Saskatoon real estate: Week in review (September 17-21 2007)
In spite of a reduction in new residential listings and marginally higher home sales the Saskatoon real estate market continued it slow but steady trend towards “balance.” A total of 110 Saskatoon homes were placed on the market, while 83 detached homes and condominiums were reported as having sold. The total number of active residential listings stood at 617 at the week’s end.
It was one of those weeks that just felt slow. Agents were talking about a lack of showings, particularly on homes priced much above the “average.” Only 30 listings were published as “conditionally sold” which could mean some fairly bleak “firm sale” numbers over the coming week.
Here’s a quick look at the numbers.
Here are a few of the highlights from this week’s stats as I see them.
- This week saw the lowest number of new residential listings (110) since the week of April 23-27.
- The percentage of Saskatoon homes selling for more than the asking price dropped to its lowest level (30%) since the week of February 19-23.
- This week brought the largest percentage of sales recorded below the asking price (59%) since I started the “Week in review.”
- The average list price and average sale price of a Saskatoon home was driven lower due to a decrease in area 1 activity and an increase in area 4 home sales.
- Area 5 sales stood out against activity in all other areas with 6 of 9 homes selling above list price and an “average overbid” of more than $12,000.
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
60 comments so far. We'd love to hear your thoughts.
April 26th, 2009 at 12:21 PM
I know we have spent a lot of time focused on the past, looking at stastics from the last year or so. anyone care to comment on what the future holds? I am curious in regards to the children’s hospital(and lots of well-paying health care jobs) and the upcoming river landing development. i am assuming that most of the materials and labour will come from the city. That’s hopefully a good chunk of the 125 mil. Further, those people will spend money eating, on consumer good and so on. Regardless of whether or not those condos are high end hopefully people will spend some buck on electronics and furniture. Not sure if there are any other major developments planned for the city but these two are a good start. Also interested in comments on an upcoming election, namely, what impact would a Sask. Party have towards the development of the resource sector and attraction of businesses?
April 26th, 2009 at 12:22 PM
Interesting,
are this weeks stats. I know week to week stuff doesn’t make a trend but that is the lowest avg price I’ve seen in a while.
April 26th, 2009 at 12:22 PM
Since the week of May 7-11.
Note that areas 4 and 5 produced as many sales as areas 1 and 2 which is a little out of the norm. 10 of those 39 sales were sold below 100K so it really has skewed the average down.
I know I’ve said it before and the numbers have proven me wrong but I have a feeling that next week’s numbers will be even more “interesting” to you.
April 26th, 2009 at 12:22 PM
I’ve been monitoring the saskhouses website for the past few months. I can remember back in July there were only about 100 houses on there and most had an offer pending on them. Now there are twice as many listings and a few reduced listings are popping up.
April 26th, 2009 at 12:22 PM
Missylu,
Interested observation. They’re only showing 6 units as “sold” for September in the sold section as well.
April 26th, 2009 at 12:23 PM
I’m not sure how up to date they keep the website but there are also many open houses listed. I wonder how long it will take for the private sellers to adapt to the market. Some still think that they can get away with “offers will be accepted until”. I sometimes call to follow up and see if anyone has even put in an offer. Those days are over.
April 26th, 2009 at 12:23 PM
Missylu,
I completely agree. It seems that many buyers are just refusing to offer on those, taking the wait and see attitude that you’ve expressed. I think it can still work if you’re priced 10% below current sales but that doesn’t seem to be happening.
April 26th, 2009 at 12:23 PM
Perhaps all of the impulsive and unquestioning buyers have been flushed from the market
April 26th, 2009 at 12:24 PM
My boyfriend and I are first time buyers. Unfortunately we didn’t get in before things went crazy. Is it best to sit tight and wait for the correction? It seems like such a big decision and I find that agents are still trying to push us to make decisions too fast. I know that it’s hard to predict the future but any suggestions would be helpful.
April 26th, 2009 at 12:24 PM
Missylu:
I think now the time of investment has gone. You should buy the house if you want to live in it.
As far as prices are concerned, the market is correcting itself but as things seems to me that it will dance around 5% up or down. It will not go to Dec. 2006. The problem will Alex and some other guys is that they are not synchronizing themselves with this situation. It you want to tell them facts that will consider it as “ïnvestor” view. Time for cheap Saskatoon in now the story of past.
Anyhow, the nice advice is that if you want to live in house, buy it but do not buy if to make money out of it.
April 26th, 2009 at 12:24 PM
Alex,
you’ve got that right and I am feeling like there is some hope for this world again. It is nice to see people approaching real estate with a more responsible attitude.
Missylu,
I largely agree with Sweety. You’ll see a real mix of opinions here on the future of the market but nobody really knows for sure where it will go. I would say that if you plan to live in Saskatoon for at least a few years, and you can afford something that will meet your needs, then go for it. Seems that rents are skyrocketing so owning will likely continue to make sense.
April 26th, 2009 at 12:24 PM
Thanks:)!
April 26th, 2009 at 12:25 PM
missylu, just my 2 cents but I don’t think waiting is a good idea if you own don’t own any property at all. Now believe me, I have a very pessimistic attitude towards the recent price increases, I figure eventually prices will go down. However, my logical argument doesn’t necessarily have to connect to reality. Markets can stay out of synch from reality for years, even a decade. If you look at historical evidence, there is no reason prices can’t go up more than they already have. It may not be sustainable in the long-long term but as long as commodity prices stay high, Saskatchewan should continue to do OK.
Some other points to note, prices a year ago were below their long-term trend line and there is no reason to believe those levels will ever be achieved again. As Norm has pointed out, prices are even now only 21% above their long-term expected average.
If you look at the US, house prices saw much larger increases percentage-wise, 200%+ in some areas from 2002 to 2006 before hitting the recent slow-down. The market in the US has been down since late 2006 and yet the national average price decreases are only 3%. Not too significant when you consider it is being called the worst housing bust in 16 years! Now it may get worse before it gets better but the only people who are going bankrupt are those who bought more house than they could afford to make payments on and foolish investors.
Personally, I would stay away from Condo’s as they saw the greatest price increase in terms of percentage and I can realistically see their prices falling. There seem to be a lot of them coming online.
If you look at the Calgary boom/bust in the 70′s and 80′s, even if you had bought at the absolute peak right before the bust in ’82, within about 7 years inflation would have brought house prices back to those lofty levels and you would still be better off than renting.
So again, I am a big believer that we are overheated but realistically there probably won’t be a big price crash. The market could stay up for years and you meanwhile fritter away your money on rent. If you are renting you will probably come out ahead buying even in this market over the long-term. I just wouldn’t put any money into it as an investment.
April 26th, 2009 at 12:25 PM
If you are intent on buying a house an you have no desire to go back on the decision – plan to wait.
Put your belongings in storage somewhere, end those rental agreements, shack up with family or friends.
Then, wait.
At some point in time things will turn around and you can’t afford to be limited by a schedule or inflexibility. Put yourself in the best position to offer the most flexible agreement to any desperate (and otherwise) sellers.
In Saskatoon, be prepared to watch homes and prices obsessively and be ready to pounce. As it is right now though, I wouldn’t pay even 75% of the price being asked for homes in this city. Too many low standards, and they are all marked up for pure profit.
April 26th, 2009 at 12:25 PM
Thank you everyone. Right now we’re only paying $700 everything included for rent in a decent home in the Broadway area. Our landlord is a very decent guy that could probably be getting upwards of $1000 for the place. Our rent is fairly cheap right now so we were waiting to save more money so that we can put down a larger dp.
My uncle and a friend of mine both own properties in Calgary. My friend will not sell her condo because there are way too many on the market….sound familiar. My uncle is having trouble because there are 5 times as many properties on the market than there were a year ago. This is all second hand information and I’m not sure if the stats support what they’ve told me. It seems like we have gone through what Calgary has on a smaller scale. Is it fair to say that this may happen here?
April 26th, 2009 at 12:26 PM
Missylu,
I think you are getting a fairly accurate picture of what’s happening in the larger Alberta markets. It’s not unusual for those places to experience significant fluctuations though. It could very well take off again.
We are seeing inventory levels rise here as well but of course, we’re talking much smaller scales. Having said that, I know of many condo projects which are planned for next year. We could find ourselves with a substantial supply of these units. I believe that single family homes are most likely to remain low. I’ll be surprised if “house” inventory manages to build to levels which brings lower prices.
April 26th, 2009 at 12:26 PM
Missylu, I just bought a house after extensive research and you can see my reasons here:
http://www.teamfisher.com/blogs/norm_fisher/archive/2007/09/07/saskatoon-real-estate-week-in-review-september-3-7.aspx
Somethingdoesntaddup, I’d be curious on how you calculate long term expected average.
Norm, I don’t really understand why average list dropped so much this week. I’ve been looking at median prices for houses and they went up another 10k this week (280k). Are more condos getting listed which is lowerering average list?
Note, my method for getting median list prices is pretty solid now. If there are 442 houses listed on mls, you just look at listing number 221 which will be the first listing on page 23.
April 26th, 2009 at 12:26 PM
Hey Norm, I like the weekly updates that sometimes include a breakout of the data between the condos and the houses… could you produce more of them?
very interesting stuff
April 26th, 2009 at 12:27 PM
Doug,
The average list prices are for the 83 units which are actually reported sold. The drops are due to a larger percentage of the sales activity happening in area 4.
Michael,
Thank you. It is my intention to do these comparisons on a monthly basis. I have to wait about 10 days into the following month to ensure that all conditional sales have firmed up and have been reported sold. The August stats did manage to get away from me but I’ll do my best to get at them in the next couple of days. Thanks again for reading.
April 26th, 2009 at 12:27 PM
Norm
The past week resuls reflects what has been happening at the “Bank” one of the lending instituions
. Traffic has slowed down, no rush applications for preapproval. The Flow of the big investment cheques have also been less apparent.
Refinancing can be up to 95% of the value with a 2.75% premium and extend it to 40 years for .60% more …total 98.35% Scarry!!!
Missylu:
I would say stay put. Take the difference between your current rent payment and what your housing costs will be and purchase RRSP’s, you will benefit from the tax deduction and the when you are ready to buy, access the funds with the Home Buyers Plan for your downpayment. Reinvest your tax return too!
I beleive that the market will correct and then you will be in a position to purchase the home you want and can afford.
I have not purchased a home since I moved to the City in February. It scares me when you see a 1961 Home that needs major updates (blue sink/toilet and old cupboard and windows) for $349,000. I think I would really consider a brand new turn key for the same price.
Just my thoughts.
April 26th, 2009 at 12:27 PM
Something,
Although we share different views in the future direction of the market, I’d like to say that I quite enjoyed your post.
Missy,
If you’ve been reading this blog for the past while, you’ll know my position on which way I believe the market is going. I think if you’re not in by December you’ll probably have to wait a couple of years. That being said, I agree with most of the sentiment on this topic in that the time for investment has passed. For me, I’m only offering on a select few properties that fit my investment style. If you’re looking for a place to live for the next 5 – 10 years then I’d say go for it. If not, then either get in and out by next May, or stay out for a couple of years. IMO
City banker,
95% refinancing? Can you provide more info? (which bank, terms etc.) I might want to check that out.
April 26th, 2009 at 12:28 PM
Northstar:
I think you are correct. Most of the people in Saskatoon did not act in Dec. and this is their fault that market went in the hand of Albertans. Now this is reason “Poor” are paying the price and “Riches” have the hold on market.
Alex:
You may criticize it but this is how system works. I am related with oil and quote oil example. How much is the exploration and upgrading cost of oil is per barrel in Canada? It usually varies between $30 ~ $32. Then why I pay $1.15 on pump? The answer is simple “This is how things work?” Canada is a welfare state but it is not as welfare that I will pay $0.27. Now if I start arguing, the people will surely request him to consult some psychiatrist. Reasonable house price issues may be a good thesis topic or it is nice to discuss it in a third-world-country election rally to win votes. We have no control on it here in Canada. It is free market and it will react according to situation. Accept it where the market is standing now. Some smart ones acted well and they got money and some who did not act at proper time and cry.
You always showing us an ideal society where things are very “reasonable”. Alex continue to search for it and one day when to locate it, please publish it. I will be the one to enter in this “paradise”.
April 26th, 2009 at 12:28 PM
Citybanker,
“at the “Bank” one of the lending instituions
.”
I suppose I had that coming. Thanks for the gentle reminder that bankers are people too.
“Traffic has slowed down, no rush applications for preapproval. The Flow of the big investment cheques have also been less apparent.”
…and my home inspector is doing inspections this week. This is a good sign. I know I will enjoy being out of that mad house environment. Buyers and sellers can both get back to making smart decisions regarding one of their largest assets.
April 26th, 2009 at 12:28 PM
Northstar,
I believe that Citybanker is talking about an insured mortgage for a primary residence.
April 26th, 2009 at 12:29 PM
Northstar – 5% down has been around for years.
The 40 year option is fairly new though, and it was something our bank had actually suggested to me in the spring as a condition for mortgage approval (to keep monthly costs down). Not entirely sure how, but I managed to get the bank to agree to 25 year bi-weekly accelerated (which works out to 18 years).
Just to chime in with my thoughts on the market:
2 minutes off the runway, the engines are throttled back and the captain turns off the seatbelt sign, but we are barely past 10,000 feet and our cruising altitude is still quite a way up.
Likewise, this market has taken off, and to some degree, leveled out, but we are far from our cruising altitude and we can expect a steady climb in the near future.
April 26th, 2009 at 12:29 PM
I saw this today and I figured I’d share it here. It contributes to my point that houses are not affordable for certain price brackets due to the unjust reallocation of wealth in our society:
http://www.globeinvestor.com/servlet/story/RTGAM.20070924.wstatscanrich0924/GIStory/
April 26th, 2009 at 12:29 PM
Jeff,
Thanks for the comment.
It’s all a matter of perspective, isn’t it? Place last week’s stats anywhere on the calendar between 1990 and 2006 and everyone would say, “what an amazing week for Saskatoon real estate!” It just looks a little dull when you compare it to most weeks from this year.
Alex,
Thanks. A little more on that story in the SP at http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=75af0372-beb3-4952-ac4b-1c4eb46caf7a
April 26th, 2009 at 12:30 PM
I think it’s disgusting and the government and corporations have turned the majority of people – who despite their wildest of dreams still comprise the middle class – against themselves.
Everyone wants to consider themselves a big time earner and distance themselves through definition and opinion from the middle class “treading faster”.
What does it take to remind ourselves that we must look after those not only within our class, but also above and below?
As more of our money is consumed by arbitrary and baseless costs in an ever growing expansion of greed, so too will our quality of life as we realize that we are reduced to nothing more than a guaranteed monthly payment to some company intentionally raising prices to require financing.
Financing is out of control. House prices are out of control. Capitalism is out of control.
April 26th, 2009 at 12:30 PM
Alex,
Your opinions are emotional and not always supported by the facts. Home ownership is much higher now than it was 30 or 40 years ago thanks to the various types of financing now available. Life expectancy is way up, in the mid 70′s last I checked. People living in poverty still are provided with free healthcare and there are very few people in our society that are starving. In the cases where people are going hungry I have a feeling there are other factors than rampant capitalism, unless you include the drug trade under the same umbrella.
I will also point out that the study you cite reflects individuals making more than $82K a year. Well guess what, there are a hell of a lot of people making less than that who own houses. Probably the majority of homeowners make less than $82K. If anything the recent housing boom has enriched the middle-class. I mean condo’s and low-end housing seem to have seen the greatest price increase in terms of percentage and guess what demographic owns that?
Everything you have, all the amenties, all the technology, high standard of living, long life expectancy, all of this is made possible by the capitalist system you so despise. Have you ever been to Russia? Go have a look what happens in socialism run amok.
Yes it sucks that people have a hard time with housing but it’s not like you don’t have options. Vote with your feet. Ultimately capitalism is self correcting so if you are so right a big correction will ultimately come. In the meanwhile, why don’t you apply yourself constructively instead of this non-stop vent.
April 26th, 2009 at 12:30 PM
Something,
Capitalism and free markets do not self correct in the sense you imply.
I don’t know what facts I can provide you with except the reality around us to help you see that.
I think what you usually say plays directly into what I talk about. Whether you are going to admit it or not is not my concern at the end of the day. The fact of the matter is that time will tell how the things I observe today tie in DEEPLY with what’s happening.
April 26th, 2009 at 12:30 PM
come Alex, mention the proletariat, you know you wanna….
There is no doubt humanity has a long way to go in our dealings with one another. That being said, can you(Alex) point to a time in history when there wasn’t a class divide (Plato compares classes to metals, thats wayyyyy back). Adam and Eve excluded. Greed isn’t a new concept. You can rant and rave about it. Why don’t you write a treatise as to try and convince people there is a better way? Is there a bunch of greedy bastards making money at people’s expense? Yes. But I don’t hear you complaining about slave labour in other countries. I don’t want too either. This is not the venue for it.
On a different note, how has the shift to dual incomes affected the average house price? I mean, in a previous time when there was only one bread earner, houses would have been less. Factor in two bread winners, whose house is probably paid off(the boomers), kids are gone, and you have some people with some serious disposable income. Maybe 89K or whatever the article mentioned is considered elitist, but two 45K salaries are quite doable.
April 26th, 2009 at 12:31 PM
“Capitalism and free markets do not self correct in the sense you imply.”
Ask the people who were around in 1930 if capitalism doesn’t self correct.
Ask the homeowners in 1982 if capitalism doesn’t self correct.
I think there are 2 options here.
1) Offer rational, plausable suggestions on what could be done to help out people being hurt by the boom.
2) Rant and rave, blaming everything and everyone.
I still have yet to hear anything from you other than option 2. What are your rational suggestions!!! Please tell me!!!
Alex, it’s not like people (including myself) don’t hear some of what you’re saying. People just don’t have respect for whining and complaining, yet having no reasonable solutions besides a Robin Hood mentality. You wonder why it seems like everyone is against you on this blog? At some point in time you’ve got to take a look at your argument. It’s not the 98% that’s wrong. I could be wasting my time with that request.
Jedi,
I totally agree that dual incomes have made the market what it is. City banker said himself that $28/hr is what is required right now for a $257,000 house. That’s 2 people making $16… er, I mean $14/hr.
. If people can’t find a $14/hr job then they need to give their head a shake. Find a house with a basement suite and you’ll probably get away with $11-$12/hr jobs. Be willing to pick up a house in King George/Holiday park area for $179,000 with a basement suite and you’ll get away with 2 minimum wage jobs. I live in King George and my wife and I love it. This market still presents fabulous opportunities for home ownership for those willing to think outside the box.
April 26th, 2009 at 12:31 PM
Does anyone have any thoughts on housing in the Riversdale area? With River Landing, The Farmer’s Market & The Crescent it would seem that this will eventually be a great place to live. I am not familiar with this area so if anyone has any insight please let me know.
April 26th, 2009 at 12:31 PM
This was an interesting article. They aren’t concerned about the west because of the economy, but what if the economy changes?
http://www.theglobeandmail.com/servlet/story/LAC.20070926.RDODGE26/TPStory/Business
April 26th, 2009 at 12:32 PM
Misslu,
I considered looking for a house in Riversdale this summer seeing the relatively low cost of housing in the neighbourhood and prospect of the area improving with the recent developments going on in the area, but after taking a drive through the neighbourhood and seeing some of the people there I don’t think you could pay me to live there. The one place I looked at had a bunch of kids about what I estimated to be about 12 to 15 years old out drinking on the lawn with their rap cranked, and another had a lady lying on her back on the sidewalk clawing at the sky in a drunken / drug induced fit. Add this to the angry looks from people in the neighbourhood while driving through and I got the hell out and wrote that plan off. While over there I was made to feel like I was outsider infringing on someones turf. Like you say, I could see the neighbourhood improving down the road, but right now I simply wouldn’t feel safe living there myself and the only way I would consider buying a property would be to rent it until (if?) the neighbourhood cleans up.
April 26th, 2009 at 12:32 PM
Yeah I WOULD NOT live in Riversdale either. A friend had a house on Ave F and I used to lock my doors while driving to his place. His place was broken into 3 times and twice was by his neighbours! It may clean up eventually, but I don’t think it will be in quite a few years. Which is sad since the old houses there should be restored to their former glory since that’s one of the most historical areas of the city.
April 26th, 2009 at 12:32 PM
Hi Norm,
Discovered your site recently and I have to say I’m thankful for the discussions and analysis you provide to the real-estate community.
I’m a home owner and have been for the last 3 years and my mortgage is coming up in March and I’m wondering what to do. We bought for the ultra reasonable price of around $110 back in March of ’05 in EastView (840sq ft, 1/2 duplex, 3 bed up, 1 down, 2 bath, finished basement).
I’m just wondering what you think I should do with the upcoming renewal of our mortgage? I’m inclined to just keep the property as I don’t subscribe to all this bandwagon jumping of flipping houses and we actually like the neighborhood and house we live in. People have advised me to sell now while the prices are much higher than we paid for our place but I think I’d rather sit on the equity we have and not borrow against it and see what happens.
Any thoughts on these questions and also what your estimate of what our home would be worth in todays market?
Thanks, A.
April 26th, 2009 at 12:32 PM
Sunny,
Interesting story. I’m surprised that Mr. Dodge didn’t mention Saskatoon given the fact that we had the highest price increases this year.
Hey Andy!
Thanks for kind feedback. I am fortunate to have a pretty good crew of readers popping in and out of here, with a wide range of opinions, so it does make for some pretty interesting reading.
I wouldn’t be the least bit surprised if your home has doubled in value since you bought it. I recently listed and sold one on Kingsmere which was just a smidge bigger, with no real basement development. It went for close to 190K. Given that you have a developed basement, and a better location, I would guess that you’re probably in that 210-220 range anyway.
I have no idea what you should do but keep in mind that there’s little to be gained by selling if you’re just going to purchase something else. Yes, you’ll get a good price for it but you’ll pay dearly for the next one. If you’re settled in, plan to remain in Saskatoon, and the home continues to meet your needs, I would suggest avoiding the costs involved in selling, buying and moving. This house will just get easier to pay for as time goes on and it should continue to appreciate (assuming the market does) as well as anything else. If a larger home is in the future, why not start saving the difference in monthly payments for a while to see how it feels. When your needs change, and you need more home, you’ll have some extra cash and the confidence that it will be a comfortable move for you.
Thanks again.
April 26th, 2009 at 12:33 PM
Alex, Stephen Lewis will be speaking at the TCUP in early November about inequality. I have heard he is a good speaker. I think its about 20 bones, but you get to donate it to one of 4 charities. Why don’t you go, see what he says, and see if there is anything in his speech that you could use to lessen the gap in Saskatoon?
April 26th, 2009 at 12:33 PM
Just wanted to weigh in on the Riversdale topic. It’s an interesting area considering 2 years ago people selling couldn’t get 30k for one of those houses. Now some have sold for $160k.
I think the area has a ton of potential considering its close proximity to both downtown and the river. Where else in any city can you get that without paying a ton? The houses directly across the river start at $500,000. It’s amazing the psychological barrier 300 feet of water has.
Areas like those take a long time to turn around though. I think those that bought there in February and are able to hold for 10 years are going to make a killing. Like 400 – 500% killing.
I don’t have 10 years worth of patients.
Andy,
I agree with Norm in that to sell your house because the market is way up wouldn’t make sense. That is unless you’re planning on going somewhere else that is cheaper. For me I always pull equity out and do something with it. Else it just sits there and does nothing. It costs me roughly 6.5% to do so and I’ll take that money and make 30% with it. Just a thought. I can’t see interest rates going down anytime soon, so locking in for a while might be good.
IMO
April 26th, 2009 at 12:33 PM
Tell the truth i don’t think the price will keep going up.yes, Everyone talking about the climbing price of house, but the porpulation of saskatoon are not creasing sharply.It means those guys from other cities who have bought houses here can sell their houses at any time and run away. they just bought but not live in. Saskatoon has 250,000 people, about 70,000 familis (I guess)Half of them can’t afford a house above 300,000$.(these guys wages increasing with price of house?)Those who can afford have their own houses, If they buy another houses, they must sell the former house, then how many houses come to the market? Prices depend on the market.I think house price now should be consumed for some years to go to the balance.I just can’t understand why those new houses come to market on 400,000$ or 500,000$? who will buy? Saskatoon is’t a big city as Calgary or edmonton, its market is so limit.Calgary and Edmonton need 10 years come to this price, at the same time double ot triple the population, Can Saskatoon’s price just go far solely? Price depening on market, Market depending on population and salary,and so on.If not, big price just a bubble.
April 26th, 2009 at 12:34 PM
Iris, Canada AM, this morning, talked about growing populations in Sask. Didn’t mention toontown specifically, but its growing. Not sure if you are aware but we are playing a little game of the price is right (grand prize – satisfaction of best reasonable guest!!!) Norm will be putting out the specifics in a while. Please throw in a predicition when it comes out.
April 26th, 2009 at 12:34 PM
Hey Norm, et all, I realize that many try to downplay our dip as a “market slowdown” or “a seasonally slow period” but in compiling this week’s stats with those of the previous 5 weeks, can we finally call this a downward trend?
Despite some attempts to capitalize on continued investor interests, it’s becoming pretty clear that things just aren’t sustainable. The buyers just aren’t there guys. We’re also seeing more and more “completely renovated top to bottom”‘s coming on to the market. Are we starting to see a problem? Is this an indication of who the buyers were that caused our “boom”.
J.
April 26th, 2009 at 12:34 PM
Johny,
I personally wouldn’t call it a downward trend. It’s definately leveling off but to establish a downward trend I’d need to see the next 2 – 3 months decrease significantly in avg price. After all August just set a record.
I also remember saying that from now until December could see a 5% retracement. If that happens the city would still be in an uptrend looking at a monthly moving average of the past 2 years.
IMO
April 26th, 2009 at 12:35 PM
Johny,
Can you clarify how the last 5 weeks have been a downward trend? Average price? (It was 262 last week, hightest ever) Sales and overbids? They are slowing down. Don’t really see listing prices going down. Days on the market and expired listings? Increasing.
If you hop on to the Edmonton and Calgary blogs we are definitely in better shape than what is reported on them. Just wanting to know what you consider a downward trend.
April 26th, 2009 at 12:35 PM
Norm and Northstar
Sorry to correct you Norm, but there is 95% refinance available underwriten by Genworth, with Scotiabank for a while and just recently I think RBC come aboard.
There is also a new financing program available for Rental properties at 90% also underwritten by Genworth, and currently only available at BNS, and get this up to 40 years too!!
April 26th, 2009 at 12:35 PM
Well, I was more referencing the number of sales as an indication of buyer sentiment and general buyer demographic.
Contrary to the 262K avg last week, we hit 228K this week… pretty huge swing. I think Norm even admitted himself that both weeks were skewed by a few unusually high sale prices and the next week, a few unusually low sale prices. Typically (always) when interest in a particular market slows, so too does the market itself. It’s fair to say we’re seeing more than a slowdown in interest as the speculative investors are scrambling to exit.
On a side note, I was also interested to see how quickly you’d both be on me to pull forum-reader attention from the idea of a slowdown… pretty quick on the draw boys… kind of like batman and robin
J.
April 26th, 2009 at 12:36 PM
Johny,
If you had said “slowdown”, I would have agreed with you. I believe your words were “downtrend”.
Remember that your views are as skewed to the downside, as you figure ours are to the upside.
City Banker,
Thanks for the info!! I’d also like your opinion on something. I currently have a contract on a business that I need a total of $250,000 for. I can come up with $95,000 myself, the business has $75,000 in assets and $80,000 in lease hold improvements. I also have around $70,000 in equity in my personal residence. Would this scenario work at the institution you are a part of? Also would I get more pulling the equity out of my house or getting a 2nd mortgage? TIA
April 26th, 2009 at 12:36 PM
Good morning,
I’m away for a few days and having some challenges getting to my computer.
Citybanker,
Thanks for that. So we’re talking re-fi’s here?
Johny,
I tend to look at the numbers and the trends in terms of “is it good for buyers or sellers?” No question in my mind that things are slowly moving back towards favouring buyers. Again, take last week’s numbers and pop them into any previous September and they probably look pretty good but in comparison to recent months, they look weak.
Demand? The investors seem to have stopped buying. Remains to be seen if immigration and locals can carry this load. There is a fair bit of product sitting that would have been scooped up pretty quick in May.
April 26th, 2009 at 12:36 PM
My views are skewed by facts and well presented arguments. I already own a house. I’d like people to start being realistic and don’t want to see people hurt by over-extension and speculative investors (making a quick buck). I have no personal interest in this market to be honest Northstar.
Slowdown or Downtrend, I stand by either. In comparison to market activity of the past 5 months, I’d say the past month is pretty indicative of a downtrend.
J.
April 26th, 2009 at 12:37 PM
I agree with Norm in that if you compare this to previous years, demand is still pretty strong. People were talking about a softening market as early as last month. If you look at august housing sales though, Saskatoon sold more houses in august than it did in august of 2004, 2005, and 2006.
I also agree with Johnny that the market is cooling but come on – this was the hottest real estate market in Canada and probably North America. Of course price increases of 75% per year can’t continue indefinately and its healthy for things to cool.
The thing I keep in the back of my mind is that local people in Vancouver and Calgary always thought prices would come back down. And guess what, they never did – in fact they kept on climbing and many locals lost out. I can see that happening in Saskatoon as people continue to move here from cities with higher property values (we’re still below average and people are migrating here from accross the country).
April 26th, 2009 at 12:37 PM
Hi Norm!
Doug, people moved to Calgary and Vancouver for a reason, jobs. Those economies continue to grow jobs in huge volumes. Professional jobs that graduating students move cities for. Saskatoon job growth is nowhere near par in growth to that of the two cities you’ve listed. Trust me, I watch jobs in saskatoon on an hourly basis, from my office in Calgary. People don’t move to saskatoon just to move to saskatoon. People go where the opportunity for personal success is.
April 26th, 2009 at 12:37 PM
Hi Jen,
I agree about the importance of jobs but you’ll have to explain that to the people moving here. I heard on the radio yesterday that statscan predicts Saskatchewan will hit the 1 million mark for population within months based on current levels of migration.
April 26th, 2009 at 12:38 PM
Good posts Doug,
I also don’t disagree with Johny that the market is cooling. What I disagreed with is that it’s in a downtrend. Anyone who trades stocks knows you need a confirmation of a downtrend by a cross of a significant moving average. Same thing applys in real estate. Take a look at this chart.
http://www.canadian-housing-price-charts.235.ca/canadian_housing_price_chart.htm
Vancouver: Oct 06 – Jan 07
The market corrected a touch and since has nearly shot up another 100k.
That’s why when Johny says “we are in a downtrend”, I say “I need to see sigificant moves downwards over a few months to confirm that for me”.
Maybe I’ll come up with a chart for the past few years in Saskatoon.
IMO
April 26th, 2009 at 12:38 PM
Any thoughts as to why Vancouver shot up another 100k after their correction? Any relation whatsoever to what’s going on in saskatoon?
J.
April 26th, 2009 at 12:38 PM
Johny,
My point is 1 month of a slowing market is hardly a down trend.
April 26th, 2009 at 12:39 PM
Hello Everyone, Just wanted to drop a note.
I’ve been following this blog for a while and really like that there is various perspectives on the Saskatoon Market. I currently live in the Toronto/Greater Toronto area, and find it quite an eye opener on the prices of the houses being listed (I moved to Toronto from Saskatoon for the exact reason that many have mentioned on this blog — jobs and Career building!!! Or lack of opportunities expecially when you first graduate). I’m hoping to move back eventually, but with these state of affairs where jobs/careers are not as easily found, nor is housing choice as easily available – I’m on the fence for now.
On my way to this blog I took a look through the postings of some of the higher end houses in the Area 1 (Briarwood etc)– this area would be equivalent to the area I currently live in the East end of Toronto Scarborough/Pickering- which is further away from the downtown area. These 2400 sqft houses in Area 1 saskatoon are listed at $800,000 to $1.2m. Now you compare this to a 2 year old house out in the Scarbourgh/Pickering (Great Toronto Area)with 6000 sqft + walk out basement selling at $856,000. These aren’t little houses. These are almost mansions with large back yards! So how does this compare? Too much to pay for sqft in Saskatoon!
And I also think about the market/jobs/commerce for Saskatoon in comparison to Toronto. There is a large gap. With Saskatoon having way fewer jobs/commercial investment etc, and the housing prices are much higher per square feet! I definately think that the houses in Saskatoon are over valued, and people should consider what they are getting for the money they are paying – as well as the long term implications of taking out mortgages that are beyond their means. Can you imagine at age 30 taking out a 30 year mortgage or 40 year mortgage? How old would you be before you pay off your mortgage? about 70. At any given time anyone can have a set back or crisis that may take them out of their jobs. What would happen then? How would you pay for it? Expecially with the types of combined incomes of $85,000 per household, how can someone adequately live a “comfortable” without taking another job, or worrying all the time? Not to mention if they have kids?
Why I say this is that between my husband and I we make a pretty good salary $170,000+, but wanted to live within our means – meaning at any given time if one of us lost our jobs, we could still pay for everything (yes you may say that Toronto is higher living expenses, but we also do not get taxed as badly on our income taxes. Saskatchewan is actually one of the highest tax rates for incomes. As well groceries don’t cost as much either!). Our house is about 2300 sqft with basement cost us $260,000. It’s now valued at about $310k to $320k because we’ve lived in it for about 4 years now and it has gone up with the market value + proximity to Central Toronto + continued job development — but these are actually quite reasonable prices to pay when you live around Toronto central. I don’t see the same reason for Saskatoon home price increases.
I really think that because Saskatoon is a smaller place the “craze” to buy a house falsely inflated the market value of the houses. Hopefully like many of you said that the housing market will balance out. And buyers actually start to “think” and realize that they don’t have to be caught up in this craziness. Patience will pay off. If the house costs had not gone through the roof, I would not be hesitating to return to Saskatoon, take a large pay cut and still live in relative comfort. But it does seem like you can only get an older house at about 1000 to 1200 sqft for $300,000 + which may also be a fixer upper. Not that I’m not willing to put in the elbow grease (as we did reno’s ourselves on our house), but the extent to which reno’s must be done to some of the houses I’ve seen for Saskatoon makes me pause in correlation to the huge amount of money paid for the house in the first place!
On another note…what would anyone recommend in terms of houses? I know there’s a lot of talk about resale houses here…but what about building a house? Which one is lower in cost? Is there much choice (land etc) in trying to get a new house built?
Thanks everyone!
April 26th, 2009 at 12:39 PM
Ex_Saskatoon – thank you for the balanced approach. I tried to make that point awhile back. Saskatoon – try to count the head offices of multi-national corporations here. Do we have a major shipping port? Do we have a large population base of immigrants ( although we do have an attractive immigration policy?). No is the answer. There is lots of speculation of oil, uranium, ect. I have yet to see any evidence of these taking off immediately. My conclusion, although, Northstar you work very diligently to portray otherwise, is a lot of speculation went into the investor craze. Sure, lots of people came – what -even 3-5 thousand? But, is that enought actual immigration (1-2 percent increase) to drive a 50% appreciation in house value?
I don’t think so. By the way, whatever the opinion may be, facts are facts and slowly but surely more places are coming on the market, soon, from what I can tell from more condo conversions, there will be even more. So, only time will tell. My prediction is $230,000.00 next spring.
April 26th, 2009 at 12:39 PM
I looked into building earlier this year and it didn’t seem like a reasonable option. I was given an off the cuff quote of about $200K to build a 1200 sqft bungalow, basement unfinished, no garage but including the various permits and hookups. Now I didn’t seriously pursue it so it could be other builders are considerably cheaper but the guy I talked to has a good reputation. I should also mention that that assumes I already have the land. Can’t help you with the actual land prices.
I also looked into pre-fab houses as there is a manufacturer just out of town who does it and there prices are considerably less than $200k. I was told that they weren’t even accepting new clients unless you were an established builder. In other words they’re so jammed up with work they just blew me off.
I suspect that eventually things will slow down and prices will head south but for the meanwhile this should give you a rough idea of where building costs are at.
April 26th, 2009 at 12:40 PM
Ex_Saskatoon I applaud you. I think that’s been the sentiments of quite a few people but I had NO idea that Toronto was that cheap. Everyone keeps saying here that we’re so low compared to Toronto. I appreciate your view since you are orinally from this province so you are familiar with our city and the job opportunities.
Cindy you are right. I think IF the NDP are not in power for the next term we could actually see some oil production in the province, but that’s going to take some time to develop before we really get to see the rewards. And even if they do develop here are we going to see profesional work? I don’t think so, since their head offices are in other cities already. I feel this line of reasoning may have been the cause of investors buying here too because when I was in Edmonton earlier in the month that was the talk there, that we were the next oil province. Now what they don’t know is that Lorne C. is holding out for the feds to give us all the money and until then will not let the industry go, so… we wait.
Vancouver is increasing right now due to the Olympics taking place there in 2010. Maybe some rich SK people who sold their place for a killing and are sick and tired of these cold winters moved there too.
People are already speculating that the real estate market will go down after that.
I’m sorry but I don’t remember who said this, but I thought the same thoughts as you about the 40 yr mortgage. I’m in my late 20s and really don’t want to be still paying for my mortgage when I’m already in my sixties. When we were buying this was suggested to us and we decided to go with a cheaper house and make biweekly payments so we can have it paid of in less than 25 yrs. How sad would it be to still have a morgage when you are collecting pension already.
I think Saskatoon is a great, beautiful city. I just don’t think the people that live here are willing to pay the prices that everyone keeps talking about (Calgary, Edmonton). As others have said, we can’t compare. Also their markets aren’t doing so hot right now, so how can we expect ours to be better after the boom of the last year?