In a report titled, “Peaked: Canada’s housing market in depth,” economist David Wolf of investment-banker Merrill Lynch says that “Canada's housing market is entering a sustained downturn amid excess supply and as higher prices deter new buyers.”
According to a story in today’s Globe and Mail, Mr. Wolf is most concerned about Saskatchewan, where the doubling of house prices in Regina and Saskatoon over the past two years “has led us to estimate that these markets are now close to 50 per cent overvalued.”
David Wolf is not the first economist to make the claim that Saskatoon is overvalued. Scotiabank economist Adrienne Warren said it first in September of 2007. RBC’s Amy Goldbloom said it again in October. Both of these stories were covered on this blog and in the Star Phoenix. Seems nobody was really listening then.
The Saskatoon Region Association of Realtors responded with this.
I have argued that prices in the Saskatoon real estate market have been out of whack with fundamentals so I won’t go out of my way to take issue with Merrill Lynch. I would suggest that it’s appropriate to keep in mind that this report is written by an investment-banking firm who makes the bulk of its money selling investments, and they don’t sell real estate.
This post is dedicated to Doug who would like you to know that unemployment is up, crime is obscenely high, incomes have not risen in Saskatchewan as much as they have in Alberta, Saskatoon’s population may be down by 2000 people, Westfair Foods is moving to Regina, SaskHouses now has 420 properties advertised, MLS listings are well above 1500 and growing weekly, MLS sales suck compared to last year, the average price of a Saskatoon home is falling, the price of oil is dropping, GDP was lower then expected last year, and “breaking your hip” is a real threat when living in Saskatoon. :)
Now that we’ve got that out of the way, let’s talk Saskatoon real estate.
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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Royal LePage Vidorra