I came across an interesting “Letter to the Editor” in yesterday’s Star Phoenix which I wanted to touch on. The letter was submitted by Maureen Shebelski, a Saskatoon resident and mother.

Maureen’s decrial of the current state of the Saskatoon real estate market is a testimonial to her social conscience and it’s obvious that her concerns are sincere at every level. She points to the challenges and consequences which are inevitable in a market that experiences such rapid and significant change. Rising property taxes and insurance rates, increasing levels of debt, and uncertainty about the future are all things that are on Maureen’s mind right now.

I share many of the concerns which she expressed. I am also a parent, and coincidentally I have one daughter and one son, both young adults, so I’ve spent lots of time considering how this “new Saskatoon” will affect them. I’m also keenly aware that there are many residents in this fine city who will face challenges that will dwarf those that my own kids might experience as a result of this “boom.”

Maureen also takes the opportunity to place a little blame for what’s going on, starting with Premier Lorne Calvert and wrapping up with the real estate industry. She says, “I also blame the real estate industry and its new method of taking bids on houses, instead of taking offers. When my father was in real estate, there were some ethics involved. I don’t see that now.”

This attempt to “blame the real estate industry” and suggest that there is something unethical about “the new method of taking bids” would be easy enough for most to agree with, particularly those who are facing the challenge of buying a home in this market. Ultimately, it demonstrates a lack of understanding as to the role of a “seller’s agent” in the real estate transaction.

Since it is “ethics” which are questioned here, let’s take a look at some of the ethical guidelines which may apply from the Canadian Real Estate Association’s Code of Ethics which all REALTORS® are sworn to uphold.

Article 3 – Primary Duty to Client – A REALTOR® shall protect and promote the interests of his or her client. This primary obligation does not relieve the REALTOR® of the responsibility of dealing fairly with all parties to a transaction (Also appears in provincial statutory legislation in the Saskatchewan Real Estate Commission Bylaws, section 702).

Article 12 – A REALTOR® shall render a skilled and conscientious service, in conformity with the standards of competence which are reasonably expected in the specific real estate disciplines in which the REALTOR® engages.

Article 18 – The business of a REALTOR® shall be conducted in strict accordance with all statutory and regulatory requirements.

Ethics and statutory regulation aside, we have volumes of agency law decisions that define an agent’s obligations to his or her client. Agency law provides a history of expectations that are considered reasonable and holds an agent accountable and liable for damages which result from a failure to act as a fiduciary to the person or persons who have hired them. In its simplest form, the agency relationship is founded on obedience, confidentiality, competence, disclosure, accountability, trust and loyalty.

Finally, the listing agreement used in Saskatchewan binds a seller’s agent to the following promises to his or her client;

• obey the seller’s instructions on the Exclusive Seller’s Brokerage Contract and all lawful instructions of the seller;
• represent the seller’s best interests;
• fully disclose known facts which might influence the seller’s decision;
• maintain the confidentiality of personal and financial information discussed with the seller even after the Exclusive Seller’s Brokerage Contract expires;
• safeguard the seller’s documents and money; and
• exercise reasonable care and diligence.

I expect that most people do understand that multiple offers on a property most likely places the seller in the best possible position to negotiate a favorable price and terms. Given that are bound by a Code of Ethics, statutory law, agency law and our promise in writing to act with complete loyalty to the seller, how is it that we are viewed as “unethical” for making as many prospective buyers as possible aware that a client’s home is for sale? I would suggest that failing to make every effort to deliver the best result for a client would be unethical and unlawful.

Discussions which I’ve had with Al Jacobsen, Registrar of the Saskatchewan Real Estate Commission and with Randy Katzman, a local real estate lawyer suggest that agents who fail to provide adequate exposure for a client’s property could be subject to both the prosecution and civil litigation with potential consequences including large fines, license suspension or cancellation, and damages which might result from that negligence. Personally, I’m not much into any of that.

Every time that a seller’s home is sold without a reasonable level of exposure to the market, a betrayal is committed. Every time an agent brings a seller’s property to the market and provides buyers with reasonable access, a promise is fulfilled. Seller’s benefit and so does the community of Saskatoon real estate buyers.

Please don’t call the Saskatoon real estate community unethical for doing right by its sellers. They pay us a hefty chunk of change for representation and they deserve to get exactly what they’ve paid for; obedience, confidentiality, competence, disclosure, accountability, trust, and loyalty. Acting as one’s agent is an honor and a privilege that should be taken seriously.

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

Norm Fisher

Royal LePage Vidorra

I thought it would be interesting to compare the average selling price of Saskatoon homes during the month of May 2007 to those recorded in May 2006 in order to provide some perspective on Saskatoon's real estate price increases.

This first category compares units that would be classified as homes, both detached houses and condominiums. The selling price of Saskatoon homes shows an increase of 44% in May, over the previous May with the largest gains being shown in Area 2 and Area 5, up 64% and 65% respectively.

The average selling prices of Saskatoon houses jumped 37% in May to an all-time high of just over $240,089 from $174,797 for the same period last year. Again, Area 2 and Area 5 record the greatest gains at 62% and 61% respectively.

Saskatoon condos saw huge increases with the average selling price rising to $210,236 in May 2007 up a whopping 75% over the average in May 2006. Once again, Area 2 and Area 5 pull the prize for the largest increases at 81% and 94% respectively.

So why such a significant difference in the price gains when comparing condos to houses? Why do Areas 2 and 5 show greater gains when compared to the rest of the city? I think it all boils down to demand and there’s no question that Saskatoon condos have been a prime target for those wishing to build a bit of an investment real estate portfolio. Affordability is also a major factor for both investors and first-time buyers who may be scrambling to grab a little piece of Saskatoon for fear of being priced right out of the market. For those wanting to purchase an east-side home, Area 2 is more affordable than Area 1 and consequently, there are more buyers who can afford to live in Area 2, and fewer buyers who can reach the lofty average of $285,000 which Area 1 homes are fetching. For those who find Area 2 a bit of a stretch on the housing budget, Area 5 provides a solid alternative for a family home.

It seems unlikely to me that the disparity between house prices and condo prices can’t continue for the long term. I expect that we may begin to see condo price growth level out some while detached houses play catch up. In the coming months, we are likely to see the condo supply increase and some of the apartment buildings which have been purchased with “condo conversions” in mind will find their way back onto the market as single condominium units.

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

Norm Fisher

Royal LePage Vidorra

The average selling price of a Saskatoon home increased close to $12,000 during the month of May to a record $233,013. The average was just shy of $221,000 for the month of April 2007. Here is an overview of sales activity including both condos and houses.

Saskatoon houses were scooped up as quickly as they were listed for sale with 383 units changing hands and an average selling price which is now pushing towards the quarter-million-dollar mark.

The average price of a condominium in Saskatoon exceeded $210,000.

Tomorrow we’ll take a look at how the average selling price of condos and houses has changed since May of 2006.

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

Norm Fisher

Royal LePage Vidorra

If Saskatoon real estate buyers were holding out any hope that this market may have been starting to show signs of balancing, this week’s numbers provide a solid slap in the face and a reality check.

While there was some good news on the listings front when total actives briefly broke the 300 mark for the first time this year, and the largest number of new listings for any week this year came on the market, Saskatoon real estate agents also reported a record number of residential sales at 154 units.

Saskatoon home buyers continued to show their spirit and determination to get out of the market once and for all bringing offers over the list price on a full 75% of homes listed. The average overbid for all Saskatoon homes reached its highest average once again at $27,156.

Here’s a look at the numbers.

Here are a few of the more notable sales from last week.

• Showy Forest Grove bi-level at 1,100 square feet with no garage goes for $310,500.
• Lakeridge two-storey (1,726’) sells for $370,000.This is only remarkable because it also sold in 2003 for $182,000 and provides a pretty clear picture of what’s happening to Saskatoon property values.
• More than one, one-bedroom condo in the 735’ range sells in the 180’s.
• Cute little (900’) Queen Elizabeth bungalow with a legal suite and no garage sells $62,000 over list at $270,000.
• Large (1,584’) Montgomery Place bungalow goes $20,000 under list at $269,900. This one is a bit baffling as it has a double garage, large lot and some nice upgrades.It was left open for offers for one full week. Perhaps the best buyers for this home found something else in the meantime.

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

Please feel free to call or email.

Norm Fisher

Royal LePage Vidorra

For the first time this year, active MLS® listings of condominiums and single-family homes within the city of Saskatoon broke the 300 mark. Since late December, we’ve been hovering between 236 and 292 active listings. At the close of business today there are 312 listings showing an active status. An “active” listing is one that has not yet been reported as having a firm offer in place, so properties that have not attracted offers as well as those which have been “conditionally sold” are counted among them.

Is this a big deal? Most buyers and sellers aren’t likely to feel much of a change when they’re out there doing business. You can continue to expect to find competitive bidding on homes that are priced realistically. However, it is encouraging to know that active listings are now about thirty percent higher than they were at the lowest point. Over the past two weeks, there have been more new listings than there were homes sold. I wouldn’t expect to see prices come down anytime soon but as we make our way towards 400 Saskatoon homes for sale, and hopefully we’ll continue to move in this direction, we might expect to see the pace of increases slow.

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

Norm Fisher

Royal LePage Vidorra

This is not exactly important real estate news but I couldn’t resist writing a small snip about this story.

It seems that the popular A&E reality program, “Flip This House” has run a number of episodes that amount to nothing more than a sham. Featuring self-proclaimed “real estate developer” Sam Leccima, the episodes represent his renovation projects as having been sold for huge profits. As it turns out, most of them haven’t actually sold and at least one of them wasn’t actually renovated.

To make matters worse, it’s clear that Sam Leccima is the target of a number of civil suits from prospective investors who trusted him to invest their money wisely. One gentleman claims to have lost $100,000 to the smooth-talking television celebrity.

A&E claims to have no knowledge of the sham and they have pulled all episodes which feature Leccima from their re-run schedule.

Thanks to Doug Quance for the heads up on this bit. Doug is an Atlanta based agent who has been on top of this home town story since October of last year when he noticed some of Sam’s sold properties were still listed for sale.

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

Norm Fisher

Royal LePage Vidorra

Canada Mortgage and Housing Corporation (CMHC) released its "2nd Quarter Housing Market Outlook" for Saskatoon real estate today. Once again, the publication proves to be a huge waste of taxpayer dollars.  I hate to be so damned sharp but I'm constantly frustrated by the government agency's failure to get it right. You'd think that they could do better given the resources available to them.

In their forecast released late last fall, CMHC predicted, "In 2007, prices will continue to rise although at a slower pace largely due to the forecast increase in supply. A less pronounced increase is forecast for 2007, with prices rising by 7.3% to reach $169,500."  In this newly released 2nd Quarter Forecast, CMHC has adjusted its forecasted increase stating, "Average prices are expected to increase by 21.4% in 2007, bringing the average resale price to $195,000."

It's worth noting that the average selling price of Saskatoon homes has already reached $206,000 year to date, and it topped $220,000 over the month of April. Inventory levels remain desperately low and there is no apparent sign that balance will be found anytime soon.

To their credit, CMHC does make the point that many of the homes currently under construction will be ready for occupancy in the coming months. Given the types of homes that are currently under construction, there is some reason to be hopeful that these “starts” will bring some resale inventory to the market as they near completion.

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

Norm Fisher

Royal LePage Vidorra

March was crazy. April was absolutely insane! I’ve never seen anything like it and neither had some of the old-timers in this business who have been around forever.

Buyers went after the property like another house would never be built and bidding wars reached new heights. By the end of the month, about 80% of Saskatoon homes were being sold at, or above the list price. Through most of the month, the average overbid topped $20,000. A lot of homes sold for $30,000-$50,000 above the asking price, many without any conditions at all.

The average price of a Saskatoon home (condos and single-family detached homes combined) surged further forward to a record-breaking $224,845, up from $203,065 the month before. Average days on the market plummeted to an unheard of 9 days.

The largest gains were seen in houses where the average selling price moved from $208,124 last month to an almost unbelievable $234,406.

104 Saskatoon condos traded hands with an average selling time of only 7 days. The average selling price hit $193,866, and an increase of just $4,500 from last month. Condos had seen a disproportionate increase during March when the average selling price increased more than $30,000.

Such massive changes are difficult to fathom over a short period of time. Agents are somewhat clueless on how to advise their clients, and buyers seem absolutely determined to sew up a deal, almost indifferent to the cost and somewhat reckless as well. Buyer, or seller, we should all be hoping that some of this steam comes off soon. Too much, too fast can often be a bad thing.

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

Norm Fisher

Royal LePage Vidorra