Saskatoon real estate: Week in review (September 24-28 2007)
Whether or not you wish to call it a downtrend, there should be little question that the Saskatoon real estate market has cooled considerably when compared to recent months. It’s beginning to feel “normal” again with listings lingering a little bit longer and prospective buyers are once again feeling like they have some options which didn’t exist just a couple of months ago. The inventory of active residential listings reached 631 units, the highest point this year.
Overbidding activity continued to cool with only 20% of Saskatoon homes selling for more than the asking price, down from 30% the week before. A full 71% of reported sales traded below the asking price. The average overbid declined again, to its lowest level since I started the week in review.
This past week’s average selling price was up several thousand dollars from the previous week but was still well below numbers recorded just a few weeks ago.
Here’s a look at the numbers from this past week.
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
55 comments so far. We'd love to hear your thoughts.
April 26th, 2009 at 12:40 PM
Re: state of the market
Naysayers, I have a question for you. Norm, please feel free to weigh in on this. I am not so much concerned about the state of the market as to where it is going. I contacted Prudential realtity today to inquire about the new townhouses they have for sale. There are 45 units. The first three are listed at 355/375 K (mls# 254949). It has been mentioned that there are numerous condo projects upcoming throughout the city. Furthermore, in Willowgrove, Briarwood, and so on, it is not uncommon to see developers build a 600K home and try to sell it. I thought one was ludicrous in Willowgrove only to sell at 775K. My point is, it would seem to me the developers have the most to lose. What they are building shows confidence to me in the market. If the bubble was about to burst, why would you build 45 units at nearly 400K? Do the developers know something we don’t, or are they in for a big surprise in the near future?
April 26th, 2009 at 12:41 PM
In regards to builders ability to predict the future, why don’t you have a look at the stocks of some home builders in the US?
Beazer Homes – closed $8.25, off of a 52-week high of $48
Hovnanian – closed $11.09, off a 52-week high of $38.66
DR Horton (the biggest builder in the US) – closed $12.81, off of a 52-week high of $31.
Even these numbers I list don’t reflect the full truth because if you to their multi-year highs, they are down even more. Beazer Homes, was as high as $75 a couple years ago for instance.
The only thing these home-builders seem to know is that demand is high right now. Their ability to predict the future should very much be questioned based on the data available.
Now I don’t mean to portray home-builders specifically as short-sighted, most industries act this way. It is just human nature to get overly excited during the good times only to go broke when the market turns.
April 26th, 2009 at 12:41 PM
I don’t know about all home builders but a friend of my dad’s is in construction. He said a few months ago that the builders he worked with believed the bubble would burst next spring. Maybe they hold out hope until then?
And how can they stop building if they’ve already bought the materials and have signed the contracts for work to be done? My dad’s friend also said new home prices in Willowgrove have already been dropped from the crazy recent months prices due to the drop in MLS prices, so they know the sales are not the same too.
April 26th, 2009 at 12:41 PM
Something… – good post. I guess I liked to believe that the builders have good business sense but there probably isn’t a better example than the one you listed.
April 26th, 2009 at 12:42 PM
The labour market is very tight right now in Saskatoon. That would explain part of the reason why costs are high in building homes. If you notice it takes close to year to have a home built. In other provinces with the exception of maybe Alberta, its done much sooner. Combine this with sky rocketing costs for building materials and you’ve got a pretty expensive property.
April 26th, 2009 at 12:42 PM
Bruce, that was my original question. If this buule is seemingly about to burst, which would means land costs, labour, and materials would presumably become chearper b/c people will no longer pay the price they are, why would a builer build numerous condos or 600K spec homes? Something… made a good point. Jon, if builders and contractors are not in this for profit, how come some Habitat homes had to be halted becasue they couldn’t get certain trades to do some of the necessary work? There was a brochure in the paper and at least 3 builders were sponsors of the mayor’s gala. That is all well and good, but let’s not kid ourselves, at the end of the day profit is a huge driving force. That is not to say it is all Builder’s motivations, but you would be amazed at the crap put out there, even my reputable builders, in a market like we had from Feb-Jun this year.
April 26th, 2009 at 12:42 PM
I know everyone would like to see prices come down but you’re kidding yourself if you think builders are going to build houses at a loss. I don’t care what business you are, if you can’t turn a profit then you don’t do the work.
For whatever reason, young people just don’t like to get into the trades. We’re always going to have a shortage of plumers, electricians, and skilled home builders in my opinion. That’s the way it is accross the country and if people here aren’t willing to pay the going rates then these tradesmen will go to neighboring provinces to do the work.
I thought most of these homes were presold but if they’re not and the homes can’t be sold then the contractors are either going to go broke or they’ll have to move to a province where they can be successful. Neither scenario is going to bring the price of a new house down.
April 26th, 2009 at 12:43 PM
Doug,
Actually, the scenario where houses can’t be sold affordably by contractors WILL bring the price of houses down. If they can’t sell them profitably they will still sell them, but at a loss. That would imply a price reduction.
Again, go and actually read what is happening to the US housing industry right now. Builders selling at huge discounts, bankruptcies, a complete mess. Don’t think it won’t happen here.
April 26th, 2009 at 12:43 PM
Attn Blog,
From a technical analysis perspective, I have created a chart on the Saskatoon avg home price. The chart contains a 3, 6 and 12 month moving average. As of August monthly stats the avg home price is currently above all moving averages. I suspect that with September’s stats, the 3 month will be broken for the first time in over a year. Although the 3 month doesn’t mean a whole lot, the fact that it will be broken does signify at the least ” a short term top “. The 6 month in my opinion holds a little more weight. If the avg price breaks through that for 2 consecutive months, in my opinion we’d be in a downtrend. The 12 month is the most solid and I wouldn’t expect prices to go any lower than that.
When September stats come out I will plot and let everyone know where the market stands technically. I will also try and find a way of making my chart available for anyone who wants to see it.
April 26th, 2009 at 12:44 PM
Something, I would tend to agree with you about your comments above.
Jedi – I totally agree with you prices are ridiculous, especially as I see this from afar in Toronto. The Saskatoon prices are making us feel “lucky” in Toronto. I have friends who bought a 2000sqft home down at the Toronto centre “Beaches” area for $490,000 this summer! This is directly downtown where you can access the lake, the shopps and restaurants! So if you are thinking it’s ridiculous, I think anyone who is reasonable and has sense is in agreement with you! I think it’s ridiculous. But any Contractor who get’s a buyer for that is not crazy though — it would be the buyer that is crazy. The contractor/builder only builds it and sets a price. If a person wants to buy it, you can’t really stop them.
(My first post was Friday – since I’m new to this – just so most of you know, I lived most of my life in Saskatoon, but now reside in Toronto area for the last 4yrs and own our own home.)
It’s seems to be the labour cost increase of the builders. Skilled Trades labour must be paid more, because of there aren’t enough people at this time to meet demand – and builders know that they can charge more for building a house. As for selling at a loss — I think the houses that don’t sell right away will likely take longer to sell, and my require price drops for the builder to sell by price reduction.
As well…just talking supply and demand in the market…if you only had only so much time and so many people to do the work…wouldn’t you take the job that paid you more? Same idea with house building – the builders will more likely to build the houses that people are willing to pay the price for. These construction company’s in Saskatoon are also caught up in the “craze” and will likely build as long as they preceive the market to be hot. People should of course take into account my comment below about squarefootage when buying these “homes”.
My first post on Friday compared a 2400sqft home cost of $800,000+, in Saskatoon to a 6,000sqft home here in the Toronto area at about $850,000. Another good example is some 2500 to 3000sqft houses here in my area Pickering/Scarborough are selling for $450k to 550k. But once again, these seem reasonable when you live in or around Toronto due to the numerous jobs/commerce etc. But when you look at Saskatoon, it doesn’t have the same job market to justify such prices. But as buyers, we should all make an educated purchase. It’s definately too much to pay per squarefootage for a home, for the kind of commercial/business market that Saskatoon is currently.
But builders are human and are caught in the “Lorne C. marketing induced” high in the Saskatoon market + buyers – and may not be reflective of “confidence” in the market. If there is a trend back to equilibrium, it will come because the perception of Saskatoon’s business, economy, commercial jobs, do not meet the expectation of buyers who moved or invested in Saskatoon — and this can happen within the next year or year and half when people do not see job results. The young people will once again start to move out to East and West to find jobs to start their professional careers – I’m not just talking about skilled labour in the “oil, uranium or any other natural resources” predicted for the Saskatoon. I’m talking about corporations, international headquarters, marketing, finance firms, business etc. Not everyone is a in the skilled labour/trades – those who are seeking other types of professional careers may still not find jobs in Saskatoon.
April 26th, 2009 at 12:44 PM
Something, if contractors have to sell houses at a loss that pushes price down in the short term. When those contractors leave the market though, you’re just cutting supply and then prices have to go up.
April 26th, 2009 at 12:44 PM
Doug,
There always seem to be more contractors willing to make a go of it. Over the long-term, there would be consolidation leaving only larger, more efficient builders who come in and make their money off of scale. Or at least, that seems to be the direction the US was heading before their bust.
At any rate, to get back to the original topic, I think you have effectively agreed with me via your last post, that builders are no gauge of the future direction of real estate prices.
April 26th, 2009 at 12:44 PM
Attn Ex_Saskatoon ….. your Toronto prices don’t seem accurate to me ….. my brother just paid $440,000 for a 800 sq. ft. condo in a new highrise going up in downtown Toronto. That’s $550 a sq. ft.
April 26th, 2009 at 12:45 PM
I think I’m going to have to agree with something and sunny as far as new construction goes. I imagine that alot of the townhouses going up right now are being built mainly because of contractual obligation; and if you’re any kind of reputable builder, you’re going to fulfill your obligations regardless of which way the market turns.
When it comes to selling these units, I think the builder is most likely going to weigh the costs of having empty units over a period of time vs selling them sooner, but at a loss. If our market is headed for a downswing, people may be able to get a good deal on some new property.
I still think things will be picking up again next spring, but not as much of an increase that we saw this spring.
April 26th, 2009 at 12:45 PM
Ex Saskatoon, Brad,
There’s obviously examples of homes in either city that seem higher than the other’s. The 2400 sq/ft house here for $800k is probably over valued. I also don’t know a place in Toronto to pick up a house for $150k. I could be wrong. The fact is the avg home price in Toronto is $340,000 while in Saskatoon it’s under $250,000.
April 26th, 2009 at 12:45 PM
Another fact, avg house price in Moosejaw is under $70,000. Where’s the relevance between avg home price in toronto and avg home price in saskatoon? Two completely different economies, one does not indicate the direction of the other.
J.
April 26th, 2009 at 12:46 PM
Johny,
I’m sick of you constantly playing devil’s advocate. It’s getting old. At no point did I talk about market direction or economies. The relevance is that ex sask brought up house prices in Toronto and Brad followed up. Ex sask said you can get a bigger, brand new house in Toronto for less than here. He might be correct, however he started the comparison so I rolled with it. Why don’t ask ex sask why he’s comparing the two. Oh, that’s right, he supports your argument. Are you purposely trying to start arguments.
It’s funny that even though I generally disagree with the nay sayers, I try and encourage them when they make good points. You however claim to be unbias, yet I’ve never heard you say “good point” to anyone on here that may feel the market is going up. I find that interesting.
April 26th, 2009 at 12:46 PM
Northstar,
Deep breath. I’ll say “good point” to those who will show me an educated argument and I’ll reserve opinion for those who state opinion.
You certainly peeked my interest with the promise of a technical analysis chart. Your chart may warrant a “good point” if it fits the aforementioned criteria.
“The fact is the avg home price in Toronto is $340,000 while in Saskatoon it’s under $250,000.”
What was the point of this statement? What were you trying to prove? There’s no relevance in citing average house price between the two cities. Batman and Ex_Sask were making a statement about differences in value between Saskatoon and Toronto, taking more than just avg house price into account. They’re speaking from experience and trying to show indications of potential affordability issues in Saskatoon.
It seems to me that every time someone raises a slight hint of alarm in the state of inflation, you swoop in to throw in something like “The fact is the avg home price in Toronto is $340,000 while in Saskatoon it’s under $250,000.” to try and skew topic. So I suppose that makes your accusations somewhat hypocritical.
J
April 26th, 2009 at 12:46 PM
Johny,
“Batman and Ex_Sask were making a statement about differences in value between Saskatoon and Toronto”
How is talking about avg house price “not” making a statement about the difference in value between the 2 cities?
“It seems to me that every time someone raises a slight hint of alarm in the state of inflation, you swoop in to throw in something like “The fact is the avg home price in Toronto is $340,000 while in Saskatoon it’s under $250,000.” to try and skew topic.”
Go back and read through my posts. Many times I’ve given recognition to points that slant to the downside. This in itself should point to the fact that I try and be as objective as I can. Yes I have a slant to the upside because that’s the direction I believe this market is going. Please go back and reference a post where you said “good point” to anything that was stated by any upside person.
I believe I offered an educated argument before. I made that same argument recently to respected ears and recieved high praise for it. If people don’t agree with me then I can respect their opinions so long as they respect mine. I feel you have no respect for my opinion else on occasion I’d hear “You make a good point” or “I can see what you’re saying”. I guess what bugs me a little is that you claim to be completely objective yet everything you post is negative. You claim that you don’t like the way I allegedly pump up this market yet you do the same thing to the downside.
Once again I ask. Why did you wait to dump on me about comparing Toronto and Saskatoon when I wasn’t the one that brought it up? Why after Ex Sask brought it up didn’t you say ” Why are you comparing two different markets? “. When someone brings up those stats comparing the most expensive houses in each area, stating Saskatoon is overvalued based on 1 section of the housing market, it doesn’t make sense to me. Thus I bring up avg house price to contradict that argument because I feel avg house price is a better representation. Avg house price deals with all homes in the entire city. Not just $800,000 homes in 1/20th of the city. I think it’s fair to do whether I think the market is going up or down. Moreover I agreed with ex sask saying he was probably right in the cost of higher end homes between the two cities.
As far as my chart goes, it will be ready to go upon Sept stats. I don’t know how to put it on here so I’ll need suggestions. Maybe Norm can post it somehow if I E-mail it to him?
April 26th, 2009 at 12:47 PM
Just because someone offers a different opinion, does not imply that they are a “Naysayer”. I am quite happy to be in Saskatoon, love the city, plan on staying indefinetly. I enjoy hearing ALL of the opinions on this blog. It helps people make a decision based on a gathering of information. When I go to an electronics store and all the clerk has to tell me is “you need to buy this…pressure pressure pressue”, I leave, and gather my own information from a variety of sources. With the purchase of a home, I would think the value in doing so is even that much more important. So, please, “naysayer”, “pro buy buy buy’ers” and everyone, contribute your opinions freely. You never know if the person reading this may appreciate that little tidbit of information. I realy appreciated the comparison to Toronto and Saskatoon. For me, I view Toronto, Vancouver, as stable economies. This market, however, instills a little fear into a buyer – there is no guarantees, and if you don’t educate yourself, then be very carefull about jumping in without your wits about you.
Looking at other markets, primarily what has happened to the credit crunch in the US – as history is the best predictor of the future – Canada has often followed suit HISTORICALLY. So – be aware of rising interest rates, be aware of economic indicators of recession, be aware of oil, uranium, that may take off in Sask, and increase prices even more. We (my husband and I) can’t afford to take a major hit by purchasing and loosing out. So, our responsibility lies in waiting to see what will happen. If you have budgeted appropriately, and it doesnt matter what happens with interest rates, or house prices, then whatever – Sounds like this is the case for you Doug.
I think that is the point that I have tried to make, and I personally get the impression that is what Johny has also tried to do.
April 26th, 2009 at 12:47 PM
Cindy,
Please don’t get the impression that when I say “Naysayer” I’m refering to people in a negative fashion. I use the word in reference to people who feel the market is going down. It’s quicker to say that then “people who think the market is going down”.
I also appreciate all the different perspectives. I understand the point you an Johny are making and I see your points of view. What I don’t appreciate is a lack of respect for my points. I believe it was you that said last blog topic that you felt I did dilligent work but that you don’t agree with me. I can accept that because you understand where I’m coming from. I respect your points of view and encourage you to share them.
When it comes to Johny I don’t get that respect. All I get from him is that I’m pumping and why am I posting what I’m posting. He feels I skew facts because I’m trying to get people to buy houses. In reality that has absolutely nothing to do with why I’m posting. Just how people present their reasons why they feel the market doesn’t sustain this growth, I’m presenting my reasons why I feel it does. Plain and simple. Johny can’t accept opinion unless either 1)it’s accompanied with facts that he’ll rip apart anyways, 2)It’s given by him or other people that support his views. Then opinion is O.K.
April 26th, 2009 at 12:47 PM
Northstar,
In all honesty, I’m not entirely convinced that your contributions to this forum aren’t to perpetuate a buyer’s frenzy and further inflate an already unsustainable market… for the benefit of your real estate portfolio. As Cindy said, if you’re educating readers, I respect that.
I’m very concerned at the level of debt people are being forced to take on for the sake of ownership. My concern is validated by the state of things in the U.S. I’m even more concerned that Saskatchewan has been hit particularly hard by frenzied buying, an inflated market, and mass speculative investment, all at the tail end of potential spill over recession from south of the border. If saskatoon can’t sustain the state of things, we could see a much more negative impact than any other Canadian market that’s experienced the same type of growth. In economic terms, we don’t compare to cities like Calgary, Vancouver, Toronto, Edmonton, we just haven’t seen their infrastructure growth. Their booms happened following that type of growth. It’s important to note, our boom happened prior to growth and was based on the speculation that “growth will come”… that’s a very dangerous position to be in.
The only thing I’m trying to inject into this forum is caution. And it’s irresponsible to do otherwise without significant data to support your argument. As I said, you seem very quick to jump out infront of anyone on this forum who cautions buyers about the state of things, with an overly optimistic “opinion”.
I’m familiar with Small Cap public forums on Stockboards and can identify pump and dump rhetoric and behavior.
I’m sorry if I offend you and it’s nothing personal. I’m doing what I feel is my responsibility to do.
J.
April 26th, 2009 at 12:47 PM
Johny,
I think it’s important to note that Northstar did not start the discussion comparing Toronto to Saskatoon. He was responding to a comment that seemed to suggest prices are generally higher in Saskatoon than they are in Toronto. I think the stated “averages” answered that suggestion quite well and I don’t really see how it’s “irrelevant.” How would you have him answer this kind of a claim if he wishes to participate in the discussion?
April 26th, 2009 at 12:48 PM
Just a comment on the discussion about new home builders and their exposure to risk in a potentially softening market; I don’t see it. It seems to me that with deliveries delayed by close to a year, these companies are not spending a lot of time and resources doing speculative building. There isn’t a very good selection of “new” homes offered for sale on the market. I suspect that there’s already a contract in place for almost every basement that’s in the ground. At the end of the day, they may got caught with a surplus of land but I suspect that’s even unlikely.
April 26th, 2009 at 12:48 PM
Incorrect, the conversation was regarding comparative geographic locations in each city and how the prices of said locations compared. City averages really had no specific relevance…, however, perhaps a general relevance by default. Like saying apples and oranges are generally round so one must indicate the taste of the other.
J.
April 26th, 2009 at 12:48 PM
Ex Saskatoon,
With due respect, only 8 of the 4500 or so Saskatoon homes which have traded this year through the MLS, broke the $800,000 mark. These properties would be considered truly exceptional by most people and represent the absolute high end of a very exclusive market. They are not going to be the kind of homes one would compare to a $500,000 home in area of Toronto. If you were to look at the entire list of 2000-3000 square foot homes which have sold in Saskatoon over the last few months you’d see a value range from $130,000 to $825,000. I’m thinking that those properties at the two extremes probably wouldn’t serve well in this kind of comparison.
Find me a 2200 square foot four level split in a mature area which has been completely renovated, inside and out, is adjacent to a beautiful park area and offers a spectacular view of the city and the river valley for $565,000 in Toronto and you’ll have me convinced. I think we both know that home doesn’t exist at that price in Toronto. My guess is that it’s somewhere south of a million, but that’s just a guess.
April 26th, 2009 at 12:49 PM
Johny, I can see Northstar’s point about your willingness to be generous with those who have an opinion similar to yours. What is it about ex saskatoon’s comment that convinces you that a valid “comparison” has taken place here?
April 26th, 2009 at 12:49 PM
Norm,
Do you think the large number of condo units coming to the market in the next year will lower the average cost of a starter home? Right now it seems that some of the largest price hikes we have seen over the past year have been on the lower end properties. It seems that the price between the mid range and starter homes / condos have become quite comparable. There seems like a huge discrepency in the quality of house you are getting for your money. For example, I have found that for a starter home you are going to be looking at around the $200,000 mark for a solid bungalow in a good neighbourhood. Going to the $250,000 – 260,000 range, however, and it would seem you are getting a lot more house for your money. Is this just my imagination, or are the mid range houses not a much better value than the seemingly overpriced starter homes that come onto the market?
April 26th, 2009 at 12:50 PM
The fact that they were taking a little more into account than comparing avg prices between the two cities. I don’t recall indicating whether or not I was “convinced that a valid comparison has taken place”.
I do recall saying the following:
“Batman and Ex_Sask were making a statement about differences in value between Saskatoon and Toronto, taking more than just avg house price into account. They’re speaking from experience and trying to show indications of potential affordability issues in Saskatoon.”
J
April 26th, 2009 at 12:50 PM
Jason,
I think you are right. I have noticed that there seems to be a big difference in what you are getting for your money, especially with condos. $200,000 get’s you a pretty mediocre condo, whereas going up to $250,000-$300,000 could get you quite a nice one. My guess is that this might be indicative of the economic demographics in Saskatoon. i.e. There are a lot of people that can afford $200,000-$250,000 but once you get much higher the number of people that can afford it significantly drops off.
April 26th, 2009 at 12:50 PM
Jason,
With the exception of spots in area 4, I would tend to agree with you. Some starter houses coming on the market are ridiculously priced as compared to let’s say, a family home. I’ve seen 1000 sq/ft pieces of crap in Caswell Hill for $189,000 or more. I don’t know if they sell at that price but it doesn’t seem like good value there.
Johny,
What more were they taking in to account besides comparing 1/100th of Saskatoon’s market to 1/10th of Toronto’s? How does that have any more bearing than avg house price?
“the conversation was regarding comparative geographic locations in each city and how the prices of said locations compared.”
Ok, then let’s compare the low income areas of each city. You can get a house in Riversdale for $60,000. 750 sq ft, 2 mins from downtown, 2 mins from a major body of water. What does that go for in Toronto? I could be wrong but probably at least triple or more. From my perspective it makes less sense to compare specific areas then it does to compare the entire market.
What ever your personal thought are on my motivations are your thoughts. I’ve decided not to let it get to me anymore because I know who I am, what I’m about and why I post here. I’ve offered my thought with references but that still has no bearing with you. All I can do is move on and see where we’re at next spring.
April 26th, 2009 at 12:50 PM
Just as a comment I keep hearing comments on the economic state of the U.S. and Canada and there are some things I should clear up. I was just at the Economic Developers Association of Canada National Conference about two weeks ago and there was obviously quite a bit of discussion on the economic climate in both the U.S. and Canada.
On the U.S. housing market – first off its a major mistake to compare our banking system to theirs. We have a consolidated banking industry – I think its 7 big majors. The U.S. is comprised of a much smaller number of players (different banks in different states) who don’t have the consolidation we have here. Point in brief is that our banking system kills theirs. If you look at a chart of their forclosure rates you’ll see increasing forclosure rates over the past 6 years. If you look at ours you’ll see a decreasing forclosure rates over the same period. Its apples and oranges.
The second point is related to the exchange rates. Exchange rates have been going up and its REALLY hurting our export manufacturers. Especially those folks in Ontario with the auto industry. If you look accross the country I’m being told that the sun is shining in the west. We have our commodities and the dollar doesn’t seem to be hurting those exports as much. My overall point being that there could be some doom and gloom for the states and other Canadian provinces but right now things look good for the west.
April 26th, 2009 at 12:51 PM
Johny,
“Incorrect.”
Ex-Sask seems to be suggesting that Toronto “prices” are cheaper than Saskatoon. The suggestion is clear that a 2400 square foot home is $800,000 in Saskatoon and that homes in the TO area which are larger sell for less. Northstar used the average selling prices to politely argue that there must be something wrong with the comparisons. These statistics are perfectly appropriate and relevant in the context of that discussion.
“I don’t recall indicating whether or not I was “convinced that a valid comparison has taken place”.”
Of course you’re not convinced Johny. You know as well as I do that house prices are higher in Toronto and that “I have a friend” doesn’t usually qualify as “experience.” I suppose that’s my point. You have no problem letting these kinds of “opinions” blow around in the wind, but you jump all over Northstar and call his motives into question for stating a fact. He has said a number of times that he’s not a fortune teller and that his opinions are just opinions. He has explained in detail why he believes what he believes. Does the guy need to post a disclaimer every time he opens his mouth?
Ex Saskatoon, this is not a slight against you. While I may not agree that you’ve made a valid comparison between these two markets I respect your right to have an opinion and I value your contribution to the conversation.
April 26th, 2009 at 12:51 PM
Jason,
You’re absolutely correct! I first touched on this in back in early June when I wrote “Watch for prices of Saskatoon condos to stabilize.”
“Consider also that the average selling price of a Saskatoon condo was up 75% in May when compared with May of 2006. Consider that hundreds of rental apartments have been removed for the rental market over the last couple of quarters and that many of them will be starting to come on the market as resale condos. Consider that the average selling price of a single family home increased just 39% for the same period outlined above and you see that the dollar difference to own a house as opposed to a condo has narrowed significantly over the last several months.
All of these factors suggest that the Bull Run which condos have enjoyed may soon come to a close. It’s doubtful that the current low inventory situation will allow prices to decline in the short term but I think we can expect to see prices begin to stabilize.”
I also see the same weirdness as we move up the price ladder, perhaps with the exception of the very high end market. There are lots of examples of bungalows in the 1,050-1,150 square foot range trading in the $350 range. Then you see larger two-storey properties which traditionally sold for much more trading below $400. It doesn’t make sense. These are the little oddities which are likely going to get sorted out in the coming months if the market continues to soften. Yes, I think that condo prices are definitely softening up already. I see product sitting on the market that would have ran away in May at the same price. These properties may very well see a decline in value. If they do, I think you can expect to see most categories of housing go that way, perhaps to a lesser degree.
Great observation. Thanks for the comment.
David,
Your suggestion about “economic demographics” makes very good sense but now that the investor frenzy has ended and prices have been driven sky high, we have a little problem. A 900 square foot condo in a three storey walk up can still be rented for $800 a month. That unit, priced at $170,000, costs a first time buyer with a 5% down payment about $1,550 a month (PIT & condo fees). With that kind of difference, there’s a very sound argument to be made for renting versus buying. This could be the bigger issue in sustaining existing prices.
April 26th, 2009 at 12:52 PM
Indeed,
Ex_Sask also pointed out:
“Another good example is some 2500 to 3000sqft houses here in my area Pickering/Scarborough are selling for $450k to 550k. But once again, these seem reasonable when you live in or around Toronto due to the numerous jobs/commerce etc”.
We can all pick arguments apart, oversimplify, and mince words into atoms until a point is proven.
Hopefully my words are minced down to an indivisible state by now.
J.
April 26th, 2009 at 12:52 PM
All of the talk about tdot is interesting, and I suppose somewhat relevant for Ex_Saskatoon as they have chosen to live there because of that. I am not sure it is really relevant for us. It would be pretty easy to draw comparisons with numerous locations in BC and Alberta where a 1000sq ft house is upwards of 500K. My question is what are we trying to prove? So we do a price comparison with 20 different properties in 20 different cities. What exactly are we trying to answer because we can choose something like Quebec City, which would be a steal compared to Saskatoon, and Vancouver which would make Saskatoon look cheap. I don’t see how these comparisons would provide any sense of what a house is worth in Saskatoon. If we are going to compare green peppers to green peppers(don’t know apples are always mentioned), it would make sense to find houses in comparable areas, with similar amenities and commutes and so on. I did a random mls search of TO and was surprised at some of the prices. That being said I couldn’t tell you if these neighbourhood were downtown, on the outskirts, in the equivalent of Riversdale, so on. I am not saying that a comparison can’t be made, just that one should be more specific.
PS. ExToon, I am glad things are working out for you. It sounds like you are very responsible with your income. More of you equals zero foreclosures. You provided probably the best example of living within your means.
IMO, I don’t care if TO is cheaper, it is not the city for me. I would take here with its higher prices(if that is true). Not a slam against TO, just my preference.
April 26th, 2009 at 12:52 PM
Norm,
Is there a difference in trending between Saskatoon houses and condos? Is the average condo price dropping faster than the avg house? I’m sure you’re quite busy and I don’t want to create more work for you, but it would be interesting to have the avg home price broken in to condos and houses.
Attn Blog,
For those who are interested, my chart has been sent to Norm for future viewing. If it’s possible, you could see it soon. If it’s not possible to post, I’m more than happy to send it to those who are interested.
April 26th, 2009 at 12:53 PM
The opinions expressed here are the sole opinions of Northstar. These opinions are in fact only opinions and should be taken as such. All opinions can not be duplicated without the expressed written consent of Northstar. Side effects may include dizziness, dry skin, erectile disfunction and verbal diarrhea.
One last cheeky disclaimer before bed.
April 26th, 2009 at 12:53 PM
Jedi,
I agree with you completely. I was trying to make a different point entirely. You recently tried to get something going on another post regarding new developments which might impact Saskatoon. I noticed a story in the Globe and Mail the other day about a new facility which will start construction at the UofS next year. It’s a $110 million dollar project to develop vaccines for infectious diseases. Another big win for Saskatoon in the sciences and one which should create some good paying jobs.
Northstar,
I can probably produce those numbers for August today. The program I’m using to calculate these numbers uses units based on the date of the offer. Many of September’s sales remain conditional (condos can take up to two weeks to firm up) so the most recent numbers would be incomplete at this point. I’m going to set myself a reminder to get at those around the middle of each month.
Northstar’s chart is posted here for those who are interested. Sorry, I couldn’t embed it.
April 26th, 2009 at 12:54 PM
Northstar,
Thanks for the chart – will take a look over this afternoon.
Norm,
that is the new InterVac Centre. It is supposed to be as much of a draw to Saskatoon for the scientific community as the Synchrotron facility. Here’s an small animation I generated while working with AODBT / Smith Carter on the project.
http://www.vido.org/intervac/intervac_animation.php
In regards to the other ongoing activity, another individual posted a complete list of all the ongoing construction over at the Skyscaper.com construction forums. I will see if I can find the list and post it here for people to see.
April 26th, 2009 at 12:54 PM
I was just wondering if there is a site or place we can get info for the average wages or household incomes for cities. We can say whatever about avg house prices and jobs and attractions, but it all comes down to where you can AFFORD to live. I was just wondering if it was possible to compare incomes to housing and see how Sask. shapes up.
April 26th, 2009 at 12:54 PM
Sunny,
Here is an article stating the best places to live in Canada. Saskatoon ranks 16 out of more than 120. The article is based on opinion so we all know what that’s worth around here.
The important part for you is it states avg household income for each community in the 1st column. Saskatoon sits at $70,100.
http://www.canadianbusiness.com/rankings/bestplacestolive/list.jsp
April 26th, 2009 at 12:54 PM
Sunny,
Here’s stats directly from stats canada on % increase of wages: The last number is % gain. For example the 5.3 at the end of Alberta is 5.3% income increase from August 2006 to August 2007
Alberta – 1,572.2 21.20 1,649.5 22.33 5.3
B.C. – 1,797.6 19.72 1,858.7 20.37 3.3
Manitoba – 508.1 17.28 512.9 18.39 6.4
New Brunswick – 323.5 16.17 335.2 16.58 2.5
Newfoundland – 201.9 15.90 207.6 16.91 6.4
Nova Scotia – 399.9 16.31 397.7 17.29 6.0
Ontario – 5,672.3 20.52 5,701.4 21.39 4.2
P.E.I – 63.6 14.72 66.2 15.07 2.4
Quebec – 3,342.0 18.75 3,369.3 19.20 2.4
Saskatchewan – 403.5 17.72 412.3 18.87 6.5
As you can see, Saskatchewan leads in this category
April 26th, 2009 at 12:55 PM
Jason,
Thanks. I clipped the article from the Globe and Mail but didn’t have it handy when I added that comment. The animation looks pretty cool. I need to learn how to make those.
Will that pedway be connected to VIDO?
April 26th, 2009 at 12:55 PM
Apparently I have lots of time on my hands today,
I’ve taken avg household income for cities across Canada and divided it in to avg house price. It’s a rough stat so take it for what it’s worth. Ex. The average house in Vancouver costs 7.56 times the avg income.
Vancouver – 7.56
Ottawa – 3.24
Montreal – 3.55
Calgary – 4.19
Edmonton – 4.14
Toronto – 3.99
Saskatoon – 3.50
Winnpeg – 2.65
Halifax – 3.12
Hamilton – 3.59
Kitchener – 3.24
London – 2.94
Quebec City – 2.81
Regina – 2.36
Thunder Bay – 1.92
Windsor – 2.15
April 26th, 2009 at 12:56 PM
Northstar,
I am curious what your sources for the above numbers were. Looking at Calgary, I have a hard time believing that the ratio is so low. I was under the impression that the average price in Calgary is over 400K which would imply an average income of nearly $100K.
April 26th, 2009 at 12:56 PM
Northstar,
I agree with Something. Please double check your Calgary stat. I have the most recent monthly average selling price at $423,801. The math isn’t working on that one. Oddly though, last year’s Demographia Affordability study has Calgary at 4.4 times earnings, but then, Saskatoon was only at 2.6 times earnigs when that one was published.
April 26th, 2009 at 12:56 PM
Something, Norm,
I was shocked too. Calgary’s avg household income currently sits at $104,200. $10,000 more than anywhere else except Yellowknife, which for some reason is $127,800!!!
Reference:
http://www.canadianbusiness.com/rankings/bestplacestolive/list.jsp
Calgary is number 28, check it out.
April 26th, 2009 at 12:56 PM
One more thing,
All avg housing prices were end of July numbers. That’s the most recent I could find for all cities. I’d imagine that all those numbers from my last post would be slightly less due to the fall real estate cooling.
April 26th, 2009 at 12:57 PM
I wish CB would cite their source because those numbers certainly don’t jive with StatsCan. So, you can earn an extra 30K in Calgary, and you’re almost half as likely to be a victim of homicide. What is it about Saskatoon that makes it a better place to live?
April 26th, 2009 at 12:58 PM
fellow bloggers, with regards to the rankings, I think they are published annualy in MoneySense in the March/April issue. I think the numbers may be a little out of date (unless they keep them current). It will be interesting to see where Saskatoon ends up next year. It is an amazing city, but the affordability took a huge hit.
April 26th, 2009 at 12:58 PM
Norm,
I know it’s your job but not your fault. why not persude the sellers to open their eyes on the fact and lower down the asking price insteading makeing us believe your stat? The core is people don’t have enough money to pay the morgage. According the family income, the price around 150,000-300,000 is reasonable just as 3 years ago.I guess you wanna exiting summer lasing in four seasons. But it has gone.Sask is a small place with tiny market.1000 immigrant can spoil it and 100 can freeze it.Face the fact, your broker can make money and we can own a house.
April 26th, 2009 at 12:58 PM
Norm:
I have to agree with you on the CB numbers being waaaaaay out of whack with what statscan reports. Personally, I’ll put my money with statscan (which pegs Saskatoon household income much, much lower).
April 26th, 2009 at 12:59 PM
Iris,
Thanks for the comment.
It’s not “my job” to attempt to influence the market up or down. My job is to provide the best possible advice to my clients, both buyers and sellers, to assist them in obtaining the best possible price and terms for themselves in a free and open market. I’m guessing that if I told you your house could sell for $300,000 and then suggested that you sell it for $250,000 because “people don’t have enough money to pay the mortgage,” you would probably think I’m off my rocker and continue shopping for an agent.
What is it that you see in this post that leads you to say “I guess you wanna exciting summer lasting four seasons.”? I don’t see anything here which is particularly encouraging for sellers.
If you have a good look around this blog you’ll find a pretty good balance of posts. For instance, you might like;
Worst quarterly deterioration of housing affordability on record for Saskatchewan: RBC
Saskatoon and Edmonton homes most overvalued: Bank of Nova Scotia economist
Consumer spending about to peak in Saskatchewan: Elliot
Average selling price of Saskatoon homes down in September
Is Saskatoon real estate overvalued? Another economist says, “yes.”
These were all posted in the last five weeks and they’re the kinds of news stories which I would sweep under the rug if my intentions were to hide the facts from the market. What I’m trying to do here is give buyers and sellers as much information as possible so that they can make their own intelligent decisions. These articles are all intended to be discussion starters. The comments box is there for you to use freely to make your arguments if you feel I’ve missed the mark.
Thank you again for your comment.
April 26th, 2009 at 12:59 PM
Warren,
That StatsCan figures for Saskatoon are not too far off from the CB stats. Given that StatsCan is still posting 2005 figures, they are a little out of date (also median as opposed to averages). I believe income growth was around 3% in 2006 and around 4.5% so far in 2007. Using the StatsCan median from 2005, that brings us closer to the $70,000 reported by CB.
The number I really question is the Calgary income figure which is 38% higher on the CB chart than it is on the StatsCan chart. Surely incomes have not risen that much over 21 months.