Saskatoon real estate week in review: April 12-16 2010
Saskatoon real estate sales bounced back in a big way as local agents reported the highest volume of houses and condos sold for any week this year at ninety-five units, topping last week’s numbers by twenty-eight and beating sales recorded during the same week in 2009 by four.
Home sellers came on equally strong and pushed listing activity to a new high for 2010 one hundred and sixty-eight detached houses and condominiums being added to the Saskatoon MLS system, a gain of just two from last weeks aggressive numbers, but up by fifty-four listings compared to the same week last year.
The much talked about “new mortgage rules” will make their debut on Monday and it will be interesting to see how supply and demand are affected over the short term. As interest rates have just started to climb in the past couple of weeks there may continue to be a bit of a rush to the market by buyers who wish to take advantage of a rate guarantee that predates the recent increases.
Click the image for a larger version of the graph.
Active listings on the Saskatoon multiple listing service pushed higher again reaching 1,180 properties, up fifty three from last week but still below the level reached by this time last year of 1,444. Single-family homes moved higher on a week-over-week basis by thirty homes and reached 705. Condo inventory grew by nineteen units over the course of the week and reached 416. Last year at this time there were 889 houses and 465 condominiums showing an active status on the MLS system. In recent weeks the trajectory of the active listing line has started to resemble 2008 more than 2009. I’m going to guess (and it’s just a guess) that inventory peaks somewhere above 2009’s high number, but below 2008’s. Housing starts, though up over last year are weak in comparison to 2006, 2007 and 2008. In my opinion, this should keep inventory levels for getting too far out of hand.
Click the image for a larger version of the graph.
Cancelled and withdrawn listings came in at just twenty-five. Once again, a dozen of those returned to the inventory disguised as a new listing. Forty-two sellers adjusted their asking price, the same number as the previous week.
The average selling price of a Saskatoon home slipped and shed seven thousand dollars from last week to $296,100. The six-week average edged higher gaining four thousand dollars over last week to finish at $290,343 and recorded a gain of nearly eighteen thousand dollars from last year. The four-week median price picked up a little more than $5K on a week-over week basis and nearly twenty-six thousand dollars over the same week last year to close at $282,000.
Click the image for a larger version of the graph.
Following a week that produced just two overbid sales, the added competition generated by more deals pushed overbid sales to ten. The average overbid was $5,127 and was largely driven by a couple of area one sales that went well above the asking price. One home priced at $312,900 recorded a $329,900 sale, while another listed at $439,900 sold for $469,000. For the most part the other overbid sales were more in the $100-$2,500 range. An additional ten sellers got their price and seventy-five of ninety-five Saskatoon home buyers managed to grind an average discount of $6,900 to close their deal.
Click the image for a larger version of the chart.
Highlights from the news this week
Housing pace cools on fewer condo starts
RBC, Scotia hike residential mortgage rates again
Condo pre-sales and the new mortgage rules
Going it alone selling a home
Best and worst home improvements for the buck
Busiest March ever for Canadian housing listings
Canada’s housing bubble – It’s not different here
Don’t let rising rates rush you into a bad decision
Home listings reach all time high
Housing may have peaked
Canada’s brewing debt storm
Last gasp for housing
Not prepared for the reckoning
Sask. home sales jump
Housing starts on the rise
A map displaying the boundaries of Saskatoon real estate areas is here.
An overview of data collection and calculation practices for our statistical reports is here.
We’re giving away a free MacBook. Check the details here.
Norm Fisher
Royal LePage Saskatoon Real Estate
There's 46 Comments So Far
April 17th, 2010 at 2:27 pm
I would think the new Conference Board predictions of decreased housing starts, due to weak immigration and slowed predicted growth to Saskatoon would be newsworthy.
April 17th, 2010 at 3:42 pm
Lol. It’s exciting to see your sudden great faith in Conference Board predictions.
I did reference this story on that topic in my post, though it has a very different tone than your comment. Are you able to reference the Conference Board statement. I’m not able to find it.
Thanks.
April 18th, 2010 at 1:49 pm
No it was a mention on CTV news, and they referenced it as quite a negative prediction for housing in Saskatoon. Putting us in the bottom half Canada wide.
Not saying I believe the Conference Board in the slightest, just funny that some of their “lead in growth” forecasts seemed to get top billing across all news networks – garnering more attention than the year end numbers, often showing we were well short of predictions. Where this predicted drop in housing starts/drop in demand was more of an after thought on one news network.
April 18th, 2010 at 3:40 pm
I saw that same CTV segment, I believe it was on Friday.
They didn’t mention anything about short term predictions,
but over I believe the next 4 years, they predicted that
both demand and housing construction would be down in
Saskatoon.
I was surprised at the pessimistic tone of the story,
as CTV usually is unabashedly positive on Saskatoon.
Makes you think, Saskatoon may have some dark clouds
on the housing horizon.
April 18th, 2010 at 10:05 pm
Tomorrow’s the big day. I suspect more than a few people will be working late into the evening…
April 18th, 2010 at 10:11 pm
Jason,
Deals have to be approved by CMHC before April 19 to qualify under the old rules. It’s all over but the cryin’ now.
April 18th, 2010 at 10:18 pm
Good point Nick. It’s nearly impossible to get some media outlets to even look at the other side of the coin. In my last go ’round with the media I tried to raise the issue of the glut of inventory at the upper end of the market but nobody really wanted to discuss it.
April 18th, 2010 at 10:41 pm
Well I’ve only heard you mention it now, and maybe about 2 other agents I talk too quite often… referring to the ‘glut of upper end inventory’. We’ve been seeing it build for quite some time, and I’ve got friends that moved several times over the boom period the last couple years are now seemingly stuck onto homes in the $500k range that they can’t seem to move. It worries me as I am about to step into the same situation as I am building a house the closest comparitive property is $650k without the triple garage and finished walkout that mine will have. I was hoping to put it up for sale in the next few years so we could move out to an acreage but if the market goes where it looks like its going, there may be little hope to sell my high priced home. Not to mention where prices will likely be headed on those types of properties in the next couple years.
April 19th, 2010 at 7:34 am
Cman,
This topic has been discussed several times in comments where I’ve provided some numbers as recently as April 5.
There never really has been a strong market for these types of homes. The total history of MLS sales of single-family homes prices above $700,000 is just 74 units. When you get above $800,000 it amounts to only a few dozen homes. There are presently 28 homes for sale in that range.
April 19th, 2010 at 4:19 pm
It would be nice to see the report which is being referenced. Is it the one which was published recently based on 2006 data?
April 19th, 2010 at 5:21 pm
Norm, yes – but who’s doing the crying; the banks or homebuyers?
April 19th, 2010 at 5:40 pm
Jason,
“but who’s doing the crying; the banks or homebuyers?”
The Realtors.
Seriously, I think this is nearly a non-issue, except perhaps with revenue buyers and there hasn’t been much of a market in that area since the bust. This will be one more in the series of “just you wait” disappointments for those in the bear camp. Rising rates will eventually have a pretty good impact (of course these changes will factor in more as rates rise) but today, you can still get a 5-year mortgage at 4.3%.
April 19th, 2010 at 5:51 pm
Conference Board Report. on,
It’s on their website now. The two-page report is $50. There doesn’t appear to be a report for Saskatoon.
April 19th, 2010 at 6:09 pm
Norm,
There has only been 74 single family home sales above $700K EVER in the Saskatoon area, wow!? How many condo sales above $500 – 600K? What sort of strategies do these high-end developers have, or do you think they have a long hard road ahead of them?
I am a big fan of your blog, thanks.
April 19th, 2010 at 6:36 pm
Young Man,
Many thanks for reading.
I’m talking MLS sales when I say 74. I expect there have been a number of them sold direct by builders over the past few years, but yes, not a big market compared to inventory.
Condos over $500K? We’re showing a history of 37 sales with 44 active listings. Move to $600+ and you have a history of 12 sales with 24 active listings. Yikes.
April 19th, 2010 at 8:27 pm
Hey Norm,
Just out of curiousity how many of those $600k+ condos are located in the Rumly Building?
April 19th, 2010 at 10:06 pm
Rick,
10.
April 19th, 2010 at 11:00 pm
Yikes, you got that right ! According to my math that’s 6 million in unsold inventory. Any idea how many units are in the Rumly ?
April 20th, 2010 at 12:13 am
Norm I’ve got to give you credit, I think you’ve consistently pointed to the glut of > $600,000 inventory.
Funny, condo wise, I remember back in my Saskatoon/condo shopping days a $899,000 1,100 or 1,200 sq ft in the Radisson building. Sure seemed Vancouverish to me. Good to see with 12 total sales, 10 Rumley, good chance this guy either didn’t pull of this scam, or was one of 2.
So Conference Board charges $50 a report… explains why the controversial, typically inaccurate report make money…
April 20th, 2010 at 11:26 am
I can’t imagine they’ll sell well! I wonder what kind of people would buy them. I wouldn’t think it would be too many first time home buyers, especially now with the new qualifying rate.
I just heard that one of the million dollar Meridian units on Broadway is sold. Not sure when it sold, but they moved one.
April 20th, 2010 at 12:05 pm
Rick,
You know, I’m not sure. There are only two sales showing on the MLS.
Mike,
Something, at some point led me to believe that most of these units had been sold but apparently not. The two sales on the system date back to late 2007.
April 20th, 2010 at 12:54 pm
You mean, only two Rumley units have been sold so far, and that was in 2007? None have sold since?
April 20th, 2010 at 12:59 pm
Mike,
No, I don’t mean that at all. It’s quite possible that there have been other sales that did not go through MLS. I’m just saying I was surprised to find 10 active listing. I recall some time ago that there were only a couple and I believe someone told me that was all they had left.
April 20th, 2010 at 2:22 pm
Oh I see, I think that’s how the townhouse we purchased worked, it never hit MLS.
April 20th, 2010 at 2:45 pm
I don’t mean to drive this topic regarding the Rumly into the ground but I thought I read marketing and advertizing months ago that only 6 units were left, I mentioned this to a friend and he just stuck his tongue in his cheek.
Regarding Meridian, a million dollars ! I always thought Broadway was artsy not Ritzy. Further I heard months ago that Ken Achs was whining to city hall about all the bums and pan handlers around his rental Star Bucks and the KG. Makes you wonder did he not see them there before he developed. I don’t know but for these expensive condos is it possible that the cardinal rule of loca, loca, location has been dismissed. These places are as expensive as h and have a view to match. I would’nt buy one not on your life, even if I could afford it.
April 20th, 2010 at 5:02 pm
Norm, just a comment on your statement:
“There never really has been a strong market for these types of homes. The total history of MLS sales of single-family homes prices above $700,000 is just 74 units. When you get above $800,000 it amounts to only a few dozen homes. There are presently 28 homes for sale in that range.”
Historically speaking, when was the first MLS listing that was above $700,000? Were there any prior to 2005? You need to take that into account. I bet almost all of those 74 units were sold in the last 3 years (or at least the vast majority of them). While there hasn’t been many historically, we are going to start seeing a lot more sales in this range in the future.
I lived in Vancouver (west side) for 8 yrs (not that I’m comparing real estate in Saskatoon to real estate in Vancouver), but 7-8 years ago, a $1million home in Vancouver was still a REALLY nice place….. now, that $1million gets you not much more than a starter home (at least on the west side). It’s all relative…..
April 20th, 2010 at 5:28 pm
Dana,
We can look for a lot more sales in this range in the future. That’s providing we don’t have a major U.S. style pull-back in pricing.
April 20th, 2010 at 6:03 pm
Rick,
Interesting thoughts but I don’t have a big problem with any of these locations. Don’t people expect a few quirks downtown? I don’t know that it would matter where you put them, you’re going to have some challenges selling such a whack up condos priced above $500K. At the same time, I’ve always thought River Landing would sell because of the premium location so there’s no question that helps.
Dana,
You make some good points, for sure. The history of single-family homes sales above $700K looks like this.
2004 – 2
2005 – 1
2006 – 2
2007 – 18
2008 – 26
2009 – 21
2010 – 3
Total – 73
Upon closer inspection I see that a 1040′ Wildwood split was reports as having sold at $900,000 in 1990 so there’s actually a total of 73 sales.
Still, if you just look at the three year period where most of these sales were recorded, this range accounts for .75% of the total single-family homes market of 7,940 sales. Over 6% of our current inventory is priced in that range.
April 20th, 2010 at 7:19 pm
.75% of total sales and 6% of inventory; the first isn’t really a number to get excited about. Out of curiosity (and not to take this too off-topic), but how many condos over $500k have been sold in the same timeframe, and what are the same numbers, ie: % sales, % inventory, etc.
It’s also unofficially official: interest rates are almost certainly going up June 1 (and most likely 50 basis points).
http://www.financialpost.com/news-sectors/economy/story.html?id=2930483
April 20th, 2010 at 7:34 pm
Hey Jason!
“interest rates are almost certainly going up June 1 (and most likely 50 basis points).”
I’d agree with the first statement, but not necessarily with the latter. Why do you think that that?
Thanks in advance…
April 20th, 2010 at 7:38 pm
Jason,
Please excuse my block-headedness- I thought it was an article I’d read earlier in the day, but it obviously wasn’t. :0
Sorry!
April 20th, 2010 at 9:23 pm
Condo sales $500,000 plus.
2007 – 7
2008 – 15
2009 – 12
2010 – 3
Share of total condo sales 2007-2009 = 1.2% (37/3139)
Current share of condo inventory = 10%+ (44/425)
With condos there is probably more happening off of the books, both listings and sales. Hard to get a good handle on that.
April 20th, 2010 at 11:59 pm
Thanks Norm. I suspect the ‘off book’ sales play more of a role with condominiums than some of the higher-end single family homes. Even so, it looks like we have at least 3 years of inventory (with more on the way).
Jen, no worries; they all tend to blend together after a bit. I actually think the Bank of Canada may go as high as 75 basis points. There’s going to be a certain “shock factor” with any rate increase, and they may just want to get it over with and weigh what impact this has on the economy over a few months without having to change the rates.
April 21st, 2010 at 9:27 am
Hey Norm,
Do you still have the great Canadian and American blogs that were on your old website ?
April 21st, 2010 at 10:57 am
Rick,
I do have them. Just not sure how they’re going to fit into the site. Is there something specific I can fetch for you?
April 21st, 2010 at 11:06 am
Norm,
Thanks for all the price history information for Saskatoon. Very interesting to see that the peak was in 2008 and then a bit of a fall-off in 2009. My bet, however, is that by 2011 we start seeing an increase in the number of homes in this price range and that will become the norm (pardon the pun!).
Rick,
I agree that if we see our mining and oil sectors stay in an extended period of decline selling those houses will be difficult at those prices. But with the announcement that the BoC is raising it’s rate and the general commentary we hear about a recovery starting, I find it hard to believe that we will see the housing crash that they saw in the US. Prices may decline or stay flat for a while, but declines of 30-50% I just don’t see it…..
As most were predicting, Saskatchewan was only affected in a minor way by the whole downturn. Can’t say the same for Calgary….
http://www.calgaryherald.com/business/Report+finds+plunging+office+rental+rates+Calgary/2603200/story.html?id=2603200
I know this is a little off topic, but it’s funny that many of the Sasktachewan nay-sayers from before the economic downturn have been pretty quiet on this blog….. the doom and gloom that many were predicting for Saskatchewan hasn’t materialized….. Could it be that we have some solid economic fundamentals in Saskatchewan…. or did we just get lucky? I believe the former as opposed to the latter…..
April 21st, 2010 at 1:03 pm
Jason,
I still politely disagree. I’m no economist, but I think the BOC has many reasons to take the rate up slowly and surely. Raising the interest rate 50-75 bp would do crazy things to the CAD, which would further strain the manufacturing/export sectors. Fiscal policy/stimulus spending is also winding up soon, and I would think the BOC would want to determine the effects of this prior to doing anything drastic or “shocking”. Just my two cents.
April 21st, 2010 at 3:04 pm
“Upon closer inspection I see that a 1040′ Wildwood split was reports as having sold at $900,000 in 1990 so there’s actually a total of 73 sales”
I’m hoping that’s a typo,
1,040 sq ft?
Maybe $90,000 for 1990?
April 21st, 2010 at 3:26 pm
Nick,
Listed at 94,900. Reported sold for $895,000. Serious typo, or the largest overbid in Saskatoon history?
April 22nd, 2010 at 12:46 pm
FYI: From the Globe and Mail: “The central bank also said it expects the real estate market to cool considerably for the rest of the year and into next year as well given rising mortgage rates and the expiry of Ottawa’s home reno tax credit. “Investment in housing is projected to weaken markedly through the remainder of 2010 and well into 2011,” the report said. “This reflects the significant amount of activity that was pulled forward in late 2009 and early 2010 by exceptionally low mortgage rates and the recently expired home renovation tax credit, together with the tightening of mortgage affordability.”
April 22nd, 2010 at 2:21 pm
$500,000 becomes normal? I hope it is because people here are paid more.
April 22nd, 2010 at 9:01 pm
maureend,
Seems to be some consensus that the market is going to weaken.
Cindy and Dana,
Prices would have to rise about as fast as they did in 2007 for these numbers to become the norm by 2011. I’m not big on predictions but I’m willing to bet money against that happening. In the same way that easy and cheap credit added fuel to the market, tougher and more expensive credit will have weaken it. Even CREA is calling for a softening of prices through 2010.
April 23rd, 2010 at 11:46 am
I have a colleague from Calgary that was selling his house early this year and his agent advised him to wait until fall to buy a house here in Saskatoon.
Let’s wait and see.
April 23rd, 2010 at 5:02 pm
Norm,
Obviously, the increased interest rates are going to affect the housing market, but that is still only part of the equation. A big factor is going to be how the overall economy shapes up in Saskatchewan and if in-migration continues. If the mining sector shows recovery (specifically potash) and many of the new proposed mining projects break ground, then I don’t think we’ll see any significant decreases in price. But I’m just prognosticating here……
April 23rd, 2010 at 7:53 pm
Dana. I agree. It is only one factor and maybe not the most significant. For example, I gather we are talking about a central bank rate of 1.25 by the end of 2010! At the end of the day, the housing market did not collapse (in fact it remained stable or slightly up) not only because of interest rates falling but because of many other factors as well.
Of course for interest rates we still have to see if the Canadian dollar strengthens more than expected and reduces inflation or if the global economy slows and weakens the Canadian recovery. Also, if oil goes much higher it may increase SK revenue but it also tends to slow the world economy.
April 24th, 2010 at 9:12 am
Yeah, I don’t think rates will go too high any time soon. The Bank of Canada’s biggest mandate is to keep inflation between 2 and 4%. Yesterdays inflation reading for March was 1.4. Emergency rates will not be here forever, but if the Bank raises rates too quickly, the country could fall back into recession.
This may explain why Saskatchewan has held up fairly well. And the future looks good as well
Sask GDP by industry
http://www.enterprisesaskatchewan.ca/economicoverview
Canada GDP by industry
http://www.investorsfriend.com/Canadian%20GDP%20Canadian%20imports%20and%20exports.htm