Saskatoon real estate: Week in review (September 3-7 2007)
The Saskatoon real estate market took its biggest leap towards “balance” this week as new listings of houses, condos and duplexes outnumbered sales by nearly two to one. A total of 126 new listings came on the market while just 66 homes found new owners. This week’s numbers brought more changes than I can recall seeing since I wrote the first post which became the “Week in review” back on February 17, 2007.
Here are a few of the highlights.
- The percentage of homes which sold above the list price fell to 35%, the lowest level since the week of February 19-23.
- The average overbid dropped 36% from last week to $9,335 reaching its lowest point since the week of February 26-March 2.
- The average underbid was actually larger than the average overbid in four of the five Saskatoon real estate areas.
- For the first time since the week of February 19-23 the average selling price of a Saskatoon home was lower than the average list price.
- Total active residential listings reached their highest level this year at 591 units.
- 19 sellers called it quits by withdrawing from the market and another 10 listings expired without a sale.
If you compare this week’s numbers to any other week between 1993 and 2006 you couldn’t help but think that the Saskatoon real estate market is really on fire. When compared to almost any other week in 2007 it starts to feel a little soft around the edges.
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
80 comments so far. We'd love to hear your thoughts.
April 8th, 2009 at 3:12 PM
Thanks for taking the time to post Norm. Very useful stats and commentary.
Looking around there seems to be tremendous quantity of condo’s coming on sale while not a lot of bungalows. From your work in the field, do you notice a distinction between the condo market vs middle-tier housing market? Is one cooler than the other or do you find the slowdown evenly distributed?
April 8th, 2009 at 3:13 PM
Something,
Thanks. It’s very difficult to tell from one week to the next. While the market is “slowing,” it certainly can’t be described as slow. Almost everything coming up for sale is still selling so the activity is pretty much dictated by availability. This week, 14 of the 21 sales in area 1 are condos (thus the drop in average selling price for area 1). I also note that 25 of 45 new listings in area 1 are condos.
In reviewing those properties which did sell above list last week, I see that the majority of them are priced between 200 and 250K and there’s a pretty balanced representation of condos and single family homes.
Next week, when I’m certain that most of the August sales are firmed up and reported, I’ll do my monthly report which will include a breakdown of activity and average prices in the two categories. That may be a little more telling.
April 8th, 2009 at 3:13 PM
Interesting week!
I think the next couple of weeks will dictate the direction of the market through December. This past week could have been influenced by the labour day long weekend and the first real week of school.
IMO
April 8th, 2009 at 3:13 PM
Indeed. As these are firm sales they likely represent purchases negotiated over the last week of August while people were getting ready for back to school. Still, the shrinking percentage of overbids is more or less consistent with what we’ve been seeing over the last four or five weeks and I expect that may continue as the weather gets colder.
April 8th, 2009 at 3:14 PM
Ah the sweet smell of recession slowly closing in.Soon time to buy boys!
April 8th, 2009 at 3:14 PM
Duh-Donald,
If you were as smart as you’d like us to believe you are you’d have realized that last fall was the time to buy and now is the time to sell. I really get a kick out of the “savvy” investors that show up to the party after prices have risen 50-60%. No matter what happens in the coming months I’m sure you’ll have paid too much considering what you might have had if you were the least bit on the ball. You actually did get “trumped in Saskatoon” there Donald.
April 8th, 2009 at 3:18 PM
There will be no reason to buy in Saskatoon for at least good year or more while Canada’s young slowly and collectively awaken to face the plight that faces them.
The hands of the 40+ deep inside their pockets, or firmly holding onto their money.
Businesses need to gear in and start recognizing the impact all this has had.
I saw Domino’s Pizza was advertising a $20/hr position on 8th Street. Big sign, and all. I apologize (and maybe regret) not looking further into it, so I’ve no idea what hours they’re pushing with that.
When I got home after seeing that, I had a little talk with myself about how sad it is that I’m right about all this. A two year (and more?!) education in Saskatoon nets you exactly what a fast food pizza chain is willing to put out.
April 8th, 2009 at 3:19 PM
Alex,
What makes you think you are entitled to a good paying job just because you have some education? There are a lot of other factors, such as experience, desirability of the job, hours, stress level, etc. I have heard of welders getting trained by a company and in less than a year making $50+ / hr working up north on pipelines. Do you think that you with your education, working what is probably a fairly cushy job, deserve to make more than them?
Also, what does any of that have to do with the price of housing?
April 8th, 2009 at 3:19 PM
sam,
It shows the adverse effects you greedy poeple are having on your own kind in Saskatoon.Wake up you dizzy bugger.Get your head out of your ass.
April 8th, 2009 at 3:19 PM
Ok we dont understand we left Calgary a year ago to buy in Saskatoon because was to be more affordable for us to buy a house and raise our kids.After selling our house in Calgary and getting 229 for it we cant find anything here at home(saskatoon)for equal value.
Jenine and I made a very big mistake of moving back.We are leaving in October to go back to Calgary and start over as we cant make it on the wages we are currently making.Jenine is a lpn.I am an accountant.
The biggest mistake of our lives was coming back to Sask.This time we will definately not make that mistake again!!!!!
Grrr at Sask.
D and J
April 8th, 2009 at 3:20 PM
http://www.mls.ca will prove it I have been looking this site for a year.Get this!
431 listings for under 300k and only 4 have sold since may.
I have been watching this site very closely.
Whats going on Norm??????
Your the real estate agent.
April 8th, 2009 at 3:20 PM
Alex,
It’s nice to see you again.
There’s a very old saying and I’m not sure where it came from.
“Your 20′s and 30′s are your learning years. Your 40′s and 50′s are your earning years.”
Some earn and learn faster than others but I think this saying is more or less true, and it always has been. This is just a fact of life. Like you, and at your age, I often wondered how I could keep the ship afloat. I was delivering furniture for minimum wage. My parents had nothing at that point in their lives.
With your education and intellect you have some great opportunities ahead of you. Spending too much time and energy focusing on what Mr. 40+ has is hurting you. Don’t give “the man” so much power in your life. It’s making you feel defeated before you can even get yourself going.
Unfortunately, you may not be able to buy your own home right now, but you can figure this out.
April 8th, 2009 at 3:21 PM
Jim,
I still believe every “greedy” comment comes from people with no money.
Dustin and Jenine,
I don’t think your mistake was moving to Saskatoon. I think it was selling a house in Calgary for $229k. Next time you have a house in Calgary for sale at $229k please let me know and I will buy it!!! I don’t know how it’s possible not to find a house here for $229k. My old high school English teacher would be all over me for that double negative.
Alex,
We don’t agree on much but it is good to hear from you again. That sign you saw could be for a store manager which $20 an hour would be about right for a good one. I do agree that there will be no reason to buy here for at least a year, probably two. ( Although I’m still looking for a deal here and there ). Also not to say that things won’t take off next spring either because they probably will. There just won’t be a good reason for it.
Norm,
Don’t jump too hard on Duh-Donald. I still think there is some room to the upside here. Besides, his hair would be great for the bare patch on my dog’s ass.
IMO
April 8th, 2009 at 3:21 PM
The only things I’m really pushing are:
Education shouldn’t leave you in the same place when you started. Otherwise, what’s all that debt for?
Jobs like a manager at a pizza place, advertised on the street instead of their product shouldn’t make someone more than what many make. I mean, how do these misalignments occur? Truthfully and honestly, if we investigate the factors behind it all, what i the source of this discrepancy?! Again, I blame pure, raw greed. Saskatoon has it’s hand so deep in the cookie jar – everywhere wants a reason to boost it’s prices and it’s monkey see monkey do in the remainder of instances.
I guess these are the woes of a free market when all the businesses get the same idea in their head and make it happen in tandem.
I heard on a radio in a restaurant that the Sask chamber of commerce said businesses aren’t doing what it takes to keep competitive.
Again, while I blame the greed that fuels this boom, I still blame the businesses for not waking up and realizing the situation for their young employees is different to the situation for their existing ones.
I’ve heard a lot of mumbo jumbo to date when it comes to how people get paid. but the reality of the situations is unless you want to attract good employees, have them feel like they’re paid well and retain them – you have to be willing to acknowledge fluctuations in the economy.
It all boils down to: Presence is commensurate with willingness to ensure capacity to stay.
Boost all you want, but I promise you everything I say is in fact coming true. I’ve predicted in prior posts that the young won’t be able to stay. Chamber of commerce is now confirming that. All the “whatever” in the world won’t reverse what’s happened to Saskatoon now because people didn’t stand together and stop the greed.
Only way of fixing it is to have the government(s) intervene to black-jack all the businesses back into that wholesome Saskatoon values.
(I could go on about how the quality of anything provided in this city is pathetic compared to what I’ve seen in others – further unwinding any justification for increased prices.)
April 8th, 2009 at 3:21 PM
Dustin and Jenine,
Sorry to hear of your problems and I’m not sure what got into Alberta that made it think Saskatoon is the land of milk and honey. I suppose you were probably hoodwinked by the big “affordability” campaign that the province ran in your area. While that message was essentially true at the outset, it ran far too long promoting what essentially became an inaccurate message.
The truth is, we saw too many Albertans arrive here too quickly. If 1,000 families pack up and move to a market which typically sells 3,500 homes a year it’s very upsetting to the balance. If you didn’t come back here with 100-200K in equity from your previous home, like many Albertans did, then you are bound to feel shut out, just like many Saskatonians do. I don’t mean to point fingers, but to answer your question, migrating Albertans have impacted Saskatchewan housing like nothing else has as far back as I can remember.
April 8th, 2009 at 3:22 PM
Ed,
Thanks for reminding me that I’m “the real estate agent.”
What the heck are you talking about? Do you actually expect us to believe that there are 427 houses on mls.ca that have been there since May? Do you actually believe that only 4 homes under $300,000 have sold in Saskatoon since that time?
I’m sorry if I’ve misinterpreted your comment but that’s how it’s coming across to me.
April 8th, 2009 at 3:22 PM
Northstar,
If there’s no good reason for things to take off next spring, why do you think they “probably will”? Also, avg house price is dropping and sales volumes are half what they were a month ago… where’s the “room for upside”? Blind optimism or misinformation?
J.
April 8th, 2009 at 3:23 PM
Northstar,
For months I’ve been saying, “this just can’t keep going like it has been” and the market has just kept going, and going, and going. So what do I know?
I do know that prospective home buyers are very weary and many feel as though the opportunity for home ownership has passed them by. Are there better opportunities elsewhere? I don’t know but you can bet that people like Alex and others in his age group are looking for them. It’s not a good thing when our young people feel this way. Then, look to comments like those left by Dustin and Jenine. They’ll have quite a story to tell when they get back to Alberta. Whether it’s true or not they’ll likely be saying, “Guess what everyone, Saskatchewan still sucks, but now more than ever!”
The focus of our governments and our community leaders should be set squarely on solving existing housing issues for low income earners, quickening development for more supply, creating good jobs, and opportunities to grow incomes. Business leaders could show us their great confidence in Saskatchewan by spreading it around a bit more. It wasn’t long ago that $20 an hour was considered a decent job. Today that person takes home about $2600 per month. If his or her rent suddenly goes from $650 a month to $1200 per month, how does he deal with that? How does he pay his other utilities, put gas in his car, feed and clothe himself? Perhaps he finds ways to cut back and to get by but what kind of hope does he have to get ahead in life? How can he ever believe that he might own a home someday? The PITH payment on a house priced 20% below the average is over $1,600 a month. We’re talking about entry level homes which are not affordable for entry level buyers. Who is going to be there to buy these properties when others want to take a step up?
We can talk about all of the great opportunity which exists in Saskatchewan but if it doesn’t reflect in the bottom lines for people in all income categories it means diddly squat at the end of the day.
Considering the huge increases which are now behind us and the feeling of hopelessness that seems to be growing in this community, I think it’s safe to say that we are far closer to the end of this thing than you might think. Given the slow pace of new development and the still low inventory levels, sellers are likely going to be able to hang in there for a top dollar sale over the next year but I think we can expect demand to weaken enough that current inventories will be sufficient to take the pressure off. I seriously doubt that we can expect much in the way of increases next year, if we see any. From here on in, every little increase in housing will have to be supported by increased incomes. There just isn’t any more that can be squeezed out of these young people. If you don’t have a healthy and vibrant first time buyer market, you don’t have a healthy and vibrant market, period.
April 8th, 2009 at 3:23 PM
Alex wrote:
“Education shouldn’t leave you in the same place when you started. Otherwise, what’s all that debt for?”
Ahhh…the education debate. So in theory, society is supposed to reward people who have continued school past the secondary level, since they have learned something that will contribute to society’s well-being. That being said, I am fairly sick and tired of (mostly University) grads complaining that they can’t cover their debts now that they’re out of school. This isn’t a stab at you, Alex, this is just a general comment.
I have two degrees…I worked all throughout University (in an area that many of my peers would not work in) to pay most of my way. What debt I did leave with was small and manageable (I say was, as it was gone in my first year of employment). Yet so many of my friends are now graduating and finding out what the payments are going to be on $40k, $50k, or $60k of debt. This should not take them by surprise, it’s not like they wake up one morning to find out they owe $50k in student loans. Every year, they made the conscious decision to take on more debt. They had choices and options that they did not explore, and they are (usually) solely responsible for the position that they are now in.
Alex wrote:
“Jobs like a manager at a pizza place, advertised on the street instead of their product shouldn’t make someone more than what many make.”
I wouldn’t make that blanket of a generalization, Alex. Perhaps the market is overflowing with people of your skillset. Perhaps there are no pizza place managers. People need, and are willing to pay, for pizza – so pizza companies need, and are willing to pay, for managers. For someone who talks “of the people”, that’s kind of an elitist tone you have there.
Education is not a guarantee of anything, Alex. It’s a risk. Part of the reason that post-secondary degrees are not as lucrative as they used to be is that everyone now thinks they are a guarantee. Ask Norm; when he finished high school, what percent of his class went on to University. Then find out what percentage of this year’s high school grads are going. “Go to school and you’ll get a good job”…well, not necessarily. There are lots of things that you can take four years of University, and $40k of students loans for, that as far as society is concerned – are useless. You’ll make a living off of doing it, but you may not make what a (as the example was given) welder up North will.
Most of the information surrounding job and salary possibilities is widely available before students pick a course of education. As Northstar got into trouble on another thread for, people make many of their own choices in life. You choose what you want to take in school. You choose where you want to live and work. There are always options.
I know one person who, upon finishing University in a field that they love, has went to work on the rigs for two years in order to pay his schooling off. It’s a choice they are making.
April 8th, 2009 at 3:23 PM
Back to the RE discussion, I just thought people might be interested to hear a confirmation that the new Saskatchewan advertising campaign is indeed in full swing here in Calgary. I saw the new billboards at the C-Train station on my way to work.
Some dude talking about “driving time” – and he’s standing on a golf course. It would appear that my favorite garden gnome, Lorne Calvert, and co. are no longer pushing the “affordability” angle. They are now doubling down on the “quality of life” angle. “With only fifteen minute commutes, that leaves plenty of time to use Saskatchewan’s many world class golf courses…”, blah, blah, blah.
I’ve mentioned numerous times before that the NDP isn’t attracting twentysomethings who want to set down roots and grow the Sask economy, they are attracting fourty and fiftysomethings who want an early/better quality retirement. As someone who is smack in the middle of the demographic that Calvert should be plying to…golf courses ain’t going to do it for me. Tell me that I can make more money in Saskatchewan than I make here. Hate to sound shallow and callous…but most people my age are all about the dollars and cents. It goes along with the whole $50k in student loans many are leaving school with. World class golf courses don’t really pay those off.
Can someone please kick these clueless idiots out of power?!?!?! Before they completely ruin Saskatchewan?
April 8th, 2009 at 3:24 PM
Johny,
The reason I think there is still more to go is based on a principal called “Elliott wave theory”. It works wonders for me with stocks in combination with some other things and it can be applied to real estate as well.
Norm,
I completely agree that Saskatoon needs to do some things quickly. I understand that we’re experiencing growing pains and it’s effecting some people. However, you talk about entry level housing that is unaffordable for entry level people. (Taking avg household income compared to avg house price), Tell me where else in Canada that has more affordable entry level housing? Probably Regina & Winnipeg, maybe Montreal. Out of those 3 cities, which are more disirable to live in. Not Regina and Winnipeg!!! That leaves Montreal which has an average house price of $235,000 and an avg income around where Saskatoon’s is sitting. Now you could go to Newfoundland and get a real cheap house. Of course a quarter of the people there are unemployed. Where are these other options? Being a realtor, do you have access to info that I don’t in other cities as well?
I’ve giving my prediction before and I’ll do it again. Plus or minus 4-5% until December then $285k avg house price by May / June. If I’m wrong I’ll have no issues admitting it. Just keep this post bookmarked.
IMO
April 8th, 2009 at 3:24 PM
Warren, I played it up the middle taking only 2 years of education and it hasn’t set me back nearly as much. I’m still versatile and always leave myself an exit-option in everything I do. I’m not as popular as I’d need to be to make crazy money, but I’m not that old. What am I really supposed to do?
The biggest complaint I have is that people EXPECT the young to have to endure some hazing ritual. I don’t understand the need to perpetuate poverty in youth. If that’s the perspective people are taking, then it would be safe to say they are simply bitter and wish what they struggled with upon others – which is petty.
If others think that what we’re going through is just “more of the same and it’ll get better”, they have another thing coming.
With regard to the government and it’s advertising, it’s just Lorne Calvert and his lack of depth.
Politicians like him should be poor like the people he’s screwed over. The people should reach in, take his money while he’s in power and ask him: “Now what’s your biggest concern?”
That being said, people don’t have much of a choice in politics. There’s nobody worth voting for because they’re all rich and can’t comprehend the delicate balance that is semi social and semi free market society. The outcome of an election is based on so much fluff, you don’t know what you’ll get even if they told you information straight-up.
It’s pure dishonesty. Makes me wish I could convince people to vote for me, but I’m not a good liar.
April 8th, 2009 at 3:24 PM
Northstar,
I said “I don’t know” if there are better opportunities. No, I don’t have any greater insight into affordability issues on a national level than the next guy. I think the best sources are RBC and Demographia and I’m willing to bet that the next releases of these studies show more serious erosion in Saskatoon, moving us closer to the bottom end.
My primary point was that I don’t see a lot more room for price growth in the short term and that first time buyers are stretched to the max. At least, that’s the way they feel. One person can only take so much whipping and a 50% increase in housing costs hurts more than “some people.” If Albertans quit coming we’ve got some real problems. If they keep coming we have some serious problems.
As I said before, I’ve been wondering how long it could go on for a long time and I won’t be completely shocked if I’m wrong.
Warren,
Am I just totally stupid or is this “new advertising campaign” completely cruel and heartless?
April 8th, 2009 at 3:25 PM
If you check, downtown high-rise apartment condos in Calgary or Edmonton go for $500-$900/sqft and from what I see on the mls.ca in Saskatoon there at $250-$400/sqft (note, in Calgary or Edmonton the high-rises that are as close to DT as the ones by the City Hospital in Saskatoon would also be considered DT). I am not sure where everybody is getting their numbers from to justify saying that housing cost are equal or`higher in Saskatoon than Calgary or Edmonton. From my prospective DT condos are still a bargain here. Since my job pays almost the same here in Saskatoon as in does in Alberta, I am seriously thinking about packing up my family moving back.
April 8th, 2009 at 3:25 PM
Northstar,
I’m familiar with the Elliot Wave Principle. I’ve found it’s greatest flaw to be it’s ambiguity in definition. By that I mean, it has very loose rules… it can be applied directly to any historic market pattern and be correct by nature of it’s flexibility, it has had very mixed results however projecting market direction.
Inventory levels are proving the principle wrong here but so too is the market’s current dependence on credit. The Elliot Wave Principle was developed at a time when debt-income ratios were much lower and we had a defined middle class. Markets are now influenced more so by lending conditions than income. Therefore proving again, this theory cannot apply to present market conditions.
The fact that we’re even considering 40 year mortgages a positive move for canadians is a clear indication to the instability of present North American economies… it is certainly proving true in The U.S.
Please provide analysis for your predictions.
J
April 8th, 2009 at 3:25 PM
The real problem is all you plus 50 or close to people who just care about yourselves.While others before you suffer the consequences.Our younger population,they are our youth and this kind of growth is only setting them up for a horrible lifestyle.Ive been fortunate to become a lpn in my time and just think about the many others who are having a hell of a time while you guys play mr.realtor and who makes more money from flipping houses.The next I meet a realtor in th er room I might just have to make him wait a lot longer than anyone else and may of my friends feel the same way.I hope and pray the market turns around and spanks you all.Now that would be rewarding for many years to come.
April 8th, 2009 at 3:26 PM
Deb-Deb,
Thanks for your comment.
One thing that you can count on is for the market to turn around. Though I’ve experienced nothing like this in my 14 years, I do know that they all tend to come to an end, and most typically there are consequences.
Given your strong feelings I wonder if you wouldn’t mind sharing some specifics on how you feel Realtors are responsible and how they might have handled themselves differently. How would the result have changed if they had taken your advice?
Thanks.
April 8th, 2009 at 3:26 PM
Deb,
I damn near died from a burst appendix in the waiting room at the University Hospital. If you make anyone wait longer to get help, they probably will die. Besides, not all realtors are bad people.
Norm,
When you say that the market is going to turn around, where do you think folks will be sitting at if they purchased their home in say May or June? Also, I have a friend who has the opportunity to purchase a condo/car combo (it’s a package deal). The price seems about right for the market we’re in, but I told her that it might not be wise to buy into the condo market because she might not be able to see the return she’s looking for. What do you think?
April 8th, 2009 at 3:30 PM
Hi Batman,
Like I said up there I think that low levels of inventory will likely keep the market from crashing, at least over the short term, but I do feel that we’ve pretty much reached the top of the market here. I think demand will begin to subside some and there are too many people here who simply can’t afford to pay more.
You mention that your friend is looking for a return. If that’s the case, there are probably hundreds of investment opportunities outside of Saskatoon real estate where she could feel more confident that she’ll realize one. If she’s actually considering living in this “investment” then I think other factors need to be considered. While the homes I’ve owned have provided a good return over the years, that’s not the primary reason why I choose to own. I like the security that comes with knowing someone can’t force me to move in thirty days, the freedom of being able to make and play by my own house rules, and the flexibility to change my living environment as I see fit. If housing refused to budge for the next twenty years, I’d most likely still want to be a home owner.
Best wishes for your friend.
April 8th, 2009 at 3:30 PM
I was a little disappointed with some of the rash generalizaions on this weeks post. Every single one of us has to accept responsibility for the decisions in life we choose. I don’t think it matters who you are or “WHAT” you do for a living. All of us make up a society. I accept that going to school was a risk, and for me, it paid off. I also have a debt to pay for that risk. Hey, I used to clean hotel rooms to make a living, some of the ladies I worked alongside were the best souled people that I knew. Better than some of my educated colleauges. My point – I don’t think that argument on the “elitist” nor the uneducated person working at a pizza place has any bearing other than what we see in the work place as a market is just an indicator of the entire market. Lest we forget this country was built on immigrants that were willing to come here, take the shittiest of the jobs in order to make a relatively better life here than in their home country. This bears impact on our future job market, which I think, the elasticity in Saskatoon is relatively small (based on past wages, and likely inflexibility many employers of the job market have in substantially raising wages). The job market is just that – a market. Saskatoons relative housing market bears weight in that, if people come here, there needs to be the jobs. There are help wanted signs everywhere in this city right now. Can the Saskatoon job market and housing market as a whole compete with lifestyles elsewhere? My personal feeling, although I have yet to see stats on this, is that it currently can not. The LPN and accountant above are probably in the same shoes that I am right now. I hear all the time that Calgary, Edmonton and Vancouver are less affordable than here. Well, its all relative. And, I seem to recall being stuck on Circle drive for 45 friggen minutes the other day. This city has some other problems that it never used to have.
Norm, I think a comment from the past bears significance, when you said you would take the past predictable market any day over what happened. I think you are completely right. This is unprecedented for SK. Calvert needs to accept full responsibility, including the negative societal impacts that his brilliant plan conjured up (I wonder how a frozen corpse downtown would look on a campaign). I get a little sick of the capitalist talk and justifying wealth at a cost to the poor. Yes, everyone can make different decisions, blah blah blah, but, there is a growing gap between wealth and poverty – regardless of what feild you are in. Capitalistic, so far is successful because it plays on our intrinsic nature to be selfish. However, it always has a cost. Do we really believe that having two SUVS, a beautiful 4000 sqft home on every block, ect is sustainable? Even if you justify that lifestyle by volunteering at the food shelter it doesnt take away the impact you have on society. “Just because you can doesnt mean you should.”
Anyways, Thanks again Norm. Seems this week many comments got a little under my skin. This is a real-estate blog right?
April 8th, 2009 at 3:31 PM
Johny,
“Please provide analysis for your predictions.” If you noticed in my previous post I made mention of the theory in combination with other things. If you feel the theory is flawed, that’s your opinion. It’s done quite well for me in a number of areas. I have no desire to post analysis of my predictions. I’d rather have the facts prove me right come May / June. Like I said before, if I’m wrong I’ll have no issues admitting it. We’ll see next spring.
Cindy,
Good post. I agree that it doesn’t matter what people do for a living. Everyone that works hard for a living deserves to live a comfortable lifestyle. Unfortunately capitalism at the moment does have some definate problems. It is the system that we have though and if there is a growing gap I’m going to make sure I’m on the best side of that gap. I don’t feel any shame in that. If another system comes along that is better I will be glad to see it.
I could be wrong but I’m assuming the lastpart of your post was poke at me. Just to set the record straight, although I make a good living I currently drive a Kia Rio and live on Ave H South. So if you are presuming that I live in a 4000sq/ft house and drive 2 SUV’s, maybe you should get to know me before you judge me. I don’t volunteer my time to justify anything. I do it because I enjoy it.
Deb-Deb,
Are you Alex’s sister?
IMO
April 8th, 2009 at 3:31 PM
Northstar- nope not a poke at you. Just a rash generalized comment about affluenza. I agree that volunteering is great, and absolutely, I would rather be on the other side of the gap as well. Additionally, one freind once said “If you really want to help society, everybody should just shoot themselves”. And….obviously that is not an approach I wish anyone to contemplate. To summarize, the growing affluence of not just Saskatoon, but North America, has a major price. It’s just too bad the consequences are so distant that we dont all make some little changes immediately to…help.
April 8th, 2009 at 3:31 PM
ps – there are some “better” systems in the EU right now. We don’t need to reinvent the wheel, but maybe look past the end of our nose.
April 8th, 2009 at 3:31 PM
Northstar,
The Elliot Wave Theory also depends heavily on crowd sentiment and its persuasion. I think you’re trying to persuade sentiment towards the assumption that avg house price will go up, in hopes that more investors will enter the market and your holdings will increase in value.
If you refuse to say to why you feel avg house prices will increase, they hold no water. Bubbles are avoided when someone steps up and provides solid market analysis… bubbles are created when buzz words and hollow claims create frenzied investors. I’m pretty sure the market activity of past weeks has proven the frenzy is over and it’ll take more than a claim that house prices will go up just cause, to bring back enough activity for you to make margin on your investment.
J.
April 8th, 2009 at 3:34 PM
Cindy,
An excellent post indeed. I would far sooner see Calvert take the blame for this, than me.
My house isn’t anywhere near 4000 square feet either and I drive a 2002 North American made car which I’ve just finished paying for.
April 8th, 2009 at 3:35 PM
Johny,
You’re reading too much in to the theory. At the core, the theory is simply that everything in life goes through ebb and flow. Much like when land grows vegitation the next year rabbits show up to feed on the vegatation. Then the year after foxes show up to feed on the rabbits. In this market investors did a lot of buying this spring. Next year will be families because of the excitment created this year. It doesn’t matter what analysis I provide, you will find a way to discredit it because of your slant to the downside. So why should I bother. Just leave it as it is and we’ll find out next spring. If I’m wrong I’ll tell you that you we’re right. If I’m right I’ll expect the same, fair enough?
“it’ll take more than a claim that house prices will go up just cause, to bring back enough activity for you to make margin on your investment.”
Are you under the assumption that my investment here started in the past couple of months?
Cindy,
Sorry, I stand corrected. Are you refering to the Socialist countries in Europe? That system has some good points. What I like about Capitalism is those that work hard in combination with working smart do well. What worries me about Socialistic systems is the potential of creating a lazy population. Not that it doesn’t happen with Capitalism either. Truth is I don’t know a lot about the system. I do know that Europe is doing very well right now so maybe there is something to it.
April 8th, 2009 at 3:35 PM
Northstar,
You got me all excited there! I thought you were going to say that next year something would show up to eat all of our investors.
Sorry, I couldn’t resist that. My sense is that you’re a decent guy and probably a very responsible landlord. I would love to see something show up to eat that “Donald” guy though.
April 8th, 2009 at 3:36 PM
Johnny,
You certainly don’t know enough about me to call me a greedy or a dizzy ***. I was just trying to point out to Alex why his sense of entitlement doesn’t match up with reality. I thought he might be adult enough to take it on his own but I guess he needs a big brother to look out for him.
April 8th, 2009 at 3:36 PM
Hello Norm,
Have you herd anything about this new development project happening in greystone. Where the developer bought out all the apartment building. And now is going to tear them down and re build? I herd it on the news, and im trying to figure out who the developer is? Do you have any info on this?
Thanks
April 8th, 2009 at 3:37 PM
SaskSeller:
There’s a story on this eviction in the student paper at Usask today: the tenants are trying to delay the process, at least so they can stay until the spring, when their kids are out of school.
The really interesting thing about this is that most of these people are graduate students in the sciences, and of course they’re going to leave town — one’s going to Calgary, one, a software engineer from Toronto, has already gone back, and one, a PhD in Plant science, is lamenting the fact that he has 2 years to go on his degree and so *has* to stay.
Tenants are mobile — good ones, especially. This little boomlet is going to winnow out the young and mobile population, and it won’t be good for the city as a whole.
Frankly, I wonder about the long-term prospects for all those condos: there are a fair number in the pipeline and if they all come online at once the prices are not going to be all that high. If the tenants get their landlord to re-think his move, they might wind up doing him a favour.
I was hired at U of S three years ago (I’m a prof, but still paying off student loans so I’m not in the housing market yet), and I’ll seriously rethink staying if the housing costs wind up too high. If I’m going to have to pay half my salary to buy, I’d rather it be somewhere with a resale market — not to mention the fact that major cities are much more fun to live in.
April 8th, 2009 at 3:37 PM
Sam,
Just to be clear, it was Jim who called you dizzy, and not Johny who is always more diplomatic.
I’m not really sure what’s going on around here lately but there seems to be a lot of name calling and finger pointing.
April 8th, 2009 at 3:37 PM
Oh, and Norm — It’s a great pleasure to read your comments, which are realistic, intelligent and humane. I think you’re spot-on about the long-term effects of pricing the entry-level buyers out of the market; in the long run, it just kills the whole market.
You’re a good realtor, I’m guessing.
April 8th, 2009 at 3:37 PM
jrochest,
Do you know who the developer is?
April 8th, 2009 at 3:38 PM
SaskSeller,
When I initially read this story there seemed to be some contradictions as to whether it would actually be torn down or converted. There are some special provisions in the Residential Tenancies Act which allow for one month notice to tenants if a demolition is planned. I won’t be the least bit surprised if the plan suddenly changes after the tenants are gone. Most of these “companies” don’t seem to have too many issues with working around the law. Time will tell. I really don’t know much about the project but I’ll speak to some commercial guys tomorrow that may be able to bring me up to speed.
jrochest,
I’ve also been wondering if the condo market will be flooded with inventory next year. The inventory of resale units are already climbing and prices have certainly stabilized.
No resale market in Saskatoon? I’ve been doing this for close to 15 years and I don’t ever remember a time when “average days on the market” were much longer than 30-35 days. While we haven’t always been statistical leaders for price growth, we almost never see values slide backwards and it’s always been fairly easy to sell a home here.
Thank you for your kind comment. You are obviously brilliant!
April 8th, 2009 at 3:39 PM
Saskseller,
As far as I know, the developer responsible for the new Greystone condo developments is RDL Management.
In regards to the current housing situation, does anyone else find it somewhat hypocritical that while the NDP are trying to come across as “looking out for the little guy” and discuss looking into ways to curb the rising housing costs, they at the same time are revamping their Move to Sask campaign in both Alberta and Ontario? In my opinion, this campaign is largely responsible for the current housing issues we are facing as our city was ill prepared for the results from the first round of advertising. Why not at least wait to let the market stabilize somewhat and for some sanity to resume before gearing up for round two? From listening to the news, instead of letting things naturally sort themselves out, they seem hell bent on continuing with this poorly thought out campaign and would rather implement hastily thought out fixes such as rent controls and upping housing allowances to try and remedy the damage that they are largely responsible for. It just doesn’t make sense to me.
It seems to me like the party is talking out both sides of their mouths, and I am surprised no one has called them on the issue.
April 8th, 2009 at 3:39 PM
Jason,
You’re bang on with your comment about the new advertising campaign. As I said further up this thread it seems “cruel and heartless.” Perhaps I don’t understand the big picture on this but with the current shortage it seems like every new resident to Saskatoon means someone else is out on the street.
April 8th, 2009 at 3:41 PM
“I thought he might be adult enough to take it on his own but I guess he needs a big brother to look out for him.”
LOL, I’m sorry, what? Let’s get specific here, I’ve been relatively quiet! What’s your problem specifically? My sense of entitlement? Elaborate.
“This little boomlet is going to winnow out the young and mobile population, and it won’t be good for the city as a whole.”
You’re so right for pointing that out, although if I might rant?
You have to stop saying ‘is going’. It HAS. And until Saskatoon fixes house prices, it will stay that way. Nobody is going to lower their standards to help fat cats get more money for less.
I’m not going to be convinced that because of no good reason I shouldn’t expect to be able to get a house just like people before me. I am not going to be convinced that I should pay more for less because “ha, suck it up.”
NO THANKS
April 8th, 2009 at 3:41 PM
Norm — well, that’s why I’m waiting. I think this jump is a blip, and that prices will come down or flatten. I’m talking about selling in a couple of decades, not right away.
So I’ll have to wait two or three years, and if there’s going to be a reset, then it will have some time to happen.
Unless, of course, I can by a two-bedroom condo within walking distance of U of S for 100,000 or less. Which, if they do flood the market, might just happen.
April 8th, 2009 at 3:43 PM
Jason, I apologize. I meant to give you “props” in my prior posting.
So here they are for you.
Support others who are suffering from this disgusting nightmare. The more who speak out and who are encouraged to speak out, the better.
Who would call out a government in the end though?
April 8th, 2009 at 3:44 PM
The blog is hot tonight,
The new advertising campaign doesn’t make a lot of sense to me either. Too many infrastructure issues for another mass migration. Helll, to many infrastructure issues for the first migration.
“cruel and heartless”, you’re probably right Norm. Even though I do find it unhealthy for the city, it is one of many pieces of “analysis” that supports my $285k avg by next spring theory. (Johny)
April 8th, 2009 at 3:44 PM
Wow, this is a busy blog tonight!
First off, I don’t know if “cruel and heartless” are the words I would use to describe the campaign, but I’m definitely not in favor of it. Someone should tell Comrade Calvert to solve the problems he has now before going off looking for new problems. Again, will someone vote these clowns out before they ruin the entire province?
Northstar wrote:
“I agree that it doesn’t matter what people do for a living. Everyone that works hard for a living deserves to live a comfortable lifestyle.”
This veers a little off of the topic of real estate, but I just wanted to point out that it’s thinking (and the corresponding taxes) like this that made me and many of my friends move to Alberta. Hard worker or not, not every position warrants a ‘comfortable’ lifestyle. All your basic needs met, of course, yes. Everyone should have food, water, clothing, and shelter, but that doesn’t make for much of a ‘comfortable’ existence.
I point this out because I get the feeling that there are some people on this board who believe that absolutely everyone should be able to own their own home, which is completely absurd. It’s like the groups that constantly advocate that minimum wage should be higher. If minimum wage was high enough to live a ‘comfortable’ life, what’s the incentive for anyone to challenge themselves and learn a skill/trade/education? Minimum wage is supposed to be low, it’s supposed to be a crappy life, so that after being on minimum wage and seeing all the things you will never be able to have (new cars, home ownership, vacations, etc) you realize that you should educate yourself and contribute more to society. That beiing said, working for minimum wage shouldn’t mean that you have to live in a tent, so something is definitely not working.
Society is supposed to reward you for working hard and specializing in something that benefits the greater good. Do you think it’s easy to become a doctor? The difficulty involved is part of the reason we (as a society) value their contribution so much and compensate them accordingly.
As for the informal poll that went on, I drive a BMW. And it’s everything I ever hoped it could be. Go ahead and flame me for elitisism and affluenza, but I feel that I’ve worked hard for it and I’ve made sacrifices along the way. If you think that nearly a decade of school is enjoyable…then you’re just not me.
I’m not callous, I don’t like poverty anymore than anyone else. Do I donate to charity? Yes, but not as much as I probably should. Would I fight for someone who wants to create real solutions to the issues of poverty that our cities face? Absolutely. But I have to object to this notion that capitalism is bad. The reason we are where we are in life today is solely because of free market capitalism and specialization of labour. Yes, it isn’t always perfect, but the fault always lies with greedy people, not with the system. At the end of this housing bubble, as it unwinds like it is in the States, all the blame falls solely on the shoulders of us – the people. We have caused this situation, and we should have known better.
The problem that we are facing today is that many people who should be getting rewarded for their knowledge and expertise are getting priced out of the housing market. When two professionals can’t own a home in Saskatoon, then home prices have definitely left the land of sustainability.
And for what it’s worth, I’ll take your bet on next spring’s prices Northstar. Prices are down another $10,000 here in Calgary. If it dries up here, I fear that Saskatoon is screwed, as all the fun money will have to pull out.
April 8th, 2009 at 3:44 PM
Warren,
You never seem to address me directly except with “being lumped in with Alex”.
Although I think you made another reference.
For your information I do work and I do have a little bit of education. Efforts made all around and I don’t feel like I should be priced out.
Simply put, I work hard. I do everything I can for myself and my fiancee. I have all the best intentions.
I guess the question of the “free market” becomes “does every hard worker deserve anything?”
At which point I think you’ve eroded the safety net that protects us all. You gotta admit, everyone needs equal opportunity and I am not without house from a lack of effort made.
Maybe my age. But not a lack of effort, please point that in a different direction.
April 8th, 2009 at 3:45 PM
I think that the NDP are sending this message out to the wrong crowd. After giving seniors prescriptions for less money he puts out ads to get retiring or close to retirement people. What happens in 5 – 10 years when we have a considerably more aging population than now and we have all those people reaping the benefits of cheaper prescriptions? The answer is the younger working class will have to pay for it through rising SK taxes. I don’t think Lorne is looking out for SK right now or for the future.
As for education… Alex I am with you. I went to school for 2 years too. I worked hard at school and got top marks, but was unable to get a high paying job. Yes I was naive and believed what the school’s administration was telling me would be the next big job in SK, but I’m still not really working in my field although I keep trying. My Dh and I were fortunate to get a home because we bought a condo when the price were lower. If not for that we would be right where you are right now, and where many of my friends are.
April 8th, 2009 at 3:45 PM
Warren,
If you have a digital camera and wouldn’t mind taking the time, I’d love to see a photo of the new billboard. They are not displayed on the government’s website. Seems they’re not making a very big deal about their out of province campaign this time. Thanks.
April 8th, 2009 at 3:46 PM
A phone call to RDL confirmed they are on board for some towhouses in Willowgrove. I have been told they are mostly commercial but now dipping into residential. No word on the Greystone project.
April 8th, 2009 at 3:46 PM
On the topic of education/working hard. I too went to school, but only for a year. I worked hard at it and graduated at the top of my class. I would love to go to university, but it’s just so damned expensive, especially if you consider the opportunity cost.
As it stands, I can make 30 – 35K/yr in my field. University will probably cost roughly 15 – 20K/yr. All things considered, I’m lookin’ at 45 – 55K/yr to go to school. Granted, I could be making a lot more with a designation, but a high-paying job just doesn’t fall into your lap when you’re fresh out of school, not unless you head West. Sure, there’s student loans as well, but it kinda scares me to hear that some folks are still trying to pay them off several years down the road.
And Warren, if we could afford it, my wife would love to go to school for 10 years. Personally, it’s not my cup o’ tea, but I can deffinitely see the benefits.
April 8th, 2009 at 3:46 PM
SaskSeller,
I have also heard today that the buildings in Greystone are owned by RDL who has held them for many years. My contact who is a veteran commercial agent claims that RDL has always been into residential. They have a few commercial leases on the main floor of Marquis Towers but have typically held 400-500 residential units in Saskatoon. He says that they intend to demolish 6 of the 8 existing buildings to make way for new condo development. The existing units will only bring $600 per month so they’re probably not real desirable for resale. Further, I would expect that they’ve been depreciated to nothing by a long term owner who could likely realize a much better return starting from scratch in what is really a great location.
April 8th, 2009 at 3:46 PM
Tumbleweed!!,
__/__/__/__/__@
April 8th, 2009 at 3:53 PM
lol! Apparently everything has been said. Time for a new post, I guess.
April 8th, 2009 at 3:54 PM
I predicted it in June and I’ll say it now. The party is over. The big dough has been made and the very deep pockets that rolled in have flipped and pulled out leaving the small guys who haven’t pulled out and those latecomers holding the bag of an artificially inflated market that rose at a ridiculous rate independent of anything really happening in the economy. Was the real estate market in Saskatoon undervalued compared to other centres? … Probably. Was it undervalued considering current local factors such as wages and other economic conditions? Maybe somewhat. but not nearly as much as the bizarre increases that we have seen. We are not Calgary or Edmonton …… Alberta is very rich on a hot hot economy and Saskatchewan is still the poor neighbor relatively speaking.
Let’s get real.
April 8th, 2009 at 3:54 PM
Thanks Brad,
What kind of a correction do you see happening in terms of a percentage? Just curious to hear your thoughts on that.
April 8th, 2009 at 3:54 PM
After 3 months of looking at houses and studying the market, I finally came accross a house that I really liked and am now a first-time home owner! It might have been a crazy thing to do considering the softening of the market, but based on extensive market analysis I felt pretty comfortable with my decision.
Of course I should have bought a year ago but I never considered it until a few months ago and that’s just the way things go. In any case, some of you might be interested in hearing my assessment of the market. After all, I’ve put my money where my mouth is and there’s something to be said for that.
SUPPLY
- the city sucks at getting infrastructure together and were only able to service about 75% of lots last year. You can’t have new housing builds without serviced lots and I expect the City to fall down as it tries to catch up let alone keep up with demand
- strong demand for construction and trade skills exists throughout the praries in all major centers and also limits supply
DEMAND
- Saskatchewan has the best immigration attraction program in Canada – just go to the river and talk to some of the fishermen there that you never used to see – they are mostly immigrants
- Saskatoon has a growing technology sector – and was the city’s third largest growth sector (after construction and trades). No major centers see this kind of growth in their science and technology sector
- On a per-capita basis, Saskatoon easily competes with the likes of Edmonton and Calgary on job growth. Add to that the fact that WHEN bio-fuels start phasing out oil, we have 50% of the farmland in Canada we are in a good long term position. Add the science-based competitive advantage and all our other resources and Saskatchewan looks pretty good.
- Calvert continues to promote Saskatchewan to build demand
PERSONAL EXPERIENCE
- I’ve spoken with a number of new people at Innovation Place who just moved here and say Saskatoon has a tonne of jobs compared to their prospects in other cities.
- I’ve travelled to New York where you can’t get a house (you rent!) unless you want to drive an hour or more. Someone said the big cities offer a lot more then Saskatoon – I say go to your big cities then. I bought a house where I walk across the train bridge every day to go to work, its a beautiful walk, and its 20 minutes – its even great in the winter. I think Saskatoon is one of the most beautiful cities in North America with the perfect sized population and amenities. Sure the construction sucked this year but try being in New York or Calgary. Better yet, switch to walking like me and you have no road rage or gas prices to deal with.
INTEREST RATES
Projected to continue to increase, especially considering the rising U.S. dollar and any federal efforts to stabalize exchange rates by increasing prime rates. An extra 100 points makes a big difference with today’s prices.
PRICE
Prices have gone up sure, but I bought a basement suite and may get a room-mate. If I get the roomate, it will be cheaper than the appartment I’m in. The only cheaper houses in Canada are in the maritimes and in Manitoba and they have their own problems.
MY ASSESSMENT
And it could be wrong, is that the market is going to stabalize and that prices will go up as they have in the past. There will be no crash unless a bunch of investors start dropping property like crazy. There are a lot of good things going for this province, we knew housing prices were lower than they should, there has been a correction, and I could easily see prices go higher. If prices do drop, I think it will only be temporary.
So, if you’re like me and have been looking for a home, don’t be afraid to buy. I’ve been noticing a lot of doom and gloom on the board lately and I was one of these folks too – but after looking at all the data, I saw the house, loved it, and wasn’t afraid to buy.
April 8th, 2009 at 3:55 PM
Congrats Doug. I for one appreciate your posts and respectful tone. When’s the housewarming?
April 8th, 2009 at 3:55 PM
Doug,
Congratulations and thanks for your analysis. Was the deal fairly easy or was there a bidding war? Curious which column you’ll end up in.
April 8th, 2009 at 3:55 PM
Doug,
Congrats!!! Sometimes the best time to buy is a softening market… Especially when the overall trend is up. Your post was great and echo my thoughts exactly. Saskatoon and Saskatchewan have a lot going for it.
What I find the most interesting about your post is that you “decided” to buy a house and made it happen. A lot of people tell themselves that “They can’t afford it” or “Housing has gone up too much”. You did what you needed to do including a mortgage helper if you choose. Props to you!!
I remember 4 or 5 years ago after the Okanagan in B.C. started to get an influx of Albertans and prices went up 50% in the first 2 years. People said that it couldn’t possibly go up any further. Since then it’s almost doubled again. Brad, all predictions made now will be in the spotlight come next spring. I’ve made mine and I think you’re wrong. I’ll give you props if you’re right though.
IMO
April 8th, 2009 at 3:56 PM
Congratulations Doug,
I realize that this is private information but given the anonymity of this board, would you mind giving us rough numbers income/debt/mortgage you’ve taken on? I’m curious what kind of affordability we’re looking at these days.
Northstar,
You’d think you’d be happy to share your analysis… hard fact would certainly help to re-energize the market and investor confidence therein… not to mention increase the value of your investments.
If you’re the seasoned investor that you portray yourself as, you have a responsibility to back up your predictions with solid analysis.
P.S. If you’re using the Elliot Wave Principle actively when investing $100K’s in real estate, I would think you’d want to read “deep” into it as well.
J.
April 8th, 2009 at 3:56 PM
I believe we will see up to a 10 percent price reduction by spring. I don’t think the sub prime issue in the states has shaken itself out yet. Fore closures continue to escalate south of the border and consumer confidence is very shaky. We like to think as Canadians that our economy runs independent from the U.S. however as our largest trading partner by far, our economy remains deeply tied to our southern neighbors. While I don’t think that we are headed for a deep recession, I do see a general cooling of our economy through part of next year.
Doug. while you might be talking to fisherman by the river, I have been talking to family members in the process of immigrating to Canada and they chose Quebec hands down. Most immigrants choose eastern Canada. Saskatoons tech. sector is growing but not on track with expectations. The synchatron is a way off predicted demand for use paid for with by private sector dollars. I doubt that the process of biofuels phasing out oil will occur in my lifetime and if interest rates continue to rise as you envision Doug, that will have a negative effect on the housing market, not a positive one as you indicate. I am a lifetime Saskatoon resident and because of the social problems that plague and will continue to escalate in our city, the romance is wearing thin. I just don’t feel safe here anymore.
brad
April 8th, 2009 at 3:56 PM
Thanks everyone! It really made me feel good about my purchase as I pointed out all of the things that were in the back of my mind. I could be wrong but if any of my analysis helps other people in the same position as me, I hope it helps.
Jedi, housewarming is October 31 – combination halloween party!
Norm, there was not a closing date on the bid. I got my bid in early and set it to expire before the open house started. It was also timed during a long weekend. I offered the full asking price and they decided to take it over trying for a bidding war. I’m pretty sure a bidding war would have taken place, but my offer was fair and the realtors seemed to have a good relationship. The appraisal came in $6k over what I paid and I’m confident I paid good market price.
Northstar, thanks – you share a lot of my optimism for the future of this province and I think it goes unrecognized sometime.
]ohny, I put down the standard 20% but make sure you bring in competitive rates when you’re talking to the bank. Those bastards will try to squese you as much as they can unless you show them your alternatives. My payments (with principle, interest, property tax, house insurance, utilities and maintenance) come in at $1500 per month but my basement suite rental plus my previous rent are $1265. If I get a roomate ($500), I save $250, if I don’t I get privacy but spend $250. I already have an offer for a roomate.
Brad, I put my money on the table because I thought it was best for me. If you or others think its not, then I wish you the best and encourage you to go with your gut. Personally I love this city, my job, and my future home and see alot of opportunities in my future. I don’t plan on leaving for a long time unless something really unbelievable comes along to change my mind. I ultimately made my decision based on the future I saw before me and alternative realities that could (and most likely would) happen which would leave me worse off.
April 8th, 2009 at 3:57 PM
Johny,
I’m not sure why you won’t leave it alone after the past 2 reponses. It makes me wonder why you feel the need to keep picking. Moreover I never claimed to be a seasoned investor. Those are your words not mine. I’m 28 years old and been investing for about 2 years. What I do have is the knowledge of learning from highly financially intelligent, seasoned investors who have taught me a lot.
Since you won’t leave it alone I will put rest to it right now. There are 13 initial criteria that I look for when investing in an area. (all criteria for provincial and federal analysis)
1)Is the area income increasing faster than the avg? ( In Saskatoon’s case, the median income is increasing faster than anywhere in the province and the province is increasing 2nd only to Alberta in Canada. ) Source 2005 stats Canada
2)Is the area job growth increasing faster than the avg? ( As Doug said before, Saskatoon is in line with Alberta and has provided impressive results the past couple of years. I believe Norm posted a blog topic about this. )
3)Does the area have a strong influx of immigration? ( We all know what’s happening in that respect )
4)Will the area benefit from a real estate ripple effect? ( With the huge boom in Alberta, it’s sure to spread. Especially since many Fort Mac workers live here in Saskatoon. Moreover the province is building a highway which will cut 2 hours off the driving time to Fort Mac. Essentially it’ll be almost identical driving times from both Edmonton and Saskatoon.
5)Does the area have multiple major employers? ( Check out http://www.sreda.com and you will find all the major employers if you dig for it)
6)Is the area good for retirement? ( Let’s face it. The baby boomer generation is just starting retirement and they’re looking for good spots. B.C. is one but the prices there are crazy. Saskatoon is the next best option. Golf courses galore, family atmosphere, all the amenities but not a huge city, slow pace. )
7)Does the area have major transportation improvements in the future? ( Saskatoon currently has $300 million dollars worth of transportation improvements slated for the future. Next to Alberta, “per capita” that’s the highest in the country.”
8)Is there an increase in material and labour cost? ( Ah, Ya!!!! )
9)Is there a labour shortage? ( Call a construction company and tell them you have a $10,000 job for them and see how long till they get to you. My contractor spent 3 full days trying to find a plumber to do a small job for him. He finally found one today and he can’t start until 2 weeks from now. I won’t talk about how much he’s charging.)
10)Is the area a desirable place to live? ( I’m originally from Vancouver so the surroundings aren’t quite what it is there. However I’ve lived in a few places across Canada and Saskatoon is my 2nd favorite place. I’d like to think it’s desirable! )
I’d like to point out at this time that when I see 10 out of 13 possible check marks I buy.
11)Is the economic development office progressive & helpful? (I’m not 100% sure if they’re progressive but they were extremely pleasant and helpful when I called)
12)Has the political leadership created and economic growth atmophere? ( My opinion is that the government has done some things well and some things not so well. What perks my attention is the election coming up soon. My belief is that the new government won’t drop the ball when it comes to this. I give this section a half check mark. )
13)Is the areas infrastructure being built to handle growth? ( This is the only area that I can see that is a complete failure at the moment. )
Then Johny, I look at secondary items,
What is the unemployment rate? ( Saskatchewan in 2006 was 4.1% – 3rd best in the country. Saskatoon was 3.4% – top 3 in the country )
What is the vacancy rate? ( Don’t know the exact stats but I imagine next to nothing considering the extensive complaining of no place to live )
What is the economic growth? ( In 2005 Saskatoon led the nation in economic growth at 7% )
Continuing on, with grain prices rising the farming industry should do well. With the pine beetle spreading in to Alberta whatever forest industry Saskatchewan has should do well. Saskatchewan has the biggest Uranium deposit in the world ( supplying nearly 1/3 of the worlds uranium. The Tech industry is booming and Saskatchewan has as much oil as Alberta does. Currently Saskatchewan provides 18% of Canada’s oil production and they aren’t even trying. Alberta has all the funding and they’re only doing 35%of Canada’s production. Look out if the government decides to tap in to it. Next to Manitoba, Saskatchewan has the largest fresh water resource in the country.
When it comes to the Elliot Wave Theory I do pay attention to the small topics. However I try to focus on the big picture. Like you said
“it has very loose rules… it can be applied directly to any historic market pattern and be correct by nature of it’s flexibility”
So why would I focus on those loose rules when you clearly said they aren’t that important?
I would greatly appreciate opinions from all in regards to what I have posted here. Please tell me what you think?
IMO
April 8th, 2009 at 3:57 PM
Thank you for your thoughts, Brad! it is 100% true analysis for the market.
SLT
April 8th, 2009 at 3:57 PM
Northstar,
You’re bending my words. As I explained, the loose rules allow for anyone to use the principle to their advantage when trying to sway investor opinion in any given market.
StatsCan is reporting a 1 dollar per hour increase in Q2 2007 over Q2 2006. Income statistics are pretty high priority for stats can and are posted on a quarterly basis…. not too sure why you’re using stats from 2005.
Job growth, immigration, Major employers, Major transportation improvements, etc, your claims, once again, are without reference.
Unemployment numbers are lower because part-time job growth is higher. And I’d venture to say the majority of the part time job growth is directly tied to construction. What happens when that circus leaves town?
It’s way too early to say what’s gone on in sask is a boom but if you’re trying to sway investment in your favor, you’ll have to do more than present a bunch of points (most of which you haven’t backed up with any recent data) that fit your argument. It’s interesting that you didn’t mention affordability or GDP growth.
I don’t want to pick, Northstar, and I’d like to leave it alone. I just see everything you say as an attempt to convince quite weary investors that they should buy right now. And I think you’re doing this to improve your personal investments in saskatoon real estate. You really didn’t start your campaign until investor confidence in our market started to wain.
I’d recommend anyone read Northstar’s analysis but realize that he does have a vested interest in presenting market conditions in a positive light.
J.
April 8th, 2009 at 3:58 PM
Johny,
My properties cash flow and I’m in it for the long term. I’m not trying to convince anyone to do anything. All I’m doing is stating what I believe will happen.
As far as references go, a lot of what I posted had reference back up. If there is something you don’t agree with, then try and find references to discredit it. Post those and I will look at it. When I initally bought here I had to put together a package to show investors so I could get their money. All of what I stated was in that package. Those investors are smart people and if what I presented wasn’t true then they wouldn’t have given me money.
I used stats from 2005 for a couple of things. This being it was the most recent data I could find. Information from a couple of years ago still holds weight. I also did mention GDP which led Canada in 2005 at 7%. I refered to it as economic growth.
I agree with you that I do present things in a positive light. I do that because I’m an optamistic person and I see a great city here with a ton of potential. My wife loves it here and I love it here. We both want to stay for a while and we want to see a progressive city eager for change. My wife should be able to walk down Ave H to work without worrying if she’s going to get stabbed.
IMO
April 8th, 2009 at 3:58 PM
Professor Johny (the title because you demand more references that any Professor I have ever had),
If you wish to take a different position than Northstar, why don’t you present your own argument, supported by your own references? You are always the first to call out anyone and even when they do provide sources you poke holes in that. In the last few months the Star Phoenix alone has printed articles to support 90% of Northstar’s claims. Northstar never once stated that people should purchase right now. He simply put out a prediction for next year. Some called him to task so he has put together an argument to support it. Even if he did incourage to buy now I would hope the other readers would do a much more thorough investigation of the investment they are about to make than simply to buy in because a guy on a blog said so. I think you are insulting the rest of the readers on this forum.
How come you don’t call Brad to task for his position? Probably because it agrees with your own. Really, no one knows the future, and this is a place where people can share opinions hopefully in a tasteful and friendly manner. There are probably many reasons one could site for the market cooling or increasing. It would be appreciated if any of the nay sayers would spend a little more time constructing a viable argument supported with reasonable facts than to simply make false accusations or unfounded statements.
PS, Doug, who would you prefer to see on halloween, Yoda, Obi Wan, Mace, or Anakin? I am assuming Batman is invited also
April 8th, 2009 at 3:58 PM
Speaking of references:
http://www.cbc.ca/canada/saskatchewan/story/2007/09/13/citieseconomies.html
Saskatoon to top Calgary in economic growth
April 8th, 2009 at 3:59 PM
Interesting article Jedi. Thanks for sharing it.
April 8th, 2009 at 3:59 PM
Professor indeed… perhaps you’ve revealed me from my secret identity as “Johny”
The claims I’ve made are usually a result of an article I’ve read which, for the most part, I’ve provided to this forum. My goal isn’t to put a negative spin on the market here, it’s to keep the forum (which many investors DO rely on by nature of your argument that they will find any resource they can to make an educated decision) honest. My greatest peeve is those who wish to influence consumer spending with pump&dump buzz words… and further, those who do so for personal gain.
I do have my own predictions regarding market direction. I promise that whenever I make solid claims on market direction, I will provide a point of reference, and I’ll expect everyone else to do the same
J.
April 8th, 2009 at 3:59 PM
Johny,
That’s very noble of you.
What are your predictions of market direction? And what are your points of reference?
April 8th, 2009 at 3:59 PM
Thanks for the confirmation Northstar, I thought I was quite noble also
. Yes, I can definitely provide my predictions and points of reference. Give me a couple of days, I’m headed to the lake this weekend.
J.
April 8th, 2009 at 4:00 PM
study real estate trend for calgary during july,aug for the past 2 years. aug is a slow month . People here are tanking about sask like it was alberta 3 years ago but they are in a speculation game not a house job structured brain mode. Most feel that they can roll a house in a hot market now and cash in before the crash. Your prices I believe are based on partly returning cash happy sask’s who made a killing in the bubble by selling and trying to by low in your bubble. But and I am seeing this I know of some people who are only buying to make a sale. This is pushing your market to a place that does not make sense. Income vs mortgage.
The for sales signs in calgary are going thru the roof and housing is finally I believe going to drop here. Specuators who were in our market are now in yours. The general public still I believe is unaware of sask leveling so I believe you are going to see over the next 6 months an influx of alberta cash trying to win in your market because ours has shrunk for the last 3 months. But I think by christmas your bubble will start to leak.
People are a little worried now, If it resets by 50K to a level where a wage can support the mortgage we might see another little bubble again.
Just an opinion, check google under bubbles and crashes
Alberta tim , Calgary but riders all the way
April 8th, 2009 at 4:00 PM
Tim,
Thanks for the comment.
We have had a lot of people “come home” over the past two years and there still seems to be fairly high interest. There’s no denying that there has been a lot of “flipping” for profit though. I see some agents working many transactions for one buyer. These homes are getting a coat of paint, a little new flooring and a for sale sign.
You’ve got to be a pretty high risk taker to be stepping in with that kind of activity right now after massive increases through 2007. I question whether there’s enough up side to pay the cost of carrying and selling over the next few months. The market has a different feel to it now. While there isn’t enough inventory to cause a price slide (IMO), I think we’ve pretty much reached the top. As you suggest, we’ve likely passed the point where locals can afford to buy.
“Riders all the way.” Another Sask ex-pat?