Saskatoon real estate: Week in review (March 30–April 3, 2009)
Saskatoon real estate agents added one hundred and forty homes to the MLS database this week including eighty-five single-family detached houses and fifty-five condominiums. New listing activity increased by twenty-seven units compared to the previous week, but total numbers continued to lag behind those seen last year when one hundred and eighty-five homes were offered for sale. Total active listings slid to 1,399 units by the close of business Friday when eight hundred and fifty-nine houses and four hundred and fifty-three condos showed an active status on the Saskatoon MLS.
Home sales increased again for the third week in a row as seventy-four firm deals on Saskatoon houses and condos were reported, up about sixteen perfect from sixty-four properties last week, and down roughly twenty percent from the ninety-two homes sold during the same week in 2008. Two of last year’s weaker spring sales weeks lie directly ahead of us bringing some hope that an “up over last year” week for unit sales may actually be realistic and attainable.
Click the image for a larger version of the graph.
On the surface there isn’t much apparent change on our price history graph as the numbers held fairly steady in each of the three pricing categories. This is somewhat remarkable given that two large sales are included in the mix this week, with a combined value of $2,130,000. When just two sales account for ten percent of the week’s total sales volume one might expect to see a bit of a spike on the graph, but these extraordinary sales simply kept us steady as one-third of all residential sales occurred below the $200K mark this week. The weekly average sale price came in at $273,638, down from $275,978 last week. The six-week average dipped to $267,001 from $268,575 the week before and substantially widened its year-over-year decline to nearly twenty two thousand dollars. The four-week median managed a bump to $260,000, up one thousand dollars from last week, and down twenty thousand dollars from the same week in 2008.
Click the image for a larger version of the graph.
The average underbid remained steady compared to the previous week ($11,907 to $12,180 or 4.3 percent of asking price), but the overall look of the graph did change as the transactions closed within ten-thousand dollars of the asking price (seventy-two percent) took the largest share we’ve seen since we started to track these numbers. Naturally, all four of the higher discount categories took a decline.
Interestingly, six of seventy-four sales this week did report a sale price, which exceeded the asking price by an average of $2,250. That’s the highest number of overbid home sales and the largest percentage recorded since the week of July 14-18 of 2008 when seven of seventy-one unit sales sold above their asking price.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Follow our daily updates on Twitter @Norm_Fisher.
Norm Fisher
Royal LePage Saskatoon Real Estate
21 comments so far. We'd love to hear your thoughts.
April 25th, 2009 at 11:57 AM
Nice activity and I love twitter i just joined =op
April 25th, 2009 at 11:57 AM
notalawyer,
We did the ‘Full Monty’ on the inside, but you could certainly spray-foam the exterior if you’re planning to replace your siding. Be sure to talk to your installer about preparations to prevent any foam from splattering finished surfaces; as promised, it’s very good at filling even the tiniest crevices, which can be a liability if you’re not properly prepared.
April 25th, 2009 at 11:58 AM
Norm,
What are your thoughts on doing a piece on becoming a real-estate agent? it would be interesting to hear the process you went through, what led you to Royal Lepage, and the positives and negatives on a daily basis for those considering a career in real estate. As always, keep up the great work.
April 25th, 2009 at 11:58 AM
“We are also very concerned about Saskatchewan, where volumes are slowing, inventory is soaring and prices are bound to reverse sharply.”
everyone else points out the kinks in Saskatoon’s armour, yet Saskatoon proudly stands a knight wrapped in tin foil with a plastic sword, when real swords are selling for less
April 25th, 2009 at 11:58 AM
Norm, fairly remarkable indeed. I can’t say I recall any time over the past year where a single million dollar sale (let alone 2!) failed to skew the numbers higher. Despite an increase in unit sales, it would seem that buyers are either obtaining properties for closer to their desired purchase price -or- we’re seeing a different type of first-time homebuyer in the market (one who, despite low interest rates, may be buying more within their means).
I still think we’re on-track to break over 2,000 listings this year, and believe that the weather has played a factor in delaying the typical “Spring rush” of new listings this year. If this hasn’t started to materialize by late April or early May, though, I’ll have to concede that we may not see a repeat of 2008 and that both new listings and sales may be fairly flat for the rest of the year.
There are a lot of new economic indicators that we may have quashed deflation at the expense of accelerating inflation, in-turn leading to higher interest rates (perhaps arriving sooner than anticipated). Insomuch as SRAR has indicated “a stable market for the rest of 2009″, I think all bets are off if this happens.
April 25th, 2009 at 11:59 AM
Armoth,
Thanks. I’m glad you like it.
Jedi,
“What are your thoughts on doing a piece on becoming a real-estate agent?”
That sounds fascinating.
Seriously, it’s probably something I should do as I probably hear that question a dozen times a year. There is a decent explanation of what’s involved on the Association of Saskatchewan Realtors website at http://www.saskatchewanrealestate.com/index.htm
Note the navigation bar on the left hand side of the page, starting with “Become an Agent.”
Jason,
“I still think we’re on-track to break over 2,000 listings this year, and believe that the weather has played a factor in delaying the typical “Spring rush” of new listings this year.”
Looking back over the past five years it appears that it’s more “typical” for that rush of listings to really start flowing in April or May. Even if new listings don’t come on big we are probably looking at inventory in the range of 1500-1800 by the peak, perhaps returning to a more balanced market by next spring.
The fact that a third of all activity was under $200K this week suggests that prices have come down substantially. I think that will become more apparent over the next ninety days.
April 25th, 2009 at 11:59 AM
Norm, it’s probably hard to gauge, but on which side of the average selling price would you say new listings are falling, ie: are we seeing more or less expensive homes coming to market, and are we seeing depletion or build-ups of inventory in certain price ranges? I agree that prices are continuing to soften, was just curious if new listings are bucking the trend or being priced competitively from the outset? In your opinion (based on your dealings with clients), where do interest rates have to remain at for a “balanced market” and if interest rates were to increase by 1-2 points by next year, how would you see that effecting the market? (do you think this would further reduce the buying pool and soften prices further?) Last question: the last two years saw an unusually high number of realtors in Saskatoon; has this number diminished as of late or are there quite a few realtors hanging on by their fingernails?
April 25th, 2009 at 12:00 PM
Norm,
Do you know if there is enough data for Saskatoon to do a Case-Shiller type of analysis? Does anyone do one for Saskatoon?
April 25th, 2009 at 12:00 PM
Jason,
“are we seeing depletion or build-ups of inventory in certain price ranges?”
This is strictly perception but I would say that the “months of supply” increases fairly dramatically as the homes get larger. If you were looking at bungalows under 1000 square feet you’d find a fairly small supply.
“if interest rates were to increase by 1-2 points by next year, how would you see that effecting the market? (do you think this would further reduce the buying pool and soften prices further?)”
Naturally, that would be what you’d expect. I’m just not sure that things are working as we would expect now, or if they will in the future. There seem to be new sets of rules being written daily.
“high number of realtors in Saskatoon; has this number diminished as of late”
Not to any great degree but perhaps they’ve been waiting for spring.
Matthew,
No such thing being done here. It’s a good idea, but it looks like it would be murder collecting the data. I wish our system was set up to identify properties that had sold more than once in recent years.
April 25th, 2009 at 12:00 PM
“If you were looking at bungalows under 100 square feet you’d find a fairly small supply.”
I should think so! I myself can’t think of a single 10×10 house for sale.
(You might want to proofread that last response – seems to be a few words and zeroes missing.)
“I wish our system was set up to identify properties that had sold more than once in recent years.”
As someone who has done enough database/GUI programming to be credible, I can say that if the data’s not already stored somewhere, then you have little chance of this ever happening… but if it is then it would be relatively simple to make it happen and would simply require a decision to do so (which brings in its own politics). Any idea if it’s there or not, Norm?
@Jason: “I can’t say I recall any time over the past year where a single million dollar sale (let alone 2!) failed to skew the numbers higher.”
Oh, but they *did* skew the numbers ‘higher’ — all the way back to ‘average’. Without those two sales, the average price for the week comes in at $251,655 — almost $22k lower.
But in fairness, the mean and median values for this week are closer together than they were last week, indicating (as Norm already said) that there were a bunch of low-end sales skewing things as well… which is why it was all a wash.
April 25th, 2009 at 12:01 PM
Norm, yes, it certainly seems as though some of the ‘normal’ rules don’t apply. I trust you meant 1,000 sqft bungalows (and not 100).
Bookrat, yes, you’re right of course (those $1M sales did skew the numbers higher, just not past ‘average’ like they normally have in the past). It would seem as though there is still a very active (albeit limited) market for $1M+ sales, although I wonder how long this will remain the case. I know of at least one sale in that price range over the past year where the new owners had yet to sell their first home before plunking $1M+ down on the second. I think we still have enough brazen speculators in this market confident that they’ll be able to sell their existing home at any price (some of these have now been on the market for close to a year, though, if not longer).
April 25th, 2009 at 12:01 PM
Bookrat,
Thanks for the heads up. I had already had two cups of coffee as well.
I have no doubt that there is sufficient data there, it’s just not accessible to me in a way which would be practical to access. I cam run a search on any address and find all of the MLS history, but obvously it would be pretty time consuming to do this one address at a time. I have a front end software to access the MLS database. While it’s fairly robust, this is not a function that is available. Might be able to get it out in a comma delimited (?) format.
April 25th, 2009 at 12:01 PM
Hello All,
Regarding the repeat sales methodology data- are you all familiar with Teranet? They use the same sort of data, and I believe it’s supplied by the CREA (please correct me if I’m mistaken on this). Unfortunately they don’t appear to have any information available for Saskatchewan. There’s a detailed page about their methodology on their site.
http://www.housepriceindex.ca/
In other news:
Value of building permits drops in Saskatoon
http://tinyurl.com/dgm9nu
“The value of building permits in the Saskatoon region fell by more than 50 per cent between January and February, according to a new Statistics Canada report. Building permits were worth $53.9 million in the Saskatoon CMA (census metropolitan area) in the first month of the year, but fell to $26.2 million in February, a drop of 51.3 per cent. Much of the decrease, according to the report, is due to a drop in residential building permits.”
April 25th, 2009 at 12:02 PM
Norm,
my family is currently looking into moving from a townhouse into a larger single family home. If and when we decide to put in an offer, how realistic is it that a seller will accept an offer on the condition that we sell our home?
With an increase in supply and some sellers becoming more motivated to move their properties has there been any change in the number of conditional sales being reported?
Any insight is appreciated.
PS really enjoy your weekly updates and monthly reports they have been a great resource for us.
April 25th, 2009 at 12:02 PM
waiting,
Thanks.
While it’s entirely possible that you may encounter sellers who are not open to including such a condition, I doubt that this will be a big problem for you. There should be a pretty good chance of selling that condition to most sellers.
Conditional sales that include a “subject to the sale of” condition are rarely reported and almost always still show as “active” on our system. The reason is that an “option clause” form is typically used. That gives the seller the right to continue marketing the property and receiving offers. If they get one they want to accept they are bound to provide the original buyer with notice (period negotiated at time of first offer) to remove all conditions or step aside. You will almost certainly be asked to sign one of those if a seller agrees to your conditional offer.
April 25th, 2009 at 12:02 PM
waiting to buy, as a recent seller (and speaking only from our experience), we had several conditional sale offers which weren’t looked favorably upon. Ultimately we did accept one conditional offer – at list price, but the buyers failed to sell within the alloted timeframe and had to withdraw their offer (we subsequently accepted a lower cash offer while they were still figuring out what to do next).
From a negotiation and bargaining standpoint, expect to pay close to list price for this consideration. The best deals are cash followed by subject to financing.
April 25th, 2009 at 12:02 PM
witingtobuy,
You could also agree to reduce your own asking price by a set amount on a monthly basis until your house sells; this would be reassuring to your seller, since they’d know you’re serious about selling and moving.
I wouldn’t want my home sitting on the market as a conditional sale (since it would get less action), unles I was virtually certain the sale would go through. Conditional on sale of own home just seems too uncertain.
April 25th, 2009 at 12:03 PM
Norm,
As a buyer I have always told my agent that I am not interested in even looking at houses that have an accepted conditional offer. Why look at something that you may not be able to buy even if you are willing to pay full price? Making an offer to me is a logical business decision but there is also an emotional component as well. I just don’t feel like countering back and forth until we have an acceptable price and then sitting there waiting for 24-48 hours while the other guy makes up his mind whether he will remove the condition or not. Also it is harder to negotiate a good price when the seller already has one offer in place.
Sellers might think that they are hedging their bets but they should be aware that there are many buyers like me. Some buyers will look at the house but not make an offer until the condition has expired. In effect their house is off the market to many buyers. This just happened to a friend of mine. Lots of traffic but the buyers agents said their clients would not make an offer due to the condition.
In one of the Vancouver real estate blogs agents have stated that some MLS descriptions have a clause stating that the seller will not accept “conditional on selling another property offers”.
April 25th, 2009 at 12:03 PM
Roger,
I understand how you might feel as a buyer but when sellers are faced with a five-six month supply they need to be realistic. Naturally, I would never get a seller tied up in that kind of a deal unless I thought the odds of a firm sale were greater under that scenario. If I owned a $400,000 home and a buyer with a $250,000 property wanted to buy it, and was willing to price their home appropriately I would give it some serious thought. The odds that you’d later come waltzing in with a full price offer are a little light right now.
If you did, we might wrap up a negotiation without you ever knowing that another buyer had an option.
April 25th, 2009 at 12:03 PM
Crikey,
I’ve seen Teranet before but with just six housing markets tracked it’s hard to spend much time on their site. I can’t find any info about where they obtain their data but I do see that it is associated with the National Bank of Canada so clearly, it’s more than a couple guys in their garage. I wonder if we;ll see it expand across Canada. It would be good to see some arms length reporting on house prices.
April 25th, 2009 at 12:04 PM
Norm,
I agree with you, I’d like to see it expand into more Canadian markets. Case-Shiller has been going for 20 years, so we have some catching up to do. I do like the methodology, as the avaerage and the median can so easily be distorted by the mix of homes sold.
Thank you for indulging my inner stats geek.