The inventory of Saskatoon real estate listings grew again for the sixth consecutive week moving from 619 last week to 668 by the close of business on Friday. 167 properties were offered for sale including 120 single-family homes (houses) and 41 condominiums. The total numbers of properties available in each of those categories sits at 423 and 188 respectively, significantly higher than last year but still a drop in the bucket compared to other Canadian markets.
Unit sales were definitely on the soft side for what should be a prime spring week. 70 homes (houses and condos) were reported sold, compared to 118 for the same week last year. There are an additional 85 residential properties on the Saskatoon Multiple Listing Service reported as “conditionally sold,” which is up about 30% from last week.
In spite of rising inventories, it seems that seller’s are still perceived to have the advantages, though not nearly as much as they had at this time last year. For the same week in 2007, nearly 70% of home sales were showing above list price sales to the tune of $23,000 on average. This past week, the percentage of homes going above the asking price was closer to 40% and the average overbid was shy of $16,000. Approximately 40% of all sales sold for less than the asking price and the average underbid was $8,818.
Average selling prices remained remarkably high at $318,584, the second strongest weekly price on record, topped just once before, the week of March 30-April 4.
Nationally, the media took a sudden and sharp turn as the Globe and Mail reported that sales had “tumbled in all major cities this winter” and that listings had “surged” in Western Canada. With that, Douglas Porter, deputy chief economist at BMO Nesbitt Burns declared Canada’s housing boom “officially over.” As a follow up, economists argued about whether or not Canadian real estate will suffer a similar fate to what’s being experienced in the US. One veteran real estate sales official from Vancouver wondered aloud if the “fat lady” is about to sing.
Meanwhile, Fraser Beach quotes the Toronto Real Estate Board reporting an improving market through the first half of April, reaching numbers just 5% below those recorded in the first half of April 2007. Sheldon and Sara in Edmonton report the strongest sales week in six months. In Calgary, price reductions seem to be the topic of discussion, but my friends in St. John report strong performance for unit sales and price gains through Q1.
Real estate has always been subject to local economic conditions, and it likely always will be. While good news for Saskatchewan continues to capture attention nationwide, we should be aware that listings are trending up and sales numbers are starting to weaken some.
Saskatoon has outperformed almost every market in North America over the past 18 months, and we’re well ahead of the rest of Saskatchewan when it comes to price gains. Some would suggest that Saskatoon house prices have blasted ahead of the rest of our vibrant economy. I think it’s hard to disagree.
Regardless of where you stand, there should be little doubt that we have hit the affordability ceiling in Saskatoon and that the pressure should be coming off of real estate prices. Perhaps it could be worse, but it’s probably high time that buyers saw a little relief in the Saskatoon real estate market. I think that homes will continue to sell in the months ahead but sellers should be aware that the game is about to change. We’re not going the way of the U.S. but it might be time to break out your negotiating hat.
Keep in mind that I don’t have any special insights or crystal balls. These are my opinions, and I’ve missed the mark before, but that’s the way I see it today.
This post was edited for errors on 4/20/08 at 7:40 PM.
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