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.
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