Residential unit sales took a harder punch falling from 48 units last week to just 31 sales this week and reaching their lowest level since the week of December 31-January 4. Saskatoon real estate agents have been reporting an uptick in activity (inquiries, showings), but that hasn’t resulted in firm sales, at least not yet. I’ll step out on a limb here and guess that unit sales in the coming week will trump the previous 7 weeks (52 units being the number to beat) as active home buyers who are eager to settle before Christmas get the job done.
Following a week which produced the lowest average and median selling prices that we’ve seen in some time, this week’s average spiked higher and broke the $310,000 mark for the first time in eight weeks as four sales exceeding $500,000 hit the books and drove the average up. Four sales hardly sounds like enough to seriously skew the numbers, but when we’re talking about total units at just 31, those heavy sale price numbers represent more than 10 percent of total sales. The spike in the average was enough to cause the six-week rolling average to take a step higher for the first time in five weeks. The four-week median selling price of a Saskatoon home remained remarkably stable for a tenth consecutive week, about $30,000 lower than its peak in June, and hovering at late March levels.
Net sale prices may have taken a big bounce but those sellers who managed to firm up a sale demonstrated some flexibility as the average underbid rocketed to $17,214, a number that has only been topped once this year, the week of September 22-26. There was a noticeable shift in the underbid chart as buyers successfully negotiated larger discounts. Just last week, 52 percent of recorded sales came in within $10K of the asking price. This week, 58 percent of buyers managed to do better, obtaining discounts higher than $10K. The $10-15K category swelled from 19 to 26 percent, and discounts of $25K or higher ballooned from just 8 percent of sales last week to a remarkable 19 percent this week.
Averages and medians don’t always paint the clearest picture. When we’re dealing with small numbers of units sales results can swing wildly based on the price ranges that are most active. I thought it might be interesting to take a look back at some specific types of properties to get a better idea of what changes have occurred. The following chart examines the average selling price of standard detached bungalows located across all five real estate areas in Saskatoon, plus apartment style condominiums located on Saskatoon’s east side.
Interestingly, there are some pretty substantial differences in how the price of each property type has been affected over the past year.
Bungalows up to 1,000 square feet have dropped less than the other properties examined. Prices remain 18% higher than they were at the same time last year ($179,569), but they’re down 12% to $212,012 from their peak of $236,673 in April.
Bungalows between 1,001 and 1,200 square feet seem to have gotten a head start on price declines. Having peaked at $322,151 in March of this year, they’ve fallen 13% to $284,763 since that time and are just 3% higher than they were in November of 2007 when they reached an average selling price of $275,910.
Bungalows between 1,201 and 1,400 square feet are 15% higher than they were last year ($295,186) at $339,376 but show the largest decline (15%) from their peak of $401,111 in April. It appears that this category moved ahead of smaller bungalows taking greater gains early in the year and was slower in experiencing declines. As Crikey once said, “Mr. Market always smells a rat,” and consequently, a larger correction has occurred.
East side apartment style condominiums bring us the most interesting statistics. This category of home shows a 16% decline from the peak of $232,037 in April to settle at $199,304 by October 2008. The average selling price is 10% lower than it was in November 2007 when it reached $223,692.
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Royal LePage Vidorra