Saskatoon real estate: Week in review (November 19-23 2007)
The Saskatoon real estate market continued along at a fairly typical fall pace this week. Sales of houses and condominiums showed a marginal increase over last week but new listings also posted some gains. Overall, the active residential listing inventory fell by 12 units to 613 properties, the lowest number we’ve seen since it peaked at 689 homes the week of October 22-26.
Average selling prices were lower in all areas, except area 5 which experienced a new high of $245,677. Across all five areas, the average selling price remained just slightly above the quarter million dollar mark.
While the percentage of homes which sold above list price was not particularly significant, the average overbid ($17,249) was the highest we’ve seen since the week of October 1-5, and was driven up by just a couple of sales. A Haultain area bungalow sold more than $40,000 above asking price, and a Hampton Village bi-level was reported sold at $54,100 above list.
Saskatoon home buyers were able to negotiate some dollars off of the asking price on 58 of 73 sales, but the average underbid ($7,947) fell after three consecutive weeks above the $10,000 mark.
Here’s a bit of an update of some specific sales in various areas of the city.
- An Arbor Creek bungalow of just less than 1,100 square feet with a double attached garage goes for $345,000.
- Erindale two-storey which is close to 2,200 square feet with a double attached garage sells for $395,000
- East College Park bungalow at 1,250 feet with a double detached garage for $290,000.
- A Wildwood condo of 800 square feet sells for $165,000.
- A Stonebridge two-storey, just less than 2,200 square feet with a double attached garage sells for $575,000.
- Area 2 bungalows in the 900-1100 square foot range sell between $260,000 and $310,000.
- 1,300 square foot Lawson Heights bi-level with a double attached garage goes for $342,000.
- 1,027 square foot Meadow Green bungalow in a decent spot, no garage brings $220,000.
- Finally, one of those Meadow Green condos finds a buyer with a 660 square foot unit going for $114,900.
Parkridge bungalow at 912 square feet with a double detached garage fetched $257,500. - A near new Confederation Park bungalow, just less than 1,200 square feet with no garage brings $245,000.
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
24 comments so far. We'd love to hear your thoughts.
May 26th, 2009 at 12:50 PM
Norm, heard things are picking up in Martensville. Can you confirm/deny this?
Go Riders!!!!!
May 26th, 2009 at 12:54 PM
Yeah, go Riders!
May 26th, 2009 at 12:54 PM
Hey guys! Yes, an exciting day indeed! Go Riders!!
Jedi, the MLS shows 7 sales (single family) for Martensville in October and 6 for November. Probably hard to characterize as “picking up.” While I can’t say much for Martensville, one does get the feeling that things are picking up here in the city. There seems to be more optimism out there generally. Activity is much like it was last year at this time, except that there is more inventory but it seems likely that we’ll see a dip below that 600 mark again in the next week or two. Good listings which are realistically priced are selling pretty quickly.
May 26th, 2009 at 12:54 PM
I also feel that the market is starting to pick-up now. If I were looking at buying a home I think the timing is right. Home prices in my opinion will probably increase while listings will decrease. I can’t say for sure this will happen, but I got this gut feeling that it will occur.
A great win for Rider Nation today.
May 26th, 2009 at 12:56 PM
Hey guys, after looking at a few things my take is that there’s a number of things happening in the market that are positive, negative, and neutral (from a growth standpoint).
On the negative side of things, we have a very large percent of homes that are being underbid and the average underbid seems to be growing (although its hard to tell from this week). On the positive side our demand is strong with over 75% of listings selling for the past 4 weeks in a row.
On the neutral side of things, median list price hasn’t been changing much. This is reflected in the last four weeks of sales and I’m guessing the month end figures will land us pretty close to last month. This is pretty normal for the month of November – prices should increase slightly in December.
All in all this tells me that we’re back to ‘normal’ real estate. Last year we only had inventory of 363 by the end of November which was moving us into a crisis by December when it droped to 253. If you look at 2005 & 2006 we had inventories at the end of November of 645 and 574 – which is what we look like now and these years were characterised by growth of 9% and 11%.
If you want my opinion, we’re going to be looking at growth of 7% (minimum, year-over-year) next year with most of that growth happening during the six months from December to May. As a rough estimate that pegs us at an average price of $275k by June.
I’ve changed my position on when to buy a home – really the best time to buy a home is anytime. If you want appreciation the best time to buy is now. If you want choice and the best home, the best time to buy is probably during the summer when there are more listings. If you want less risk (I’m not ruling out the possiblity of less growth), it may be good to wait for the market to settle further. If you’re looking for an investment, I’d stake Regina as growing by 14% year-over-year.
May 26th, 2009 at 12:57 PM
Thanks guys.
Doug, “a large percentage of homes being under-bid” is perfectly normal indeed and I think that should also fall into your “positive” category. We have a truer picture of actual market values when buyers and sellers are negotiating.
Is it picking up? I always feel that is best measured against the historical performance of the same month in previous years. Looking at the number of sales being reported each week, it seems almost certain that we should see unit sales increase by 10-20% this November over previous Novembers. Given that we were down about 8% in October, I’d have to say that things are picking up some.
May 26th, 2009 at 12:57 PM
Good comment Norm. I didn’t know how big the percentage of underbidders should be to be considered positive. Right now 20% of the market is bidding at or above the asking price. This seems healthy based on your comments.
May 26th, 2009 at 12:59 PM
For your info:
http://www.cbc.ca/cp/Money/071114/J111404AU.html
Real estate not about to burst
Published: Wednesday, November 14, 2007 | 10:45 AM ET
Canadian Press: Talbot Boggs
May 26th, 2009 at 12:59 PM
This part freaks me out a little:
“There could be considerable variation at the individual city or neighbourhood level”. We did go through a stage of considerable speculative investment driving demand…
I think I read that Calgary has come down 16% and they’ve already had their boom… We’re still waiting around for ours. Norm, do you think we may be more at risk than other cities?
May 26th, 2009 at 1:00 PM
Jedi,
Thanks for the link. Interesting article. I do feel pretty confident that Canada is not quite as vulnerable to the same kind of meltdown that the US is experiencing. So long as mainstream lenders continue to qualify people properly. I also find that most of my past clients have been reluctant to borrow as much as they qualify for, though that may change with the massive increases we’ve seen.
Jen,
It’s nice to see you again.
I caught that quote as well. You’re certainly correct that we’ve seen more than our share of “speculative investment” and as the price growth leaders in Canada, there should be little doubt that we are susceptible to correction. I think that there’s some of that going on right now. Condos have come down some in very recent weeks.
Still, the number of active listings remains low and while things have slowed down it seems that we are still busier than what is typical for the time of year and homes are still selling in less than thirty days, on average.
I posted a couple of articles lately about some comments made by two different economists. While both of them considered Saskatoon to be “overvalued” I believe that both of them suggested that corrections would most likely occur through smaller increases in the future as opposed to a price crash.
Perhaps I’m naive but I really do think that our “boom” (economy as a whole) has already begun. There are billions of dollars worth of projects planned for Saskatchewan. Lots of dollars are being invested here. Just last week, PCS announced a 1.8 billion dollar expansion. Rumour has it that Cameco plans to double production here. First Nations to invest 100 million in a slaughter operation. River Landing development to come in around 160 million.
May 26th, 2009 at 1:00 PM
My feeling is that Saskatchewan is still relatively “fresher” in the business/real estate cycle than the rest of Western Canada. Calgary has certainly peaked and is simply becoming too pricey as a result of inflation for business to expand in a big way – the Alberta Advantage is not what it once was. The higher energy royalty rate is also increasing business overheads and practically eliminating any competitive advantage over Saskatchewan if you are starting out fresh. Saskatchewan’s boom came much later and still seems to be in the “springtime” phase and brightening. Housing has gone up but still is consistent with HH incomes. BC is slowing a little right now with Americans starting to cash in on their investment property. The forest sector is really in the dumps thanks to the US housing crash etc. although mining is hot. Alternative markets to Saskatchewan for the investor might be Manitoba or Ontario but much of southern Ontario except Toronto seems to be falling into a recession thanks to the high Canadian Dollar and a devastated manufacturing sector. Housing prices are cheap in London and Windsor but the economy is far from vibrant and is still worsening in those parts. All in all, I’m thinking that Saskatchewan and Saskatoon are still decent places for a real estate investor right now.
May 26th, 2009 at 1:00 PM
So what is happening with lake placid’s proposal for River Landing?
May 26th, 2009 at 1:01 PM
Hi Steve,
City council unanimously approved their proposal around the middle of February. Permits and zoning approvals are still outstanding but that’s probably a synch.
As I understand it, Lake Placid is planning on starting construction next fall and completing the project by 2011.
May 26th, 2009 at 1:01 PM
Ron,
All good points, but I think the “investors” must realize that rents are still very weak here relative to current prices. I’m sure that there are opportunities out there but it’s very challenging to get a positive cash flow with 25% down.
I have been seeing lots of inquiries from investors lately and for the life of me, I can’t figure it out. How do these people find the nerve to invest in a market which spiked 50 points in a year. Based on the old adage, “buy low – sell high,” doesn’t it seem that the US is the obvious place for the savvy investor? I’m understanding that in many areas it’s very easy to attract tenants and maintain positive cash.
May 26th, 2009 at 1:02 PM
Norm,
Your right, it’s extremely hard to cash flow here anymore. Area 4 is about the only place you can do it and it’s tight there too.
I would think the “savvy” investors aren’t buying agressively in Saskatoon anymore. That being said even though 50 points have been gained already, doesn’t mean another 20 can’t be made. I don’t see any signs that this market isn’t going to see another 10 – 15% by May.
The problem with the U.S. right now is you don’t know if you’re catching a falling knife or getting great deals. I’m looking for some kind of stability down there before I put any money there.
I was quite impressed with Winnipeg’s market during my visit. It wouldn’t suprise me to see a 30% increase there through next year. Certain areas in town are starting to get the multiple offer fever with $20,000 above asking price sales. Prepare for a huge spring there as Winnipeg will be the leader next year. (My opinion only) Alberta is going through a healthy correction right now but I think that province is far from done. It wouldn’t suprise me to see a re-test of it’s highs this coming spring. (Again, my opinion only).
Congrats to the Riders… A perfect cherry on the Saskatchewan sundae. I was hoping for a Lion repeat though.
May 26th, 2009 at 1:02 PM
Welcome back. Your aggressive predictions lead me to believe that you have not been sufficiently whipped yet.
May 26th, 2009 at 1:03 PM
I’m sure someone will be along anytime now
May 26th, 2009 at 1:04 PM
Welcome back Northstar
I’ve heard an interview that the U.S. is expected to fall for another 6-9 months. I also heard that the U.S. was declared as being in a recession but I don’t know if it was from an official source. As an aside, I heard on the radio that Saskatchewan is the least reliant of all provinces on the United States for exports – I guess we send a lot of our exports to asian markets.
As for your picks Northstar, I also picked Winnipeg as being having good growth in their real estate market but I also like Regina — potentialy lower returns but I give it a high likelihood for growth.
Saskatoon might see returns in the 10-15% range – it really wouldn’t surprise me. I’d put the odds at 20% for that but it really depends on the demand over the next few months. November had some aggressive sales and it will be interesting to see if that continues. I see inventories hitting the 400s by the end of December and if they go lower it could get interesting.
May 26th, 2009 at 1:05 PM
Guys,
In many parts of the US you can buy revenue property which will generate positive cash flow. To me, that should be first and foremost. That’s an “investment” that makes some sense, especially if you’re truly in it for the long term. “Value” will take care of itself over many years. I don’t know that now is the right time to buy but I’d rather buy into a market which has just dropped 20% than one which has just increased 50.
Again, I don’t have the nerve to experiment with that at all. I was in a two year old property today that has had the crap kicked out of it. Looks like it’s 20 years old. I’m too flippin fussy to deal with that kind of stuff. I drive my wife crazy parking at the far end of the parking lot. I don’t think I could sleep at night with strangers living in my real estate.
No offense, but I hope that 10-20% predictions are pie in the sky. It just doesn’t seem right given where we’ve been this year. I am a little concerned though because inventory is dropping again at a fairly rapid rate. We finished the week with only 565 active listings. Only 506 of those are single-family homes or condos (316 houses, 190 condos). This is making me nervous.
Northstar, given the difficulty in getting a positive cash flow, I’m curious to know if you are now out of the market, or if you’re still in buy mode.
May 26th, 2009 at 1:05 PM
I tend to agree with Northstar…I see prices increasing steadily over the coming months. I don’t know about a 20% increase but I would not be surprised by that figure. People for some reason don’t seem to understand that Saskatoon home prices are well below the national average. Alot of companies are moving their companies from Alberta etc. With all the drilling and commodity based companies coming here I would definately say Saskatoon is one to gain. I was just monitoring the stock market today and watched Saskatchewan Potash corporation hit a 52-week high today in their share price….Thats just one example of many companies….and another new IPO is set to begin traing called Athabasca Potash based out of Saskatoon….people are making a ton of money. You gotta think when its bonus time or a wage increase? There’s alot of expansion going on it takes time for the trickle down effect but it will happen. I predict housing inventory to trend lower with prices increasing. I also predict the prices of single detached homes to increase the most….widening the gap between homes and condos. Just my opinion I have seen that unfold in other major cities in Canada.
May 26th, 2009 at 1:07 PM
Norm,
Wow!!! 565 active. That’s a sharp drop! I’m still looking in Saskatoon, just not nearly as aggressively as last winter. It will take a really good deal for me to pull the trigger. As I’ve called for another short term push until May, then a correction… I generally don’t like buying, then selling 2-3 months later for $10,000. Moreover, even though my opinion is that there’s an easy 10% here over the next 5-6 months, I think there are better returns in other markets in Canada. Therefore I will be buying mostly in Winnipeg starting next month.
I know it’s hard to wrap your finger around buying here after what has happened this year. Your comments on buying low and selling high obviously make a lot of sense. That being said, I can’t count how many stocks I’ve bought close to the low and sold for a good profit, only to have it take off another 30% after I sold. The U.S. does seem like a bargain right now but the fundamentals are so bad. It seems like every couple of weeks another financial institution down there gets hit (Most recently E-trade). I’d need to see at least 6 months of consecutive increases down there before I’d start to think about it. There’s so much inventory across the U.S. right now that even if buyers started coming back in waves, it’ll take a year to make a dent in those numbers.
Doug,
I agree with you that Regina probably has a little more upside potential in comparison to Saskatoon. You could be right with your 6-9 month prediction of the U.S. market. Check out a man by the name of Martin Armstrong. I stumbled across this website
http://www.contrahour.com/contrahour/2006/06/martin_armstron.html
about a year ago and thought it was cool, but didn’t really pay too much attention to it. It caught a lot more of my attention on Feb 27, 2007. Of course that was the day of the Shanghai market sell-off that dropped the dow nearly 500 points in one day (biggest drop since 9/11). If you notice on that website under
(The Economic Confidence Model in 2.15-year intervals)
there are a bunch of dates that this man deemed as significant to the market. Check out the 5th one down. I’m not one for coincidences but I’ll chalk that one up as a coincidence for now. I’m interested to see what happens on the 82nd day of 2008 as his formula calls for a minor bull market until April of 2009, when another drastic sell off is “supposed” to take place.
P.S. I hope Saskatoon is hungry for pizza as I just picked up a pizza place. If I could invest in weight gain I think I’d put $50,000 in to me gaining 10% in the next 6 months
May 26th, 2009 at 1:07 PM
That’s an interesting theory Northstar, it seems to be bang on to the U.S market but how do you feel it apply to saskatchewan?
I think that canada as a whole probably works contrary to this chart as foreign capital moves out of the U.S. in cycles and into foreign markets like ours. I don’t think Canada has seen so much foreign capital concentrated here before which could be a little dangerous when it moves back out and back into the U.S. see article’s reference to Japan in the early 90′s.
Greg
May 26th, 2009 at 1:09 PM
Interesting discussion . . . this is a terrific site. I echo Bruce’s comment about the strength of thet Sask. economy. I dare say it is built on much more solid fundamentals than here in BC. I believe the agriculture boom still has a long way to go and given supply/demand constraints, potash prices are going to continue to be very strong. I’m hearing of more oil companies reallocating their investments out of Alberta and Saskatchewan is one of the beneficiaries. That is a trend to watch. Alberta is going out of fashion as a serious place to invest even though commodity prices remain strong. As for prices, the ratio of prices to rents is still way more favourable to investors in Saskatoon versus Victoria, Vancouver or Kelowna. Two years ago, I stopped buying anymore properties in BC – it is just way too expensive – and in fact will be selling. I’m thinking the Saskatoon market still has legs but I agree that Winnipeg is a very interesting idea. There are good buys appearing in the USA but the macroeconomics still look very bad for the foreseeable future. I still believe the US dollar could still weaken quite considerably from here so real estate there is iffy even if it is a good buy in local currency. The problem is the US Fed has an awful choice between further recession/deflation or a depreciated dollar and inflation. The productivity gains of the 1990′s tech era which could help keep inflation down are slowing to a crawl this time, so the Fed is in a much worse position. Further, the US government’s financial position is much worse shape this time than in earlier slowdowns in the 90′s. By contrast, Canadian governments have been running consistent surpluses for many years now. Either way, it doesn’t look good for investors in the US. And if oil prices continue to stay high or even rise in the medium and long term which I expect them to do, that will not be good for the USA but will be OK for W. Canadian real estate.
May 26th, 2009 at 1:09 PM
“It’s an amazing situation. There are tremendous opportunities. You know what’s interesting, I was begging people not to buy real estate two years ago. And everybody was interested in buying. And now they are less interested, and this is the time they should be going out — not buying, negotiating to buy. This is the time.”
Donald Trump on US real estate – Larry King Live – October 21, 2007.
Probably just trying to pump up his portfolio.