SASKATOON, July 7 /CNW/ – The Royal LePage House Price Survey and Market Survey Forecast released today showed solid price increases across most housing types surveyed in Saskatoon. Price gains were strongest for the city’s most affordable homes while above-average inventory levels for higher end homes is leading to a buyer’s market in this segment.
Standard condominiums led the way with year-over-year price gains of 6.3 per cent, selling for an average of $232,833 in the second quarter. Detached bungalows sold for an average of $331,250, up 6.1 per cent from last year. Standard two-storey homes were also up, gaining 5.4 per cent year-over-year, and selling for a second-quarter average of $355,000.
“Standard condominiums experienced the strongest price gains because of affordability,” said Norm Fisher, Royal LePage Saskatoon Real Estate. “First time buyers are trying to get into the market before interest rates go up.”
After peaking in April, sales volume for the second quarter is down approximately 6 per cent over last year with declines accelerating towards the end of the quarter. Bidding wars are rare, and are typically selling below asking price.
“Predictions of a softening market – in terms of the number of homes selling – are starting to come true,” says Fisher. “Sellers need to be aware of that, and price their homes properly.”
This mirrors Royal LePage’s national forecast, which predicts Canada’s residential real estate market will start to slow in the second half of 2010 after two quarters of strong price appreciation and sales activity. While market fundamentals remain strong across most major centres in Canada, sales activity was overly ‘front-loaded’ in the first half of the year and is expected to cool off for the third and fourth quarters. Prices are also expected to steady in the second half of the year.
“We have seen an unusual pattern of activity in the housing market over the past 12 months, with the market experiencing a surge of activity and price increases that peaked in the fall of 2009 rather than spring. Early 2010 has followed a more typical seasonal pattern with prices and activity peaking in the second quarter,” said Phil Soper, president and chief executive, Royal LePage Real Estate Services. “An expected increase in the supply of homes on the market will now bring stabilization in prices and in some cities we will see both prices and unit sales decline towards the end of the year. This should not be interpreted as a severe correction but rather a natural reaction to the market having peaked quite early this year.”
The surge of activity in the first and second quarters of 2010 corresponds to a number of significant regulatory and financial industry changes that affected homebuyers over the same period, including an increase in interest rates in the spring, tightening of mortgage lending rules for first-time homebuyers and investors, and the lead up to the introduction of the HST in British Columbia and Ontario.
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Norm Fisher
Royal LePage Vidorra