The Saskatoon Region Association of Realtors® (SRAR) released the MLS® residential real estate statistics for January of 2015 today accompanied by the following release.
Please note that many of the association’s comments touch on “year-to-date” numbers, and some may be based on all sales within the association’s full trading area. The charts which you see, as always, reflect activity within the city of Saskatoon on a month-to-month basis over the past several years.
As was widely expected, low world crude oil prices and a sagging Canadian dollar have had an effect on the housing market in Saskatoon. Inventory levels continue to build due to a 14 percent increase year-over-year in listings and a 21 percent reduction in home sales. "Although this will undoubtedly have a downward effect on home prices in Saskatoon, I'm not sure we are ready to follow Chicken Little around and take cover from a falling sky," comments Jason Yochim, CEO of the Saskatoon Region Association of REALTORS ®(SRAR). Listing activity was consistently trending upward for the past number of months and this past January is no exception to that trend. The 21 percent reduction in sales year-to-date actually represents only 40 fewer home sales when compared to last January. "Although we can't ignore the potential impact of market forces we need to keep things in perspective. When buyers and sellers hear bad news it affects their decisions but may not reflect the actual market," he adds.
At the end of January the number of homes available for sale in Saskatoon reached 1,453 units. Higher inventory levels and cautious buyers will generally lead to a downward pressure on pricing. Some neighborhoods will be affected more than others depending on demand and price range. Since there are typically more buyers in the $250-450,000 range, the impact of reduced pricing will likely be less. Another side effect of higher inventories is an increase in the number of days to sell. Currently it takes 55 days in Saskatoon for the average home to sell compared to 51 a year ago. "If sellers are unable or unwilling to look at pricing to market, they have to be prepared to be receptive to offers" says Yochim. “ This is a simple fact of supply and demand in any market. Higher supply and lower demand equals a decrease in the value of a product."
The average sale price of $357,000 continues its gradual climb at a four price increase for the year. Year-to-date, the number of homes that had sold between $350,000 and $500,000 was up 18 percent with 1541 unit sales. Sales between $500,000 and $750,000 increased by 32 percent with 443 unit sales and homes priced between $750,000 and one million dollars were up 38 percent with 61 unit sales. Home that sold for more than one million dollars in Saskatoon were virtually unchanged from 2013 at 11 properties. In contrast, there were only three sales that exceeded one million dollars in the market area surrounding Saskatoon, a 50 percent reduction year-to-date compared with 2013.
A key indicator of pricing trends in the Saskatoon real estate market is the SRAR Home Price Index (HPI). The HPI is the most accurate predictor available of where the market is trending and measures a change in value of homes sold over time. Overall the composite index for Saskatoon has been trending slightly downward since the later part of 2014 with a 1.19% change since July. Even with the higher inventory levels and slower sales the index showed only a negative change of 0.09% in January. When comparing the five major areas within Saskatoon, all continued to see a slight reduction with the exception of area 4 which continues to show a positive trend in pricing. Area 4 encompasses the neighbourhoods located between Idylwyld Drive and Circle Drive west with a benchmark value of $222,500.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call of email me.
Get the most current market intelligence with our FREE Market Snapshot including prices of homes recently sold in your area. Get it here, now.
Norm Fisher Royal LePage Vidorra