Saskatoon real estate: Week in review (September 29-October 3 2008)
Total active residential listings in the Saskatoon real estate market took a strong dip this week falling to 1,680 units, down 76 properties from the previous week when active listings peaked at 1,756. Over the course of the week, 67 property listings were either canceled or withdrawn from the Saskatoon MLS, and just 42 of those homes returned as new listings producing a net loss of 25 properties. The balance of the change is the result of a large handful of listings that expired at the end of September. Now that we are a few months into a period of diminished demand, we should start to see more listings expire without a sale on a more regular basis. Today’s active listing count includes 1,053 single-family homes (houses), 519 condominiums, and 108 properties that include duplexes, semi-detached homes, vacant lots and mobiles. 629 units (37%) of the total listing inventory are vacant, while tenants occupy another 217.
In addition to the “re-lists,” most of which came back on the market with a new price, 148 sellers approved a price adjustment in hopes of capturing a buyer before the weather turns. Most years, we would expect to see unit sales drop through the final quarter, so in all likelihood, it will just continue to get tougher for sellers to move their properties through the balance of 2008.
Residential unit sales also dipped from the previous week when 70 houses and condos traded to close the week at 52. The vast majority of those homes (49) traded below the asking price while three lucky sellers managed to meet or beat their asking price. An absence of higher end sales which have been commonplace through September brought the average selling price back below the $300,000 mark for the first time since the week of September 1-5.
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
40 comments so far. We'd love to hear your thoughts.
October 5th, 2008 at 12:24 PM
It’ll be interesting to see how many of these houses get relisted at a later date.I’m thinking there were alot of people fishing for top dollar and not in need of a sale.This could affect inventory levels in a big way in weeks to come.Think of the media spins,lol.”SASKATOON HOUSING INVENTORY IN DECLINE”
A little off topic here but with all the talk of financial doom and gloom on here(with good reason),I work in the manufacturing sector and we just recieved an out of the blue raise of 8%.that brings this years wage increase to 11.5%,we still get our normal inflation raise in april 09.That raise was right across the board too from labourers to skilled trades.
October 5th, 2008 at 12:39 PM
I see all these houses that were for sale for months in my area and now i see them selling whats going on?
October 5th, 2008 at 12:40 PM
Norm , how long does a posting stay on mls before it expires.
October 5th, 2008 at 1:17 PM
Hey Norm,
I looked at the new MLS this morning, through a realtor’s site that I have been registered on, and was dissapointed to see that I could no longer tell if a listing was ‘active’ or a ‘pending sale’. Am I missing something? Has this keep piece of information been removed? Also, it seems a fair bit slower, maybe due to larger graphics.
October 5th, 2008 at 1:51 PM
C White,
Nice raise! Congratulations. Any idea how many people work for the company?
john,
I had lunch with an old friend on Friday who said the same thing. The MLS numbers still suggest that there are many more for sale signs.
Saskatoon,
Listing periods can vary from 1 day to 364 day. 90-120 days seem to be the most common listing periods.
Mark,
I’m not sure what you’re looking at. There are several website providers that display data from the “MLS.” That said, it seems that fewer agents are reporting pending sales. I suspect that they don’t want to chase potential inquiries away while a deal is still conditional. For instance, the week before last there were only 20 pending sales showing on our system. By the end of the week 70 sales had firmed up. The vast majority of conditional sales just aren’t being reported.
October 5th, 2008 at 3:52 PM
Norm,
The average sales price is holding up quite steady. However, when I look at individual prices it seems as though prices have come down, I would say to a similar point to where they were last fall. Yet the average sales price is higher now than last fall.
I was wondering what your gut feeling on this is? Is it possible that people are simply buying more house for their buck now or do you feel that housing prices (for similar houses) are quite higher now.
October 5th, 2008 at 4:47 PM
SomethingDoesntAddUp,
I think that recent averages are propped up by an unusual amount of activity it the higher end market. September produced 12 residential sales above $500K, and two of those were over 1 million dollars.
“My gut” says that you can probably pick up a small condo in the range that they would have been trading in Q4/08. Single family homes are down, but not back to last year’s prices.
Interesting to note that the average size of the homes sold in September was 1,179 square feet, while those which sold in August averaged 1,076. My “Closer look at the Saskatoon real estate stats for September,” which we’ll complete and post this week will show a declining cost per square foot in both the single-family and condo categories.
October 5th, 2008 at 4:48 PM
hey Norm,
The company I work for employs over 300 people in saskatoon.
October 5th, 2008 at 7:33 PM
C,
Thanks! That’s exciting.
October 6th, 2008 at 6:36 AM
Scotiabank predicting Canadian recession.
http://tinyurl.com/4msbj5
October 6th, 2008 at 9:14 AM
Anybody see the TSX yet today? It’s down close to 900 points its its only been open for over an hour!!
October 6th, 2008 at 9:35 AM
Wesco,
Yep. It was down by over 1000 at one point, but has crept up a bit.
What floors me is that anyone is surprised by this reaction from the markets.
Mr. Market always knows when he smells a rat.
October 6th, 2008 at 11:20 AM
I feel the people who buy houses right now are those whose family income can afford and who do need a house right now. They might be well prepared for any loss in the future, might be not. Anyway, I don’t believe the number of this kind of people is large enough to consume all the inventory at the current price.
October 6th, 2008 at 11:57 AM
I’m moving to Saskatoon in a couple of months and I looked at houses with an agent and found that we would have to pay a good 350-400K to get something not too old that does not need major renovations. I realize that houses were selling at high prices before, but not anymore. Many places have been listed for months and appear very much overpriced. We have decide to rent and see how the market does over the next year or so. I’m sure lots of people think the same way.
By the way, great website with lots of current info!!!
October 6th, 2008 at 12:22 PM
Good Idea Dale.
Why would anybody buy anything that is depreciating?It just doesn’t make sense. I am also surprised that there are still some houses that are selling for above asking. I wonder if they are negotiating appliances or something like that.
My guess is that by next spring there will be a lot more deals to be had. Especially now that first time homeowners are going to have to save up 20 some thousand dollars to buy anything worthwhile. B/c if any body looks around a quarter of a million buys you very little out there, and now that people are going to have to save up the five percent, while lets just say the first time homebuyers will be non existent until this market corrects.
October 6th, 2008 at 3:18 PM
I am one of the people who are looking to buy. We are ready to move up from our starter house and had made one offer in the spring – someone outbid us – (luckily I guess). We would like to move but don’t need to move and so we have decided to wait it out and see where prices are going to wind up. I have been VERY closely watching the neighbourhoods we would like to move into and it is amazing that some people are still asking what they are asking. There have been some homes on the market since March (with very little movement – is a $5,000 price reduction really going to motivate people.) In addition, we are hesitant to put our house on the market. We have what we think is an excellent east side starter with updated furnace, bathrooms, professional basement renovation, upgraded electrical ect. But, we have watched homes in OUR neighbourhood sit for months. I guess the question is – how long do we wait?
October 6th, 2008 at 3:42 PM
We looked at about 12 houses about 2 months ago. A number of these were vacant and their asking price reduced at the time we were looking. I noticed that some of these are still on the market.
October 6th, 2008 at 4:07 PM
Dale,
Whether or not you decide to rent is going to depend on a lot of things. Some things to think about may be:
Do you have a fair chunk of cash to put down?
How far do you think housing prices are depreciating? If you do think prices are depreciating, are you currently holding onto another property you also think is depreciating? Different neighborhoods are probably going to react to the downturn differently than others.
Are you looking for a house vs. an investment? Does it matter if you lose money, at least over the short term? What do you think is going to happen to the economy over the long term?
I’m sure there are lots of other things to think about, but these are the ones that jump to mind. This is going to be a very personal decision, and my main advice is going to be: don’t listen to too much advice.
October 6th, 2008 at 4:17 PM
Well here I am after a reasonably lengthy hiatus to lob an incendiary opinion or two and then head back into the increasingly busy “breach” of health care.
Unless you have been relying entirely on the Star Phoenix and John Gormless for information, you will realize this is an extremely bad time to be selling or buying a television, let alone a house. I propose, in all seriousness, that all and sundry should be stocking up on tinned food and keeping a goodly amount of cash on hand. The once unthinkable may now upon us.
There will always be the gullible and stupid among us who buy houses as the world teeters on the edge of financial ruin. Rent if you can. Hold onto that house. Don’t vote Conservative.
“Financial storm definitely passed.”- Bernard Baruch, cablegram to Winston Churchill, November 15, 1929
“All safe deposit boxes in banks or financial institutions have been sealed… and may only be opened in the presence of an agent of the I.R.S.”
- President F.D. Roosevelt, 1933
October 6th, 2008 at 5:25 PM
Oh Sam,
I have converted nearly all assets to cash, and I do have a goodly amount of food stocked, but I also have a tough time telling people what to do. Unless I’m related to them.
We agree that there’s a financial crisis of historical proportions on our hands, and the outcome is not going to be good. We don’t, however, have bombs dropping on our heads or soldiers lobbing napalm at us. Governments and families carried on during the unimaginable stresses of World Wars, yes? I imagine we might just scrape through this too.
October 6th, 2008 at 5:40 PM
Hi Sam – Should we be investing what ever equity we have left in our homes in bomb shelters for the backyard? Or maybe just cement “safe rooms” that we hoard food and water in?
Yes we are heading into a recession – but comparing this to the Great Depression does seem a bit extreme.
October 6th, 2008 at 7:45 PM
I bought more shares today with the remaining amount of cash i had stowed away. I wonder if the cans of spam u guys bought has market appreciation or dividends. If i was single I would sell my house also and put everything into the stock market because it is such a great deal. Times like these only come about once or twice in a lifetime. Besides if the world does falter your money is worthless anyways and only the strong will survive.
October 6th, 2008 at 8:30 PM
“you will realize this is an extremely bad time to be selling or buying a television, let alone a house”
“If i was single I would sell my house also and put everything into the stock market”
“Why would anybody buy anything that is depreciating?”
Man, you’re one patient guy, Norm.
October 6th, 2008 at 8:38 PM
lol@Armoth
I just stocked up on firearms and ammo for when the looting and anarchy starts.Is it wrong to stock up on doritos and coors light?Seriously though,obviously things are looking bad. but come on,am I the only one that thinks these people read too many worst case scenario articles by paranoid individuals?kinda the poster boys for the “nation of fear”.Im the first one to admit that its good to be prepared,but you guys need to relax.Or am I the fool that should be bailing out of my mutual funds(15% loss)and stocking my basement with canned food and water?
October 6th, 2008 at 9:20 PM
Hmm: global recession, credit markets frozen, banks teetering worldwide: where is the momentum for your imminent market rally coming from?
Please explain. I’d like to know what your line of reasoning is.
October 6th, 2008 at 9:31 PM
Hey Norm, Curious to get the realtor chatter on the new http://www.mls.ca site design. Timing for recalibrating a critical online tool for buyers and sellers alike seems a bit off….especially at a time when leveraging efficiencies and familiarity of such a tool would be expected. Perhaps I am too conservative and a creature of old habits. What is your perspective on the new site? Good for business?….or just Bad and Ugly?
October 6th, 2008 at 10:26 PM
Crikey,
“Man, you’re one patient guy, Norm.”
Never a dull day.
“you will realize this is an extremely bad time to be selling or buying a television, let alone a house”
I just bought a new bed. I’m feeling kind of stupid about it.
“If i was single I would sell my house also and put everything into the stock market”
So would I.
Today was not my day, but I am ready to buy some good quality companies when the time feels right.
“Why would anybody buy anything that is depreciating?”
Most of what we buy depreciates and few things offer the utility and durability of real estate. Probably not a good time to bury oneself in debt, but when all of this is over the land will remain. That’s one of the few things that’s fairly certain.
Watson,
I’m not crazy about it but I suppose I like it better that the previous version. It would be really cool if the map had some of the newer areas of Saskatoon given that a large percentage of the listings are in those spots. Here’s a site I like a bit better. http://www.zoocasa.com It’s not perfect but it has kind of a 2.0 feel to it. It doesn’t get it’s feed from MLS though it’s not complete.
October 6th, 2008 at 10:46 PM
Yikes, stocks have taken another pounding, how much worse can it get? Is it time to run to the hills yet?
If there is not a complete collapse of the markets (I am betting and hoping against a crash) I think there will be some great companies out there to pick up. Companies that are not leveraged too much,have a good income statement and have been around for awhile should make it. Many junior and speculative companies will be toast.
It will be survival of the fittest. Now, just to find those good companies:)
October 7th, 2008 at 7:13 AM
WOW!,
average price well under 300K this week!
(sarcasm)
October 7th, 2008 at 10:01 AM
From the G&M this morning:
TD to raise rates on mortgages, home equity loans
http://tinyurl.com/52qqq4
“The latest victims of the growing financial crisis could be the standard discount available to consumers on variable mortgages, and home equity loans at prime.
In a move expected to be followed by other banks, all of which have been stung by higher funding costs, TD Canada Trust is raising rates on both types of loans, effective Oct. 7.
Rates on these products will rise to 5.75 per cent, a percentage point above the prime rate. Only last week, TD eliminated the discount on its variable rate mortgages, offering them at the prime rate of 4.75 per cent. During the housing boom of the past several years, consumers could often get their bank to drop the rate by half or even up to a full percentage point.
“While TD Canada Trust has endeavoured to not pass on the increases in rates to its consumers, this change reflects steadily increasing costs of funds in the current economic environment,” the bank said in a statement.
The percentage point increase raises the term interest cost on a $250,000 variable rate mortgage by $12,247.22 over five years, according to Royal Bank of Canada’s online mortgage calculator. The difference is based on a 25-year amortization, a variable rate mortgage with a five-year term and bi-weekly payments. On that basis, the bi-weekly payment amount rises to $725.90 from $657.83.
The credit crisis and economic uncertainty have caused banks to stockpile their cash. That’s driving up their short-term cost of borrowing from one another, and means margins on variable rate mortgage products are shrinking.”
October 7th, 2008 at 10:51 AM
Crikey,
As my mortgage comes due in February 2009, it’s all but certain that we can count on substantial increases until then.
October 7th, 2008 at 12:02 PM
Norm said:
“I just bought a new bed. I’m feeling kind of stupid about it.”
LOL!!
Ahhh, that’s funny.
I just bought a 4-pack of underwear… DOH!!!!
October 7th, 2008 at 12:14 PM
As my wise father once said….this too shall pass.
I was searching MLS on Friday and became agitated with the new system. I kept getting bumped to different regions of the areas I was trying to search as I unwittingly clicked or put my mouse on different areas. My vote is the new MLS system is no fun. I spent 20 minutes on it and gave up. Now switched to using the point 2 system.
The big selling point to many sellers (myself included) a year and a half ago was the use of MLS. However, if it is a pain in the but to use, more sellers may consider going with private websites – such as Sask Houses if they are more user freindly.
Certainly I am not the most computer savy person, but I doubt I will go back to the mls site if it stays the same. (Especially if I have to sell my now worthless computer to buy food;)
October 7th, 2008 at 12:22 PM
Yours too, Norm?
Coming off a two-year 4.99 rate. Not looking forward to what it’s going to be by then.
I used a mortgage broker seven years ago when I purchased, and got a good rate (at the time) from some rinky bank in New Mexico. That bank’s mortgages were acquired by ING about 5 years back, so I have had one of their Unmortgage packages since then.
Might have to check out the broker again when it comes time to renew. I wonder what sorts of rates they’re coming up with these days?
October 7th, 2008 at 1:34 PM
Yeah, mine’s due next spring too. All signs point to huge rate hikes.
I’ve thrown caution to the wind and purchased a bunch of new furniture for my new house using some of the equity from the old townhouse. I always keep a cache of chocolate and coffee, the currency of the apocalypse, so I’ll still be OK.
October 7th, 2008 at 1:51 PM
My mortgage broker is telling me that she thinks there will be some downward pressure on rates towards the end of this month.
I’m at 5% right now. If any of you would like to do a five year mortgage at 5% I am ready to discuss the finer details.
October 7th, 2008 at 2:09 PM
You’re hearing mortgage rates might come down a little Norm? That might ease our fears for the short term – our mortgages are both variable right now. 5% fixed?? Our variable on our principal residence is currently just over 4%. I was almost thinking we should convert it to a fixed rate with the recent happenings financially. Anyone else want to make a suggestion?
October 7th, 2008 at 2:39 PM
Tough call on the mortgage rate issue. There is certainly going to be downward pressure on variable rates tied to prime rates in the short term, as central banks drop their key rates. But fixed mortages, as I understand it, are often more closely aligned with the bond market. This doesn’t move neccessarily in lockstep with central rates. The bailout in the States could affect that market, as the government floats a trillion worth of debt, forcing bond yields higher. This would then push fixed mortgage rates higher too. Witness the past week: bank prime rates, and therefore mortgages already tied to them, haven’t changed, and may even drop in a few weeks if central banks cut, but fixed mortgage rates have actually risen. So being variable in the next six to eight months is probably a good thing. But looking further, say 18 months down the road, bank prime rates may be rising quickly if inflation is a big issue again, and at that point, who knows where fixed rates will be. It would not be unusual, historially, for them to be at say, 7 or 8 percent. Hate to be riding a rising variable at that point and feeling you have to lock in then. A friend of mine made an interesting point the other day. He said if you don’t lock in and interest rates, both prime and fixed, rocket quite a bit higher, you’ll likely have two problems: very high payments and a house that’s hard to sell. If you lock in now, and variable and fixed rates stay low for a few years, you might kick yourself a bit, be out a bit of money each month, but perhaps be sitting in a better economic environment in which people can afford to buy houses and inflation isn’t rampant. You’d have one problem: a slight regret at paying a little bit more each month. But you’ll be able to sleep at night and not be worrying about where the rates are heading every few weeks. Especially in the tricky months ahead.
October 7th, 2008 at 2:53 PM
Ringo,
This from her response to my inquiry.
“There has been so much instability in the lending markets that I wouldn’t make any rush decisions. You still have 4 months to monitor and make an appropriate decision. Although some of the lenders are pulling out of the VRM product lines (understandably so) some are raising their fixed rates (I think only temporarily).. but the bank of Canada is meeting on Oct 21st to determine the movement in prime rate. The banks are meeting today to discuss changing the fixed rates, but watching the market indicators and analysts / shows if the Country continues to increase rates it will put us in a recession. They anticipate the rates to drop to help stabilize the markets but keep it in moderation to avoid inflation increases.”
Mine is a three year closed with a fixed rate of 5%.
My decision follows Mark rationale. I don’t want to have to be concerned about where my mortgage rate is going every quarter. I’m hoping I might luck out and find something close to 6% for a five year closed. That would give me some peace of mind.
October 26th, 2008 at 4:28 PM
Saskatchewan to lead Canada in economic growth in next few years: RBC report
http://www.canada.com/saskatoonstarphoenix/story.html?id=5b7d099d-f87a-4d83-b20a-49fcc28ebac1