Saskatoon real estate: Week in review (November 5-9 2007)
New listings of Saskatoon houses and condos remained stable with those reported the previous week while total unit sales took a small step forward to 76 properties, from 71 the week before. While sale numbers are definitely weaker in recent weeks, the ratio of sales to new listings is strengthening and total active listings are once again on the decline. At the close of the week, the Saskatoon Multiple Listing Service® was showing just 652 active real estate listings, down from close to 690 just a couple of weeks ago. Still, active listings are approximately 50% higher than they were at this time last year.
The percentage of Saskatoon real estate listings selling above the asking price was up again but the average overbid fell to its lowest level since early March. Buyers managed to negotiate a downward deal on 71% of all reported homes sales, and on average, to the tune of more than $10,000. This is surely an indication that sellers are much more inclined to over price their homes, but they seem to understand that some negotiation may be required to close the deal.
The average selling price took a fairly big hit this week, primarily a result of more condo sales, and a pretty good handful of area 4 properties which sold below the $80,000 mark.
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 1:52 PM
This is great stats. Thanks Norm. I know this is a Saskatoon RE blog, but does anyone know what the current market condition is like in Regina? Is there any blog out there that discusses Regina RE? Thanks!
May 26th, 2009 at 1:52 PM
Thanks Saskobserver. I appreciate the feedback.
Unfortunately, I don’t think anyone is doing a blog very seriously in Regina. I had breakfast with a guy I know who works there and I understand that their market is more or less like ours, though prices haven’t risen quite as much over the year.
There are some very basic monthly stats for the Regina market available here.
http://www.reginarealtors.com/ourservices-marketstatistics.html
May 26th, 2009 at 1:56 PM
Wow, interesting indication as to the swings in avg home price. I guess the argument that we can get a grasp of the market from the avg house price is finally moot!
May 26th, 2009 at 1:58 PM
Hey Norm! You know which thing I wait to read for the whole week ? that is your blog.I appreciate the time you take to collect so knowlodgable information about Saskatoon RE and the more intersting thing is the feedback on this blog from other intersting people. I have a question for you Norm, I have a property here in Saskatoon area, I am gona get possesstion of that property next week.Do you think it is the right time to sell or I should wait for the next spring?
May 26th, 2009 at 1:59 PM
Why don’t you live in the house and be happy with what you’ve got? That way you’re not driving prices up for everybody else.
May 26th, 2009 at 2:00 PM
Mannan,
Hold off until the spring.
May 26th, 2009 at 2:01 PM
Norm,
I don’t know if January was an abnormally low month for Regina, but $117,000 to $190,000 is over 60% appreciation this year. I think that might have us beat.
May 26th, 2009 at 2:09 PM
Northstar,
I think January probably was out of step. Note the following chart which pegs the average from all of 2006 at $131,812 and the average for all of 2005 at $123,712.
Mannan,
Thanks for the kind feedback. It’s a tough call and it really depends on what you’ve purchased. I am of the opinion that condos could lose a little between now and spring while single family homes may see some gains. Either way, I don’t expect that increases or decreases will be substantial.
May 26th, 2009 at 2:11 PM
Just noticed,
That Regina has done well (market appreciation) since June in comparison to here. Reminds me a little of Edmonton in relation to Calgary.
It’s a little quiet in here. I’m off to Winnipeg, then Vancouver. Blog with you all in a couple of weeks.
May 26th, 2009 at 2:11 PM
Where have all the good bloggers gone?
May 26th, 2009 at 2:13 PM
Northstar,
Regina was a bit of a slow start compared to Saskatoon but the wave seemed to last a bit longer there. I’ve told almost every investor that I’ve spoken with in the past three months to check Regina out.
Have a good trip.
Sam, some weeks are better than others. Thanks for stopping.
May 26th, 2009 at 2:21 PM
Hey everyone,
I see prices came down this week but to me the more important issue is that demand remains strong. The percentage of units sold relative to new listings was over 75% again this week which is similar to what we saw during the ‘boom’.
I’ve changed my mind and recommend the best time to buy a home is actually now (versus December or January). My guess is that as inventories drop, prices are going to slowly escalate from here on in. If you look at what happened last year, price escalations actually started in December (not the spring as most people believe – we hit our inventory crisis in the spring but prices escalated during the winter and peaked just after spring).
If you’re looking for an investment opportunity, I’d also suggest Regina versus Saskatoon. I’d invest there myself but I just don’t want to deal with all the hastle. If you want to be a firstime homeowner though, you can invest in Saskatoon and you’re still going to see your investment appreciate.
That’s my take on things anyway.
May 26th, 2009 at 2:23 PM
Doug,
I know you’ve been keeping a close eye on the medians. Curious as to what’s been happening there if you have it handy.
May 26th, 2009 at 2:24 PM
Norm,
As of today the median price of a house is 290K and the median price of a condo is 220K. There seems to be a fair amount of purchase and listing activity happening on both sides of these averages which seems to be keeping median prices fairly consistant.
May 26th, 2009 at 2:25 PM
Any chance we can get number of purchases on both sides your median? Also, what factor to inventory levels play when comparing units sold/units listed of today to those levels during our boom?
May 26th, 2009 at 2:26 PM
Hi Jen,
By definition, the median price is the point at which 50% of the inventory is priced above and 50% is priced below, so you always have an equal number of units on either side of it.
When examining inventory levels vs sales, we typically use what’s known as “absorbtion rates.” Using the sales to listing ratio one can determine how long the current inventory would last based on current sales activity. If we currently have 650 listings and we’re selling roughly 280 homes per month, you have a supply which would be “absorbed” in about two and one half months. Going back to the peak periods (April for instance), we had 254 active listings and 475 unit sales through the month, which would amount to a supply which would be absorbed in slightly less than two weeks.
May 26th, 2009 at 2:26 PM
So the same number of houses are selling above 290K as below 290K? That doesn’t really make sense to me considering your weekly avg house price hasn’t gone above 290K ever. Maybe I’m misunderstanding but something just seems off about that. Thanks for the info on inventory levels also but there seems to be a fuzzy factor there too. If inventory levels were so low then compared to now, how are we seeing the same kind of activity now as we were during our boom? Sorry for the confusion, it just seems to me that with inventory way up (compared to then) and demand down (compared to then), how are we assuming that things are ripe to pick back up again?
May 26th, 2009 at 2:27 PM
Hi Jen
I am not so sure either. I keep track of average listings on the market – both MLS and Saskhouses. Lately they seem to be slowly dropping, but I think several places are sitting on the market for long periods of time, thereby some listings expiring. But, apparently, the new listings is equalling out the sales? So not too sure on that.
I think, in the spring of last year, there were a lot of speculative buyers present in the market. That really threw a wrench into everything. I don’t think you can base any predictions on last year. One of the things I noticed is that, not just the housing market is starting to slow in Alberta. One of the newspapers I read recently said that auto sales are slowing there. The slowing of auto and house sales are two big items to watch for changes.
I think that in Sept a lot of buyers were still listing at a normal price, hoping for a bidding war. When those bids didnt come in, they bumped prices up to a level they thought they could get for the place. I think there is a lot of places overpriced right now. Norm is right. If the place is nice, price appropriately, it will sell quick. For those people (particularly some on saskhouses) that have overpriced, you may not get a sale for awhile. If you look at a 100 k income for a family that has a car payment, possibly some other debt, you can’t reach too far past a 200k mortgage. There really isnt a lot of good places in that price range.
I personally am not 100 % sure either way if we are going to see a spring boom or not. IF you look at all the other consumer factors right now. That being said, interest rates may either go up or down soon.
But, if you plan on staying, can afford the price, and budgeted accordingly, it’ll likely pay to buy if you are staying for awhile. Historically, I was told that Saskatoon had a 2% increase year over year. Saskatoon has way overshot that level for the past year. So, even though the prediction is 10-14% growth, I am a little leary.
May 26th, 2009 at 2:28 PM
Jen,
290k is the median price for houses… Norms stats provide the average selling price for houses and condos. The median price of condos is only 220k and there are units selling there too.
As for the same levels of activity during the boom – my comments were with respect to the percent of sales taking place relative to the amount of new listings coming in for the week. I’m not saying its a boom – I’m just saying the percent of sales for the last couple weeks is similar as to what we saw during the boom. Take this with a bit of a grain of salt because the amount of new listings are less than they were in the summer.
May 26th, 2009 at 2:28 PM
Jen,
For the most part I’ve stayed away from using the median because it is confusing for many, and often, they tend to relate it to the average. The two measurements are quite different and unrelated. Having said that, the median may be an even more reliable measure as it says, “half of active buyers can afford a home above this mark.” Keep in mind that the “median” which Doug has quoted is the median asking price as opposed to the median selling price. Lately, we’re seeing an average drop from list to sale price of around $10,000 which does bring those two measures closer together. Note that the average selling price of a house was close to $270K in October and the average price of a condo was just over $220K.
I’m not sure what you mean when you say, “how are we seeing the same kind of activity now as we were during our boom?, but I assume by your follow up comments that you are referring to prices and the fact that they haven’t really come down. I absolutely think that the market is going through some corrections. Prices of condos have inched down some and single family homes have probably inched up some as well. Fact is that we finished this week at 629 residential listings which is still a bit on the weak side and it still favours the seller some. However, we can clearly see by the diminished “overbidding” and climbing days on the market that it’s not nearly as favourable to sellers as it was earlier in the year.
Cindy,
Yes, after climbing over the past two months, the active listing inventory is sliding a little bit each week. Keep in mind that it’s not only sales that remove properties from the inventory. As you pointed out, expired listings are on the increase, though still far below what is typical in a more balanced market. On top of that, a number of listings will be cancelled each week as some sellers realize that their expectations are inflated, or as their circumstances change.
I feel that 10-14% in not realistic given the massive increases that we saw this year, however, 2% is low for historical increases in Saskatoon. My Saskatoon page shows the climb in sale prices in Saskatoon over the last ten years. I would say excluding last year, the average is likely more along the lines of 5%.
You can see the graph at http://www.teamfisher.com/Saskatoon_at_a_Glance/page_1723426.html
Note that 2005 and 2006 both saw higher than average increases, and we all know what happened in 2007. I don’t know how long we can continue to increase so much faster than the rest of the economy. I think we’ll likely see increases, but I expect that they’ll be below 10%.
May 26th, 2009 at 2:30 PM
So considering what you said here norm, is it really such a great time to buy right now as Doug would suggest?
May 26th, 2009 at 2:30 PM
Jen,
It depends on where your mind is at for next year and what you’re thinking of buying. If I’m right, then now is clearly a better time to buy a house than this time next year. Having said that, if a condo is in your future I think I’d wait a bit. I suspect prices will come down some more before they level out.
Of course, there are others who expect that prices will drop in all categories. I’m afraid we can’t possibly know the right answer until them.
I don’t have much trouble believing that Saskatchewan is on the upswing and that we have some years of growth ahead of us.
May 26th, 2009 at 2:31 PM
Thanks Norm. What about Cindy’s comments on affordability? I used to live in Calgary and was there during their big real estate boom. I can tell you that prices before their boom were much less than prices are here now. I can also say that I was making a lot more money there (at that time) than I am here now and that seemed to be common among many in Calgary. I can remember seeing a sign that advertised $13/hr for “grill cook” at burgerking and I remember the news talking so much about the crazy per hr rates manual labor jobs were offering. That was all before their boom. At that time there were so many people moving into Calgary (I think something like 65000 people per year). So there is demand and affordability. Ever since their boom, prices have steadily come down and it’s not very easy to sell a house there from what I hear. I realize that inventory was a lot lower here before our boom, but was it so low to compensate for no increases in wages, no increase in migration (maybe a couple of thousand from what I’ve read, in a year), and way fewer job opportunities? Why doesn’t anyone look at affordability in saskatoon when they talk about how much a house will be worth in the spring? Also, won’t there be a lot of houses coming on to the market by the spring (I mean more than usual) once all of those new housing projects (in record breaking numbers) are complete (stonebridge, willowgrove, hampton villiage, etc)? There will be houses people are moving out of as well as houses people have bought with the interests of flipping coming on to the market. Won’t that create a spike in inventory? If someone is arguing that the inventory levels and demand can sustain the price right now, won’t it be unsustainable when inventory spikes? As I type this, I realize that someone will probably make the point of migration from alberta driving demand again because Albertans can get so much more for their house there and buy so much cheaper here. But given the fact that people are having so much more trouble in Calgary selling a house than last year, won’t that all but stop migration incentive?
I just spoke to a friend last week that purchased a concrete, underground parking, 950 sqft condo on 17th ave (among the most desirable condo locations in calgary if not the most) for 290K… I’d say the equivalent is that condo building at 5 corners on broadway where condos (smaller than 950 sqft) go for 250-300K. Or maybe that Hallmark building where condos around the same size go for 250-300K. Something just doesn’t add up to make me feel comfortable in a purchase right now.
I remember there were some big arguments a while back on this board between some promoters of saskatoon real estate and some who felt the promotion was just to help the promoter’s personal investment and keep buyers buying out of fear. I sure hope that is not the case because people like me look to this board for advice on whether or not to buy. Had I not read some of the skeptic’s arguments I would’ve bought long ago out of fear of a market that is just going to keep going up… I’m sort of glad I didn’t at that time now that I’m seeing what is happening in Calgary.
May 26th, 2009 at 2:32 PM
Jen,
I didn’t comment on what a house in Saskatoon might be worth in the spring. I said that I thought predictions of 10-14% through 2008 were unrealistic (high), but that I felt that prices would likely go up through next year. Truth be told, I expect that we will see the smallest increases that we’ve seen in several years but I don’t believe that the market will tank.
Yes Jen, unfortunately everyone who feels that the market won’t tank gets labeled as a wicked promoter here. It’s too bad really as it doesn’t do much for discussion. I don’t know how long “long ago” is for you but I think I would be wondering if those little pearls of wisdom you picked up actually served to benefit you. See, homes were much cheaper here “long ago” and I don’t think it’s realistic to think that we’re ever going back to the prices of “long ago.”
In any case, I call it as I see it and I’m always careful to qualify that I don’t have a crystal ball and that I don’t know better than anyone else what will actually happen. I guess that’s why they call it speculation. Just a few weeks ago I met with a prospective buyer who wanted to purchase a condo. I advised them that I thought it might be wise to wait, as condos are going through a correction and I was feeling pretty sure that they might be able to buy for less in a few months. Do you want to know what they did? They bought, and I helped them buy it. You see, not everyone buys because they think the market is going up. Not everyone stops buying if the market might go down. Some people still buy homes because they want to be home owners and enjoy some of the other benefits that home ownership has to offer. Personally, I’m not the least bit concerned about what will happen to me if the market does go down, and nobody is happier than I am that some sanity has been restored, at least in terms of the pace. I hope that I never see a repeat of 2007 as long as I’m in this business. I have some appreciation of the pain that many felt as the market went through the roof. I’ve already seen enough casualties. It has not been a fun year.
No doubt that affordability has already played a role in diminishing demand but I don’t think we can ignore the fact that things are improving here on most other fronts. We’re leading in job growth, income growth, economic growth, and retail spending from everything that I’ve been reading. I also have to think that when half of buyers are paying in excess of $270-280 that there seems to be a sufficient amount of buying power to support the market. There’s more money out there than we like to admit. I think that the migration numbers were somewhere closer to 12,000 (for Sask) than 2,000. As for new homes, most of those are already sold. Yes, completed projects will bring more resale properties to the market but that’s been happening all year and it hasn’t created a “spike” yet. Calgary and Edmonton? Well, yes, those markets will need to improve for those people to move here. Seems to me that they are often in the tank over the fall months and then going crazy again by spring. Only time will tell. I keep coming back to the fact that we typically sell about 3,500 resale homes a year in Saskatoon, and at that rate, prices have always managed to rise. It doesn’t take very much to upset a market this small. If 2,000 new families move here next year, prices will rise. The Saskatchewan Chamber of Commerce is targeting growth to 1.5 million, by 2,030, I believe. If we see 20% of that increase it will probably keep continued pressure on housing.
The most recent sale in the Hallmark for a condo that size is 240, which is 20% lower then what your friend paid in Calgary. These comparisons are always tricky to balance. I’m working with a client right now who is deciding between two one bedroom condos (under 700′) in downtown Edmonton which are priced at 280 and 290. I’m not really sure what that should mean to us here in Saskatoon.
May 26th, 2009 at 2:33 PM
I don’t remember saying that house prices were going to what they were “long ago”. Actually Norm, it seems like most of your post is to discredit and downplay my concerns rather than address them. Did I accuse you of something or insult you in any way… did I steal your baby? And just so I’m clear, do you consider any argument that house prices won’t go up to be a sarcastic “pearl of wisdom” while anything supporting prices going up to be a good argument? Obviously I agree that some, if not most, buyers are buying because they want to live in their own house, my question was whether or not demand would spike again as a result of migration and speculative buying. And 12000 migrants in a year?? Is this number to saskatchewan or saskatoon? I was speaking about saskatoon.
That felt like an outright attack on my expressed concern about the possibility that house prices will go down (and no, I don’t mean to the levels they were before!). Your comments didn’t seem objective at all.
May 26th, 2009 at 2:34 PM
Jen,
Please accept my apology. I did not intend to come off in this way.
Your concerns are valid and intelligent and as I’ve said many times, I don’t have a crystal ball and I am open to the possibility that prices could move backwards.
I don’t want to put words in your mouth, and perhaps I’ve misunderstood you but I suppose I read your comment to suggest that one can only predict an increase out of self interest, and that the “skeptics” position is somehow more noble than the position that suggests that prices could increase further before they level out. The fact is that skeptics have been issuing these warnings on the blog since the beginning of the year (truth be told, I’ve heard such warnings for years) and prices are not likely to roll back to those levels. To my way of thinking, anyone who placed a whole lot of weight on the skeptical reasoning has probably lost a great deal as a result. My point is that both sides of that argument are based on “fear” and they both have the potential to cause damage. We should all take some care to ensure that we make informed decisions, and then we should be prepared to accept the benefits or the consequences. Having said all of that, I think that one should be able to make their opinions known without fear of having their motives attacked.
Sooner or later, we have to accept the fact that one can’t turn around in this province without running into some good news.
On immigration, yes I intended to point out that the 12,000 is for the province (Sask). Though I don’t have much to offer in the way of proof I suspect that the state of our market through most of this year would suggest that many of those people settled here. I have also made the very point which you’ve made. To a large degree, continued immigration will depend a lot on whether or not these people are able to sell their homes in Calgary and Edmonton for what they consider to be a fair price.
Again, I apologize for insulting you. I value the opinion of everyone who contributes here (except for that “Donald Trump” guy)
and your comments are always thoughtful and insightful.