Results of a recent Royal LePage study released today.

Despite the perception that aging Baby Boomers may create an oversupply of traditional single-family homes as they downsize into smaller residences, a new Royal LePage Real Estate survey shows that demand for suburban detached homes remains strong among Baby Boomers and Generation Y.

The poll by Leger Marketing found that of the 40.6 per cent of Baby Boomers (born between 1947 and 1966), who do have plans to move to another primary residence, almost half (43.5 per cent) are looking to purchase another primary residence that is a similar size or larger than their current property. Of the total responses from Baby Boomers who intend to purchase their next primary residence, 66.8 per cent said they will do so in the next five years.

“Baby Boomers are the wealthiest generation in Canadian history. They live in large homes with ample space for their many possessions. They love their garages and their yards. This study clearly indicates that contrary to popular belief, most Boomers do not intend to downsize anytime soon,” said Phil Soper, CEO of Royal LePage Real Estate.

Male Baby Boomers, who are planning to move, are more keen on upsizing their residence than women, with 23.0 per cent reporting that they plan on moving to a larger residence compared to 12.1 per cent of women. Baby Boomers looking to purchase a condominium prefer less amenities and low maintenance fees (54.5 per cent) over properties that have many amenities (39.1 per cent). Seventy-eight per cent of Baby Boomers currently own their own homes.

Contributing to the desire of Baby Boomers to continue to invest in large, suburban homes is the reality of housing children well into adulthood. According to the survey, a quarter of Generation Y lives rent free because of arrangements with family or friends, but that number climbs to 33.4 per cent in the Prairies, 29.7 per cent in Quebec and 27.2 per cent in Ontario.

“The adult children of Baby Boomers aren’t going anywhere fast. Good jobs have proven more difficult for them to find, they’re extending their studies and they’re living at home. It is no wonder the concept of swapping a family-sized home for a small retreat has lost its luster,” said Soper.

Meanwhile, members of Generation Y (those born between 1980 and 1994), who plan to purchase their next residence, are most interested in single-family multi-storey homes (50.6 per cent) and bungalows (19.0 per cent). Only 15.7 per cent of Generation Y said they plan to buy a condominium or an apartment. In comparison, 22.9 per cent of Baby Boomers looking to purchase their next residence desire condominiums or apartments.

The survey found that more than half of Generation Y planning to purchase their next residence, intend to purchase in the suburbs (55.7 per cent) compared to the downtown core of a city (21.7 per cent). Forty-three per cent of current non-owners who plan to purchase in the next five years say it is because they are planning to start a family in the near future. Among this younger demographic planning to purchase their next residence, the safety of a neighbourhood and proximity to their work, family and friends are the most important attributes when selecting a new home. Keeping in mind that nearly half of Generation Y listed their near-term plans to have children of their own (42.0 per cent) as a motivating factor to purchase, the least important factors are proximity to the downtown city core and restaurants or entertainment.

“The young people who make up Generation Y are our first-time home buyers. Like their parents, they dream of owning a lovely house in the suburbs, which provides value as well as access to parkland for children to play and the perception of greater family safety,” said Soper. “Even as condominium living becomes more popular across Canada, the study results do not point to a corresponding decrease in demand for traditional single-family homes. For the Baby Boomers that do head downtown, there is a generation waiting to move in.”

Among Baby Boomers who plan to downsize when they purchase their next residence, the most popular reasons are to reduce maintenance (73.7 per cent), free up money for retirement (48.1 per cent) and for travel (30.9 per cent).

Regional Comparisons of Those Planning to MoveRegional Generation Y comparisons showed that more Ontarians and Albertans place importance on being close to the city’s downtown area or town’s core than Quebecers and those from the Prairie provinces. Likewise, a gym or fitness centre is more important to Ontarians, Albertans and British Columbians than it is to Atlantic Canadians or Quebecers. Atlantic Canadians also place less importance on proximity to public transportation, restaurants or entertainment than Generation Y living elsewhere in the country.

When comparing Baby Boomers across Canada, Ontarians, Quebecers and Albertans are more likely to choose a home in the country than British Columbians. More Baby Boomers from British Columbia value being close to public transportation when purchasing a home than those from Ontario and Alberta. In addition, there are no significant regional differences comparing Baby Boomers who want to upsize, downsize or continue to live in a similar sized property.

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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 Saskatoon Real Estate

SASKATOON, January 8, 2013 – The Royal LePage House Price Survey and Market Survey Forecast released today showed strong year-over-year house price increases for detached bungalows and standard condominiums in Saskatoon, while standard two-storey homes made modest gains.

Detached bungalows posted a strong year-over-year increase of 8.8 per cent, to an average price of $363,750. Standard two-storey homes saw a 2.2 per cent increase over the same quarter last year, selling for an average of $376,750, as supply and demand began to balance. Standard condominiums sold for an average price of $261,333, increasing 12.5 per cent year-over-year. Norm Fisher, Royal LePage Saskatoon Real Estate noted that the increase in the average price of standard condominiums reflects the sample average being skewed by higher end units that were sold as opposed to a general increase overall.

“Market activity in the fourth quarter was healthy and especially strong among single-family homes and condominiums priced above $350,000,” said Fisher. “Entry-level properties took somewhat of a hard hit this quarter as a large portion of first-time buyers delayed entering the market due to new mortgage regulations introduced in 2012.”

Fisher commented that inventory levels are slightly below year-over-year averages. However, there is still a good amount of supply on hand to meet the needs of buyers.

"Saskatoon's economy is exceptionally diverse with strengths in many areas including natural resources, bio-sciences and even small businesses – our strong job sector should continue to fuel our market as we move into 2013," added Fisher.

Nationally, the average price of a home increased year-over-year between 2.0 and 4.0 per cent in the fourth quarter of 2012. In the fourth quarter, standard two-storey homes rose 4.0 per cent year-over-year to $390,444, while detached bungalows increased 3.6 per cent to $356,790. National average prices for standard condominiums increased 2.0 per cent to $239,374.

As home sales volumes slowed in the second half of 2012, the average Canadian house price, for the most part, held firm. Some consumers delayed their entry into the market during 2012, faced with economic uncertainty as governments in both the U.S. and Europe struggled with debt management plans and as homes in some regions became less affordable. Compared to 2012, fewer homes are expected to trade hands in the first half of 2013, which should slow the pace at which home prices are rising.

Phil Soper, president and chief executive, Royal LePage, noted that the housing market is well into a cyclical correction and that fears of a sharp or drawn out collapse are unwarranted. Home prices have risen faster than salaries and wages for three years and the market requires time to adjust. By the end of 2013, Royal LePage expects the average national home price to be 1.0 per cent higher compared to 2012.

“A helpful comparison is to reflect on the beginning of 2009 when the country was in the grips of a very grim global recession,” said Soper. “It was a bleak time, with plunging consumer confidence driven by rapidly spreading unemployment. The meltdown of the American banking and finance sector had sent their housing market into a downward spiral and our own real estate market saw home sale transactions fall dramatically. Price appreciation in Canada ground to a halt, but home values dropped only slightly. With economic fundamentals such as employment levels improving, we expect this cyclical correction to be short-lived.”

SASKATOON, October 3, 2012 – The Royal LePage House Price Survey released today showed varied year-over-year price increases for all three housing types surveyed in Saskatoon.

Standard condominiums posted the largest gain of 7.4 per cent, selling for a third quarter average of 252,333. Standard two-storey homes rose a modest 4.1 per cent year-over-year to 373,500, while detached bungalows saw a 3.9 per cent increase over the same quarter last year, selling for an average price of $348,000.

“Limited inventory and increased demand have pushed prices up throughout the region, which has especially been seen across standard condominiums priced between the $200,000 - $300,000 range,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “Despite this, there is still a good selection available for homes priced above the $400,000 mark.”

Fisher noted that healthy migration levels and strong consumer confidence in Saskatoon’s local housing market have resulted in healthy market activity this quarter. Although new mortgage regulations slightly impacted unit sales for properties priced below the $400,000 price range, established immigrants, first-time buyers and move-up buyers are still very much active in the marketplace.

“Overall, our local economy is doing very well and buyers are eager to get into the housing market while interest rates are still low,” explained Fisher.

Nationally, the average standard two-storey home in Canada increased 4 per cent year-over-year rising to $403,747, while detached bungalows rose 4.8 per cent to $366,773. Standard condominiums witnessed an increase of 1.8 per cent to $243,607. Most cities in Canada experienced modest price appreciation in the quarter, but fewer homes were sold compared to the same period in 2011.

“A drop in the number of homes trading hands typically precedes a period of softening house prices. Where there is reduced demand, those who want to sell their homes adjust their asking price to stimulate interest. Home sales were positive in July, fell 9 per cent year-over-year in August and we are expecting September to show a decline as well,” said Phil Soper, president and chief executive, Royal LePage. “We had predicted this cyclical change early in the year, a natural market reaction after a period of strong expansion. Changes to mortgage regulations, which took effect on July 9^th, accelerated the correction.”

In July, the Minister of Finance announced that the maximum amortization period for insured mortgages would be reduced to 25 years from 30 years. This was the fourth intervention in just four years and the most impactful. Potential first-time buyers, which in a typical market represent one third to one half of all purchase transactions, felt the changes immediately.

“While hard-hit in the short-term, we expect first-time buyers to adjust to the tougher mortgage qualifications. The dream of homeownership is very much alive among young Canadians. They may remain renters for some time as they save; some will opt for less expensive neighbourhoods and some will purchase smaller homes,” added Soper. “In the meanwhile, we will feel their absence in national sales statistics.”

The Royal LePage House Price Survey and Market Survey Forecast released today showed strong year-over-year price increases for all three housing types surveyed in Saskatoon.

Standard two-storey homes posted the largest gain of 7.3 per cent, selling for a second quarter average of $379,500, over the same quarter in 2011. Detached bungalows saw a 6.0 percent increase over the same quarter last year, selling for an average of $351,125. Standard condominiums sold for an average price of $255,667, a 5.6 per cent year-over-year increase.

"This past year has been a big year for migration to Saskatoon and it’s reflected in our house prices,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “Last year was a good year for market activity and we are seeing a 10 per cent increase over last year’s level this quarter.”

Fisher also noted that inventory for all three housing types were down, particularly detached bungalows.

“We are seeing some multiple offers, but even in those instances the selling price is usually only marginally higher than the listing price,” added Fisher. “Despite, the spurred market activity, buyers are being cautious.”

Nationally, in the second quarter, standard two-storey homes rose 4.7 per cent year-over-year to $408,423, while detached bungalows increased 5.5 per cent to $376,311. Average prices for standard condominiums increased 3.3 per cent to $245,825. During this period, signs from across the country clearly indicated that the national housing market was at a turning point, with some major regions continuing to grow unabated while others peaked and began to pull back for the first time in three years.

“We have had three years of solid house price appreciation in almost all regions of the country,” said Phil Soper, president and CEO of Royal LePage Real Estate Services. “Confidence in Canada’s real estate market is sound, but home prices cannot grow faster than salaries and the underlying economy indefinitely. Some regions have reached or perhaps even exceeded the current upper level of price resistance as buyers have embraced an era of historically low mortgage rates.”

The first-time buyer segment of the population, which represents up to half or all transactions and where activity strongly correlates to low interest rates, is expected to be slowed by recent regulatory changes that will reduce access to insured mortgages.

“The most recent set of mortgage changes, the fourth in four years, is also the most aggressive. The cumulative impact of these new regulations has created a significantly higher hurdle for young buyers seeking their first home and comes at a time when the market was slowing of its own accord. The timing of this intervention was unfortunate,” added Soper.

Continued migration and low interest rates offset by healthy supply of homes for sale

SASKATOON, January 12, 2012 – The Royal LePage House Price Survey and Market Survey Forecast released today showed slight year-over-year price increases for all three housing types surveyed in Saskatoon.

Detached bungalows posted a modest gain of 0.9 per cent, selling for a fourth quarter average of $334,250, over the same quarter in 2010. Standard two-storey homes saw a 2.6 percent increase over the same quarter last year, selling for an average of $368,750. Standard condominiums sold for an average price of $232,333 – a 3.3 per cent year-over-year increase.

“Migration to the area continues to sustain Saskatoon’s balanced market,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “In the fourth quarter we also saw a demographic shift. Although we see a range of buyers, typically the market is dominated by first-time buyers. In the fourth quarter, more established buyers took advantage of low interest rates to move-up from their previous homes.”

Fisher also noted that pockets of Saskatoon still had an ample supply of inventory and this led to the balanced conditions seen in the fourth quarter.

Nationally, despite calls in some quarters for Canadian house prices to soften in 2011, the market proved resilient as demand created by low interest rates and a relatively stable national economy created upward pricing pressure for all housing types surveyed. Further, recent high profile reports forecasting significant house price declines in 2012 are not supportable. In the fourth quarter, standard two-storey homes rose 4.2 per cent year-over-year to $375,427, while detached bungalows increased 6.1 per cent to $344,392. Average prices for standard condominiums increased 3.6 per cent to $234,680.

“In the recovery period following the 2008-2009 recession, I found myself repeatedly speaking of ‘irrational exuberance’ in the Canadian housing market,” said Phil Soper, president and chief executive of Royal LePage Real Estate Services. “Expectations were too high and the pace of expansion unsustainable. With this report, I find myself in exactly the opposite position. Widespread calls for a major real estate correction in 2012 simply can’t be justified. The industry has significant momentum entering the year, and is buoyed by the stimulative effect of very low interest rates; we expect the market to continue to expand – albeit at a slower pace.”

Royal LePage expects average price growth to continue through 2012 and predicts national average prices to increase by 2.8 per cent by the end of the year.

The Saskatoon Region Association of REALTORS® (SRAR) released the residential real estate statistics for March, 2011today, accompanied by this release.

First quarter sales for 2011 continued to be strong. Saskatoon REALTORS® assisting 346 home buyers with the purchase of their dream home. This number was down 4% from March of 2010 when 359 homes were sold. Year-to-date, unit sales numbers stand at 821, up 6% from 2010 when the total stood at 772. The $300,000 to $350,000 price range continues to be the most active. The average number of days to sell in the month of March was 36.

The average residential selling price in March was $294,025. This number is up 4% from March of 2010 when it was $282,393.

REALTORS® listed 694 homes in March, down 6% from March of 2010 when 739 properties were listed for sale. Year-to-date, 1769 homes have been listed for sale, up 11% from when the 2010 first quarter ended with 1599 being placed on the market. Home buyers had 1219 homes to choose from at the end of March.

In areas surrounding Saskatoon, sales were very active with 91 homes selling, down 6% from March of 2010 when 96 homes were sold. REALTORS® listed 274 properties in these areas in the month of March. That number is down 9% from March of 2010 when 300 properties were placed on the market. Year-to-date, 664 properties have been listed for sale, up 9% from this time in 2010. The average number of days to sell in areas around Saskatoon during the month of March was 66.

The new home market remains strong with steady city lot sales taking place. Interest rates remain unchanged being favorable to purchase that next home. Job creation in the Saskatoon area remains steady. The forecast for the next quarter of 2011 is for listing and sales numbers to continue to balance and for prices level or move up slightly due to demand.

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

House prices in Saskatoon continued to hold larger than expected year-over-year gains, according to the Royal LePage House Price Survey and Market Survey Forecast released today.

Detached bungalows led the way with price gains of 6.7 per cent over the same time last year, selling for a fourth-quarter average of $331,250. Standard condominiums showed year-over-year price gains of 6.2 per cent, selling for a fourth quarter average of $230,000. Standard two-storey homes followed close behind with an overall increase of 6.1 per cent, selling for an average price of $359,250. Some of the gains are attributable to sales of higher quality units in each category, which often occurs when the selection of homes increases as it did in 2010.

“In terms of unit sales, the market is performing as earlier predicted for many regions in Canada,” says Norm Fisher, Royal LePage Saskatoon Real Estate. “A strong first half of 2010 and a weaker second half – Saskatoon was no exception to these forecasts.”

Conditions improved through the fourth quarter as unit sales started to pick up again following a significant decline in the third quarter but multiple offers in the fourth quarter were very rare and homes typically sold for below asking price. Condo sales are down roughly 25 per cent while inventories are up 35 per cent over last year. Properties under $300,000 represent the most sensitive segment of the market as they are most impacted by changing affordability levels. Buyers at that end of the market are definitely holding back. While the Saskatoon market closed 2010 with seven percent fewer residential sale compared to the previous year, unit sales in categories at or below $300,000 declined by eighteen percent. Sales in price ranges above $300,000 gained fourteen percent through 2010.

“We noticed this trend a few months ago,” added Fisher. “Entry level price categories are showing some weakness in unit sales while the higher end is strengthening.”

Nationally, the average price of a home increased between 3.9 and 4.6 per cent in the fourth quarter of 2010, compared to the previous year, as markets shrugged off a lackluster third quarter and returned to a post-recession growth profile. Home values are forecast to continue a moderate and steady climb in many of the country’s key housing markets through 2011 with sales activity skewed to the first half of the year.

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.

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Norm Fisher
Royal LePage Vidorra

The Royal LePage House Price Survey released today showed softening price appreciation across most housing types surveyed in Saskatoon. The modest year-over-year price increases reflect strong activity at the end of 2009 and beginning of 2010, but market activity slowed down considerably in the third quarter of this year. Overall unit sales for the third quarter were down 18 per cent from last year.

"Along with this slowdown in activity, we have seen a considerable increase in inventory compared to last year," said Norm Fisher, Royal LePage Saskatoon Real Estate. "Buyers are not feeling a lot of pressure to act quickly right now, so demand is dropping off."

Detached bungalows led the way with year-over-year price gains of 5.5 per cent, selling for an average of $328,750 in the third quarter. Standard condominiums sold for an average of $230,000, up 4.5 per cent from last year, while prices for standard two-storey homes were up 2.7 per cent year-over-year, selling for a third-quarter average of $350,000.

"It's not clear why detached bungalows experienced the strongest price gains, however lower priced properties are always most in demand," explains Fisher. "We're beginning to see prices level off after peaking at the beginning of 2010."

Detached bungalows and standard condominiums showed the greatest sales volume decreases for the third quarter, with single family homes under $400,000 down 30 per cent and condos under $250,000 down 25 per cent from last year. Multiple offers are rare, except when properties are priced below market value. Houses typically sold below asking price.

"With this softening of the market, sellers need to price their homes accurately," says Fisher. "However, Saskatoon's population is growing steadily as our employment rates are among the best in the country - so buyers are definitely out there."

Nationally, Canada's residential real estate market saw year-over-year growth in the third quarter as fears of a double dip recession or a housing bubble faded. House price appreciation slowed to a more modest five per cent in the quarter, which is historically typical of balanced real estate markets.

"Most Canadian housing markets cooled in the third quarter. In fact, the year is unfolding much as we predicted, with the unusually active first half of 2010 giving way to slower markets in the later part of the year.  Helped by very low rates in a competitive mortgage financing market, the third quarter was slightly stronger than anticipated, on new demand fuelled by improved affordability in many regions," said Phil Soper, president and chief executive, Royal LePage Real Estate Services. Looking ahead, it is very unlikely that the period from now to year-end can keep pace with the activity levels posted in the overheated market of the final quarter of 2009."

In the third quarter, the average price of a detached bungalow in Canada was up 4.6 percent to $324,531, compared to a year ago. Over the same period, standard two-storey homes rose 4.4 percent to $360,329 while standard condominiums rose 3.9 percent to $226,481.

"House price growth now sits just below the long term annual average of approximately five per cent, but once this is adjusted for inflation, which is very low and expected to continue to be that way for some time, appreciation is right on track.  Canadian homeowners will be pleased," said Soper.