Great news for you, keep me updated as to when you’ve picked. Maybe you could develop your basement and rent it out to my husband and I! Hah!

George,

It was like that in the past, and that time will come again. Maybe by the time you’re ready to build! :’)

Where did this come from? Well, from this Western Investor article, explaining that it’s a great time to buy in Saskatoon! Saskatoon will surpass Calgary in house prices!

This may explain why half of Saskatoon’s listings are vacant or tenant-occupied.

http://www.sreda.com/resources/pdfs/WI%20B50B51.pdf

of course, there’s no explanation of *where* the figure came from, but it looks purdy and will help Draw! Investment! To! Saskatoon!

Without it, prices will fall and we can’t have that!

Thanks for the information. Actually the good news is that I will get to “pick” a lot. I was just disappointed to hear that there is only 80 available for individuals. Will let you know how it goes!

I hope for your sake and others that a day will come when the city is on their knees begging you to buy a lot. Not that I am in the same boat, but I would like to build in a few years, but I wonder if it will even be worth the hassle of just trying to get a lot. I wonder what the procedure is for getting a lot in Warman or Martinsville.

Yes there are 235 lots available total, but it’s exactly as you say, the builder’s get to cherry pick ‘em! Individuals get 1 lot to every 2 lots for builders. Keep in mind lots from this particular area were also “presold” to larger building companies prior to the draw, bringing down the number significantly from 300. (That’s why you see lots as “sold” on the maps – 75 lots were sold this way)

Quite frankly this city doesn’t give a damn about people like you and me, they are just concerned with business relations.

So I take it you didn’t get a good number either? :’(

Inflation rate = nominal GDP/real GDP = 1.114/1.028 = 1.084

Which would you focus on if it were all yours?

The “nominal gross domestic product” numbers which this recent story is about take price increases into account. Therefore, the massive increases in commodity prices are counted into the equation where they weren’t in the first story.”

So which of the two numbers should we concentrate on?

Lol. Great comment!

Mithan,

I agree with your comment completely. I’ve had a lot to say about the deterioration of affordability. I would be happy to see the situation improve through higher incomes and lower taxes resulting from a truly healthy economy.

“Some districts in Japan saw over $100,000 per square foot.”

Not exactly. This oft-quoted statistic is very misleading. The japanese bubble was huge, but not that huge. The price quoted is a land price, not the price a person would pay for a home. “That’s insane!” you might say. “They had to pay extra to build on top of that? The bubble was even bigger than I thought!” Again, this is prime real estate in the most sought after neighborhood in one of the richest cities on the planet. You don’t build a 3 bedroom bungalow on it. You erect a 40 story building with 10 units per floor. The top floor you make into a penthouse to live in, because after all, you are quite a smart guy. Just look at all that money Kazumori-san down at the bank is lending you. They wouldn’t do that unless they were unless you were one clever little sashimi.

So you build. And you list your, ultra-mod sophisturbication units at a price of about $10000/ft. High? You betcha. This is quality. The drapes are wired and the toilet splashes clean warm water on your bum after you make a deposit. Unfortunately, only a few apartments sell at this price. You drop your asking. A few more sell. Now, you have a lot of empty units, and Kazumori-san is starting to smile nervously. But you guys are actually pretty good pals since you treated him to fugu that time, and he ate it and didn’t die. If he drops the hammer on you, he looks like an idiot, and the bank must book the loss. So the bank starts carrying your loan as “non-performing.” This very useful accounting procedure recently adopted by a few American banks. Hmmm. Anyway, the bank nurses you along for the next couple of years, while you sell fewer and fewer units at lower and lower prices. It is a fact that a relatively very tiny number of homes sold at stratospheric prices in Tokyo sometime around 1990. But as far as facts go, it’s rather information poor.

In order to get more accurate picture of the impact of declining real estate prices on the typical homeowner, you must dig into the median and average data. I see data indicating the average home in tokyo sold for about $750/ft recently. Combine that with well documented median and average declines of 50-70% to the present, and you can figure that the typical buyer at the height of the bubble paid a little less than $3000/ft.

Again, this is undeniably nutty behavior. Why does this matter, if our market is clearly not the crack-shack foolishness exemplified by the Tokyo market in 1990?

You pointed out that the Japanese paper loss was “$20 TRILLION.” That stat is combined real estate and equities performance over more than a decade that saw homes decline 50% and a stock market crash of more than 70%. Compare that to the already $1-2 TRILLION written off by the big American banks alone, while nationally their home prices are down a mere 5-10% and the DOW and the SP500 are sitting within 10% of all time highs. After only a couple of years, the US is already booking losses within an order of magnitude of Japan’s.

But Japan’s bubble was likely at least two logs less nutty than commonly supposed. The economic impact of the Japanese crash was also mitigated by the fact that it was relatively small in comparison to the global economy. An isolated and insular, wealth destroying archipelago, with great seafood, certainly, but not a crack-shack. It was more like a few people doing blow off the head of a sony robot. Now a much larger group is out in the garage smoking pot. A group that collectively, has much more at stake. A group much less able to handle a loss.

Oh, yeah… they’ve got the munchies.

Now, don’t get me wrong, I have no problem with seeing speculators burned, but the vast majority of the homes being bought are being bought by real saskatchewan families who need a home to live in, they didn’t buy in to flip a house for $100k, they bought in to put a roof over their heads.

I really hope that Sask has really turned a corner and that jobs grow in both numbers and pay. If that happens, paying for a $400k house wont be a big deal for people. God knows we need better jobs than Rona, Walmart and Tim Hortons.

Still, I think we are really going to level off anyways, since the Speculators will dump this year, keeping prices flat as people move in from other areas.

Unless of course you see a LOT of people move into the process, then all bets are off and it is possible people from Ontario could start looking this way now that Ontario is tanking.

I’m hoping to do that later today, but I am pretty swamped at work.

Yes, I’m sure there will be many people very disappointed to hear this god news.

this Stats Can report probably deserves its own heading, should get some people bent outta shape.

when the first report came, I thought it was mistake or something wasn’t right but it was Stats Can reporting it. So I accepted it, but I guess I did not understand it. I thought with all the resources we have and the commodity boom our economic growth would be higher than reported. I have felt in the last year we will be better off than Alberta in the long run because of our diverse economy and the numbers are starting to show that.

Your fish analogy pretty much sums up my understanding of how these numbers work, but I am led to believe that we are showing some pretty good performance in job growth as well.

Hopefully we see some substantial growth in real gdp in the years ahead. I suspect oil production will continue to grow. Potash is supposed to double if I recall the “buzz” correctly.

I catch three fish and sell them for a dollar each, I have N real productivity

I catch six fish and sell them for a dollar each, I have a 100% increase in real productivity.

I catch three fish and sell them for ten dollars each, I have no increase in real productivity but a 100% increase in nominal productivity — something like that?

“Do you have any thoughts on the Saskatchewan markets? Several friends of mine have been buying properties in this province as apparently they are going through a huge economic boom right now. They have been told that the Saskatoon and Regina housing prices in particular are going to climb through the roof, ultimately surpassing those in Calgary and Edmonton in value. They have been told by realtors that by the end of 2010 that the average home price will increase about another $150,000 as apparently these cities are now on the international radar and people from all over are looking to relocate in these Paris’ of the prairies. Due to the thriving natural resource industry in this province, I have been told that prices will peek at near or above Vancouver levels. I am currently renting right now, but have been looking to eventually buy here in Mississauga. A $150,000 cash in hand from selling a property in Saskatoon or Regina would go a long way to helping this dream become a reality.”

I have to assume that he’s a troll or a spinner, one of the two, but surely no-one could POSSIBLY be so stupid as to think that Saskabush’s real estate values will top out at an average million dollars per SFH, which is what Vancouver’s are.

The whole thing is here:

http://www.greaterfool.ca/2008/05/14/step-3-mainstream-media-gets-it/#comments

Confused?

I’ve been doing a little reading this morning, attempted to sort out these seemingly contradictory numbers.

Here’s what I learned.

The “real gross domestic product” numbers which we discussed in “Saskatchewan Underperforms” post are based on price adjusted estimates with the intention of measuring production growth. Price increases aren’t counted.

The “nominal gross domestic product” numbers which this recent story is about take price increases into account. Therefore, the massive increases in commodity prices are counted into the equation where they weren’t in the first story.

Clearly, there is a bit of a resource boom going on as well.

That’s insane: how did they get 11.4 per cent of nominal GDP growth out of 2.8 per cent GDP growth?

What does ‘nominal’ qualify? I’m not an economist…

or ……… Stats can

http://www.canada.com/saskatoonstarphoenix/news/story.html?id=1eb13f02-7f76-4b41-b613-40e1b24d23c0&p=1

Is there a boom or not?

“I know this cause I am already out, hoping into my BMW in the alley.”

So you took your money out of an investment that typically appreciates and put into some that typically depreciates….Good thinking.

* Home prices in Canada are not overvalued.

* There’s little evidence of widespread speculation.

* Canada’s housing market is not overbuilt.

* Households are not over-leveraged, noting that mortgage carrying costs as a share of disposable income are historically low.

* Overall mortgage quality is still sound, as Canadian lending standards are tighter than those in the U.S.

Now maybe they said this in reference Canada as a whole. But in Edmonton, Calgary, Saskatoon, Toronto, Vancouver, where investors could not find enough properties to buy, this is not the case. How many people do you know bought investment properties. I know alot. Many without any idea what they were doing. They learned about the Big “E” word, and how to leverage their home to buy something.

I am curious as to how many houses are vacant. How many people have bought spec houses. When I visited showhomes during the boom, or quasi-boom, I was shocked by how many people were buying spec houses.

Speculation was rampant. I would love to know Scotiabanks reasoning as to why they said otherwise. Edmonton’s and Calgary’s, and soon Saskatoon and Regina will have huge inventory too as speculators will be unloading their properties. The smart ones have left out the backdoor, and the the others our just too greedy. I know this cause I am already out, hoping into my BMW in the alley.

Did you say there were only 80 lots available in the draw? On the lot draw package I got, it said that 235 lots are available. Did builders get the rest then? Can builders just cherry pick whatever lots they want? Anyone know how the process works?