Saskatoon real estate: Week in review (July 6-10 2009)
Saskatoon real estate sales continued along at an impressive pace with ninety-one homes being reported as firm sales to the Saskatoon MLS system. Unit sales were up over the previous week by just two, but increased by sixteen compared to the same week last year when seventy-five properties changed hands.
New listings of single-family detached houses and condominiums took a dip falling to one hundred and three properties, down from one hundred and nineteen last week, and sharply lower than the one hundred and seventy-six homes which were offered for sale during the same period last year.
Click the image for a larger version of the graph.
Total active residential listings took another slide, falling twenty units on a week-over-week basis to finish at 1322, nearly ten percent lower than they were at this time last year when the residential inventory reached 1461.
Fifty-six home sellers adjusted their asking price this week while another twenty-two canceled and relisted their property, most at a new price.
A good run on higher end homes including two houses that sold above $800,000 pushed the average selling price for the week sharply higher to $300,899, up more than $30,000 from last week. The six-week average also edged higher to finish at $281,537, up just $1300 from last week, but about $26,000 lower than it was this week last year when it reached its peak for 2008 at $307,696. The four-week median increased a little more, up $4,200 from the week before to $276,500, but down from $289,950 at this time last year.
Click the image for a larger version of the graph.
The average underbid grew from $11,393 last week to $14,262. An average discount of 4.5% puts us on the higher side of what we typically see from one week to the next, but this isn’t unusual during weeks when a higher percentage of the sales are in the $400,000 and higher category. A total of fifteen homes traded above 4400K this week.
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.
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Norm Fisher
Royal LePage Saskatoon Real Estate
29 comments so far. We'd love to hear your thoughts.
July 14th, 2009 at 3:31 AM
Hey Norm! What’s the feel out there as to why sales are still strong? Is most of the interest coming from outside the province? Where are all the jobs coming from? Glad to see people are sticking to their guns and underbidding – we’re by no means running out of inventory.
July 14th, 2009 at 8:30 AM
Just had to share:
July 14 (Bloomberg) — Conman Bernard Madoff was moved temporarily to the U.S. Penitentiary in Atlanta, the same facility where Charles Ponzi was once incarcerated, to begin serving his 150-year sentence.
http://tinyurl.com/kngjut
Ahhh… Karma is something, isn’t it.
July 14th, 2009 at 2:57 PM
MHO, Heather, and I know I’ve beaten this drum before; it’s all about the carrying costs. People who are buying now either: 1) see mortgage rates going up and are jumping in before they go up more, or b) have a pre-approved rates at a the historic lows of a couple months ago and need to move before it expires. This theory serves to explain both the # of sales, and the prices being paid.
But who knows? I also saw the two $260k weekly averages a few weeks ago and thought that this was the cusp of the downturn. Now that spun around in the last three weeks, and produced the two highest weekly averages of the year. I still think that the fundamentals are going to have us heading downwards, but I have given up trying to predict when… except to say, “Sometime after interest and/or unemployment rates rise”
Again, this is not to say that Saskatoon isn’t doing well, or that Saskatchewan isn’t doing well compared to the rest of Canada … just that I’m still not seeing the higher wages and hundreds (thousands) of middle-class jobs that justify the strong sales at (IMHO) still-inflated prices.
July 14th, 2009 at 4:36 PM
Heather D,
I’m with Bookrat that this is largely driven by low interest rate but population and job numbers would indicate that people are still moving to Saskatchewan. Anything I would have to add to that is purely anecdotal.
There is really strong activity at the entry level, and that’s probably spurring some move up activity.
Bookrat,
The past few weeks have been heavily skewed by some hug transactions. We’ve seen 4 sales above 800K in the past 30 days. Also fairly surprised by the action in the whole $400+ category all of the sudden. 60 sales in 30 days.
July 15th, 2009 at 9:26 AM
I hope I don’t come off as a conspiracy theorist here, but prices are being maintained on purpose by artificially low interest rates set by central bankers/governments. I find it likely it is being done to prevent a housing price decrease until other recession related factors are addressed (ie. unemployment; manufacturing etc.).
Once other factors are under control, or until the market simply can’t sustain the low interest rates any longer, rates will rise and we will finally get the price correction we desperately need to get back to fundamentals.
I’m with Bookrat on not trying to predict the bottom any longer. If there is one thing I’ve learned from following the markets for the past few years, it is that they do not follow fundamental indicators anymore (maybe they never did), but instead are driven by political forces and interventionist actions. Stimulus spending, in my humble opinion, is nothing more than a payment to delay the inevitable. As much as I do not like the man, I think Stephen Harper is well aware of that fact – last I heard he’s refusing to spend more on “stimulus”. It is too bad I cannot say the same for our brothers and sisters to the south.
July 15th, 2009 at 10:30 AM
James, you’re not alone in this line of thinking… Inevitably, interest rates are going to increase (sooner as opposed to later), and these mortgages will all have to be re-financed at these new rates. This will effectively have the same end result as sub-primes in the US. Articles like this still never cease to amaze me, though…
Housing rebound ‘nothing short of amazing’
http://www.financialpost.com/news-sectors/story.html?id=1789598
And for those who’ve been beating the Potash drum…
Potash price drop watched by gov’t; India deal a new low; could affect Sask. sales
http://www.thestarphoenix.com/Potash+price+drop+watched/1791725/story.html
July 15th, 2009 at 11:08 AM
“This will effectively have the same end result as sub-primes in the US.”
I’m not sure that’s technically true, but I get your gist. I think “effectively the same result as ARMs” would be more accurate. I don’t believe lending to non-credit-worthy borrowers was/is anyhere near as much of an issue as in the US- I suppose how you define “sub-prime” would matter to that argument.
Interesting developments with the price of potash, hmm? Could be painful for the provincial coffers as well as those employment rates.
July 15th, 2009 at 1:40 PM
Crikey, yes, ARMs might be technically more accurate when looking at the current lending requirements (I would agree with you there). However, the 40-year, 0% down and ‘anything goes’ type of financing that accompanied the recent housing bubble in 2007-2008 was very sub-prime-ish. All those loans will ultimately have to be refinanced at almost certainly higher interest rates and subject to a new set of lending criteria.
July 15th, 2009 at 3:29 PM
I’m all with you about the dangers of those, Jason.
This is completely OT… a Venn diagram of current social media, courtesy of TBP.
http://tinyurl.com/mnzuue
July 15th, 2009 at 4:18 PM
Crikey, if the Venn diagram wasn’t so close to the truth, I’d still be having a good laugh… (‘stalking’ and ‘ADHD’ were quite appropriate…
).
Say, what’s happening with River Landing? I see a few new billboards up around the city, but the SP has been fairly quiet on the subject… and I haven’t been able to ascertain if City Hall extended the timetable for them.
July 15th, 2009 at 7:48 PM
This is a must-read article from the Wall Street Journal. Highlights some great examples of how the US is deliberately manipulating and misreporting unemployment data.
The Economy Is Even Worse Than You Think
http://online.wsj.com/article/SB124753066246235811.html
“The Bureau of Labor Statistics preliminary estimate for job losses for June is 467,00… June’s total assumed 185,000 people at work who probably were not. The government could not identify them; it made an assumption about trends. But many of the mythical jobs are in industries that have absolutely no job creation, e.g., finance. When the official numbers are adjusted over the next several months, June will look worse.”
July 15th, 2009 at 10:02 PM
Jason, I read your post and then found this on financial post. Enough to make my head spin if I didn’t know better.
V-shaped recovery in the works, says economist
http://www.financialpost.com/news-sectors/story.html?id=1793033
July 15th, 2009 at 10:45 PM
George, …!!
July 16th, 2009 at 5:35 AM
Thanks Bookrat/Norm. Low interest rates are definitely key. I’m not sure interest rates will go up until employment rates improve across Canada. I’m starting to wonder how many entry level buyers (that can afford current prices) are left, considering? Also with so much movement into the province – which sectors are creating the most new jobs?
“Again, this is not to say that Saskatoon isn’t doing well, or that Saskatchewan isn’t doing well compared to the rest of Canada … ” Tiresome isn’t it? Putting disclaimers on your posts so you’re not labelled an “SK hater”. ;’)
July 16th, 2009 at 8:18 AM
SK HATER!!! just kidding
It is quiet in here these days. Norm I think there is a direct correlation between how well the market is doing and the number of posts on your blog.
July 16th, 2009 at 8:46 AM
Ahh, that’s “Saskawhiner” to you!
George, did you see Mish’s take on Ms. King’s economic projections?
Another interesting projection from a University of Calgary prof: Verleger Sees $20 Oil This Year on ‘Devastating’ Glut
July 16th, 2009 at 9:44 AM
Jason,
“Say, what’s happening with River Landing?”
You turned something up a few weeks ago and suggested that they’d been given until August 17(?) to pay for the land. I understand that to be correct. Clock is ticking on another deadline. In addition to billboards they’ve been spending some money on the radio and in print.
L.oki,
“Norm I think there is a direct correlation between how well the market is doing and the number of posts on your blog.”
I thought it might be the time of year but there were plenty of comments last July, but back then everyone thought they knew what was going to happen. Today, everyone seems a but uncertain.
July 16th, 2009 at 10:36 AM
Crikey,
$20 for a barrel of oil, would that lead to 20 cents for a liter of gas? ha ha
Would demand destruction lead to supply destruction and higher than $150 in the not too distant future? It is possible. ( really anything is possible these days)
Oil inflation chart
http://inflationdata.com/Inflation/images/charts/Oil/Inflation_Adj_Oil_Prices_Chart.htm
Norm,
“Today, everyone seems a bit uncertain.”
I would have to agree. Everything we read in the national news shows the economy all over the place. Confidence is quite good here even though there have been some layoffs and some things postponed. Some co-workers have mentioned housing is a good investment especially since prices have come down and the low interest rates. Others have been “burnt” by buying at the peak with higher interest rates.
If everybody had a crystal ball, everybody would be rich.
July 16th, 2009 at 12:31 PM
Norm, I’d never been able to find anything to confirm they’d in fact been given the extension (although I assume that was the case). Just seems strange to find the press conveniently absent, especially in lieu of the recent advertising blitz.
L.oki, if I had to hazard a guess, I’d say that recent market activity has surprised a lot of bulls as well. The market seems fairly unpredictable to gauge at the moment: sales are increasing (particularly those over $400k+) while at the same time prices continue to see year-over-year declines (despite a steady decrease in inventory). Economic news is hit and miss, depending on what and where you read. In this kind of environment, it’s really hard to comment (let alone ponder) on where things may be headed in the short-term. I think the only thing that people generally agree on is an interest rate increase at some point, and even that’s open to a wide degree of speculation.
Crikey, wow. $20 oil. When I read things like that and news on potash prices almost falling in half the first words that come to mind are “tax increase”. Speaking of tax increases, I heard that some business were hit with three to four-fold increases on their property taxes, but I haven’t been able to find any links with more details.
July 16th, 2009 at 3:55 PM
If oil goes to $20.00 bbl, I’ll buy all of it.
July 17th, 2009 at 5:55 AM
Consumer prices decline 0.3% in June
http://www.financialpost.com/news-sectors/story.html?id=1796715
“Canada’s inflation rate for June was negative 0.3%, marking the first time since November 1994 overall prices have declined on a 12-month basis.”
July 17th, 2009 at 9:01 AM
“Today, everyone seems a bit uncertain.”
Are they ever (Am I ever!)! It’s strange to see several uber-bears softening their stances, such as Nouriel Roubini and Meredith Whitney. Admittedly, they’re not saying it’s all good, but that a recovery, however anemic, may be on the horizon.
Meanwhile… Canada has registered its first technical deflation in 15 years, and…
http://tinyurl.com/kncqxo
Forty-six jobs at Viterra Inc. in Regina will be eliminated and moved to a company based in Bangalore, India. “This outsourcing announcement means job losses for our city and our province and it takes these valuable knowledge-based jobs out of our economy,” Wagner said in a news release. The laid-off workers earned between $49,000 and $100,000 per year, Wagner said.
http://tinyurl.com/ll5z8w
TD Economics has cut its 2009 economic forecast for Saskatchewan based on a less bullish outlook on potash, agriculture and, to some extent, oil.TD is now estimating a one per cent drop in gross domestic product (GDP) this year, down from the March forecast of a 0.4 per cent increase.
Saskatoon booster- I admire your enthusiasm.
July 17th, 2009 at 9:33 AM
For the record, Crikey, Roubini ‘softening his stance’ was mis-reported by CNBC and he was quite upset by the misrepresentation. Apparently his prediction is the same as it ever was.
http://market-ticker.denninger.net/archives/1226-CNBC-You-Owe-America-An-Apology.html
(I haven’t validated Denninger’s reporting myself, but I have yet to find anything where he is factually incorrect when I have done so, and as such I’m inclined to take Karl’s word for it.)
July 17th, 2009 at 10:24 AM
Bookrat, here.
http://www.rgemonitor.com/roubini-monitor/257299/roubini_statement_on_the_us_economic_outlook
July 17th, 2009 at 12:19 PM
Thanks, Bookrat. To be frank, Whitney’s commments were taken out of contaxt, too. Her call in Goldman could have at best be interpreted as a trading buy, and her longer term forecast for both that stock and the markets were pretty much overlooked in the reporting of it. Whether or not CNBC was more “opportunistic” in this than any other media outlet, I’m not sure.
July 17th, 2009 at 1:14 PM
Hmmm, deflation is upon us eh?
July 17th, 2009 at 2:31 PM
George, so it would seem (good call).
Bank of Canada expected to keep its rate promise
http://www.financialpost.com/story.html?id=1801255
(looks like interest rates will remain at current levels until at least the end of 2009…)
July 17th, 2009 at 3:57 PM
Jason,
personally, that is great news for the ol variable rate. In other news, I know one place there won’t be deflation. The LBS, before I go to the lake this great weekend. Summer is finally here!!!
July 19th, 2009 at 10:03 AM
“Hmmm, deflation is upon us eh?”
Technically, George, you’re right. I think we also have to focus on how and why the YOY number is negative (hugely less expensive energy costs, among other things). In this post, economist Nick Rowe makes an interesting argument why we should be focusing on the core CPI numbers, and why the risks of deflation may actually be easing:
http://tinyurl.com/mnlo6q
Take a look at January’s core CPI- that was nasty. The core CPI has improved since then. How things will look from here on in- anyone’s guess.