Saskatoon Real Estate Resource Centre Blog

I have been following Edmonton and Calgary's market for about a half year and these numbers for Royal Lepage are wrong.

Edmontons avg price for a SFH which includes bungalows and 2 stories in Q1 is 395k. I don't see how averaging 330k for a bungalow and 363k for a 2 story = 395k.

http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html

So I don't think our prices have reached Edmontons

but I will say that with Saskatoon increasing and Edmonton decreasing the gap has narrowed and affordability is probably about the same.

While I agree that prices in Edmonton exceed Saskatoon for the most part (bad sample?), I would say based on income vs. price, affordability is now worse here.

However, we followed the Alberta market on the way up.  We too will follow the way down... our MLS inventory is starting to build.

What I find interesting is that if condo prices increase to the $300,000 range by next spring, as my friend was assured by his realtor, our prices will only be second to Vancouver. Pretty amazing price gains for such a short amount of time.

Jason:

I think your friend needs a different realtor. Might I suggest Norm? :)

Seriously: yes, prices will probably go up to the silly range, only because they're being driven by outside investors. But they won't stay there: struggling with a nasty rental market is unpleasant, but it's not nearly so unpleasant as owing 300,000 on a condo that you can only sell for 120,000.

It's an interesting report.

Oh, and that's a great interview, Norm!

I'm sure there will be a flood of letters to the editor claiming that prices will never go down because the booming Saskatchewan economy will make these prices sustainable by driving salaries to Edmonton/Calgary levels.

But you're right.

Really, do people write those kind of letters in Saskatoon?

I don't believe Saskatonians think that way. My general sense is that they're feeling a little nauseous and they want the ride to stop...

Oh, I really hope so. But I've seen people making these arguments: the local CTV station carried this information on Thursday night, I think, and found someone from CMHC who argued that Saskatchewan's economy would be stronger than Alberta's because it is more diverse (Potash will save us all!).

No, I am not joking.

callum,

Nearly everyone I speak to is CONVINCED Saskatoon's real estate market is only going to get worse this year.  As most things go, the only people who care are the one's affected by it.

I had a friend tell me yesterday one month after buying his $300K house that he could now sell it for $370K, *cough*... BULL$HIT!  Some people just need to get their head out of their a$$.

I would LOVE the ride to stop, abruptly.  :')

I don't want to see people who've bought in at high prices suffer because of a sharp drop.  I really think there needs to be something to equalize out all the unnecessary debt though.

It's too much and we've hurt our own economy by allowing the greed to run rampant.

What's the point in incurring debt that the country has a stake in as well, only to pay it to some lucky rich guy?

Has never and will never make sense to me.  It's been very irresponsible so far.  I still maintain that nothing will blow up overnight though.  Part of being "Canada" is that we take care of ourselves -- or at least we used to.

Maybe things will go badly?

I think that people who've bought at high prices are bound to suffer at a sharp drop: but there won't be a sharp drop, there will be a slow leak. Ordinary folks who got stampeded I feel sorry for. Flippers? I'll pass the demons the pincers and the hot oil.

Heather: if by 'worse' you mean 'more expensive', I agree. I don't think we're at the top yet, by a long shot. We've only just started to go up and most bubbles get really unaffordable before they deflate.

I think I'll be sitting in a rental apartment throwing pay into GICs for at least 3 years, probably 4.

I had an argument with some people recently concerning this issue. They believe that our prices are going to continue higher and I said I hoped it was not. They think that it's SK's day for a heyday like Ab's been having, but I don't think we've built the economy to have that heyday yet. So unfortunately there are still those that believe our high prices will rise even more and they think it's justified to do so. I hope it will not rise even more or we are going to squeeze out the middle classed people from SK due to not being able to afford the cost of every day living. I guess we will all have to wait and see. I can honestly say I never thought the average sale in Saskatoon would be 320,000!!! But it is.

Honestly, the sooner the bottom falls out from under this unjustified, overpriced nightmare, the better.  I hope it all falls to a thundering thud.  I would feel bad for those folks who overpaid for their house, but otherwise, common sense desperately needs to return to this oversized town we call Saskatoon.

Robin, Heather, and some others,

You seem to indicate you would be quite happy if the bottom fell out and good honest people who have bought into the market lost a fortune.

Not everyone who buys into this market is evil. It is a little disconcerting you wish ill fortune on them, and hope to benefit from it.

Why should they care about you and your plights if you are just counting down until their downfall?

It is one thing to act and care for affordable housing, another to only be self serving. Shannon, whom has nothing to benefit from all her work, has gone to great lenghts to help others. Heather, you have been posting here a while, what have you done except hold back contractor's names (so you could benefit), bully other's (calling into question Todd's upbrining in another thread), and wish misfortune on others?

I do hope the city comes through for hard working and underpriviledged citizens struggling to find a place to call home. I am a little sick of some though who care only for themselves.

I don't think people who expect prices to fall are wishing misfortune on others: in fact, when prices return to a more reasonable level it will be good for everyone except the few who've bought at inflated prices.  

But the bottom <i>will</i> fall out eventually!

I don't think anyone here is in a "plight". We'll rent: that's getting harder and more annoying, but it's not a real hardship -- particularly since the condos on the market are converted rental units, so if you buy one you're just paying twice as much money to live in a rental unit with a new paint job.

I am concerned about unaffordable rents, lack of tenant protection and too many condo conversions. I think lots of people here are, especially Shannon. These are bad because they force people out of the city and put a heavy burden on low-income households who need low-cost rentals -- kids starting out, recent immigrants, seniors on fixed income, single parents and the working poor. They also put an extra burden on university students, which could cause a drop on enrollment at U of S -- and will drain money from rural families who have to help their kids survive in the city. You can't eliminate housing for a whole class of people without damaging the larger community.

Concerned,

I think the biggest difficulty is we have all these people goading the market.

Some who try to analyze it use these very high level and overly orchestrated theories to "solve" problems.  Others just come on with some frothy victory rant about their superior abilities to read a market.

It isn't that much of a feat.  I'm sure everyone would be such a genius if they had access to the cash!

To me, a lot of the talk seems to intentionally distance from any hope of a solution.  It's a game of smoke and mirrors keeping people from getting too close to a solution.

But by far, the most damning and most contemptible aspect of all this is the stark denial of the broad daylight examples around us today.

It doesn't help that we have Alberta with - yes - the smoldering remains of a middle class.  It doesn't help that we have the United States, run dry by an ignorant lack of social policy and recognition of reality.

It doesn't matter how much happens *around* Saskatchewan, it will still suffer the deranged fantasies of free market opportunists.  They'll do anything to keep the circumstances exactly as they are by keeping everyone second guessing the merit of any solution.  They've locked the discussion up tight on the basis that if their cash cows are at all impacted, the solution is wrong.  I don't see why their greed doesn't get the axe all together - profit is lowest priority without doubt.

Some people think laissez faire will be different in Saskatchewan because -- why?  I don't get it.  Wake up, look around and see the damage already done elsewhere.

You can't get a more obvious slap to the face.

Who has this kind of cash though?  Seriously?!  Nobody answers that and nobody addresses the examples all around Saskatchewan proving just how bad this kind of growth is.  It's always skimmed over for other points to cherry pick.  "Rarara, any government involvement is bad."  "You can't solve things with regulation."  Sure you can!

The only reason the wealthy have so much to complain about losing is because they have out-leveraged the rest of the economy into a position of having more.

So forgive anyone who thinks that there should be a tremendous backlash.

I don't personally think it is helpful, I want everyone to succeed!  That's not only common sense and respect for your fellow man, it's good community building!

I just don't think *wealth over others* should decide whether you get a better shot to own a home over someone who doesn't yet...

Concerned,

I've seen far too many people stressed to the hilt over the threat (and often reality!) of losing their homes due to this greedy, crazy, nightmarish housing market.  Seniors have died from stress because of this nightmare.  

Honestly, I really don't think that wishing for the bottom to fall out immediately is overly selfish on my part.  Too many people have suffered as a result of this fictitious boom; this ridiculous speculative market.  

Obviously, I don't wish any bad things to happen to the good, honest people who made the most difficult decision to buy during this crazy time.  That is why I think I mentioned that I would feel bad for such people if the bottom were to fall out immediately.  However, that doesn't mean I can't still wish for it to happen.  This sudden, unjustified rise in prices and profits has done nothing but harm people, and made rich people even richer.  A sudden end to this problem would help more people than harm, I think.

jrochest,

That's exactly what I was saying, everyone still thinks it's going to get worse, even you.  I'll take the minority stance and say that we're at our peak.

"bubbles get really unaffordable before they deflate. "  If you don't think Saskatoon's market is "really unaffordable" yet, and since we're pretty much as unaffordable as Calgary, I guess both markets are damned.  I do think you're being overly pessimistic, I believe you'll be seeing more opportunity for yourself within a year or two.

Concerned,

It's ignorant to say I'm wishing ill fortune on others... however I am wishing the investments of some who've contributed to the problem will flop.

I think you're forgetting that most people who are in the market were either in before the boom, or have come from other places with tonnes of equity.  These people have made HUGE gains, and when the market recedes, they will have lost NOTHING, they will still have a profit.

Sure, I'm self-serving and care only for myself.  You've contributed nothing to this discussion, only criticism.  I'm glad you support Todd's attitude, that's just what this world needs.  Maybe come back with your real name and a legitimate arguement and we'll talk.

Norm,

here is another website for Edmonton's stats.  It does not say price per bungalow or 2 storey but the average does show around 385k not 330k.

http://www.ereb.com/pdf/QuarterStats.pdf

I don't see any imminent "crash" coming. All I see is possibly a stop to the overbid process. I have noticed a lot of realtors trying to keep up the practice of bid wars and failing. I know a lot of that is fuelled by homeowners who are wishing for last spring too, and some realtors are just doing as they are told. I can see the prices sort of 'pausing', but certainly not dropping. Houses are still selling by the buckets, which means many people can still afford to buy. I'm just not sure the market will raise any higher than it's at currently this summer. I think more full value offers will go through without making overbids necessary, as long as prices aren't inflated any more than they currently are. I can see a plateau possibly, but certainly not the doomsday crash that is making people a little uneasy who are getting ready to list. Just my two bits - hard to predict the unpredictable.

Okay I do take offense to the comment that most in the market were in before the boom or had tonnes of equity. I do think that a lot of the market is investors, but quite a few of the people involved are like myself, they want a home and are unsure if there is going to be an end in sight for prices. I don't think it's fair to lump everyone into the same pile right now. I can tell you that we don't have tonnes of equity, since I've been living in Saskatoon for 9 years, but we wanted a home and didn't know if we would be able to afford one in a year or so if the prices kept climbing. So for my sake, and others, I'm hoping the market won't 'crash' and I'm left regretting my purchase, as I'm sure many others are feeling also. We've all got to remember that not everyone out there is looking to make a buck, but just looking to live.

Sunny,

Don't take offence, I am still in the boat you got out of.  I was directing that at the point that if the market errodes a LARGE percentage of people will have lost NOTHING.  It's the people who bought in at the end of the peak which will be hurting, unfortunately.  I obviously wasn't saying EVERYONE has equity, but a fair amount do to cushion the blow.

We bought our house last spring, so we got in ahead of this year's big increase, but homes had still taken a huge increase by the time we could buy. Unfortunately we get stuck in the bidding wars and put bids on 7 different places until we got our place. We'd been looking for 6 weeks and were getting discouraged since we were being told we were going to have to up our budget (prices kept climbing), and we just didn't feel comfortable doing that. I really feel for the people that are feeling hopeless right now because we've been there and other young couples that are friends of ours are going through the same thing. We had friends that had to buy at Aberdeen because even the fixer uppers in Saskatoon were beyond their reach. I know alot of people think that Saskatoon is just catching up, but being a young professional couple like we are, I just don't see our economy catching up with the housing prices so something has to give.

And Heather I know it's got to be frustrating right now if you are looking, I've been there, but I don't wish the housing to crash because some honest people will be hurt too, I hope it tapers off a bit so that we can still keep Saskatoon affordable for anyone that wants a home. The home we got is not my dream home, but it's our starter home. We had to sacrifice a lot of our wish list because we just couldn't afford it all. We'd rather not stay awake at night worrying about our payments. :) But we have time to develop it and then move up to the 'dream home' in the future. :)

Sunny,

Very smart, I'm happy you were able to get into the market last spring, you should be sitting pretty right now.  It was wise of you not to "up" your budget so you would feel uncomfortable about monthly mortgage payments, unfortunately not everyone took caution.  There was a big panic about getting into the market before being priced out permanently, which I think is ridiculous.  If a person is thinking about getting into a 40 year mortgage and putting 30-40% of your income towards it monthly that person should probably just keep saving and rent until the market is better - of course that's only my opinion.  I'm much more conservative with money compared to others I know.

I agree that while our real estate has "caught up" our wages have NOT.  I really don't expect the market to crash like in the States, but I suspect entry level buyers will have a lot more to look forward to by summer.  :')

Hi Norm,

Great work on the blog, I read it frequently.  It is a great service to homebuyers/investors.  Do you have any numbers for average price per sq ft?  (Saskatoon/Edmonton/Calgary/Winnipeg?)  I'm looking for some type of 'normalized' number where you can compare apples to apples.  I think that is what this report is trying to do.  Is the average home that is selling in Edmonton or Calgary larger?

Thanks Norm, good article. I am working as a <a href="http://westtorontorealtor.com">West Toronto realtor</a> and I am not convinced about that numbers either. I am usually following all the reports and from time to time  some sensation like this appear but usually is also buried fast too. If prices in Saskatoon are really higher it has to be just some special occurrence. If you check prices in Edmonton now, you can see at a glance that prices in Saskatoon could be hardly higher. Somebody above in a discussion promised  to reveal  his own research. I am really looking forward to seeing it.

Thanks Norm, good article. I am working as a <a href="http://westtorontorealtor.com">West Toronto realtor</a> and I am not convinced about that numbers either. I am usually following all the reports and from time to time  some sensation like this appear but usually is also buried fast too. If prices in Saskatoon are really higher it has to be just some special occurrence. If you check prices in Edmonton now, you can see at a glance that prices in Saskatoon could be hardly higher. Somebody above in a discussion promised  to reveal  his own research. I am really looking forward to seeing it.