Housing affordability in the Saskatoon area improved slightly for the second consecutive year, according to the 7^th Annual Demographia Housing Affordability Survey, but not enough to remove it from the ranks of the most “seriously unaffordable” places to buy a home. According the Demographia’s estimates, Saskatoon home buyers can expect to pay 4.3 times the median income for the area to purchase a home priced at the median. The median defines the centre point of value at which half of all sales occur above and half occur below.  While Saskatoon saw its second improvement in as many years our current ranking of 4.3 leaves us amongst the most expensive Canadian markets to own a home and well above the national ranking of 3.4 which Demographia defines as just “moderately unaffordable.”

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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 Vidorra

City manager Murray Totland says the proposed $50-million Art Gallery of Saskatchewan is now “rock solid” with all funding agreements between Saskatoon and the provincial and federal governments completed.  Announced two-years ago, the art gallery is still in the design stage but construction should begin as early as 2012. The gallery will be built next to the Persephone Theatre at River Landing in Saskatoon’s Central Business District.

As it opens, the Mendel Art Gallery will cease to operate at its City Park location where it has been since 1964. A wing within the new gallery will serve as a tribute to Saskatoon’s first gallery and the Mendel family whose generous financial contributions made it possible. A planning process for renewalof the Mendel site and Kinsmen Park is underway.

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Visit our Saskatoon Neighbourhood Profilespages to learn more about what’s going on in our city’s neighbourhoods.

Norm Fisher
Royal LePage Vidorra

Speculation ended this morning as Canadian finance minister Jim Flaherty announced the details on new changes to the country’s mortgage rules, some which will take effect as early as March 18. In a move expected to remove 20,000 of the most marginal prospective buyers from the housing market this year, the maximum amortization period for CMHC insured mortgages is being reduced to thirty years. It’s currently thirty-five years, having been reduced from forty years last April.

The new rules also impact upon homeowners who seem all too eager to cash out their equity to “buy boats and cars and big-screen TV’s,” Mr. Flaherty said as he announced that home equity loans will be capped at eighty-five percent of the home’s value, also on March 18. CMHC will discontinue its practice of insuring home equity loans and lines of credit a month later on April 18. Home equity lines of credit have grown by 170% in the last ten years, doubling the rate of growth seen in the mortgage market.

The moves were widely applauded by a number of bank leaders who have recently expressed concern about the rapid expansion of household debt and called upon the government to tighten lending rules. Frank Techar, president of commercial and personal banking for the Bank of Montreal called the actions “prudent, measured, responsible and timely.”

The Bank of Canada has been reluctant to raise interest rates from record low territory as the Canadian economy continues to perform sluggishly. Analysts at Scotia Capital suggest that tightening of lending rules is the more effective way of curbing debt without risking a further slowing of overall economic growth.

Predicting that the rule changes will moderate housing demand across the country, Flaherty announced that the minimum down payment required for a CMHC insured mortgage will remain at 5%. “We do not want to create any shock in the market or any sort of dramatic pressure. We want to be moderate,” Flaherty told reporters at the early morning briefing.

New mortgage rules could price some out of the market – Financial Post

Debt worries trump home sales – Globe and Mail

Buying a home about to get tougher – Financial Post

Flaherty details new mortgage rules– Globe and Mail

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 Vidorra

CREAeconomist Gregory Klump reports on MLS® sales and listings for the Canadian real estate market for December, 2010.

From the release.

"Actual (not seasonally adjusted) national sales activity via the Multiple Listing Service® (MLS®) Systems of Canadian real estate Boards was down 14.4 per cent on a year-over-year basis in December 2010, which reflects record level sales for the month of December in 2009. Activity in December 2010 ran slightly ahead of the ten year average for the month (Exhibit 1).

"The national trend for monthly sales remained stable in December, with seasonally adjusted sales activity having edged down by less than a percentage point from the previous month. Led by Calgary, Winnipeg, and Hamilton-Burlington, seasonally adjusted sales activity was up month-to-month in half of local markets. Toronto, Vancouver, and Montreal were among the markets that posted a small month-over-month decline in December."

The full release can be found 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 Vidorra

The Saskatoon real estate market bounced out of the holiday slowdown this week to begin its march towards spring. Local agents reported a total of forty-two house and condo sales to the Saskatoon MLS® system, a gain of eighteen over the previous week, and ahead of the same week in 2010by just two units.

Even though new listingsfell by ten units compared to the previous week they continued to move into the system at a fairly rapid pace finishing well ahead of the same period last year. Agents listed one hundred and thirteen single-family homes and condominiums to trump the numbers recorded in 2010 by twenty-six homes.

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The inventory of active residential listing on the Saskatoon MLS® system moved higher for the second consecutive week cracking the 900 mark again after sinking below it for just two weeks. Today, there are 905 active residential listings on the MLS®, a gain of fifty-two over last week and roughly thirty percent higher that they were at this time last year when just 695 properties displayed an active status on the system. One a weekly basis, single-family detached homes moved up by twenty-five to 492 and condo inventory gained twenty-two units to 363. Last year at this time those numbers stood at 388 and 259 respectively, so active house listings are up roughly twenty-seven percent while condominiums are ahead of last year by forty percent.

Click the image for a larger version of the graph.

Listing cancellations and withdrawals came in at just fifteen units this week. Twelve of those returned to the system with a new MLS® number. Just fifteen price adjustments were processed over the course of the week.

Entry-level sales that were missed last week made their comeback as the weekly median price dropped $25,000 to $289,900. The average selling price of a Saskatoon home followed in the same direction but lost less as it slipped from $306,893 last week to $297,526. The six-week average price slipped nearly two thousand dollars on the week to $303,047 maintaining a year-over-year gain of nearly twenty thousand dollars. The four-week median price inched higher from last week to finish up by just five hundred dollars at $295,000 to claim a stunning forty-two thousand dollars gain when compared against sales during the same week last year. The four-week median did dip to some of the lowest levels seen over the past few years in January of 2010 before it began to rebound. Conversely, at this time, it’s sitting within a couple of percentage points of its all time highs.

Click the image for a larger version of the graph.

Some small amount of heat could be seen at the negotiating table this week as about fifteen percent of Saskatoon’s successful home sellers managed a sale price at, or above the asking price. Two sellers saw their homes overbid by an average of $6,100. Thirty-six of forty-two buyers bagged themselves a discount averaging $10,100 or roughly 3.3 percent of the asking price.

Click the image for a larger version of the chart.

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 Vidorra

You may recall, back in early September, while mentally struggling with the idea of rising average sale prices in a not so hot market, I resorted to some deep number crunching, as I often do, and realized for the first time this year that some real significant changes had started to occur. I pointed out at that time that virtually all of the unit sale losses that were being experienced in Saskatoon’s real estate market could be attributed to price categories under the $300,000 mark.

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.

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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 highsof 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 Vidorra

After spending "several weeks" renovating his Pittsburgh home, Andre Hall took a break for the holidays. When he returned he found a backhoe sitting where his house used to be. It seems that a demolition order that had been withdrawn by the court after Hall bought the house as a rehab project was mistakenly executed leaving the Hall family with nothing.

This isn't the first time this kind of thing has happened. Here's a similar story from Winnipeg where a prospective buyer apparently demolished a property before the purchase contract was signed.

House prices in Saskatoon continued to hold larger than expected year-over-year gains, according to the Royal LePage House Price Survey and Market Survey Forecast released today.

Detached bungalows led the way with price gains of 6.7 per cent over the same time last year, selling for a fourth-quarter average of $331,250. Standard condominiums showed year-over-year price gains of 6.2 per cent, selling for a fourth quarter average of $230,000. Standard two-storey homes followed close behind with an overall increase of 6.1 per cent, selling for an average price of $359,250. Some of the gains are attributable to sales of higher quality units in each category, which often occurs when the selection of homes increases as it did in 2010.

“In terms of unit sales, the market is performing as earlier predicted for many regions in Canada,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “A strong first half of 2010 and a weaker second half – Saskatoon was no exception to these forecasts.”

Conditions improved through the fourth quarter as unit sales started to pick up again following a significant decline in the third quarter but multiple offers in the fourth quarter were very rare and homes typically sold for below asking price. Condo sales are down roughly 25 per cent while inventories are up 35 per cent over last year. Properties under $300,000 represent the most sensitive segment of the market as they are most impacted by changing affordability levels. Buyers at that end of the market are definitely holding back. While the Saskatoon market closed 2010 with seven percent fewer residential sale compared to the previous year, unit sales in categories at or below $300,000 declined by eighteen percent. Sales in price ranges above $300,000 gained fourteen percent through 2010.

“We noticed this trend a few months ago,” added Fisher. “Entry level price categories are showing some weakness in unit sales while the higher end is strengthening.”

Nationally, the average price of a home increased between 3.9 and 4.6 per cent in the fourth quarter of 2010, compared to the previous year, as markets shrugged off a lackluster third quarter and returned to a post-recession growth profile. Home values are forecast to continue a moderate and steady climb in many of the country’s key housing markets through 2011 with sales activity skewed to the first half of the year.

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 Vidorra

Curtis Olson wrote an excellent post called “It’s good in the hood,” on the Saskatoon Speaks blog. He talks about the renewal that’s occurring in the Riversdalearea and how the area is changing as new people move in.

This kind of renewal is hard and it takes a long time but new development in South Caswell Hill and at River Landing could certainly bring lots of positive change to the relatively small residential neighbourhood that enjoys a wonderful location along the edge of the river and the Central Business District. There certainly seems to be a committed group of thoughtful and progressive people leading the charge for change.

The discussion and debate that follows is particularly interesting. Clearly, fear is a major factor, at least for those who are outside looking in. Finding ways to address those fears would be a major step forward.

Check his post 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.

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 Vidorra