Saskatoon Real Estate Resource Centre Blog

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Yikes - not what a guy wanted to hear. CBC is saying a 26% price increase this year. It saddens me to see my friends who have made the move back here to Saskatoon looking for a more affordable way of life who after barely unpacking their bags are now heading back to Calgary. These aren't unskilled individuals either, one of them does granite countertop work and the other is a lawyer. Both love the city, but have come to the conclusion that they it makes financially more sense to move back to Calgary where their wages were signficantly higher to purchase their first home.

But, listening to Atch and Co down at the city, this is a good thing! The more people we run out of town and the faster prices run out of control, the more it must mean were booming! Maybe when we have a homeless problem as big as Calgary and Vancouver we'll have finally "made it" in their eyes.

Like Heather said in another post, perhaps the biggest thing that upsets me about this whole real estate spark here in Saskatchewan is the attitudes of the people. For some reason, I always thought we were a bit different than Alberta, and that we had a more of a small town / look after your neighbours mindset rather than the "look out for number one" mentality that seems to have become the norm for our neighbours next door. What I find in Saskatchewan is that we now have a huge chunk of the cities population whose homes have doubled and trippled in value over the last year for no apparent reason at all, and when faced with the issue of rising housing costs either say that "well, they should have been like us and bought earlier", or more often, "well, its still signficantly lower than Calgary." In the meantime, while their young neighbours are having to relocate to other cities or out of province, they are running to the bank with the new found wealth trying to figure out how to further put a squeeze on the market by re-investing their equity into buying up additional properties. I'm glad for these people that things turned out the way they did, but I just wish some of them would take the time to listen to the problems facing some of us not so fortunate to own property before the big boom of 07. The fact is, rents and housing prices have shot up almost exponentially, and wage increases have been almost now existant in comparison. Something just doesn't add up.

Norm,

I don't think realtors or home owners look at the year over year numbers.  It is now month to month.

To get an average of 275k for the year, we will see prices higher than that.  Right now the average is 259k.  I remember Northstar saying 287k by May. He may not be that far off if CMHC is right.  

Listening to the CTV news last night, it was mentioned that house prices WILL NOT go lower because of the diversified economy.

That is a pretty bold statement.  All I can say is never say never.

Norm,

"If CMHC is right, and they often aren’t..."  You're hilarious!  I love the banter in your blogs, it really makes my day!  :')

Jason,

Yes, just look at what money and greed can do to such a lovely city.  I'm sure there was a time when Calgary was lovely too, ha!  I do believe you're right, a city's success IS measured by it's homeless population! (Where are we going? HIGHER!)  Perhaps when SK begins  feeling the impact of the U.S. recession some of these fat cats will be humbled.

*********Heather's Predictions for 2008*********

While moderate increases will continue into the first 2 quarters, the market will plateau in the 3rd, and start showing signs of vulnerability by the 4th.  2009 = APOCALYPSE!!! (aka recession) :'P

************************************************

Hey if CMHC can do it, so can I!

Jason, you might want to read the article again, specifically where it states: "CMHC estimates that Saskatchewan saw positive net migration to the tune of 14,325 people in 2007. They expect to we’ll see the province’s population grow by 10,200 in 2008, and a further 8,200 in 2009."

I don't know how you come to the conclusion that we're "running people out of town". Obviously that's not true.

Heather,

    Although I agree somewhat with your prediction, I got slammed for making statements like that to the upside months ago.  "You're just fueling buying hysteria to increase the value of your investments", "You're a pumper" are comments that have been put my direction for making predictions that are turning out to be true.  I could be wrong, but if I remember correctly, I've heard similar things from you in the past.  

    I don't think it's wrong for you to make those statements... Only wrong to make those statements and then chastize me for making similar opposite statements.  Just thought I'd mention that.  

George,

    Thank you for acknowledging my predictions.  You're the first one to say "Northstar might be right".  Of couse, we've yet to see the spring play out, so I reserve the right to be wrong.  

    I've said from the beginning that my predictions came solely from my research of the fundementals, technical analysis of the market and had nothing to do with what I wanted to see happen to my portfolio.      

speaking of,

    predictions... There goes the Dow back down 350+ points today.  11000 soon.

The thing that gets me is the people saying how the population of the province has boomed...and is booming..

I wonder what that number would be if you disreguard the number of NEW BABIES, as well as the number of immigrants (since they are unaware of the poor housing situation)...probably way less.

Northstar,

"15% more "at least" in Saskatoon by May" is one of your predictions.  Whether or not intentional, you are a "pumper".  All negative connotations aside, you talk confidently about your insight into the market and this will affect some who hear it.  I'm simply trying to counterbalance it's effects.  ("Un-buzzing" has been referred to in earlier posts)  Yes, I am the exact opposite of a "pumper".

The difference is, when the time comes that builders are in lower demand and the market is receding, I'm not going be kicking the trades people while they're down.  It seems many of the people profiting from this hot market have no sympathy for others not able to get in.  Supply and demand is a very convenient excuse to justify screwing people.

So the way I see it, there are WAY too many people shouting from the roof tops that our market is going to remain hot.  Supply and demand dictates that there needs to be more people, such as myself, arguing that our market is overpriced and demanding a change.  (P.S.  My predictions were meant to be whimsical, although I truly do believe there will be a cooling trend later on in the year)

Jesse,

I also think that the numbers of migrants will be lower than expected this year.  Many people from other provinces are finding out that Saskatoon isn't as affordable now, and unless they REALLY love the city (like I do) they aren't going to make the move.  Regina on the other hand probably has more room to grow, but for their sake I hope they've already seen the worst of it.  I don't think our professional job market will be very strong this year either, although I'd like to see otherwise.

Heather,

Do you even own your own home?

You are making VERY bold comments without much to back them up.

Have you ever heard of 'speculation'?.....You are a victim of it!!

Maybe you need to get into the Business world to understand what the USA is gong thru. All I hear from you is blah..blah..blah....

Lee,

Huh?  I'm a victim of what?  All I'm hearing from you is cuckoo cuckoo!  I can't even tell from your post what exactly your stance is on the US economy... so you DON'T think they're in a recession?

I have as much evidence to back up my predictions as anyone else does to contradict them.  NOBODY knows what's going to happen this year.  Why are you getting so defensive?  Please explain your view points in a calm manner so I at least know where you're coming from.

Jason, Heather and anyone else who would like to listen.

There is hope regardless of the hype. The Calgary market turned off faster than anyone would have predicted I think. To me the bigger problem is the length of time it takes for the psychology to change after a rapid rise in RE prices. Once the bubble bursts, it's only people in distress situations that are willing to reduce asking price to make a quicker sale. Most people will keep looking for the return to rising prices and multiple bids long after that ship has sailed. Which creates a reciprocating effect: one can't reduce his sale price because he needs all the equity he can get to make his next deal for a place whose owner also can't reduce and so on.

I had hoped to move back to Saskatoon and was there over the summer looking at properties. (To live in not to speculate). I am still looking to move there as I prepare to relist my house in Calgary, but the main reason... affordability has all but disappeared.

Saskatoon has a great feel to it and has a lot of positive attributes. But the lack of opportunities for profesionals, the relatively low wages and the erising RE prices are making me examine the criteria for moving back.

Over the long term I'm sure there will be corrections and Saskatoon will return to being a reasonable market place. But looking at the shortage of supply and the possible continuing demand as people cash in Alberta equity and buy in Saskatchewan (mostly Sakatoon) it may take a while.

Ken,

I agree with you 100%!  It's unfortunate, but due to the market's rapid inflation we are definitely going to see some resistance from the seller's end.  That's why I feel the best option is to hold out for a while so not to become part of the problem.  2007 wouldn't have gotten as crazy if some people had kept their wits about them.  Good luck with your decision on whether to stay or sell.  Make sure not to become a victim of speculation!  LoL  ;')

Heather;

Thanks. I'm in an ok position. Not smart or brave enough to speculate so no chance of that. LOL.

I have owned my place for a while so I have accumulated some pay down equity but I empathize with people that are trying to start out now and are caught up in it all. I have heard the term property hoarding being used and it seems an appropriate term for an unfair practice. The bubble really doesn't do many average Joes and Janes a lot of good. And IMHO does a fair amount of harm.

I've never been to Thunder Bay but the brochure looks nice:

Canada ranks as most affordable out of following countries: Australia, Canada, Ireland, New Zealand, the United Kingdom, and the United States. http://www.demographia.com/dhi.pdf

Heather,

    I'm not going to get in to anything regarding the effects of the boom in Saskatoon (positive or negative).  I'm here to talk about the what the market is doing and that's it.

    A pumper is someone who makes blanket statements with no evidence to back it up.  I on the other hand have provided numerous pieces of factual evidence to back up everything I've said.  I've shared my points with references.  I've talked about what resources the province has that the world has high demand for.  I've even provided a chart which Norm posted which now has broken through the previous high with lots of volume.  Therefore I'm not a pumper.  If someone doesn't agree with my evidence than that is their opinion.  It doesn't make me a pumper just because I've stated that I believe the market is going up.

    By your logic, Johny would be a basher because he thinks the market is going down.  In reality, Johny has stated what he believes and has provided his reasons for it.  Therefore he's just a guy with an opinion and not a basher.  

http://www.cga.org/canada/debt/ca_rep_2007-10_debt-consumption.pdf

Two big things happened in the US prior to the crash.

1- A run up in consumer spending (umm, Canada right now?)

2- A spike in housing prices (no need to say anything?)

It does no harm to anyone to balance a discussion.  I am sick of people tar and feathering the other side of the pro-boom argument.  What does it matter if someone on here questions the media, the CMHC, ect.  That is part of a healthy democratic society.  If you read the link above - one BIG thing stands out!  That is, that Canadians are currently guilty of using their housing equity as their savings account.  Now, maybe I am a little burned by the lack of professional wages I could get in Saskatoon, and getting angry at the saskatoon real estate market.  BUT, I will say - I had assumed in the decision I had earlier made that I would be easily able to afford a home in Saskatoon.  That was a BIG reason that we moved there, which was a better lifestyle.  To any of you out there considering this move - pencil it out before you do so!

Heather - you go girl!  Sure Saskatoon may boom another 20 to 30%.  But will that continue?  Whats leftover?  Jeepers, if you can only imagine for a second when the bubble starts to get bigger, what supports the base of the bubble?  Hmmm, first time home buyers.   What is the average again for the family wage in Saskatoon?  Ohh, 70 grand.  Wow, so that means?  Ohh, and when you look at average incomes for each neighborhood, what does that mean to the sustainability of prices?

I aint no economist, but have enough smarts to know that there are some big questions lurking there.  But maybe a labotomy and blindly accepting the predictions will be all that Saskatoon needs to sustain the boom.  Good luck with that.

Northstar,

If you are not a pumper, than I cannot possibly be a basher.  There's no sited definitions for either that I can find on the web, so I guess it's a matter of opinion.

Everything you and I speak of is circumstantial evidence, which is precisely the reason why no one can agree on what's going to happen to our market, not even the analysts!  It all comes down to a matter of opinion.  However, if a majority of people are rooting for a particular outcome it can become a matter of self-fulfilling prophecy.  This is a real concern to me because it's happened time and time again - take for example the stock markets over the past couple months.  People who are not educated on the matter will blindly follow those who are, or simply those who are most convincing.  It's like a gang market mentality.

I'm tired of people (who don't know their head from their ass as far as the real estate market goes) telling me that it's only going to get worse, it only goes up, that's what they've heard.  And that's why I'm here, to disband these ideas.  It's a tough job, but somebody's got to do it!

Cindy,

Yep, right now it's not looking so good for Saskatoon, but if everyone gives in to the current situation things will only get worse.  I think there are going to be more people than you think signing up for those labotomies - they'll need them to sign-up for their $300K mortgages on a $70K income!  Why is everyone so damn compliant in this city?!?!  Maybe Atch is slipping something into our water source...  LoL

Northstar,

I agree that you just tell it as you see it.   I have done the same thing, but I don't think I have the same grasp of the market as you.  And there is nothing wrong with posting opinions on here, pro or con.  What I don't like are the people that post once, make no sense and insult others.  But Norm has done a good job with moderating that.  

On another note, I went to the movies last night and I overheard a lady behind ( I know, eavesdropping) ask her husband if he read the paper today.  He said no and she mentioned house prices going up.  She said if they had the money, they should by a property and flip it. Thats all I heard.  I just found out first hand from a stranger that the media sure influences people.  

Forgot to say...

Norm a big Thank You.  Even though the Saskatoon market no longer influences my pocket book, I am obviously still reeled into the conversation.  Really enjoy this blog, and I think you do a great job of it.  Lots of great food for thought.  I think many people have baited breath over this.

Heather,

   Fair enough.  I agree that mob mentality happens which provides a self fulfilling prophecy.  I don't think I've ever called you a basher,  I just take it personally when I'm called a pumper because I'm not.  

   As I've said before, I could care less which direction the market goes because #1) 90% of my properties cash flow, #2) I got in mostly before the run up, and #3) I'm in it for the long term.  I'll be calling a bear market here when I feel it's time to and yes I will still have property here while I'm doing it. (I will sell a couple though).

   The reason I take being called a pumper personally is becasue I'm an investor with my own company.  It's a slap in the face.  It's basically saying that I don't know what I'm doing and just got lucky.  When in fact I did my research and made a calculated decision.  It's also saying that the reason I'm here is to convince other people to buy houses so I make more money. (which is completely un-true).  I have a number of friends and others ask me if they should buy a house.  My response always varies with what their goals are.  I don't want to see other people screwed over so I can make an extra few thousand dollars either.

    All in all, I think it's noble that you want to provide the opposite side of the story so that people can make the most educated decision.  To be the "unbuzz" for the sake of being it because you don't like what you see happening is OK.  But it does come from an emotional place.  Maybe you have because I don't get to this board as much as I used to so I apologize if you have...  But I think you'd serve the other side much better if you were to provide facts and other relavent information to support your side.

When you speak of this

  "Everything you and I speak of is circumstantial evidence".  

    I have provided cold hard facts on my decisions to this board and if you'd like I'll provide it again.  So circumstantial evidence I don't think applies to me.  If people don't believe in the facts I provide then that's their right to do so.  It doesn't change the fact though.  

    Maybe I'll research when I get some time and post the facts to the downside  

Find out who the seller is and if your politics are strong enough...then refuse to buy from flippers. Dig a little bit on the history of the property.  Agents have access to a lot of this info and I believe one can also check land-titles.

Our house was bought from a long-time resident.  He sure wasn't flipping.  And STAY AWAY from any sort of "presentations of offers...etc." DON'T let the sellers control the market! The buyers have the $$ and therefore the power.  It might not seem this way, but that's the bottom line, even in a seller's market. They want your money more than you want their house.  Make it your mantra. Choose where you will spend your money. If it looks like a flip, then refuse to buy it.

 Flipping needs to be recongnized for the exploitation it is.  If you want a sense of revenge...take a look at Calgary's MLS right now.  Lots of spec-u-vestors are stuck with properties.  This WILL happen in Saskatoon, but it's tough to guess when or how.

Northstar,

Circumstantial evidence, noun

Defn: evidence providing only a basis for inference about the fact in dispute

I'm not saying that the info you provide isn't factual.  The evidence you present infers that our market will continue to climb (our natural resources).  The evidence I present (which I have listed to a degree in previous posts) infers the opposite, that our market is unstable (US recession, affordability gap).  We both have proof to back up our predictions, but none of it is DIRECT evidence.  Direct evidence leaves very little room for doubt.

Here's some of the articles I've read:

http://www.rbc.com/economics/market/pdf/house.pdf

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080118/recession_outlook_080118/20080119/

http://www.reportonbusiness.com/servlet/story/RTGAM.20070913.whousing0913/BNStory/robNews/home

There's also other articles that Norm has posted on here about affordability.  It's great that we're one of the most affordable countries (first world) to live in, why is everyone so eager to change that?

Mike,

Great words of advice, I hope the people of SK and MB take heed.

Heather,

I totally agree.  It is very important to look at the facts before us, not the facts around us.

In past posts I have tried to draw attention to how statistics are being used as a tool to manipulate the impression of the situation.  Often they are the first resort of a "defer for later" tactic.

Anyone familiar enough with statistics will know well enough to stay away from them when considering this situation.

I won't concede the fact that sincere concern has even been displayed until people stop using these telltale tools of denial.  It's just too easy to mess up.

What makes it difficult for me is just the same as what Norm is having troubles with.  How does this end up being sustained?!?!

Who pays for these homes?  How?  I don't know a single person who does the same thing that I do who gets paid enough to buy in Saskatoon, Edmonton or Calgary.  The best I have come up with so far is that they have another higher income in the home.

If I could take a break from work and afford to go canvasing entire cities asking people "just what the heck do you do?!" I would!  I think this information is essential at this point to see not the fact that people are affording these houses (that much is obvious), but what they are doing to afford it!

What does the damage isn't observed solely by seeing what they are doing.  It's observed by seeing how the decision to pay for 350k+ houses has impacted their lifestyle.

Disposable income?  Savings?  Vehicles?  Health coverage?  Free time?  Family time?  Babysitters?

A house at the high prices we are seeing today would require my income three to four times over to afford!

Maybe I'm not enough of a workaholic.  Maybe my fiancee is old fashioned and I support her decision to eventually be "the mom".  We don't think we're wrong to expect these options - it certainly wasn't unheard of even 8 years ago.

Why the sudden change?  And as noted already, why are we so eager to change the things we liked best about our country?

Alex,

I too have wondered over and over and over again...What does everyone do to be able to afford these things!!!???? I know that in my small circle, it's a lot of cosigning, a lot of people have jobs that make less than my 44grand a year income, have new cars, in the market to buy a new house, and so on...my possibly twisted theory is that it's the 'parents paying for kids' mentality here...

I've asked around too, and people just can't understand why i can't go out and just buy like everyone else is.

My guess are these things...

Parents paying for kids condo's as an 'investment' where they can be 'paid back' - drives the condo prices higher and availability fewer.

Parents giving people that have lower paying jobs, supplimentary funds, trust me a girl i know working as subway can't afford what she's doing letalone the trip to bahamas every year or europe..

The investors of course doing things like in the building next to me, buying condo's to rent out at TOP rents fof 950-1000 a month for a 1 bedroom just to hopefully cash in once the housing goes up even more. Driving up rent all over the city too...

Double income households do make it possible but even then it's a fairly tight squeeze with 'normal jobs'.

The people that DO make more money, working in mines, in oil, etc. Good for them! Nothing really against people that DO make good money, it's just that I can't see that at least in this City and province, people making the sheer amount of money that is pouring into buying all the property.

I too would love to canvas door to door to ask these people point blank what their situations are, incomes, and so on. I doubt most would be forthcoming since most that seem to get income from 'other sources' won't admit that they haven't done it themselves.

It's a crazy situation.

Hi Jesse,

A couple of answers lie in that link I posted above.  

1-  Sure parents are helping to some degree, most likely.

2- The net income in Canada, once debts and payments are paid is in the negative right now on average.  What does that mean?  The house is a savings account.  Ie - The house is the leverage for the lifestyle, ect.  For anyone to get onto a mortgage calculator, or even go to a bank budget (scotiabank has a great one) try to pencil out the numbers, with groceries, utilities, gas for a vehicle, insurance, vehicle payments. I am not even going to discuss student loans...

The simple answer is.  People are living on debt.  A very very precarious situation.  The average Canadian has something like $22,000 dollars in consumer debt alone.  That's bad debt.  Houses are "good debt" but one could ask many Americans right now how they feel about that statement.

Jesse, some of the people in Vancouver did mortgage partnerships.  That brings up a whole different can of worms.  Partnerships can be very challenging to say the least.  BUT...for two people that cant find any other way, it might be the only option.  My suggestion would be to wait.  Be patient.  If you look at the calculators, the difference might be a few hundred dollars a month in mortgage in the future.   However, if the market dips 2009-2010 well nobody knows how far it will go.  Nobody can predict what will happen for certain.  And, as Norm has pointed out (diligently I might add) you may miss an opportunity to gain equity.  That being said.....Here are some numbers to ponder.

If you can buy a place for 300,000 dollars right now, you are looking at a 1700-1900 dollar mortgage.  Plus taxes and insurance.  Lets say it gains 30% (fairly bullish) to $390,000.00 in a few years.  Then you go to sell it.  You certainly wont have a lot paid off on the mortgage end of it.  You will have some equity in the sale.  But, figure in 6% realty fees. OK ...now other side.

If we have seen a huge spike, there is a potential for a huge drop.  Lets say instead you take your money and rent for $1000.00 a month.  You try hard and put that extra $700.00 a month away.  You also dont have any repairs and maintenance to do.  Then the market takes a nose dive, you have your money sitting there ready to take advantage of the situation.

Dont forget.  If you buy that $300,000 dollar home and it takes a dip of even 10% down to $270,000 dollars.  Well, that was a good part of your rent that you could have afforded.  Now, your in a negative equity spot if you need to sell.  

The worst thing right now is to listen to all the b.s. in the media.  Take time, and focus on YOUR finances and what YOU can afford worst case and best case scenarios all entered into the equation.  There is a lot of fear from the prospective buyer right now and sellers are capitalizing on it.  Take away the fear, use your head, and you have control.

Good luck!

Jesse G., Alex,

Just to give you an idea where I am.  Looking at taxes for last year, wife and I combined are at 101k last year.  This year should be over 110k.

According to stats can the average wage went up 6.3%.  I will see this, but my wife won't.  It seems her boss is used to paying the wages from 5 years ago.  It is frustrating for her but I suspect she will see a significant increase this year.

We bought a couple years ago, but if we would have waited to buy now, I don't think we would be in the house we are in now.  We enjoy going out, vacations and putting money in investments, some of that would be curtailed.

Thanks Cindy for your insight. I like the fact that this site allows for such discussions to take place, props to Norm.

I am doing what's best for me at the moment and trying to find a basement suite to move into, hopefully in the 500-700 range and wait things out.

One thing that you didn't say but that drives me nuts too is people that say 'oh yeah but people are in debt'..which is true but usually they say that blanket statement without explaining what debt they are talking about. I like how you explained the number and it makes sense. What I've found, is a lot of people say oh they're just in debt...but from what I've found at least personally, the banks won't allow me to go into debt (which is a good thing) for more than I can afford. I think that is the main difference with what happened in the US as opposed to what's going on up here.

Much appreciated.

George,

Thanks for sharing, helps all of us get a sense of where people are at.

Norm,

That makes sense about the amount of downpayment would significantly help purchase a house, even an expensive one and you are bang on when you say the new prospective entrant's are the ones affected most.

I also think there are parents cosigning mortgages.  Housing was relatively cheap until last spring.  Mortgages of 50 to 100k were the norm just over 10 years ago.  I suspect many home owners are mortgage free in this city and have the money help out their kids.  It is an investment for them, their kids have a stable place to live and can build equity.

Cindy,

Most people who buy a house don't go back to renting.  So if a house takes a 10% dip, you shouldn't lose money if you are buying in the same market because everything is relative in the same market.  Same goes for the people who say their house went up 100k and they upgrade in the same market, they didn't make any money.  It is just perceived equity.

Norm, or anyone...

I'm wondering what the specific benefits are for a buyer to hire an agent. And how does the payment for services or commission work?

Also, when a home is put up for sale, is there a lag time before it is on the public mls website, when only agents know it is for sale?

And if so, can offers be made through a buyer's agent so the house could be purchased before the general public even knows the house is up for sale?

Maybe this is obvious, but I am new to all this.

Thanks

Norm,

Yes there are two sides to the story.  I feel there is a valid reason why the bear is looked at more admirably than the bull.  When the economy is down and a community isn't thriving, the bear isn't rooting for things to get worse.  When the market is up and things are prosperous, the bull wants more and more driving it to the point of unsustainability.  That's the way I see it, but I may not have a full grasp on the bear vs bull concept.

I confess that I am an idealist at heart.  Greed is what can ruin a community, a country, it's  people.  I'm not just talking about businesses, everyone has some level of responsibility.  Think of all the stuff we buy at Walmarts for WAY cheaper than what we should be paying for it, raping other people's land of their resources, then making them work for cents a day to produce the crap that we buy.  Yes, it's a bit off topic but it is all related.  Many people won't sacrifice a sliver of their pie even if it means a better quality of life for others.

You were saying in your last post that people who have waited will be paying a higher cost compared to those who dove in while the market was hot.  I think this might be the case with some but not all.  What about the people who bought in the summer last year when the interest rates were higher, and now have a 40 year mortgage because they bought a house they couldn't afford?  How much extra will they be paying to the bank on their HUGE mortgages because they didn't want to wait?

What about the people who did choose to wait, and are saving money each month towards a downpayment for their first home?  The people that didn't contribute to the panic buying and overbidding, and didn't feel comfortable taking out 40 year mortgages.  You think those people are the ones that will lose out?  Maybe owning a home in Saskatoon isn't such a great investment as it once was.  In some of the larger cities such as Vancouver/Toronto there have been studies done showing that renters whom invest their money wisely can make more profit than those who own their property.  Maybe this is in the near future for the young people of Saskatoon.

Alex,

There are SO many questions, and I can only think there will be some hard answers to come in the next few years.  Not all parents can afford to help their kids out with a mortgage, or even rent the way it's going.  I hope the couples in their 300K mortgages bought a big enough house for their kids to live in for 30+ years!  At least a crowded family is a close family, right?  LoL

Norm & Alex,

You guys really put a lot of thought and effort into your posts.  I really appreciate it!  :')

Just some random thoughts...

Jesse, good luck with the purchase. Hope everything works out. I think if I was in your shoes I would really look at the situation from a big picture perspective. Do you plan to be in Saskatoon for a long time? If so, now may be a good time to get in the market if it is realistic. What I mean by realistic is finding a payment within your means. A payment that won't affect your quality of life of interest rates go up a point or three. Or if your car breaks down or other things pop up. Find something in your price range that regardless of whether the market skyrockets or bottoms up you have piece of mind and won't be worried about living on the street.

If this isn't feasible investing as previously mentioned is probably a good idea. Just be careful. The stock market took a big hit and has done so in the past (nortel, bre-x, so on). Just diversify or find something you are comfortable with. There is also another risk. A fellow tenant in my wife's apartment building was saving for a down payment on a house. She took the bus, and made many other sacrifices. She was up to about 5K when the market took off. Now she is unfortuneately priced out. We got into the market last year primarily as an investment. We are not flippers, or speculators. We just saw an opportunity to pay off car (old ones, pre 2000) and student loans. We are downsizing and hope to see a little profit. Don't get me wrong, we are still extremely frustrated that housing isn't what it used to be like. We have great incomes and houses are probably out of our range. But we found something we are happy with and will be for a long time.

In terms of how people can afford things count me in to shaking my head category. I wondered this preboom. I don't think there is one asnwer. As stated, a few are above their means, no doubt. I am not sure people are spending their equity though. One, don't forget about the brain drain. Saskatoon isn't a young community. For many years our brightest left for greener pastures. Those who stayed are probably doing okay. Further, many of people my parents age probably have their house paid for, kids are gone, and they are close to retirement. They can afford nice cars and things.

Saskatoon used to be affordable. If we were in a 150K house, we could have nice things to. If you were in the market you are probably in a good position. It is the newbies that are hurt. Trust me, I know. My salary is higher than many of my coworkers but they are paying on 1/3 our mortgage for twice the house. Other payments are easier for them, harder for us.

Finally, there seems to be an attitude shift. Before, it was taboo to show you had money. Now it is vogue. I think its ridiculous that we have clothing stores that sell $400 dollar pairs of jeans, but someone out there is buying them.

Ezra:

If you are new at this, you may be wise to use an buyer-agent, since they are generally paid from the seller's end. You also benefit from the resources of a R/E company.

When we were looking for our house here, lots of the new listings would be "pending sale" the instant they appeared on-line! This was a bit frustrating, especially since we had a buyer-agent working for us and access to all the info.  Good price/location often sells very fast, but sometimes we suspected agents were hooking up buyers-sellers before others even knew the place was for sale.  Is this right or wrong? I dunno. I'm pretty sure it was happening.

  Eventually we bought a private sale and paid our agent a flat rate to continue to act on our behalf, but as Norm pointed out, that's a bit unusual.

 I read somewhere that buyer-agent is a new player in R/E and this wasn't really done much until the 90s. It seems quite common now.

Good post Jedi,

     I'll add on something here.  Saving money in our society today doesn't get you anywhere. (at least the old school mentality of saving money).  Unfortuneatly our society is controlled by the central banks of G8 countries which has caused inflation since their inception.  Before these central banks, government printed money based on how much assets it had (gold, silver etc.)  Now that central banks print the money, government has to go to them for it and pay intrest on that printed money.  Which of course the people pay and inflation occurs with every dollar printed.

    I would love to go back to a time where a person knew how much their dollar was worth, but as of right now, Michael J Fox and the Delorean don't exsist. (at least in the publics knowledge).  

    So if saving up money doesn't work, then what does?  What keeps you ahead in these times is to accumulate as much credit as possible and then spend that credit on things that make you more money than the intrest you're paying.  That's the only thing that works because our system has morphed in to that over time.  This way of doing things has no foundation and will come crumbling down at some point.  But when it does, the value of the dollar will be the value of a piece of paper anyways.  

    Often the word greed is mentioned on this blog and there is a lot of it in our society.  It is seen as much in the poor and middle class as it is in the upper class.  The true evil at work here has nothing to do with greed though.  It has to do with power and control (central banks).  Take a look through human past at all the civilizations and there are a lot of things in common to ours (including certain people wanting power and control).  These central banks "will" cause a depression soon to create panic in the masses like a heard of sheep.  

    My advise:

#1) Own a corporation!!! Corporations pay 17% tax and you pay a ton more

#2) Acquire as many assets as possible (that are completely paid off) including gold and silver boullion

#3) Have no debt

#4) Be in good physical condition

#5) Know how to fish and grow food

Just my late night random thoughts

I think we have a libertarian here...

Northstar, your ideas all center around wealth.  Is there any chance you have ideas to preserve quality of life for everyone?  It isn't bad to show concern for your personal situation but there will never be a day where every single person can accumulate that kind of wealth.

The notion that everyone should do it plays into greed in the end and depletes resources for others.

If we can't learn to share certain things - and this includes houses - our country is doomed regardless of how many bars of gold and cans of beans you have in your basement.

Alex,

    My point is that nothing can be done about what is eventually going to happen.  I love your notion of sharing and perserving quality of life but until something major happens to force the mass population to look in the mirror, this will keep happening.  

    I truly believe that everything is in perfect order right now, regardless of how screwed up it seems.  So instead of trying to change things as a rogue renegade, I will let things play out and hopefully the masses will have an awakening.  Until then I will do what's best for my family and that making sure I can provide the things we need (food, shelter, water etc.) no matter what happens to the economy.

Thanks to CTV last night for their frenzied media story on the CMHC reports.  Some memorable excerpts:  "If you're not in the market, buy NOW!"  "If people are waiting for prices to come down, they'll be waiting a LONG time."

One representative of the CMHC (?) stated that he expects Saskatoon real estate will DOUBLE in price in 4 years!  $500,000!!!  Really?  I don't think this crap even went on with Calgary, and they expect this of Saskatoon?!  I'm extremely disappointed with the CMHC.  If anybody is actually listening to them and taking this seriously you're equally to blame for what's going to happen.

To all the young people who can find opportunities elsewhere, do it.  Saskatoon doesn't deserve you.  This city is losing it's charm, and it's values.  We ARE the next AB.  Alex, Winnipeg is looking VERY appealing right now!

Heather D.,

Either that comment about RE doubling was from some clown who was interviewed by CTV that has nothing to do with CMHC, or the figures were from preboom.  I watched the news as well last night, but was kind of occupied when this came on.  Was it the bald guy who said this?

To know what CMHC believes, you just have to read the article Norm put up.  297k in 2009 is a far cry from 500k.  Even that may be stretching it.

To put 500k into perspective, only one community is averaging that number right now ( Briarwood).  For the average to go up that much in 4 years, many communities would have rise up even faster than last years increase.  City Park would have to see 500k averages for this to happen.

THIS WILL NOT HAPPEN.

I hope somebody ( Norm or someone on here) went to this conference.

I think it was the bald guy...  LOL  There's only two guys I remember, one was white haired and said how people will be waiting a long time for things to cool down.  So I'm pretty sure the younger one made the comment on doubling prices.

Yes, doubling again in that short amount of time is outrageous!  Why did they put these guys on the news!?  They could have talked about the CMHC reports rather than letting these jokers speak their POVs.  :'/

Yeah, the bald guy is a clown, I've seen him in the news in other business ventures. They probably picked him because they are familiar with him, not because of his expert advice.

I agree, the media is famous for creating spin on any story.  CHMC's real forecast I expect is something like 2008 18%, 2009 8%, 2010 5%.  But instead the media picks a clown to report about the conference.  They would rather sensationalize a story so it sells better.

Thanks Heather for filling us in on that garbage...becuase that's exactly what it is. I imagine CMHC has everything to gain by this.

In a way i hope the prices are driven so high (like a million dollars) that it forces me to leave to a cheaper city (like Minneapolis among MANY others)..the population will be under a million again within 10 years for sure....probably less at the rate it's going...you'll have nothing but managers and no worker bees.

*watches province explode with joy*

Norm,

I need a spot on the 6 o'clock news pronto!!!  ROFL

I'll call up CTV right now.  ;')

Jesse,

I think to a certain extent that will happen if prices don't stabilize soon.  Like Norm and others have stated before, this market is completely shutting out first time home buyers.

Northstar,

You can look after your own interests and more without contributing to the problem.  I do have to say I fully understand the position of wanting the best for yourself, your family and your kids.  Remember, that is a shared interest and part of the definition for society entails recognizing you aren't the only one with it.

People who own more than one home right now should all be in question.  The rich like to tread the definition of hogging the market and graciously providing the opportunity for house renters very closely.

Free market values just don't cut it though.

That's why we have things like health care and private utilities (sadly in decline).  Because some things were deemed to be so essential that the goal of profit could not be put before availability.

Do you think a home is not essential and that a competitive atmosphere makes it easy?  Do you think it has made it easy so far?  Can you think of anywhere that might be suffering due to it's profit-at-all-costs mentality?

I can't think of a single circumstance where the switch from public to private has actually benefited anyone except the salivating wolves close enough to take over.

I bought my home, underbid on it and would have no desire to acquire more property if it were an option.

"Providing for your family" and "cannibalizing our economy" are two different things and are not accomplished via the same methods.

Denying your impact on the market is to the same ultimate effect as all the others who forgive themselves.

As radical as it seems to you to see an issue with investment, it isn't to the people you rob the opportunities from.

Prices have been stable, we have been around 250k since June 07.  But there is an expectation of prices will increase this spring and so on. There is a buzz on the streets again about RE here. I know that new homes have gone up quite abit.  Wages in the trades have increased 10% in 07(statscan) and I would expect more of the same this because of the labor shortage. Builders are at about 190/sq/ft with no upgrades, and the city is increasing lot prices again.  The new homes will increase