I met with one of my newer agents the other day to review an offer he had written for one of our clients. The offer was beautifully prepared and technically perfect. The buyer had left no doubt that they wanted this house offering a full $20,000 above the asking price. It was on Tuesday. The seller had instructed their agent not to present any offers before Wednesday at 8:00 pm.

I had one question for my agent, “What if this is the only offer which the seller receives?”

If you’ve been listening to people talk you might believe that “everything is selling for more than the asking price.”Well, guess what. Everything is not selling for more than the asking price. Last week, 52% of the sales reported sold at or below the asking price.I’m hearing of more instances where the seller only receives one offer and if yours is the only offer on the table, you’re probably not going to feel very good about offering thousands of dollars more than they are asking.

If I were representing a buyer in a purchase, I might suggest that we wait until the offer presentation is almost imminent before a decision is made on the offer price. Then I might ask the seller’s agent if they have received other offers on the property. They don’t have to tell me but they almost certainly will if there are other offers. If they respond by saying, “my seller has asked me not to disclose the existence of other offers,” my client and I will have to make the call as to what that means. On the other hand, we may hear, “yours is the only offer at this time.” Perhaps that might influence the price which my client is prepared to offer. It would certainly influence the advice which I would offer the client.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

Providing analysis of what has happened in the Saskatoon real estate market takes a lot of work, but reviewing statistics and crunching numbers normally produces a pretty accurate result.

Predicting the future of a market is much simpler. You review what’s been happening lately, evaluate factors which may impact the market, fill your press release with all kinds of cool intelligent words and provided that you are smart enough to forecast early and waaaaaay into the future, sufficient time will pass and people will forget whatever you’ve said by the time your prediction fails. Simple!

Being correct in a market forecast is much more difficult. I could report a number of failures of my own, but I won’t, because this is my blog. :)

Today, I happened across a copy of the RBC Housing Forecast for 2007. Written sometime over the early months of this year, the report includes some real gems which drive home the point that even the brightest minds that economics can produce sometimes can’t see the forest for the trees.

“The western provinces continue to show signs of price growth topping out with British Columbia, Alberta and Saskatchewan all likely having reached pinnacles in the pace of price appreciation.”

Don’t you wish they could have told us that in January?

With respect to Saskatchewan specifically, the report indicates, “…we anticipate housing affordability to ameliorate in the coming quarters as markets continue to cool” (ameliorate is an impressive word which economists use to say “improve”. :)

Let’s hope that things don’t “continue to cool” at this pace all year long.

What’s most startling about this particular “forecast” is that it was just released last week.

Apparently, it’s hard to get an economist’s attention once his work has begun.I’ve always understood that they can’t see what’s going on in Saskatchewan from Toronto, where I suspect this report was prepared, but come on; the Saskatoon real estate market is so damned hot they should be able to feel it out there.

As for me, I anticipate that current market conditions will persist unabated until housing inventories begin to ameliorate and buyers begin to demonstrate substantial resistance. You can take that to the bank.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

It’s easy to get swept up in the excitement of this booming real estate market. If you’re not careful, you can miss some really important stuff.

Some people are really hurting.

He’s here. She’s there, with the kids. They can’t find a home, but they have to be out of the one they currently own in less than a month. They’ve tried hard, sometimes bidding up to $20,000 over the asking price. Someone always seems to outbid them and the next home that comes on the market always seems to be more money. They don’t know where they’ll end up.

Meantime, investors are sending money from all over the country. They all want a little piece of the Saskatoon real estate action.  It's the "next Calgary," don't you know?

Don’t get me wrong. I don’t resent you and I recognize your right to invest in this community.I just know where I want to focus my efforts right now and it’s not on spreadsheets.

If you want to talk cap rates, income and expenses, and property management, please, call another agent.  I’ll be busy helping someone find a home.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

Spring is in the air, and Saskatoon home buyers are definitely taking their real estate seriously this year. The average days on the market fell sharply from 26 days in January to just 20 days in February. Many of the better homes and condos were sold in bidding wars and by month-end, over 50% of the new residential listing inventory was selling at, or above the asking price. Prices were somewhat slow in reacting given the “heat” on the street. The average price of a Saskatoon home increased to $188,028 from $183,971 in January (condos and single-family detached homes).

The price of a house or single-family detached home inched up to $194,360 from $190,652 in January.

The condo market continued at a crazy pace. The average selling price of a Saskatoon condominium lost a smidge to $158,924 from $161,279 the month before. The average in December was just $144,363 so they remain up fairly substantially year to date. The average selling time in the condominium category plummeted to just 11 days and the average selling price actually came in higher than the average list price.

 I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

The front page of today’s Star Phoenix says, “Tenants feel the pinch: Heated market driving increases in rental charges.”

The story references the predicament of a Saskatoon woman, Marilyn LePage who faces her third rent increase in the last twelve months. She has written a letter to the city council asking, “What can be done to keep rent increases and frequencies under control for myself and other Saskatoon citizens?”

The answer she received was sure to disappoint as the council made it clear that “rent controls” fall outside of the local jurisdiction. City solicitor Theresa Dust reminded those present of past attempts by the province to place controls on rents and noted that it produced “poor results.”

This is one of the sad realities of a real estate market that is experiencing a growth spurt. It affects almost everyone, and those who don’t own their own a home can be affected the most. They not only move further away from owning a home due to the increased cost of housing, but they inevitably pay the price in higher rental costs as market values increase.

I expect that we’ll hear many more stories like Ms. LePage’s over the coming year. East-side apartment-style condos are now selling in excess of $130,000.An investor who purchases such a unit with 25% down will face carrying costs of over $850 per month not including maintenance or insurance. At present, that same unit has a market rent of about $700.Assuming the unit is occupied every month of the year, the landlord is a couple of thousand dollars shy of covering expenses. They won’t be excited about that for very long.

At the same time, vacancy rates are falling across the city and that trend is expected to continue as more people move back to Saskatoon. Condo conversions will likely remove a number of units from the rental market over the next two years.

Ultimately, rents are subject to the principle of supply and demand just like resale real estate is. More renters and fewer rental units equal higher rent payments. It’s pretty much unavoidable.

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

I really got a chuckle out of this story and couldn’t resist sharing it.

It seems that a British Columbia woman has been sentenced to serve two years of probation in Saskatoon after she pleaded guilty to seven counts each of credit card fraud and possessing stolen credit card data, one count of theft under $5,000, two counts of breaching an undertaking and two counts of failing to appear.

A judge ordered her to “board a bus” and head for Saskatoon. Apparently, he wants her as far away as possible from her former boyfriend and he thought Saskatoon would be the perfect spot for her to begin addiction treatments and rehabilitate herself.

Saskatoon really is a great place to live. You can’t help but wonder what the rest of the world thinks when they start sentencing people to live here. 

Norm Fisher

Royal LePage Vidorra

Canada Mortgage and Housing Corporation (CHMC) is predicting that the price of resale homes in Saskatoon will continue to rise through 2008. Citing lower inventory levels, an increase in demand, and low mortgage rates CMHC expects to see the Saskatoon resale real estate market maintain a “brisk pace” through 2007 and 2008. According to the government housing agency, several factors will play a role in maintaining the growth trend which Saskatoon is experiencing.

• Low vacancy rates in rental properties
• Pressure on rents resulting from increased demand and low supply
• Employment and earnings gains will continue to attract people to the area
• Escalating prices in Alberta will discourage some from seeking opportunities there
• Large equity gains for Saskatoon home owners will encourage people to upgrade to more expensive homes
• Escalating construction costs for new homes will continue to make resale homes attractive

Yesterday, Scotiabank released its annual Canadian Real Estate Trends report. They note that “Saskatoon has the tightest housing conditions in Canada” and predict that while there will be some cooling off in many areas of Canada they “anticipate pockets of buoyancy in housing markets across the country in 2007, including Saskatoon…”

I’m always happy to answer your Saskatoon real estate questions. 

Norm Fisher

Royal LePage Vidorra

It’s starting to look like spring has arrived. Following a winter with precipitation levels which were 40% above the average, and with plus zero temperatures predicted for most days over the next couple of weeks, it’s about to get wet. The City of Saskatoon has issued a warning that a little preventative maintenance is in order if you’d like to keep the spring melt-off from ending up in your basement.

Here are the tips they’ve provided to prevent a basement flood.

• Remove snow from around your foundation and window wells.
• Most lots drain along the outside edges. Remove snow from these areas.
• Keep the snow in your yard because shoveling it onto streets or lanes could block drainage.
• Clear snow and ice from around the bottom of your downspouts and extend downspouts at least two metres so water drains away from your foundation.
• Where possible and safe, help clear snow, ice, and debris from the catch basins in your area.
• Check your roof and eaves troughs for excessive snow.
• Consider hiring a professional to clear snow from your roof.
• A roof rake may help you to clear snow and debris from the edge of your roof.
• Consider using sandbags to block water from entering low lying areas besides your foundation.
• If water is getting close to your foundation, use an appropriate pump to drain it to the gutter or back lane.
• Please use all equipment properly and follow safety guidelines.

Best wishes for a dry spring.

Norm Fisher

Royal LePage Vidorra