont get me wrong!I support financial growth in any community.But when the honest middle income hard working families are taking the economical blows and downfalls of high rent increases and high housing sales it hurts us all!

  Regards,Jonathan

• Jonathan
  April 7th, 2009 at 2:14 PM

  You guys are way off the wall on housing prices in Saskatoon.Wake up geez its SASKatOOn.NO JOBS Who wants to buy a 300,000 home there when you can buy the same 300,000 home where the wages are 3 times higher in alberta.Move to alberta its Gods country here and lots of work.Cost of living is the same here as Sask.

  Great blog Norm

  Peace out!!!

• saskobserver
  April 7th, 2009 at 2:14 PM

  I already heard people are starting to move to Alberta again, with the cost of living isn’t that attractive in Sask.

• Warren
  April 7th, 2009 at 2:14 PM

  Stumbled across this blog, very cool (reminiscent of bobtruman.com, keep up the good stats Norm. Thought I’d throw my two cents in (as a resident of Saskatoon for eight years and now of Calgary for one).

  Both sides have a lot of good points, but in the end a lot of people are going to get hurt by this recent “Saska-boom”. I keep hearing about the wave of people moving from Alberta back to Saskatoon, but I sure don’t see it. I think it’s a case where the situation has been the opposite for so long, that any number of people coming back is being trumpeted as a victory (by the NDP).

  The only thing that I see flowing back is Alberta money, in the form of realty speculative investment. Now that the market out here has peaked (condos have dropped in price and single family detached have managed a 2.5% gain in the three busiest months of the year – woohoo (heavy sarcasm)) and there is no more “quick rich” plays, wanna-be Donald Trumps have turned their eyes to Saskatchewan and specifically to Saskatoon.

  First is the problem of a lack of bodies to fill the homes (an Conference Board of Canada economist humorously commented on this back in the Spring after the Director of the Homebuilder’s Association called for 2,000 new starts this year – “I still find it a hard call that you’re going to build more new houses than you will have additional people in your economy.”).

  Second there is a problem of a lack of jobs to fill what bodies you do have. People can claim there are soooo many jobs in Saskatoon, but the numbers are telling a different story (see article in first post). Sure you can work in the service industry or in construction, but I still see educated professional after educated professional finishing their schooling and leaving because of zero job opportunities. What large corporations have moved to Saskatoon in the last twelve months to spur this kind of housing boom?

  I’m not trying to be down on the city, it’s just sad to see this wave of absurdity continuing further East. Not everyone can be a millionaire, and your house cannot make everyone a millionaire. You can’t get something for nothing. And as it’s been pointed out, the one thing that Saskatoon had going for it in spades (affordability) has now disappeared. People keep comparing Saskatoon to Calgary and claiming Saskatoon to be “cheap”, but they neglect to mention that the mean household income in Calgary is about 50% higher than in Saskatoon.

  I’m not saying that the Calgary housing market is accurately priced (it’s not, do a P/E ratio on any house here in Cowtown and then talk about sustainability of current prices), but for Saskatoon to have parity as a goal is ludicrous until you start to not only higher the professionals your University churns out, but to start them at six figure salaries.

• Alex
  April 7th, 2009 at 2:15 PM

  Warren,

  So long as the rich are the ones who control popular opinion and politics everything you mentioned will go unnoticed.

  There are a few people making a killing in Saskatoon and it’s going to drive many people away (myself included).

  If I can’t at least afford a house next year, I’m out. The economy is just busted here and greed has run rampant.

• Sunny
  April 7th, 2009 at 2:16 PM

  Jonathan I DO not feel sorry for the former Sask people moving back here. Please! I have people I graduated with selling their house in AB for 4 times what they bought for and paying less than half for a better one here. Why should I feel sorry for them since they can pay cash for a house and I have to pay mine off in the next 25 years. I feel sorry for individuals like myself that stayed in Sask and supported the finances here and are getting kicked in the butt by AB, BC and US investors. We are getting paid lower wages than AB but having to pay just about as much for houses. My DH and I have been discussing moving down south to get a more economic house. The house that we got is not our dream house but our starting out house. I do agree with you that the housing boom is unfounded due to lack of good jobs. There are jobs here, but they are definitely not high paying!

  Warren you are so right! It is more AB people getting rich off of our housing ‘boom’. I don’t know how many people that have told me of investors coming to buy 6 – 8 houses no matter where they were as long as they were solid. I’m sure Norm can attest to that. And I agree with you about the comparision too. It was on Canada AM one morning about how it was still cheaper for individuals to buy a house in Saskatoon vs AB or BC. It might be, but you’re right, we make a lot less. If it wasn’t for my family living in this province and I DO like Saskatoon, there is nothing to make me want to stay here.

  Greed IS the issue here and unfortunately we can’t blame all the people in Saskatoon for the greed. It’s fueled by a lot of outside sources. When rent that was $500 turns to $1000 this year for an apartment, there is something wrong. Where are the people that only make minimum wage going to live? The gas prices keep going up, which drives up the grocery prices and now the housing prices are up. I wouldn’t be too surprised to see more people take advantage of selling their house and move out.

  Have a good weekend!

• sam
  April 7th, 2009 at 2:16 PM

  Okay, for the records your guys numbers are way off. The affordability numbers have been posted numerous times here and Saskatoon IS cheaper, relative to wages, than Alberta. You can buy the same 300K house in Alberta Jonathon? Have you even looked at housing prices lately? Maybe in small town Alberta, I don’t know, but certainly costs are WAY higher in Edmonton and Calgary.

• Alex
  April 7th, 2009 at 2:16 PM

  Sam,

  From an Alberta perspective, things look good. Because you’re coming in with cash in hand to buy a house outright.

  The cost of living is fine when you don’t have $1200 of your income being lobbed off for house payments. It’s crippling debt. We don’t get paid more because Alberta is here. We just get told to be quiet because the Albertans coming back are being magnified into a majority. There are more people being hurt by this, and the problem is that they aren’t vocal enough about it yet.

  I suspect that will be changing over the next while though.

• Hossein
  April 7th, 2009 at 2:16 PM

  An intersting article about the house prices:

  http://www.canada.com/edmontonjournal/news/story.html?id=458c9785-6717-4dfb-be78-98275a4f7720&k=79565