The inventory of residential real estate listings gained some ground again this week breaking the 1,200 mark for the first time since late December to settle at 1,213 units including 737 single-family homes and 395 condominiums. Last year at this time, total residential listings sat at 361 units including 189 single-family houses and just 133 condos. Over the course of the week Saskatoon real estate agents added 118 single-family homes and condominiums to the local MLS database. That number represents a decline in new listings of twenty-four properties compared to last week when 142 homes were listed, and an increase of eleven properties compared to the same week last year when 107 homes were offered for sale.
Unit sales strengthened some for the second consecutive week as sixty homes were reported sold, up from forty-nine last week, but down sharply from the ninety-four homes recorded as sold during the same week last year.
Sixty-two Saskatoon home sellers changed their price over the course of the week, while an additional fourteen canceled and re-listed at a new price hoping to attract a buyer.
The average selling price for the week came back down to earth following two weeks in which the averages were pushed higher due to sales exceeding $1 million. This week, the average fell nearly $20,000 to close at $278,727. The six-week average remained stable at $281,811 when compared to the previous week but it continues to show gains of nearly $30,000 compared with the same week last year when it was just $251,804. The four-week median price fell $5,500 from last week, reaching $259,000, a gain of $17,000 compared with the same week last year.
How is it that prices still appear to be fairly strong on a year-over-year basis? Is the average Saskatoon home still fetching $30,000 more than it would have during the same week last year? Technically, yes. Were prices actually up in January over the previous January as the real estate board stats suggest? Absolutely not and this is where “averages” can be misleading. The “average price” is certainly higher but it’s important to note that different types of homes are selling. In January 2008, condominiums accounted for a full 40% of all residential sales. In January 2009, condo sales accounted for just 20% of all residential sales. If you remove all of the “other stuff” like vacant lots, mobile homes, duplexes, etc. and just look at the ratio of houses and condos, you’ll see that condos account for 45% of sales in 2008 and just 20% in 2009. Let’s do a little math here to demonstrate the point. To make this exercise as simple as possible, and to demonstrate how this kind of a condo to house sale ratio can skew the averages, let’s assume that prices are roughly the same in January 2009 as they were in January 2008. We’ll use $290,000 for single-family homes and $220,000 for the condos.
You’ll note that the “average sale price” increases more than $17,000, or approximately seven per cent in this example on a year-over-year basis. In fact, everyone that bought a house paid $290,000 and everyone who bought a condominium paid $220,000 in each of the two years. Prices did not change at all. This is precisely the case for Saskatoon homes. As the “Closer look” for January suggests, the price of a Saskatoon home is pretty close to what it was at this time last year. While the average sale price is seven per cent higher this year, prices have not increased seven percent since January 2008.
The average underbid came in much lower this week at $13,438, compared to $17,018 the week before. Still, buyers paying a price within $10,000 of the asking price fell to fewer than 50%, a rare occurrence even in this tough buyer’s market. The seven percent of buyers lost in these categories moved directly to the big underbid categories with the $15,001-$20,000 category growing from 12% to 17% and the $20,001-$25,000 category growing from 2% last week to 5% this week.
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Norm Fisher Royal LePage Vidorra