In Saskatchewan, most housing types saw some small improvements in affordability. Although measures remain slightly higher than their long-term averages, RBC indicates that affordability in Saskatchewan isn’t likely to be much of a factor in the short-term.

“Affordability, therefore, is unlikely to be a factor restraining Saskatchewan homebuyers at this point. Indeed, they were very active in the fourth quarter, with resales surging nearly 9% from the third quarter to their highest levels in almost four years. Strong economic growth will continue to benefit Saskatchewan’s housing market in 2012.”

Read the full RBC Housing Trends and Affordability report.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Now, the new federal budget is planning for greater oversight of the federal crown corporation, which was founded to provide insurance on Canadian mortgages where buyers are unable to produce a down payment of 20 percent or more.

“The government will propose legislative amendments to strengthen oversight of CMHC and to ensure its commercial activities are managed in a manner that promotes the stability of the financial system,” the budget said.

Banks are required to insure mortgages that don’t meet the minimum 20-percent down payment threshold. Apparently, in recent years, banks have been insuring mortgages that are eligible to be processed without the insurance. Given that purchasers bear the burden of the insurance cost, it’s no wonder that this approach seems attractive to lenders. No additional cost to them – substantial decrease in potential risk of loss.

Three years ago, CMHC reached the ceiling for mortgages that it was allowed to insure, by law, at $450 billion. That number was adjusted to $600 billion at that time. By the end of 2011, CMHC was insuring $541-billion in Canadian mortgage loans.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

From yesterday’s Regina Leader Post:

“We think the government is ‘bang on’ here,” said Alan Thomarat, CEO of the Saskatchewan branch of the Canadian Home Builders’ Association. “Any of the money that they’ll have forsaken with respect to revenue collection from taxation, they’re going to get back at least threefold as far as we’re concerned — in job creation, in the consumption taxes and the project development and in our ability to continue to make sure that there’s housing for the growing labour force we need here.”

“Rental housing now starts to make sense — where it hasn’t in the past,” said Al Didur, chair of the government affairs committee of the Association of Saskatchewan Realtors, who called the program “exciting” and said developers can “stack” it onto other incentive plans.

The budget makes additional allowances for affordable housing including;

• a $2 million funding increase for the Rental Construction Incentive and Affordable Home Ownership program;

• $10.2 million in new expenditures by Saskatchewan Housing Corp., including $1 million for Habitat for Humanity build homes for 20 low-income families;

• $9.2 million for the Rental Development Program to develop an additional 200 rental units in communities with long-term housing needs;

• the previously announced Saskatchewan First-Time Homebuyers Tax Credit, which provides a tax credit of $1,100 for an eligible home purchase.

Read: Government expands plan for affordable housing – Government of Saskatchewan
Read: Tax break for rental housing construction unveiled – CTV
Read: Budget 2012: Business gives enthusiastic reception to Sask. apartment plan
Read: Apartment plan ‘bang on’ – Leader Post

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon recorded its third consecutive annual improvement in affordability according to Demographia’s study. It moved from a median multiple of 4.3 in 2010 down to 4.0 by the third quarter of 2011 to re-enter the ranks of the “moderately unaffordable” for the first time since 2007.

Calgary, Montreal and Victoria also showed modest affordability improvements during 2011 while Halifax, Ottawa, Regina, Toronto, Vancouver, and Winnipeg all became less affordable.

Vancouver once again reined for the largest income to price gap in Canada. In that area it now takes 10.6 times median income to purchase a home priced at the median, up from 9.5 times just a year ago.

Click image for a larger view.

See the entire Demographia survey for 2012 and past reports for 2011, 2010, 2009, 2008, 2007, and 2006.

*The median defines the centre point where half of all values are above and half are below that point. For instance, if the median income for an area were $50,000 then half off all income earners would earn more than that and half would earn less. In the case of home values, it’s the point at which half of all sales occur above the number, and half occur below.

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.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

The following is an excerpt from the report on Saskatchewan: Although RBC’s affordability measures for Saskatchewan continue to be above their long-term averages, widespread improvement was recorded in the third quarter. The measures fell for all housing types—between 0.8 and 0.9 percentage points—and reversed part of the increases (in some cases, substantially) from the previous quarter. Saskatchewan home buyers seem fairly comfortable with current affordability levels. Indeed, they were quite active in the third quarter, with resales rising nearly 6% from the second quarter to their highest levels in two years. Hefty gains were seen in Saskatoon and, to a lesser extent, Regina. Home prices in the province maintained their steady ascent, showing modest gains for most housing types. The Saskatchewan housing market will continue to be well supported by strong economic growth in the coming year.

Although the report lacks commentary on the Saskatoon market, the charts on page 8 of the report show slight improvements for the percentage of income required to carry a mortgage on a Saskatoon home, in spite of marginally higher prices.

Read the entire report here.

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.

Interested in the value of your Saskatoon home? Grab a FREE Market Snapshot that includes sale prices of recently sold homes in your area. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

“The Saskatchewan Party says a new tax credit for first-time homebuyers would make home ownership a little more affordable.

On the campaign trail in Regina on Thursday, Premier Brad Wall pledged to introduce a non-refundable income tax credit to all first-time homebuyers that would result in an income tax savings of $1,100.”

Read more.

How do you feel about this campaign promise?

Our Saskatoon home search tool offers MLS® listings from all real estate brands with the most detail and information available anywhere. Check it out here.

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.

Norm Fisher
Royal LePage Saskatoon Real Estate

Citing an economy that “stumbled” through 2010 and deterioration of affordability that is worse than other regions of the province, the report calls for a slightly higher rate of price declines in Saskatoon than may be experienced nationally. TD is forecasting an 11.5 percent decline in unit sales and an 11.1 percent decline in the average sale price for Saskatoon.

Interested in learning more about the TD report? Read it here.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

The Royal LePage House Price Survey for the second quarter of 2011 has just been released. Here is the media release for the Saskatoon area.

Second-quarter house prices in Saskatoon experienced little change over the same period last year, according to the Royal LePage House Price Survey released today. Second quarter sales volumes remain stable because of increases in higher end single-family home sales and healthy competition for buyers in other categories.

Detached bungalow prices showed no change, selling for a second quarter average of $331,250. Standard condominiums sold for an average price of $242,000 – a year-over-year gain of 3.9 per cent. Prices for standard two-storey homes fell slightly by 0.5 per cent, selling for a second quarter average of $353,750.

Overall, Saskatoon’s flat price changes conceal a varied market performance for some housing types. As entry-level properties reached an affordability ceiling, upper-end properties witnessed a surge in the number of sales recorded.

“Saskatoon saw a 46 per cent increase in sales of single-family homes in the $500,000 plus market while other housing types such as standard condominiums witnessed a considerable drop in sales,” says Norm Fisher, Royal LePage Saskatoon Real Estate.

Inventories remain higher than normal across all housing categories and an increase in competition to attract buyers is helping to maintain price stability overall.

“We’re seeing a drop-off in the entry-level buyers as a result of new mortgage rules and affordability though more executives and expanding families are keeping the market strong,” explained Fisher.

Nationally, the residential real estate market saw sizable year-over-year price increases in the second quarter of 2011, but high house prices are concealing early signs of a moderating market. The market has seen its near-term peak in house price appreciation, and a slower second half of the year is expected. Still, by the end of 2011, the national average house price is expected to be 7.7 per cent higher than it was at the end of 2010.

“In many of Canada’s regional markets, we saw house prices appreciate at a significantly faster rate than wages and salaries, and this trend cannot continue indefinitely,” observed Phil Soper, president and chief executive, Royal LePage Real Estate Services. “We expect price gains to moderate considerably in the latter half of 2011, which should reduce the stress associated with purchasing a new home,” Soper said.

Average house prices in Canada continued to rise in the second quarter across housing types surveyed. The national average price of a detached bungalow rose 7.5 per cent year-over-year to $356,625; the price of a standard two-storey home rose 6.1 per cent to $390,163; and the price of a standard condominium rose 3.5 per cent to $238,064.

Read the Star Phoenix story here.

Our Saskatoon home search tool offers MLS® listings from all real estate brands with the most detail and information available anywhere. Check it out here.

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.

Norm Fisher
Royal LePage Saskatoon Real Estate

It’s worth noting that the carrying costs for a typical detached bungalow in Canada required 39.9% of household income in the fourth quarter, significantly more than your lender would likely approve you for, but slightly less than what RBC says is the “long-term average.”

Here’s what the report has to say about Saskatchewan.

The Saskatchewan housing market finished 2010 on an enviable note. Home prices, for the most part, rose slightly in the fourth quarter, yet housing affordability improved for the second consecutive time. The provincial home resale market gained back solid forward momentum in the second half of last year (notwithstanding some softening in the final months), which contributed to re-establishing a stronger balance between demand and supply. Generally, the price increases in the fourth quarter more than reversed declines in the previous period but were too small to negate the beneficial effect of lower mortgage rates on affordability. The RBC Measures fell between 0.6 and 1.1 percentage points in the quarter, although the levels continue to be modestly above historical averages in the province. In our view, the Saskatchewan market will take its current affordability position in stride as a rebound in provincial economic growth, and, especially, continued strong migration inflows will support housing demand this year.

Read the full report here.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Billed as “the first program of its kind in Canada,” the Equity Building Program will be available to those who earn too much to benefit from social housing programs. This $3-million program will provide down payment loans to home buyers earning between $45,000 and $70,000 per year, who are currently renting a home in Saskatoon. As part of the arrangement, the home buyer agrees to pay back the loan, at a low interest rate, over a five-year period of time.

City planner, Alan Wallace is quoted in a story published in the Star Phoenix on February 9. “House prices have risen dramatically. We think there are a number of households out there that are in rental situations that will find it extremely difficult to fund the down payment.

“What we’re concerned about is if incomes aren’t able to keep pace with house prices…people have a tendency to slide backwards on the housing continuum. We want them to move up.”

Interested parties can obtain full details on conditions and qualifiers from the Affinity Credit Union in Saskatoon.

Read the Star Phoenix story here.
A television report from Global News is here.
More details on the Affinity Credit Union website are here.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Madani, in a report released this week titled, “Canada Economics Focus, house prices likely to fall for several years” says rising interest rates and near stagnant wage growth resulting from low inflation will cause housing affordability to deteriorate substantially in the years ahead taking values down an estimated twenty-five percent.

The report is an interesting read addressing some of the typical, “Can’t happen here because” arguments while taking a look at how such significant declines might effect the economy and Canada Mortgage and Housing Corporation.

Read it here.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Click image for a larger view.

Most Canadian markets managed to record some improvements on a year-over-year basis. The greatest changes were seen in Calgary and Edmonton, both of which moved into, or significantly towards, the moderately unaffordable territory. Both markets shaved a half-year off of the median income multiplier that Demographia uses to measure affordability. Nationally, we saw an improvement in the median multiple of 0.3 from the survey released a year ago.

Once again, the major British Columbia markets win the prize for the largest income to price gap. In Vancouver, it’s estimated to take 9.5 times median income to own a home priced at the median for the city.

See the entire Demographia survey for 2011 and past reports for 2010, 2009, 2008, 2007, 2006.

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.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

In hindsight, this is a trend that has been present through most of 2010. Now that the year is behind us I thought it might be interesting to have a good look at the numbers.

First, total residential unit sales in the Saskatoon real estate market declined seven percent in 2010 to 3558 from 3820 the year before. On the surface, this appears to be not such a big deal. The numbers put us in line with the five-year average for this area and make for a pretty typical year. More interesting though is the fact that sales of home at prices that are below the average ($300,000 or less) have fallen quite significantly, by eighteen percent, in fact. At the same time, sales of homes priced above the average have increased by thirteen percent masking what could be the most significant Saskatoon real estate story for 2010. Let’s look at some numbers.

Click image for a larger view.

One’s first inclination may be to assume that Saskatoon home buyers who are active are buying higher priced homes and this is probably true in some cases. For instance, it’s not that difficult to imagine that a buyer shopping in the $250,000 to $300,000 range stretches to the $300,000 to $350,000 range but the $250,000 to $300,000 range softened by just seven percent. It’s not at all likely that buyers who would typically have budgeted up to $250,000 would even be able to consider the $300,000 plus range. The market at $250,000 or less dropped by a stunning twenty-three percent. As I said to Cassandra Kyle in a Star Phoenix story last week, I believe these buyers exited the market for affordability reasons.

2010 brought a number of small changes that impacted on affordability. First, you’ll recall that there were some changes to mortgage lending requirements that made it more difficult to qualify for mortgage money. For the most part, these changes were welcomed as prudent by almost everyone but they did change the game and eliminate “marginal buyers” from the market. No sensible person could argue against that. Secondly, rates increased. The changes were small, but they certainly impacted on some. Finally, by spring of 2010, prices for some types of housing, particularly those with the greatest appeal to entry-level buyers had found their way back towards the previous highs of 2008. Inventory, while higher than the previous year, remained stubbornly low in the lowest price ranges throughout the year, insulating prices to some extent. The combination of these factors meant that many people who might have opted to buy simply couldn’t afford to be in the market and that’s probably a good thing given what lies ahead.

It’s all but certain that interest rates will soon be on the rise with many economists predicting a one-percent increase in the prime lending rate by the close of 2011. There is increasing talk of further changes to mortgage lending requirements that may limit the market more. With a number of major banks calling for tighter rules, some action is almost a given, in spite of CREA’s rally cry against it. While consumer confidence in our province remains high debt levels are at record levels, income growth is largely expected to soften in the year ahead, and taxes are expected to increase. All of these potential affordability influences will have their largest impact on first time buyers. The only other variable that comes to my mind is price. Will they soften as the other variables take a further whack at affordability or will they continue to defy common sense, as some would argue they have for years? The answer seems obvious, but it has seemed obvious for some time now, hasn’t it? It might be hard to find more failed predictions than have accumulated across the Internet for Canadian housing in the last few years.

This we know for sure; first time buyers are the foundation of a healthy real estate market. Without new entrants, people who are already in a home of their own can hardly consider a move up, so when eighteen to twenty-three percent of that market disappears we should be concerned.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Spurred in part by a decline in homeownership costs, Saskatchewan home buyers resumed house hunting in recent months with home resales in the province rebounding since August and reversing most of its slide in the first half of this year. The earlier softening of activity, nonetheless, had a linger- ing effect on home prices in the third quarter, which fell across all housing types relative to the second quarter. In turn, this lingering effect, along with lower mortgage rates, contributed to a significant improvement in affordability. The RBC Affordability Measures dropped between 1.8 and 2.2 percentage points, which was the most since early 2009. While lower than they were a year ago, the measures are still modestly above their long-term average, thereby suggesting to us that current market conditions are stretching homebuyers’ budgets to a degree. However, those budgets are likely to be boosted from a strong expected rebound in the provincial economy and, thus, family income this year and next.

Read the full RBC Housing Trends and Affordability study here.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

The building is will be an “affordable housing” project built with senior residents in mind. It’s expected to be completed as early as the spring of 2012.

Both levels of government contributed to funding the project run by the Knights of Columbus and K.C. Charities.

This is not your typical CMHC report. Rather, it’s an extensive review of the “state of Canadian housing” that goes well beyond a basic market update. In fact, the market update component is relatively small and looks back to 2009. Certainly, you’ve “been there, done that.” What you’ll find in this year’s Housing Observer is a pretty exhaustive presentation on the following seven topics that I pulled from the table of contents of the report.

Housing and the Economy
Housing Finance
Current Market Developments (if you can call 2009 current)
Demographic and Socio-economic Influences on Housing Demand
Recent Trends in Housing Affordability and Core Housing Need
An Exploration of Alternative Measures of Housing Need
The Equilibrium Initiatives

Download and read the report here.

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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Canadians from coast to coast saw a higher percentage of their income going towards housing costs in the second quarter of 2010, largely driven by an increase in house prices and mortgage interest rates when compared against the first quarter. This marks the fourth consecutive time that RBC’s “Housing Affordability Measure” rose. According to the Housing Trends and Affordability report released by RBC Economics this morning, the increases have managed to consume roughly half of the improvements experienced in late 2008 and early 2009 when house prices in most areas of Canada cooled significantly.

The deterioration in affordability was seen across the country with the worst of it experienced in Ontario and British Columbia with the remaining provinces seeing “minor erosion.” Only Saskatchewan and Manitoba experienced some improvements, though they were limited to townhomes in the former and condominiums in the latter.

In Saskatchewan

“While home resale activity in Saskatchewan has been on a declining trend in recent months, home prices have held up to a large extent. In the second quarter, prices either appreciated moderately or edged lower just marginally, depending on the housing type. With mortgage rates rising during the quarter, affordability generally eroded some more in the province. RBC Housing Affordability Measures moved up between 0.6 and 1.5 percentage points (townhouses bucked the trend, edging lower by 0.1 percentage points). These increases pushed levels further above long-term averages, thereby indicating that some tensions may be building in the provincial market. Nonetheless, we expect that a strong rebound in the provincial economy this year and next will likely help ease such tensions.”

Read the entire report here.

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.

Norm Fisher
Royal LePage Saskatoon Real Estate

Meanwhile, Statistics Canada released some income figures from the tax returns of Canadians and Saskatoon, with a median income of $77,740, recorded the largest year-over-year income gain to enter the top ten list of the highest income earning cities at number nine.

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.

Norm Fisher
Royal LePage Saskatoon Real Estate

I had the opportunity to help a few clients purchase a home who had the interpretation they would not be able to enter the housing market for another year. These clients had solid credit, good job stability but they lacked one of the most common first time buyer requirements, a down payment.

In these, like all cases, we explored every option available for a down payment ranging from grants, HBP (RRSP Home Buyers Plan),  a gift from family, borrowed funds (Line of Credit, etc.) but none were feasible for clients.

This left us with one option which only a couple banks offer, a “Lender Cash Back”. This specific program covers the 5% down payment which is paid from the bank and they also covered an additional .5% to help with closing costs or to help increase the clients minimal savings. As with anything today, this is not free. The bank increases your interest rate in order to make back the down payment over 5 years. Today you can get a 5 year fixed rate at 3.65%.  With this program you get the posted rate which today is 5.39%.

So in all cases the bank makes back the full down payment and you end up paying less towards your principle (along with higher monthly payments) due to the higher interest rate. In some scenarios it can get you into a home sooner than expected but I encourage clients to explore all other options before settling for a Lender Cash Back.

The mortgage you choose should always suit your needs, this is just another option available in the market today that not all are aware of. Please feel free to comment or call me at 306-260-9918 to ask any questions you may have.

Have a great weekend.

Riel Syrenne
The Mortgage Group

The low lying area at the bottom of the westside neighbourhood would better serve the community as a storm retention pond and park according to Councillor Myles Heidt who says the disaster prone location is no place for some of the city’s most vulnerable families.

“This is not right what happened to those people,” Heidt said. “They should all be closed and turned into a pond. . . . We don’t tolerate landlords that keep their houses at a certain level, so why should we tolerate this? Let’s make the tough decision that has to be made.”

Once completed, the facility will offer a total of 128 units at the downtown location. There are currently more than 80 people on a waiting list for the Lighthouse, which caters to “the poorest of the poor,” executive director Don Windels told the Star Phoenix.

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.

Norm Fisher
Royal LePage Saskatoon Real Estate

The Parkview Green sales brochure is here.

Visit Alan Wallace’s Pleasant Hill Village blog for more information on revitalization in the Pleasant Hill area of Saskatoon.

Mr. Tal clearly feels that Canadian housing is overvalued but he doesn’t think there is an unmanageable affordability problem in Canada.

First, Tal believes that “at least 1.5 million houses in Canada are overvalued” and his research indicates that prices on those properties are inflated by as much as 14%. Provincially, British Columbia is the worst with an over valuation of 20.7% and Alberta is the least inflated at 8.6%. Saskatchewan fits neatly between the two at 13.2%, just below the national average.

Tal goes on to say that the market is showing clear signs of cooling and that price growth has “rapidly decelerated” over the past few months. He goes on to suggest that absent a “trigger” to a violent correction, prices will not necessarily crash. According to Tal, rising rates will not be the trigger some believe it to be. He speculates that rates will climb slowly and that most Canadians will be able to manage the costs associated with those changes.

According to Tal and CIBC’s affordability index, which is based on actual transactions as opposed to “synthetic mortgage” assumptions, we can afford it. On average, Canadians are using just 15.6% of their income to make mortgage payments. “Manitoba and Saskatchewan still enjoy the best home ownership affordability in the nation” with just less than 12% of income being used on to service mortgage debt.

The report concludes by saying, “While higher interest rates will clearly erode affordability, our detailed look at the distribution of mortgage payments as a share of income does not reveal major pockets of vulnerability. Accordingly, the most likely scenario is that higher interest rates will lead to a modest decline in prices (probably in the magnitude of 5%-10%) in the coming year or two. But given relatively modest rate hikes and the current balanced affordability position, the more significant adjustment will be in housing market fundamentals that are likely to catch up with prices in the coming years—paving the way for a healthier housing market by mid decade.”

What do you think?

Read to full report here.

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.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Regionally, the greatest erosion in housing affordability occurred in Saskatchewan and Manitoba.

Owning a home in Saskatchewan took a bigger chunk of household budgets in the first quarter. This more than reversed a small decline in the last three months of 2009. RBC affordability measures rose between 0.9 and 1.6 percentage points, representing some of the stronger increases in the country (although trailing far behind British Columbia). After flattening or declining marginally in previous quarters, housing prices picked up notably in the province in the first few months of this year; however, with sales slowing and the number of homes available for sale growing more recently, further price increases are unlikely to be as hefty in the near term. Despite the deterioration in the first quarter, affordability measures remain well off the peak levels of early 2008 – which were also the all-time highs in Saskatchewan.

Read the full report here.

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.

Real estate geeks can follow our daily updates on Twitter @norm_fisher.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

So, how will home prices be impacted?

“We estimate that at their peak in the first half of the year, average home prices will be roughly 15% overvalued when benchmarking against long-term economic fundamentals, such as income growth. If our forecast unfolds, roughly a third of this excess would be unwound by the end of 2011, leaving our estimate of valuation at roughly 10% above fundamentals, back to what it was in late 2007. As in our last forecast, we still expect the bulk of the readjustment to occur over a medium-term time frame of 2-3 years whereby average home prices rise roughly at the rate of inflation-after having climbed by over 8% annually over the last 8 years. Meanwhile, household incomes will be allowed to catch up and close the gap, which is concentrated in the country’s most expensive markets (e.g. Toronto, Vancouver).”

The bottom line?

TD expects to see the average price of a home in Canada to reach $349,000 in 2010 and moderate to $339,700 through 2011 when unit sales are expected to post a 10-12% decline. They expect prices to drop in seven of ten Canadian provinces and predict that the Prairie Provinces will post “meager” gains over the same period. TD says the average price of a home in Saskatchewan will finish 2010 at $242,000 and rise to $245,000 through 2011.

While TD is predicting national price declines that are nearly twice those called for by the Canadian Real Estate Association (CREA), their predictions paint an optimistic picture given the amount of bubble talk we’ve heard over the past couple of months. TD economists believe that a quicker and stronger than expected economic recovery, and credit markets which will remain favourable by historical standards, will keep Canadian housing from the crash that some are predicting.

There does seem to be a couple of points of consensus amongst those who regularly comment on the nation’s real estate market. Demand is going to drop and home prices are likely to follow.

Phil Soper, chief executive officer for Brookfield Real Estate Services, owner of Royal LePage and le Capitale is quoted in a Globe and Mail story today. “It’s likely too conservative, but they (CREA) have the direction right,” he said. “Affordability is eroding in Canada, and higher prices and more expensive mortgages will push people out of the market quite quickly.”

Read TD’s report here.

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.

Our Saskatoon home search tool offers MLS listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate