"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.