The Saskatoon Region Association of Realtors® (SRAR) released the MLS® residential real estate statistics for February of 2014recently accompanied by the following release.
Please note that many of the association’s comments touch on “year-to-date” numbers, and some may be based on all sales within the association’s full trading area. The charts which you see, as always, reflect activity within the city of Saskatoon on a month-to-month basis over the past several years.
Active listings in the Saskatoon market reached 1,236 units at the end of February compared with 1,040 at this time in 2013. Inventory continued to climb in spite of a 14 percent increase in sales year-over-year.
In February, there were 300 residential unit sales which is just slightly above the ten year average of 276.
Click the images for a larger version of the chart. Meanwhile, new listings added to the market last month totalled 576 units which is 29 percent above the ten year average of 450 units for the month of February. There continues to be a large number of homes available in the new home market in the price range exceeding $450,000. This has recently resulted in sellers having to adjust their price to respond to the increase in inventory. Homes priced in the established areas below $400,000 continue to be in shorter supply and at times can see multiple offers. "Supply and demand cannot be ignored when it comes to pricing a home,” says Jason Yochim, Executive Officer with the Saskatoon Region Association of REALTORS®. "A sellers decision where to set their asking price should be determined by what else is on the market and how quickly they would like a sale. If a home is sitting on the market for an extended period of time it is generally considered to be priced above market."
Norm's note: Supply and demand is best understood looking at a market's "absorption rate" or months of inventory. Months of inventory is calculated by dividing the total number of active listings by the number of sales in the past month. Coming into the new year a six month supply of homes existed in Saskatoon. By the end of January available inventory had shrunk to a 5.2 month supply. By the end of February it was down to a 4.1 month supply. So, while inventory has increased in actual numbers, and there is no denying that it's high compared to recent years, it has been falling quite sharply over the past sixty days. Most real estate analysts would suggest that a four month supply tip the scale slightly in favour of sellers. Of course, the type of market (buyer's vs. seller's) can vary from one area to the next, and from one price range to the next.
The current inventory level represents 4.1 months of inventory in Saskatoon which is eight percent higher than the average of 3.8 months over the past four years. According to Yochim, "The months of inventory is simply how long it would take the current inventory of available homes to be absorbed by the market.”
According to the Saskatoon MLS® Home Price Index (HPI), the benchmark value for single family homes in Saskatoon increased by 3.82 percent year-over-year to $325,700. The largest year-over-year increase was west of Circle Drive where the benchmark value increased by 6.16 percent to $276,500. The benchmark value for homes on the furthest east side of Saskatoon (east of Circle Drive) increased by 2.03 percent year-over-year to a value of $407,400.
"Irrespective of the stats, every home is unique in its own way and every seller's situation is unique. Trends in the market will affect sellers directly. To find out how, it is highly recommended to contact one of the more than 600 professionally licensed and trained REALTOR® members of the Saskatoon Region Association of REALTORS®. REALTORS® subscribe to a strict code of ethics and are dedicated to developing professional standards and continuing education in the real estate profession.
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