Saskatoon real estate week in review – Sept 21-25 2009
Saskatoon real estate sales retreated again falling to just sixty-seven properties, down eighteen units from last week, and just slightly short of production for the same week last year when seventy Saskatoon homes were reported sold. This is the first week that failed to beat last year’s numbers since the week of June 12.
New listing activity was also lower, but just marginally. Local agents brought one hundred and eight new house and condominium listings to the Saskatoon MLS system this week, three fewer than last week, and down fourteen properties compared with the same week in 2008.
Click the image for a larger version of the graph.
Active residential real estate listings held steady at 1088, down just three units from last week, but well below the 1758 properties that were available during the same week last year when active listings reached their peak for the 2008. At this time, there are six hundred and thirty-three single-family homes and three hundred and seventy condos displaying an active status on our multiple listing service. Last year, those numbers were at one thousand and ninety-four and five hundred and forty-three respectively. Typically, unit sales and new listings both begin to slow in the weeks ahead, and usually we would expect to see active listings continue to decline through the fall.
Canceled and withdrawn listings fell to just twenty properties this week and eleven of those came back for another run at the market as a “new listing.” Forty-seven Saskatoon home sellers adjusted their asking price.
The average selling price of a Saskatoon home remained steady at $273,700 while the six-week average fell roughly eight hundred dollars from last week to $284,114, lower than last year’s number by about $10,000. The four-week median increased eight thousand over the previous week to $273,000, ahead of last year’s number by just fifteen hundred dollars.
Click the image for a larger version of the graph.
The average underbid was nearly identical to last week at $10,150, and about 3.3% of the asking price. The percentage of home sellers who managed to bag a sale within five thousand dollars of their asking price fell sharply from 39% last week to just 25% this week but fewer high dollar discounts kept 45% of all done deals in the $5001-$10000 discount category.
Map displaying the boundaries of Saskatoon real estate areas
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.
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Norm Fisher
Royal LePage Saskatoon Real Estate
17 comments so far. We'd love to hear your thoughts.
September 27th, 2009 at 11:48 AM
Thanks Norm. I learned something interesting today… I was under the impression that mortgages were non-recourse in Saskatchewan unless you took out an additional mortgage or HELOC; I didn’t realize that by refinancing with another lender, this also negated the non-recourse clause. How many homebuyers have refinanced without realizing the level of protection they were inadvertently trading away…?
In other news, BMO the first big bank to prime (5-year variable to 2.25%).
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2009/09/bmo-is-the-first-big-bank-to-prime.html
September 28th, 2009 at 11:34 AM
“by refinancing with another lender, this also negated the non-recourse clause.”
Jason,
I have to admit this sounds more than passingly odd to me. Do you mean to say that unless you continue to refinance with the same lender, your loan becomes full recourse? If you have any links/info, please do pass it along.
September 28th, 2009 at 2:02 PM
Jen, I admit that this seemed unusual to me as well, although one has to consider that non-recourse mortgage protection is only on the original purchase. My understanding is that a second mortgage, HELOC (I believe these have been independently verified) or refinancing through another vendor negates this, as you already own the property and are instead using the home as collateral for a loan (and not a purchase).
At least that’s the impression I’ve been left with, and I’d certainly welcome any (legal) clarification here from anyone more knowledgeable. Links to the Limitation of Civil Rights Act in Saskatchewan here.
http://www.justice.gov.sk.ca/Limitation-of-Civil-Rights-Act
http://www.qp.gov.sk.ca/documents/English/Statutes/Statutes/L16.pdf
……….
Mortgages and Agreements for Sale and Leases of Land
s 2. Action on personal covenant prohibited in certain cases
2(1) Where land is hereafter sold under an agreement for sale in writing, or mortgaged whether by legal or equitable mortgage for the purpose of securing the purchase price or part of the purchase price of the land affected, or where a mortgage is hereafter given as collateral security for the purchase price or part of the purchase price of land, the vendor’s or mortgagee’s right to recover the unpaid balance due shall be restricted to the land sold or mortgaged and to cancellation of the agreement for sale or foreclosure of the mortgage or sale of the property, and no action shall lie on the covenant for payment contained in the agreement for sale or mortgage.
2(1.1) The benefit of subsection (1) extends to and includes a mortgage that secures, or is given as collateral security for, the purchase price or part of the purchase price of the land, whether or not the mortgagee was the vendor of that land.
September 28th, 2009 at 10:02 PM
Thanks, Jason. Sorry, I didn’t post as “Crikey” last time, but let’s just go with it.
I would have thought that the entire term of the loan would be covered and that it would have less to do with who originated the loan, but if accurate, it raises the potential for some interesting questions.
Speaking of CMHC, I thought I’d pass along this link. The article itself is pretty interesting (if dry in parts-it’s an economics blog!), but more interesting, I think, are the comments:
“Does CMHC have big enough reserves?”
In a slightly related vein:
IMPP (Insured Mortgage Purchase Program)Expected to Continue
September 28th, 2009 at 10:02 PM
Hi Jason and Jen,
In furtherance of your comments above and Norm’s request for advice from someone ‘more knowledgeable, ‘ I figured I would chime in (I am a lawyer at Cuelenare, Kendall, Katzman & Watson in Saskatoon and specialize in real estate law).
You are correct in asserting that when you refinance with another lender, you in fact lose your ‘non-recourse’ mortgage protection. The Limitation of Civil Rights Act (in conjunction with the Land Contracts Actions Act) states that the remedy of the bank on a purchase mortgage is limited to realization against the secured property itself (ie: foreclose and sell it). However, on a refinance (no longer a ‘purchase mortgage’), the bank technically may pursue further monies owing to them against the person (mortgagor) where (hypothetically) there would be insufficient sale proceeds to satisfy the outstanding mortgage amount.
In practice, the bank never pursues the mortgagor for outstanding monies since there is (almost) always enough money on a foreclosure to pay them out. But technically, the bank does have the right to pursue the mortgagor on the refinance mortgage for outstanding amounts.
Note that the state of the law in this regard varies from province to province. In Alberta, there is no legislation that mirrors that of our Limitation of Civil Rights Act. Thus, the bank can pursue their claim against the mortgagor even on a purchase mortgage. I guess that clearly illustrates our vastly different histories and political evolutions.
I hope this answers/confirms your comments. If you have further questions, fire away.
Regards,
Mike
September 28th, 2009 at 10:32 PM
Hey Mike. Thanks very much for sharing your thoughts on this question.
September 28th, 2009 at 11:06 PM
Jen (Crikey), definitely!
With respect to the IMPP, this threw me for a bit of a loop: “In doing so, the government has minimal risk of loss because the mortgages are high quality and already insured.” Correct me if I’m wrong here, but with CHMC having the majority of market share, there’s a good chance at least some of these mortgages are in fact insured through CHMC. So is this not a bit of a ‘catch-22′, ie: the Government is guaranteeing CHMC to insure potentially high-risk mortgages, which then become a ‘safe bet’ because they’re already insured (effectively with the Government)? Although by guaranteeing these, the Government is technically responsible for any losses. Maybe I need another glass of wine…
I think the question of CHMC’s reserves is an interesting topic, especially in scenarios where it may have no recourse for mortgage defaults (such as Saskatchewan).
……….
Thanks Mike (and Norm, for putting in the request!), that definitely clarifies things. The only unanswered question I had was with respect to how this might play-out with CMHC-insured mortgages, ie: in a foreclosure scenario, does CHMC have any recourse beyond that of other lenders, or is it similarly limited by the Civil Liabilities Act?
September 29th, 2009 at 9:47 AM
Thanks for taking the time to help us out, Mike! When you have time, can you also tell us if all CMHC-insured mortgages are full-recourse loans? I’ve heard this but haven’t been able to verify it.
“Although by guaranteeing these, the Government is technically responsible for any losses.”
Come on Jason, you know who’s ultimately responsible for any losses! Mr. and Mrs. present and future taxpayer.
September 29th, 2009 at 10:10 AM
Jen, “We may consider each generation as a distinct nation, with a right, by the will of its majority, to bind themselves, but none to bind the succeeding generation, more than the inhabitants of another country.” –Thomas Jefferson
September 29th, 2009 at 8:47 PM
Hey Mike,
Thanks for the info above. I’m curious, does the non-recourse apply to all first mortgages, even if the property is used as a revenue property. I’ve heard differing accounts before, but have never had an expert at hand. I think Norm mentioned it only applied of ‘principal residences’, but I didn’t see that when I first scanned the act. Perhaps other legal interpretation since has established that?
Thanks
September 29th, 2009 at 10:07 PM
Mark,
The legislation applies to natural persons who occupy the premises as a principal residence and use the mortgage proceeds to pay the purchase price of the property.
September 29th, 2009 at 10:40 PM
Further to Norm’s tweet and link to the S-P’s article: “Saskatchewan’s population rises to 1,030,129, highest since 1987″, here’s something from the G&M:
Canadians migrate east and west for jobs
“Most headed for the Prairies. Saskatchewan recorded its biggest year-over-year population increase in five decades between July, 2008, and July, 2009, adding more than 16,500 new residents. The influx pushed the province’s population beyond the one-million mark for the first time in 22 years.”
Essentially the same information, but this article’s got a nice pie chart.
September 29th, 2009 at 11:59 PM
Jen, I think we’re missing the boat here in SK… Nunavut is on fire!
(0.68% increase)
September 30th, 2009 at 7:16 AM
More Saskatchewan population stuff from today’s SP.
September 30th, 2009 at 8:40 AM
Hey Norm,
What is your source for that information on non-recourse and it’s relation to natural persons and principal residences? Is it in the act itself – I didn’t see it there?
October 1st, 2009 at 9:42 AM
Interesting September numbers! (352 sales, up 43% from last Sept)
Tax hikes loom in the post-crisis world
http://www.financialpost.com/story.html?id=2052093
“With few exceptions, most industrialized Western governments find themselves in an untenable fiscal bind, the result of spending binges in the years leading up to the recession, together with the hundreds of billions dished out to ward off a possible depression and an ageing population poised to demand more health care and pension payouts from government. Those bills will come due. And experts fear increased taxes are the only way to pay the piper.”
(Attempts) at spending cuts first, then when all else fails…
……….
GDP Unchanged in July
http://www.statcan.gc.ca/daily-quotidien/090930/dq090930a-eng.htm
“Real gross domestic product was unchanged in July, following a 0.1% increase in June.”
Good news for those with variable rates, as we probably won’t see any BoC rate hikes until a period of consistent GDP growth.
October 1st, 2009 at 1:15 PM
Mark,
I apologize, as I may have confused this discussion with some legislation that limits a sellers right to sue a buyer for defaulting on a purchase agreement. I cannot find a reference to natural person, or primary residence in the context we’re discussing. I did notice in section 40 of this Act that a “corporate body” may waive the rights afforded them by Act, but I can’t say whether that is standard when a corporate body purchases real property.