I thought it would be interesting to compare the average selling price of Saskatoon homes during the month of May 2007 to those recorded in May 2006 in order to provide some perspective on Saskatoon's real estate price increases.
This first category compares units that would be classified as homes, both detached houses and condominiums. The selling price of Saskatoon homes shows an increase of 44% in May, over the previous May with the largest gains being shown in Area 2 and Area 5, up 64% and 65% respectively.
The average selling prices of Saskatoon houses jumped 37% in May to an all-time high of just over $240,089 from $174,797 for the same period last year. Again, Area 2 and Area 5 record the greatest gains at 62% and 61% respectively.
Saskatoon condos saw huge increases with the average selling price rising to $210,236 in May 2007 up a whopping 75% over the average in May 2006. Once again, Area 2 and Area 5 pull the prize for the largest increases at 81% and 94% respectively.
So why such a significant difference in the price gains when comparing condos to houses? Why do Areas 2 and 5 show greater gains when compared to the rest of the city? I think it all boils down to demand and there’s no question that Saskatoon condos have been a prime target for those wishing to build a bit of an investment real estate portfolio. Affordability is also a major factor for both investors and first-time buyers who may be scrambling to grab a little piece of Saskatoon for fear of being priced right out of the market. For those wanting to purchase an east-side home, Area 2 is more affordable than Area 1 and consequently, there are more buyers who can afford to live in Area 2, and fewer buyers who can reach the lofty average of $285,000 which Area 1 homes are fetching. For those who find Area 2 a bit of a stretch on the housing budget, Area 5 provides a solid alternative for a family home.
It seems unlikely to me that the disparity between house prices and condo prices can’t continue for the long term. I expect that we may begin to see condo price growth level out some while detached houses play catch up. In the coming months, we are likely to see the condo supply increase and some of the apartment buildings which have been purchased with “condo conversions” in mind will find their way back onto the market as single condominium units.
I’m always happy to answer your Saskatoon real estate questions.
Royal LePage Vidorra