Saskatoon real estate: Week in review (November 23-30 2007)
The active stock of Saskatoon real estate listings took a significant hit this week, falling to just 543 properties, a decrease of 70 units from last week. Only 487 of those properties are single-family homes (304) and condos (183). A meager total of just 64 new residential listings were offered up for sale, while 78 Saskatoon homes traded hands.
Still, buyers managed to negotiate with sellers and a full 83% of the homes which sold brought prices which were below the asking price by an average of $7,782.
Overbidding was non-existent on Saskatoon’s west end, and not much of a factor in the north and east where only 8 properties fetched prices above list price. I should mention that I did massage these figures slightly this week. One condo, in the Rumley project, was reported as selling approximately $90,000 above the list price. This tweaked my interest and prompted a call to the listing agent. She tells me that the additional dollars reflect upgrades that the buyer chose to have added and that the selling price matches what would have been the asking price had these upgrades been included with the original listing. I was amazed to learn that 9 condos have already been sold in this project fetching prices from around $550K to almost one million dollars.
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
26 comments so far. We'd love to hear your thoughts.
May 26th, 2009 at 11:32 AM
This week’s sold/listed doesn’t seem much different from last week’s. Is the drop in inventory due to expirations? Are unrealistic sales prices now becoming an issue?
Greg
May 26th, 2009 at 11:32 AM
Norm, can you explain more about the 506 that are houses and condos versus the 565 total. Are the rest appartment buildings or land or something? When I look at MLS it says there are 540 houses and condos so I’m just a little confused about the figures.
May 26th, 2009 at 11:33 AM
Guys,
Have another look at the first paragraph of the post. I just realized that I pulled these numbers at 5:00 PM on Friday and missed everything that expired at midnight on the 30th. It’s worse than I thought.
Greg,
The math never works from one week to the next. There are a number of listings which expire, and another handful which will be pulled from the market for one reason or another.
Total expired listings for November were 85, the most for any month this year.
Hi Doug,
MLS Online gets its data from the agent MLS but it’s often a couple of days behind. Some homes reported sold to our board as late as Thursday or Friday can still be appearing as “active” there. Anything that expired over the last couple of days is still there as well. The balance of the listings (487 to 543) are mobiles, semi-detached, duplexes, vacant lots, and “other” which would cover properties with up to four living units. I notice that there isn’t a “semi-detached” class available in the MLS Online search. It’s possible that these are also appearing as “houses” on that website
May 26th, 2009 at 11:34 AM
Norm,
Do you think it’s going to be a similar real estate year in 08′ as it was in 07′? Should one be looking for a house now, rather than the spring to avoid the bidders wars before they start?
May 26th, 2009 at 11:38 AM
Curious,
Even I would be shocked if there were bidding wars like this year in 08′. I do think you’ll see a market of sellers easily getting asking prices in a short amount of time. For investment purposes, December is usually the best month to buy. All in my opinion of course.
May 26th, 2009 at 11:41 AM
Curious,
The fall activity we’re seeing provides a little insight into what may be to come for Saskatoon. Clearly, it remain a seller’s market and inventory levels are starting to take a hit again. I expect that we’re going to have a busy spring, though I can’t see it getting like it was last year with everything selling by bid. The really good stuff is likely to see multiple offers, I’ll bet.
May 26th, 2009 at 11:41 AM
Norm/Northstar, why all the hysteria?
Greg brought up a good point which you confirmed Norm. If expired listings are at their highest ever and units sold have remained relatively consistent from week to week, isn’t it the expired listings that’s causing a dip in inventory and not necessarily demand? Is it possible to see how this month’s/week’s stats compare with 2006? Why does this week’s post feel like someone hit the panic button when the stats suggest nothing’s really changed in demand… are we getting desperate for buyers?
J.
May 26th, 2009 at 11:42 AM
Johny,
Hysteria? Really Johny, please give me a break. There’s no panic here. Just a few people taking some interest in a declining inventory, the same way we did when it was climbing.
Yes, expired listings climbed to their highest point in November. There were 85, compared to 80 in October. I am also interested in the fact that over the past four weeks we’ve seen 305 houses and condos listed, and 289 units reported sold. That’s a 95% sales to listing ratio. A healthy market should see at least 30% of attempts to sell failing.
There were 230 residential properties sold during November, 2006. 316 this year.
I am still working full time. Thanks.
May 26th, 2009 at 11:42 AM
Full time? Come on Norm, we all know what fulltime means for a realtor
kidding of course, I’d never question your work ethic.
J.
May 26th, 2009 at 11:43 AM
I see that the Saskhouses.com blog is reporting increased activity and demand for November non MLS listings.
May 26th, 2009 at 11:45 AM
Thanks Philip. I caught Dale’s post as well and it didn’t surprise me a bit. The post is linked here, “Average asking price drops in November” if anyone else would like to read it.
May 26th, 2009 at 11:45 AM
Johny,
I provided you with incorrect numbers in my last comment. I seem to be having some trouble sorting out two different data sets. The initial monthly stats are always based on sales which firmed up during the month. Last year, there were 230 units. This year there were 316. However, it is also important to note that inventory levels are far better this year at 538 actives vs. 363 last year. I had hoped that we would have more inventory going into the winter months. Again, I think that there is too much pressure on prices when you’re seeing sales to listing ratios abaove 90%.
May 26th, 2009 at 11:48 AM
Thanks for the info Norm. I didn’t realize that there was such a difference in inventory from this year to last year but I also didn’t realize there was such a difference in sales. I was always under the impression that 500 listings was low but lastyear’s 363 listings puts things into perspective. If demand tapered off, would we have a problem with that many listings?
Greg
May 26th, 2009 at 11:50 AM
Johny,
“Why does this week’s post feel like someone hit the panic button when the stats suggest nothing’s really changed in demand… are we getting desperate for buyers?”
Where do you come off saying this when the first sentance of my last post was this.
“Even I would be shocked if there were bidding wars like this year in 08′”
My posts are my opinions on what I see happening in the market. My comments come from experience investing and I’d have the same opinion whether I owned property here or not. I don’t own anything in Winnipeg yet, but I’ve given my view on that market. If my motives for posting were pure profit and I felt that I actually had pull on people buying, I’d keep my mouth shut about Winnipeg until I loaded up.
I also don’t have time for desperation in any area of my investments
May 26th, 2009 at 11:50 AM
Norm, I was also thinking that larger inventory would be a buffer for us this year. However, the extra demand going into winter is really significant and if it continues then the buffer of extra inventory isn’t going to last long. The next couple of months are going to be pretty key but I’m starting to think we’ll be in the 300s by January.
Call me crazy but maybe Saskatoon IS growing too fast for this tiny resale market. Edmonton has a population that is five times larger than Saskatoon and they normally have an inventory between 2,000 and 5000 (currently 9500)… we have 500 and that math has me thinking its too tight. This must be what the city is thinking but their lots aren’t going to be here for another year. Anyway, just thinking out loud…
May 26th, 2009 at 11:51 AM
There is an article in the current MoneySense that talks about house prices peaking. It identifies Western Canada as an area for concern. They suggest looking at three indicators:
1. Affordability: measures the percentage of local household income taken up by costs of owning an average home. If housing costs are already eating up a big chunk of incomes, there is no money left to bid prices higher. Quarterly reports at http://www.rbc.com/economics/market
2. Price-to-rent ratios: measure how expensive home prices are in relation to equivalent rents. If its much cheaper to rent a home than buy it, home prices could be getting to high. For city by city analysis:
http://www.rbc.com/economics/market/hi_city.html
3. Sales to new listing ratio: are a leading indicator of future prices. A market is balanced when there is one sale for every two new listings in a month. If sales drop to less than 40% of new listings, then it is a buyer’s market and prices could drop. Go to : http://www.td.com/economics/special/pg0907_housing.pdf
I haven’t checked these sites, just providing some sources for people to do own research. Also, this is MoneySense’s opinion, not mine.
Saw on A2 of Saturday’s Star Phoenix a little congratulatory note from ICR Ashford to a uranium company for renting or buying a place on 3rd ave.
Northstar, what is the moving average over the last three months?
Regarding bidding wars, and the cyclical nature of real estate, I remember bidding wars in Toronto around 2000/2001, and obviously more recently in Alberta. Does anyone know how they played out? Does tha market return to normal, or is there a correction phase, or something else happening(I don’t see a similar situation to the states as plausible)?
May 26th, 2009 at 11:52 AM
Greg,
Remember that 363 listings last November is what set us up for what happened this year. 500 is a fair bit higher than it was then but it’s not considered to be a lot of inventory for this area. With the exception of 2007, I don’t recall many months in the last 15 years where active listings dipped below 500 units.
Doug,
I agree. We need more inventory is these levels of demand are going to persist. I believe that the city doubled servicing on lots this year but it didn’t go very far towards bringing much balance.
Jedi,
Affordability – Significantly eroded. In fact, worse than any other Canadian city.
Rent to Price ratios – worse than they’ve ever been. Why buy when you can rent for less?
Sales to listing ratio – Sorry, as I said above we’re running at 95% over the last four weeks.
May 26th, 2009 at 11:52 AM
Jedi,
On affordability I have this: http://www.rbc.com/economics/market/pdf/house.pdf
Saskatoon has gone up quite a bit compared to what they were but we’re still below the Canadian average.
Rent to price ratios – haven’t found any data on this – wish I did – I rent out my basement but the only good info I’ve found on renting is here.
http://dsp-psd.pwgsc.gc.ca/Collection/CMHC/RM/NH12-81E/NH12-81-2006E.pdf
Norm, I also heard on the radio a few days ago that the city was spending a bunch of money next year for new lots. Not sure how many lots compared to last year – any insight on that?
May 26th, 2009 at 11:53 AM
Lol, interesting how they didn’t give saskatoon (the hottest real estate market in canada) it’s own affordability line in the comparison chart. just saskatchewan. I’d really like to know how just saskatoon matches up. There are probably quite a few rural listings in saskatchewan that help make saskatoon’s affordability look better than it actually is. Still, the caution is not encouraging considering I’ve been debating whether or not to buy a house for a while now. I’m really scared. I doubt things will drop out anytime soon but what happens in a year or two years? I read your post on phoenix after someone else pointed it out. I hope that doesn’t happen here.
Greg
May 26th, 2009 at 11:54 AM
Greg, Saskatoon does – its on page 5. Its at about 35% for a detached bungalow compared to canada which is about 40%
May 26th, 2009 at 11:55 AM
Jedi,
Thanks for reminding me of my chart. The current avg house price is a little over $251,000. The last 6 months have created a perfect W and handle, (A bullish sign in stocks). The 3, 6 and 12 month moving averages sit at roughly $249,000, $249,000 and $225,500 respectively. Thus the average house price is currently above all 3 moving averages. That being said, the 3 month moving average has gone sideways now for 4 months and the 6 month is starting to go sideways as well. The 12 month is still in a strong up trend.
I don’t care if this sounds un-objective, but looking at the chart, I haven’t seen a bullish set up like this since February. Especially if sales to listing ratios continue to go up. If anyone wants to see it I’ll be happy to scan it and send it to Norm. I’m sure anyone who trades stocks would agree with me after looking at this chart.
Greg,
In my opinion I think it will be another good spring for Saskatoon real estate. On the flip side, I think after that good spring, you’ll see a correction. Again, all in my opinion. I’d probably suggest not to buy right now ( in your circumstances ), as you are scared. Nothing good ever comes from fear or greed.
May 26th, 2009 at 11:55 AM
Doug,
“Affordability” is measured by percentage of income required to pay for a house. Averages in other areas aren’t relevant to this particular measure. A close read of the last two affordability studies from RBC indicate that Saskatoon has experienced the sharpest decline of any market in Canada. We are right up there with the larger centres.
This post touches on “rent to price ratios” and this economist says Saskatoon “is out of whack with the underlying fundamentals.”
What I find most interesting about this economists comments is that she suggests that corrections are more likely to be experienced through slower growth moving forward than price declines. Scotiabank economist Addrienne Warren said something similar. Both said they felt Saskatoon is “overvalued.”
I believe that the city’s goal for new lots is similar to what they did this year, around 1,900. That was twice what was done in 2006 and it’s pushing the limits of what can be done given the difficulty in finding manpower to service them.
Greg,
I am cautiously optimistic. If you review the posts from September and October you’ll see a number of solid warnings. At the same time, it’s difficult for me to ignore all of the good news that this province is generating. It doesn’t seem all that hard to believe that we could have several years of significant growth ahead of us. It’s fun to watch the market but at the end of the day I would suggest that a prospective home owner’s criteria should be much different than an investors. To me, the bigger questions are; can you comfortably afford a home? Do you plan to be here for the long term?
May 26th, 2009 at 11:55 AM
Norm,
I think those 1900 they did last year are an important part of why our inventory climbed in the fall as high as it did. Hopefully they can build even more next year.
If you take a look at Inventory turnover, you’ll find that a month of inventory would turn over in about 80 days in 2004 and 2005. In 2005 and 2006 its been more like 60 days, and in 2007 its more like 40 days. The trend is really not that good and I see a pretty strong correlation between inventory turnover and price increases.
Prices really started picking up when our inventory was turning over in 20 days in February – June. Right now we’re turning over in 50 days which is the same as November of last year.
May 26th, 2009 at 11:56 AM
Found this on mysask.com today:
More than six hundred geoscientists, exploration company officials and mining experts from across Canada are in Saskatoon today. They’re here to talk about the province’s booming mining industry.
Industry leaders say the mining industry in Saskatchewan is worth nearly $280 million. Mineral production is also at an all-time high. Energy and Resource Minister Bill Boyd says there are a number of industry players and investors from all over the world looking into expansion and new growth opportunities here –and we’ve only scratched the surface.
Mining is a growing part of our economy. Anybody going of know any discussion at the above conference?
May 26th, 2009 at 11:57 AM
Above, please substitute or for of. Oops. On saskhouses.com there are a couple of links to Saskatoon’s hot economy and a perspective on the housing market. interest rates are also down, and a further quarter point cut is expected in Jan or Feb.
May 26th, 2009 at 11:57 AM
Jedi,
Thanks for the update on interest rates.
my comments from a month ago,
“I was talking with my mortgage broker a few days ago. He said the general concensus among brokers right now is that rates will be cut .25 – .50% in the first and second quarter of 2008. We’ll see if that prediction comes true.”
Anyone have any thoughts on what this means for Saskatoon’s market?