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Garth Turners Greater Fool

Excerpt from a Globe and Mail story on Garth Turner and his latest book, Greater Fool.

Garth Turner has some unsettling news for Canadians who've tied their financial future to their homes – every real estate bubble in history has burst, and there's no reason to think it will be different this time.

Mr. Turner's new book, Greater Fool, The Troubled Future of Real Estate, argues that Canadians have been buying homes at inflated prices by taking advantage of expensive mortgages that last 40 years and signing up for incentive plans that allow them to forego the traditional down payment. As a sub-prime-mortgage crisis unfolds in the United States, with more than 400,000 families losing their homes in the past year and a million more said to be on the brink, should they smugly assume they are insulated because of high commodity prices and a strengthening dollar?

“When the average family can no longer afford the average home, how can so many people be deluded into believing a boom will last forever?” he asks. “How could we put so much money into something we might never be able to sell, except to a greater fool?”


This article is a very interesting read. Check it out here.


Garth’s blog is also worth following.


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.


Follow our daily updates on Twitter @SaskatoonHomes.


Norm Fisher
Royal LePage Vidorra

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Saskatoon real estate: Week in review (March 24-29 2008)

Residential listing activity picked up the pace this week with a total of 164 single family homes (houses) and condominiums being offered for sale on the Saskatoon MLS. Total active listings in the residential category finished the week at 470 units including 298 houses and 127 condos. An additional 50 properties are displaying the “conditional sale” flag. Though still a relatively small number, the Saskatoon real estate market didn’t see inventory build to this level until into August during 2007. In fact, at this time last year there was a total of 254 listings including both active and conditionally sold, so there are more than twice as many Saskatoon homes available now as compared to the end of March last year.


Saskatoon real estate sales remained brisk with 94 homes reported sold on the local MLS, up from 86 the week before. A larger number of sales in areas 4 and 5, combined with fewer sales in area 1 brought average selling prices back under the $300,000 mark.


Overbid activity was down some over the previous week with 46 of 94 Saskatoon homes (49%) reporting sale prices that exceeded the asking price. During the same week last year we were up around 55% but the average overbid was a little lower at $14,076, compared to $16,130. You may recall that the market really began to heat up through April and May last year with average overbids topping $20,000 and $25,000 respectively.


Should we expect more of the same in 2008? It’s a pretty tough call and most would admit that they’d have never dreamed that we’d be where we are today. Logic has failed us over and over during the last 18 months so I can’t say I’d be totally surprised by another insane spring. On the other hand, I think that the sales numbers over the next couple of months, perhaps beginning with March, will finally start to show some weakening in demand. If the current inventory trends continue on an upward swing, we should start to see the pressure coming off of prices earlier this year. Given the massive deterioration in affordability over the past two years, the troubled North American economy and the fact that most major real estate markets across Canada are starting to experience at least some weakness, I can’t say I’d be surprised if our “suddenly” isn't looming just around the corner.

Saskatoon real estate: Week in review (March 24-29)

Notable sales


  • Meadowgreen bi-level, 972’, very dated, no garage goes $53K over list at $248,500.
  • North Park bi-level, 820’ with a single garage, dated, sells $40K over at $280,000.
  • Avalon area 1.5 storey, 952’, no garage, a stone’s throw from the freeway sells for just over $267,000.
  • Massey Place apartment, 1,050’ goes 20K over at $220,000.
  • Confederation Park 4-level split, 940’ without a garage fetches $295,000.
  • Lakewood apartment, 868’ sells for $250,000.
  • Adelaide Churchill bungalow on busy street, 1,004’ and no garage brings just over $328,000.


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.


Follow our daily updates on Twitter @SaskatoonHomes.


Norm Fisher
Royal LePage Vidorra

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Tenants of the Saskatoon Milroy Apartments received offers to purchase their units from the developer yesterday. Two of them kindly dropped me a note and I thought you might be interested in the details.


A tenant living on the 12th floor writes, “We got a package in the mail last night with the price and upgrades they are doing. Ours is priced at $315,888.09 - we have 30 days to buy and if we buy before April 10 we save a whopping 2000. This includes a surface parking spot as well. Sounds a little (alright a lot) steep for this place. They are planning on "gutting" the suite - replacing plumbing fixtures, kitchen cabinets, flooring, windows and appliances and upgrading the electrical service to the building and each suite. Replacing the air chiller, moving to in-suite laundry and upgrading the elevator(s).”


I love the .09 cents thing.


According to another tenant residing of the 17th floor, it will set you back considerably to move up five floors. He states that his unit is offered to him at $351,502.32.


Let’s assume that the gentleman on 17 is interested in purchasing this property and he coughs up a 10% down payment and mortgages the balance. At 5.1% over 25 years, and assuming condo fees of roughly $290 per month and taxes of $200 (a guess, but probably somewhere close), he’ll have monthly payments totaling $2,385.13. An annual income of $95,000 will be required to qualify. Thankfully, we have 40-year mortgages that allow him to qualify with just $82,000 in annual income. :)


Average annual income of a Saskatchewan resident - $38,636.


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.


Follow our daily updates on Twitter @SaskatoonHomes.


Norm Fisher
Royal LePage Vidorra

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Tenants of Saskatoon’s Milroy Apartments learned Thursday of their lost court challenge aimed at stopping the condo conversion project at their building, which was approved by Saskatoon city council on January 14, 2008.


“The decision was that the court is not interfering with city council’s decision. The application to set aside the decision approving the condominium plan was denied,” said Andrew Mason, lawyer for the Milroy tenants. Mason presented his case before Court of Queen’s Bench Justice Mona Dovell on March 12 arguing that council did not correctly interpret or apply provisions in the provincial Condominium Property Act which gives municipalities discretionary wiggle room to deny applications based on low rental vacancy rates. The latest Rental Market Report released in December by Canada Mortgage and Housing Corporation pegged the vacancy rate in the area at just 1%, and at .6% across the city of Saskatoon.


The Milroy Apartment tenants will now have to decide if they are willing to bear additional costs, which would have to be incurred if they choose to appeal the court’s ruling.


The City of Saskatoon has agreed to undertake a review of its condominium conversion policies and city administrators have already brought a proposal of potential changes forward. The administration will present the court decision to the city’s executive committee on March 31, and according to city solicitor Theresa Dust, a policy debate will likely ensue at the committee’s April 14 meeting.


Read the story from today’s Star Phoenix 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

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Saskatoon real estate: Week in review (March 17-20 2008)

New listing activity cooled significantly in the Saskatoon real estate market this week with just 116 properties being offered for sale, down from 156 last week. Still, active listings on the Saskatoon MLS managed to creep up slightly to 423 units including 274 single-family homes (houses) and 112 condos. 63 additional homes are showing as “conditionally sold.”


Sales activity also took a bit of a slide, though not as sharply as the drop in new listings. 86 properties were reported sold on the MLS compared to 97 the previous week, and 100 during the same week last year. With nearly three fourths of the month behind us, it is conceivable that unit sales could come in below the levels seen during March 2008. Given the rapid changes in “affordability,” I think we can likely expect some down months soon.


Buyer attitudes remained aggressive. I heard of many instances where the old “delayed presentation of offers” strategy failed to produce results, but 55% of the Saskatoon homes that were reported sold achieved selling prices that exceeded list. They knew what they wanted and they went after it hard with the average overbid exceeding $15,000. While this particular stat has been on the grow in recent weeks, it hasn’t been above 50% since the week of August 20-24.


Average selling prices went through the roof breaking a new weekly record at $312,470 compared to the previous high of $275,825. This massive increase can be explained by a smaller than normal number of sales in areas 4 and 5, while areas 1, 2 and 3 were all quite active.


Notable sales


  • Meadowgreen bungalow at 1,070 square feet with a double garage fetches $285,000.
  • River Heights one-bedroom apartment (624’) goes for $161,000.
  • Lakewood Pine Creek town house breaks a new record for this development at $285,000.
  • Caswell Hill one and one half storey in really rough shape and listed at $99,900 sells $63,000 over list.
  • Varsity View bungalow (1,080’) with no garage brings seller over $411,000.


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

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Note: The graphics in this post were updated on March 5, 2009 to reflect the final sale numbers as reported by agents for February 2008. 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 (condos and single-family detached homes combined) for the month of February came in at $266,573, up from $252,763 in January and sharply higher than the average of $188,028 recorded in February of 2007. A strong and steady flow of new residential listings combined with strong demand led to an increase in unit sales to 339, up from 319 during the same month last year, and well above January’s number of 265.


Houses (single-family detached homes) continued to experience large prices gains with the overall average coming in at $310,533, up from $284,473 last month, and $194,360 a year ago.


The average sale price of a Saskatoon condo slipped for the third consecutive month to levels not seen since May of 2007. Lower averages can largely be attributed to a couple of conversion projects offering small units priced below $125,000. When we look to other projects which have a large number of recorded sales over several consecutive months we can see that condos are continuing to rise, though not nearly as sharply as houses. For instance, looking to the Pine Creek project in Lakewood, we can find sales ranging from $235-$245,000 in December, selling from $245-$260,000 through January, and as high as $270,000 in February. These numbers probably provide a more accurate picture of what’s happening in that market.



You may note that these monthly stats are different than those released by the Saskatoon Region Association of Realtors (SRAR) at the beginning of March. Just a quick reminder on why: SRAR reports on all residential property types, including semi-detached and duplexes while my “closer look” numbers focus specifically on houses and condos; units which we would consider homes as opposed to income properties. SRAR also bases their report on sales which firmed up during the stated period, where my numbers focus on contracts written during the period.

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

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Residential real estate sales softened nationally in February, edging down 6.4% from January, and 9.6% compared to February 2007 according to the Canadian Real Estate Association (CREA).


“Snowfall in Toronto made it tough to show prospective buyers, and tough to process a listing,” said CREA President Ann Bosley. “It was one of the toughest months ever weather wise for REALTORS® in Toronto.” (Brilliant guys!)


Seasonally adjusted residential sales activity declined by more than new listings, making the resale housing market more balanced in February 2008 than in any other month in over nine years.

A monthly decline in sales activity coupled with strong gains in new listings caused resale housing markets to become significantly more balanced in February in Regina, Saskatoon and Newfoundland & Labrador, which had been the three tightest major markets in January. Edmonton, Calgary and Windsor remain the most balanced major markets, while Saskatoon and Winnipeg are now the tightest.


“More balanced” in Regina and Saskatoon? Hmmm.


Read CREA’s press release 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

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Saskatoon real estate: Week in review (March 10-14 2008)

It was another big week for new Saskatoon real estate listings with 156 residential properties being offered up for sale, the highest number for any week this year. Total active listings settled at 411 units including 251 houses (up from 201 last week) and 116 condos (down from 124 last week). An additional 68 properties are displaying a “pending sale” flag. Taking a quick look back to the same week last year, we can see that there is approximately twice the number of Saskatoon homes available today. New listings have managed to outpace sales for 10 of the last 11 weeks, a positive sign for buyers looking for a bit of balance, if that trend continues.


So far, there is little sign that a growing base of active listings is playing in the buyer’s favour. 97 properties changes hands, delivering one of the largest sales weeks this year, topped only once, the week of February 18-22. Unit sales this week increased about 25% from last week and about 12% from the same week last year.


The number of Saskatoon homes, which sold above the asking price, exceeded the number sold below for the first time this year, accounting for 41% of all homes sold. The average overbid managed to increase slightly from last week to $16,029. Where buyers were able to grind a bit of a deal, the average underbid also increased slightly, pushing the $9,000 mark.


Average selling prices managed to eclipse average asking prices for the third consecutive week, but a number of inexpensive homes sold in area 4 and an active week in condo sales resulted in a lower average selling price than we’ve seen since the week of February 11-15.


Notable sales


  • Forest Grove condo at 630 square feet sells 13K over at $183,000.
  • Dated Haultain area bungalow at 924 square feet, with no garage fetches $321,000.
  • Lawson Heights bungalow at 949 square feet with a single garage goes for $343,000.
  • Fairhaven coach home at 1,140 square feet brings $225,000.


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

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“Saskatchewan is the new Alberta…,” according to RBC’s quarterly Housing Affordability report released yesterday. The catchy subtitle goes on to ask the question, “but for how long?”


“Saskatchewan now holds the top spot on growth across all key housing indicators including housing starts, house prices, residential building permits, and re-sale activity… The major erosion of affordability that has occurred over the last year should gradually take a bite out of current momentum over the coming year.”


RBC measures the percentage of pre-tax income required to service mortgage debt on four popular types of housing. Here’s a quick look at how affordability has been impacted in our province between the fourth quarter of 2006 and the fourth quarter of 2007, the latest numbers this report examines.


Detached bungalows have gone from 31% of income to 40.4% of income.


Standard two-storeys have gone from 33.8% of income to 42.3% of income.


Standard townhouses have gone from 24.8% of income to 34.2% of income.


Standard condos have gone from 19.9% of income to 26.2% of income.


Lower housing prices in Calgary, measured against high increases in Saskatchewan have leveled the playing field between the two areas over the last year. You’ll now pay an equal portion of income to live in either Saskatchewan, or Calgary.


“Nationwide housing affordability deteriorated in every consecutive quarter throughout 2007 to end up at its most unaffordable level since the housing bubble peaked in 1990… Only Alberta bucked the trend in the latest quarter.”


RBC is predicting improved affordability across most markets in 2008, largely driven by “falling mortgage rates, cooler forecast house price gains and decent income growth.”


Read RBC’s Housing Affordability Report 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

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Tenants of Saskatoon’s Milroy Apartments asked Justice Mona Dovell to overturn the City of Saskatoon’s decision to approve an application to convert the apartments to condos on Tuesday.

Andrew Mason, the lawyer representing the group of tenants who are opposing the decision argued that city council either misinterpreted the provincial legislation that governs condominium conversions, or ignored it.

Bill Davern, legal council for the City of Saskatoon maintained that council has jurisdiction to make the decision without interference from the courts, that they “fairly considered” all factors which the law requires them to consider, and that the decision to grant the application was “not unreasonable.”

Davern told Justice Dovell that 21 additional applications for conversion projects are waiting for approval and that if she decides that the courts should have the final say in this instance that it would open the door to future actions.

“I don’t know whether the court, with all due respect, is properly equipped to do that.”

Justice Dovell reserved her decision and promised to deliver a judgment as soon as possible.

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

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Saskatoon real estate: Week in review (March 3-7 2008)

Before I get started here, let me just mention that the Saskatoon Region Association of REALTORS® launched a new MLS® system on Tuesday of last week. While it wasn’t without its glitches the roll out was pretty smooth. One of the hiccups that did occur caused some problems with entering sales, and as of Friday, no sales had been entered since 02/28. The problem was remedied late Friday and I noticed that a good handful of sales were entered over the weekend. That activity seems to have stopped, so I’m assuming that the job is complete and up to date, but it’s possible that some are still missing. I’ll be following up over the next couple of days and will make the necessary adjustments for the sake of historical accuracy should some changes occur.


Residential listing activity was very strong over the first week of March with a total of 155 single family homes (houses) and condos offered for sale. Total active listings finished the week at 369 units, which I’m sure will strike you as low, given the heavy listing activity. The new MLS® system separates properties which have pending sales from the actives. There were an additional 63 homes in the pending sale category. Grouped with the other active listings, that’s a total of 432 residential properties so it appears that inventory has seen a pretty good increase from the 370 homes we reported as active the previous week.


At the same time, unit sales came in softer than last week with just 78 properties reported sold, down from 92, and also down just a smidge from the same week last year which counted 82 sales.


The percentage of sales which were subject to overbid activity was up once again, but the average amount over list saw a fairly big decline from $14,797 to $11,229. The average selling price of a Saskatoon home slipped up over the $275K mark for the second time this year. The average selling price for this week last year was just under $190,000.


Notable sales


  • Forest Grove apartment (890’) sells 14K above list price at $203,333.
  • Forest Grove bungalow (900’) with no garage goes $21K over at $300,700.
  • Lakeview two-storey split (2,150’) fetches 43K above list to sell at $559,900.
  • Exhibition area condo (678’) brings $198,000.
  • Mount Royal bungalow (970’) on a busy street, nor garage, $271,500. Wow!
  • Confederation Park bungalow (1,040’) with no garage goes $25K over at $270,000.


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

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You’ve got to know that Saskatoon community services manager, Paul Gauthier is having some long days at work. He’s one of the civic officials responsible for processing condominium conversion applications. That can’t be a real funfest right now. In fact, approving condo conversion applications has become so controversial that Gauthier has simply had enough, and he has elected to invoke a clause in the current policy which allows him to toss the political hot potato to city council for review of all existing and future applications.


If you think it’s a hot debate now, rest assured that things are about to heat up.


Council passed a motion on Monday, which essentially puts 21 existing apartment building conversion applications in limbo. Gauthier advised council that a new report would be completed for its March 17 meeting, outlining the current situation and possible policy changes which could be used to regulate condo conversions. Another report, recently brought forward by city administrators was tabled for later discussion following a court date on March 11 when tenants of Saskatoon’s Milroy Apartments will argue against the certificate of approval which was issued on that property. Mean time, no conversion certificates will be granted and those which are already in the hopper would be dealt with in accordance with any new policy council might choose to adopt.


Dealing with a steady flow of angry tenants and concerned citizens can’t be easy. I’m guessing that we’ll have some pretty vocal investors on our hands as we move forward from here. Tens of millions of dollars have been invested and those investments were made with an end goal in mind; conversion and resale.


It’s easy to see valid points on either side of the argument. Displaced tenants have few options and promising them that “the market” will eventually work its magic is of little comfort when you don’t know where you’ll be living in thirty days. Free market proponents will argue that there are major benefits to be realized through conversions. Preventing these units from reaching the resale market limits supply in an already stressed market and puts further pressure on prices. Ultimately, that hurts the rental market as well. It’s a real catch 22.


The complexity of the issue can’t be overstated. At the end of the day, the math is fairly simple. Demand exceeds supply in both the rental and the resale market. We need more property in both arenas if we’re going to see any relief. Development of new rental property is the only solution that serves everyone and it needs to happen fast. Free land anyone? I suspect the city may be open to your proposal.


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

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