Saskatoon City Council approved proposed changes to policies governing the conversion of existing rental apartments to condominiums at last night’s council meeting.

City administrators presented their report which was prepared in response to a request brought forward by Councillor Pat Lorje during the meeting of City Council held on August 13, 2007 to “provide a report to the executive Committee on a review of our existing condominium conversion bylaw, together with suggestions for improvements to ensure an adequate supply of affordable rental housing while still maintaining an orderly investment market for multi unit accommodation.”

The report highlighted the positive and negative “implications” of condo conversions including the reduction in the supply of rental housing, the disruption and displacement of existing tenants, the creation of opportunities for affordable home ownership, investment and upgrading of older properties and the opportunities condo conversions create for small investors to enter the market.

The current condominium conversion policies offer the following protections for tenants occupying the apartments to be converted:

1)tenants must receive at least three months notice prior to an application being submitted;

2)tenants must receive a reasonable opportunity to purchase a converted unit in the building; and

3)tenants, at the time of application, may stay for up to two years after the date of application.

The report, written by Tim Stueart, Manager of the City’s Development Review Section noted, “In recent months, a number of investors have been undertaking measures to remove tenants from buildings in order to circumvent the requirement to allow tenants to stay in place for up to two years after the date of application. This has been done by giving tenants notice to vacate their units prior to condominium conversion application, or by significantly increasing rental rates.”

Both of these practices are allowable under Saskatchewan’s Residential Tenancies Act, in spite of the hardship that they can cause at a time when vacancy rates are low and alternate accommodations are difficult to find.

The new policy, approved last night brings the following changes:

1)increase the notice period for tenants from three months before an application is made for conversion to six months before an application is approved;

2)delete the provision which allows tenants to stay in place for up to two years after the date of application;

3)add a new clause which will provide that during the six month notice period, no rent increases shall take effect and no construction related to the condominium conversion shall be undertaken;

4)add a new clause which will provide that should the rent be increased or construction related to the condominium conversion be undertaken during the notice period, the applicant will be required to begin the notice period again from the date that the rent increases take effect or the date that the construction work is completed; and

5)add a new clause which will provide that where an applicant has vacated or substantially vacated a residential building prior to submitting a condominium conversion application, the application shall not be approved for twelve months from the date which it is submitted. This requirement shall be waived where a building is vacant as the result of significant damage or where t has been vacated as the result of a Health or Fire Order.

Clearly, these changes provide a strong disincentive for investors to attempt to circumvent policy. Hopefully, they will provide a fair balance for both tenants and landlords when it comes to notices to vacate.

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 Vidorra

If you have some spare time on your hands this weekend, you might consider spending some of it at the Credit Union Centre, where the Saskatchewan Federation of Indian Nations (FSIN) is hosting Pow-Wow 2007. Five bucks will get you through the door, and provide an opportunity to experience a truly beautiful “cultural celebration” expressed through song and dance with the people of Saskatchewan’s First Nations.

If you’ve never been to a pow-wow, you’re in for a real treat with this one as hundreds of singers and dancers pack the venue to honour residential school survivors and compete for over $80,000 in prize money. This really is a great Saskatoon event.

More details at the FSIN website

What is a Pow-Wow?

My Flickr slideshow of the 2006 Pow-wow

Note: The graphics in this post were updated on October 7, 2008 to reflect the final sale numbers as reported by agents for September, 2007. The graphics show the final figures while the commentary reflects the statistics as they had been reported as of the date of the original post. The average selling price of a Saskatoon home (houses and condos) took a pretty big hit in September dipping well below the quarter million dollar mark and settling at $241,537 as compared to $258,508 in August. Part of the adjustment can be attributed to fewer upper end sales ($600,000 and higher) and a larger percentage of more affordable west end sales, but there’s little question that higher levels of inventory, combined with decreasing demand played a role in giving active buyers a little more clout at the bargaining table. Total units sold fell to 266 from 361 in August, a fairly typical decrease moving into the fall months. 

Prices of Saskatoon houses saw the largest decline falling to $241,401, well below the averages for the previous three months and not much higher than the number recorded back in May at $240,089. The previous high of $270,726 was recorded just a month earlier.

Oddly, the average selling price of a Saskatoon condo increased again to $241,956 from $230,260 the month before. This is the first time that I can recall the average selling price of a condo being higher than that of a house.

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.

Norm Fisher Royal LePage Vidorra

October 9^th to 12^th is Affordable Housing Week in Saskatoon. Presented by the Saskatoon Housing Initiatives Partnership, Affordable Housing Week presents a variety of events in support of “attractive, affordable, innovative, sustainable and green housing initiatives in Saskatoon.”

Interested? Check the agenda here (no longer available).

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 Vidorra

There has been a fair bit of talk and speculation about how the U.S. “credit crunch” may impact Canadians and our real estate markets.

The Canadian Real Estate Association (CREA) has published a brochure titled; “A Credit Crunch Primer” which explains in fairly simple terms what sub-prime lending is and how the practices associated with it have impacted the American lending industry and real estate markets across the country.

The brochure also touches on some of the reasons why CREA believes that Canadians are far less exposed to major fallout.

“Unlike the U.S., the Canadian housing market has not been artificially driven by bad lending practices. Our long-term fundamentals are solid. Canada has a growing population. Our energy and commodities are in high demand, and job creation is strong. Consumer confidence remains high. However, there may be an impact on the overall Canadian economy, which may affect the Canadian housing market. For example, the drop in housing starts in the U.S. will mean lower demand for Canadian softwood lumber products.”

I’ve posted a copy of the brochure here.

A tip of the hat goes to Bill Madder, Executive Vice President of the Association of Saskatchewan REALTORS® who sent me a copy of the brochure. Thanks Bill.

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 Vidorra

In a recently released report from RBC Economics, economist Amy Goldbloom makes a pretty compelling case that real estate is “overvalued” in western Canada and “out of whack with the underlying fundamentals.”

Goldbloom takes “a look beyond the standard affordability measure” and delves into “price to rent ratios,” something which I just happened to touch on, though not nearly as eloquently, in the comment thread of the most recent Week in review. :)

This report is brilliantly written and equally thoughtful, but one comment left me scratching my head. See if you can identify it.

Goldbloom has this to say about Saskatoon. “Housing markets across the major cities in the Prairies have long been the most affordable in the country. But, the recent pick-up in Saskatoon’s market has quickly changed conditions. Regina and Winnipeg have seen their price-to-rent ratios move up during the last few years after stable valuations through the 1990’s but are still at modest levels. The bigger story is Saskatoon where the recent pick-up has caused price-to-rent ratios to soar. In contrast to Calgary, Edmonton and Vancouver, the pick-up in Saskatoon has been very concentrated in the last year. The sudden and steep acceleration in price-to-rent ratios coincides with the sharpest deterioration in affordability on record. More expensive conditions already appear to be pricing people out of the market. Fifty percent price gains are starting to weigh on demand and softer demand should feed through to cooler price gains ahead.”

Read the RBC Canadian City Trends report here.

Read also: Saskatoon and Edmonton homes most overvalued: Bank of Nova Scotia economist

Read also: Worst quarterly deterioration of housing affordability on record for Saskatchewan: RBC

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 Vidorra

The average selling price of a Saskatoon home dropped to $242,091 in September, a decline of 4.3% from the all time high monthly high of $253,240 recorded in August. Depending on how you want to view it, this figure represents the lowest average selling price since May of 2007, or, a whopping 49% increase when compared to September of 2006.

Are prices actually dropping?

It’s interesting to note that there were some subtle differences in the activity which occurred in September when compared to August. Certainly, some of the decline can be explained by a close examination of the numbers.

In August, there were six residential sales recorded above the $600,000 mark for a total volume of $4,594,175. In September, there were only three sales above 600K for a total volume of $2,115,000. Those three missing sales essentially skew the average price down by almost $7,800.

I also note that in August, 69% of all residential sales recorded were in Areas 1, 2 and 3. In September, that number dropped to 60%, which obviously means there were a higher percentage of sales occurring in the more affordable west end areas.

I have my doubts that buyers actually paid less for the home they bought in September than they might have paid in August. Averages are always much more telling over a longer period of time and the numbers from the coming months are sure to paint a clearer picture.

What does it all mean?

There should be no question that things have changed.

Buyers can take some comfort in the fact that the steam has definitely come off of what could only be described as an overheated market. Active Saskatoon real estate listings reached their month end high for 2007 at 619 units. Most months this year, we’ve operated with fewer than half that number. The percentage of homes selling above the asking price is way down, and those that do sell above list price are averaging much smaller overbids. Home inspections and mortgage conditions are back on the table. In a nutshell, you have more options and more time to make prudent decisions which will presumably include a reasonable amount of due diligence.

Sellers need to be thinking more about the details. Three months ago, you could just slap up a price, and wait to see what would happen. It was almost certain that some desperate soul would come along and meet your price and terms, throwing caution to the wind, and hoping all was well when the dust settled. That little party is over, at least for now. There are many decent homes which have lingered on the market for weeks. Buyers are clearly saying, “Enough is enough.”You need to get your mind back on the “fair market value” system and put a little thought into properly pricing the home for sale. Preparation is also a factor because you now have some competition. Tidy the place up, maybe a little fresh paint. :) Cleaning, de-cluttering and painting are the cheapest and most profitable improvements you can make to prepare your home for sale. Buyers are still willing to pay a fair dollar for a home which is presented well, but they’re a little reluctant to overpay for a property which needs attention.

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.

Norm Fisher Royal LePage Vidorra