Saskatoon real estate: Week in review (August 18-22 2008)
New listing activity in the Saskatoon real estate market slowed some this week with just 134 new properties added to the MLS in the “houses and condos” categories but the active inventory continued to make some gains climbing from 1,628 last week to 1,667 by the close of business this week. Today, there are a total of 1,067 Saskatoon houses and 488 condominiums showing an active status on our system.
Sales continued at a rather lackluster pace with just 56 units placing a sold sign including 54 houses and condos. As of today, total residential sales for the month of August sit at just 169. Last August produced 398 sales so we have some serious ground to make up during the last week of the month. Unless something amazing happens next week it seems clear that sales will be much softer this August than they have been for a few years.
The average selling price of a home in Saskatoon bounced back a bit from last week to finish at $276,320, about $6,500 higher than last week but still the second lowest average since the week of March 10-14.
My thanks to Pam for crunching the numbers and producing the graphic for this week’s review. You’re handling things like a real pro and I’m proud to have you on my team. Thanks for looking after things while I’m away.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Follow our daily updates on Twitter @SaskatoonHomes.
Norm Fisher
Royal LePage Saskatoon Real Estate
There's 153 Comments So Far
April 28th, 2009 at 10:29 am
Until housing starts return to levels of 04-05 inventory will keep going up. Demand is softening even with many properties being reduced since the peak in May. The pool of buyers is getting tapped out. I really do not see a rush of buyers before Oct. 15 like some say.
A co-worker signed a contract last winter for a new home before things went stupid. It took over 13 months before he moved in. He was ticked about the time it took, but he sold his old property in May at the peak and said he could not have timed the market any better. His old property almost went for what he paid for the new one. ITS HALF THE HOUSE!!!
Now there are people who signed a new contract at the peak and are now faced with selling their old property in a market with declining prices and sales. I don’t think it will be the declining prices that will hurt people. It will be actually getting their house sold. Many I suspect are going to be landlords.
In time there will be great bargains for first time buyers. For investors the prices have to come down quite a bit.
April 28th, 2009 at 10:29 am
Sorry, more doom and gloom
http://finance.sympatico.msn.ca/Investing/JonMarkman/Article.aspx?cp-documentid=9637816
or possibly a great time to buy!
April 28th, 2009 at 10:30 am
We started looking for our first house in spring and made several offers and of course were always outbid.
We put our name in the Willowgrove lot draw and were able to get a lot. We figured this was good fortune, but since then the market has really turned around. Yet the builders are so busy now, prices are very high and lead times are long. It doesn’t really make sense to be building compared to buying. We’re thinking of cutting our losses and turning the lot back in to the city.
I wonder what the building market will be like in 1 year’s time?
April 28th, 2009 at 10:30 am
Hey Saskatoon bears: your time is here. Have ‘fun’? Not sure why anyone enjoys a market downturn…. It’s tough on everyone.
April 28th, 2009 at 10:30 am
The sheer volume of inventory now has to be apparent to the casual observer: most people aren’t RE geeks and normally don’t pay attention to house prices, but when there are houses sitting unsold in every block, with idiotic prices attached to them, the penny drops.
There’s already been evidence of reluctant landlording on the part of some sellers who post here: Ringo’s renting out her old house, for example. All this does is increase the inventory and extend the fall in prices, of course.
Well, Callum, it’s nice to see you accept reality. Enjoy’s the wrong word, though. Bears are in the position of the person who’s been pointing out that the gathering clouds on the horizon look like rain, and that perhaps this isn’t the best time to be holding a garden party. This doesn’t mean that the guy likes hail, or wants to see the party destroyed.
This isn’t just about Saskatoon: it’s just been really sad to see Saskatoon get sucked into the vortex at the very last minute. People will lose money, houses, marriages and much sleep, and all this is bad. My solution, though, would have been not to have the lunatic run-up in the first place — since that’s driven young couples and first-time buyers from the city, evicted tenants and made life stressful and untenable for those on low or fixed incomes. Not to mention annoying for everyone else!
And yes, I’ll greet the noisy suffering of the speculators and flippers with glee. Mwahhhahahaha. Chortle. Guffaw.
April 28th, 2009 at 10:31 am
One comment only, since I’ve made enough in the past.
I would’ve expected a quicker downward trend in prices. It seems for the last three weeks list prices have barely moved, even though inventory is now at an all time high.
Example: The town houses on Keevil, which I am keeping my eye on as I will buy when the price is right, have not dropped a single penny. Range is still 275-300 (and a few outlandish 300K+ tags). They’ve been sitting for 2 + months now.
It’s tempting to throw out an extreme underbid on these lots (ie. 75K under asking) just to see what would happen.
April 28th, 2009 at 10:31 am
Yah Callum,
I don’t think any of the “bears” wanted to see people hurt, although you did not seem to give a flying sh#t about those that were looking and couldnt buy. You also didnt seem to give a crap for those who couldnt even find a place to rent. I said a long time ago, I have no empathy for the jackasses who pumped the prices up so much. They are the sole reason we were outpriced and had to leave. So….hope all the bulls are happy!!!
You made your bed, now have a nice sleep.
April 28th, 2009 at 10:31 am
Ryan: you’ll probably have to wait a year or so.
Right now, two or three months with no interest can be explained away (there’s lots of inventory, so it’ll just take a little longer to sell). If you offer 200K they either won’t counter (it’s an insult! The guy down the street got 309 in April!) or they’ll assume you want it at around 250-260 (a ‘reasonable’ amount, 10 grand less than asking or so). You are wasting your time and theirs, and you’re just making them angry.
By the Fall, well, they’ve missed the sweet spot and everyone knows that prices go up in the spring — so they’ll wait for the Spring.
And in the Spring (when everyone who has been waiting to put their property on the market for the “spring rush” does so) the inventory will be higher than it is now (I’m betting around 2,000 to 2,500) prices not appreciably cheaper, and interest will be lower than it is now, I’d wager. But they won’t take a lowball offer, because it’s just the start of the selling season.
By about July of next year some of those owners should be delighted to entertain offers of around 180K.
April 28th, 2009 at 10:32 am
Good point, jrochest.
I wouldn’t say I’m “happy” that people who bought at or near the peak will lose money. Will everyone spare a minute and feel bad for the people that were panicked into buying by the RE pumpers because “if you don’t buy now you’ll be priced out forever”? Anyone who spends a significant portion of their income on an asset (even a house) is at risk of losing money if that asset loses value. Peaks and valleys happen with the prices of anything, even houses. Buy low, sell high, if you can. Right?
Let’s count the reasons why an affordable and sustainable housing cost is a good thing, shall we?
Lower house prices are good for pretty much everyone (except speculators who bought at the peak expecting someone else was going to shell out the nose forever). Should we continue to sacrifice families to make sure bankers have plenty of debt to earn interest on? Every “affordability” program drives prices higher by pushing buyers deeper into debt (40 year am, etc.). Let’s think about that.
If you own a house and want to upgrade, you benefit from falling prices because you’ll save more on your next house than you’ll lose in selling your current house.
Sure, some people may lose, but those that thought they could make a quick buck selling to an even more debt-ridden sod may not have been the greatest idea anyway.
April 28th, 2009 at 10:34 am
Ryan S.
Don’t expect too much of a response on throwing a lowball on Keevil Cres. Only the ones that were asking Near $300k or more have been reduced to sell. One just sold this last week for $285000 and it was a private sale, nothing special, no a/c.. so demand is there around that price point.
The townhouses that have less demand (kenderdine for example smaller, no garage) that are asking around $260-280k are the ones that the prices will need to be reduced considerably to be able to sell.
April 28th, 2009 at 10:34 am
C-man –
You’ve just made my point — one sale at or near asking is enough to reinforce the faith in that price range, which is why a lowball now won’t work.
But if “demand” is there at 285K, why are there 11 identical units sitting unsold?
I stick to my guns on this one: give it a year, and they’ll be happy to talk. Some units might sell, but the vast majority won’t.
April 28th, 2009 at 10:34 am
Jrochest,
the crippling factor for this market will be lack of sales. There are going to be people that NEED to sell but won’t or can’t, the lack of demand with increasing supply until housing starts level off will put some over the edge. And even when housing starts are cut back, lots of inventory will just sit there for some time. Price drops are going to be bigger than most expect.
If I was looking to buy, I’d wait till next fall. You will save tonnes renting and with depreciating property. Almost like double dipping
April 28th, 2009 at 10:34 am
If it was not plunging, why a special report in the middle of the month?
Edmonton resale housing market not “plunging” say REALTORS
http://www.ereb.com/MarketActivity/AugustSpecial.html
April 28th, 2009 at 10:35 am
I dont get how when we compare Saskatoon to Edmonton for home prices its not the same, but when we say edmonton and calgary are crashing now we are the same.
George,
I liked the oil link I actually thought it was going to take longer for som1 to actually catch on. Dont know why the US didnt see this coming its like biting the hand that feeds you oil then bombing them and then slandering them behind their back then next week expect some cheap oil to be shipped their way haha. I believe thats why the smartest US men came to check out the oil sands project that they have going on in Alberta to decrease the US dependency on oil from the Arab states and get it from their friendly neighbor good old Canada!
April 28th, 2009 at 10:35 am
Looks like somebody could have saved themselves $100 this week, tsk tsk.
Kids are going back to school PDQ, if parent’s aren’t buying those condos now I don’t imagine there will be many selling in Sept.
April 28th, 2009 at 10:35 am
“Hey Saskatoon bears: your time is here. Have ‘fun’? Not sure why anyone enjoys a market downturn…. It’s tough on everyone.”
Yeah; well the market “upturn” has been the toughest of all. Not only am I faced with higher rents, but my particular apartment building is now inhabited by obnoxious, immature punks who enjoy making noise, chucking pop bottles and flicking cigarettes off their balconies, and putting a lit cigarette on my car spoiler, leaving a permanent burn stain.
This is all happening because some of the senior tenants in what used to be a quiet and responsible apartment building have been forced out and relocated, and riff-raff allowed so the owners can collect as much rent revenue as possible while the building waited for condo-conversion permission.
(Thanks, Saskatoon boom, for making my community a better place to live!)
April 28th, 2009 at 10:37 am
“I dont get how when we compare Saskatoon to Edmonton for home prices its not the same, but when we say edmonton and calgary are crashing now we are the same.”
How about: Saskatoon is one-fifth the size of Edmonton and therefore should not have comparable housing prices, any more than, say, Medicine Hat should have the same prices as Saskatoon.
But the bubbles are linked, directly: ours is a ‘rolling bubble’, formed by money from Edmonton and Calgary. And when the money dries up in these cities, the speculators sell their holdings in the secondary bubble cities, and prices fall.
April 28th, 2009 at 10:37 am
jrochest,
What makes you think you can call the time and price of RE prices. I don’t doubt that in general you are correct, prices will go down and possibly by a lot but come on man, you have no idea how long it will take. To say that prices are going down by 1/3 by July that’s just foolish.
Edmonton RE market has been in the dumps for well over a year and prices have gone down only by about 10%. You have no idea how long the process will take. You don’t know what will happen with interest rates, inflation rates, local economy, national economy, global economy, commodity prices, canadian dollar, you name it. Your theory is at best a wild ass guess.
April 28th, 2009 at 10:38 am
Oh sure, it’s a SWAG (statistical wild-ass guess).
I’m guestimating based on what’s seemed to happen in other markets — where 350+ days on the market usually produces some kind of a price correction.
And Edmonton is down by 10% overall — but more vulnerable categories (like conversions and/or condos in new developments on the outskirts of town) have fallen by much more.
April 28th, 2009 at 10:39 am
And I’m not extrapolating from those particular properties to the larger market as a whole — I’m just thinking about seller’s psychology and expectations.
April 28th, 2009 at 10:39 am
Armoth,
Interview with Buffet about oilsands
http://www.cnbc.com/id/15840232?video=828981936&play=1
He is not investing in them, they were just curious about them.
April 28th, 2009 at 10:40 am
Robin,
be patient, rents do not always go up. (Another myth about RE.) In Calgary, there is so much inventory, few sell, people have put there places up for rent. The vacany rate has gone up and these landlords are begging to have someone fill their place to at least make a partial monthly payment of the place. Rents have gone down $75 from boardwalk with more to come I’m sure. The same will happen here, don’t worry. I’m sure in while people will be able to negoiate their rent.
Jrochest,
if we use Alberta as our crystal ball for a 10% drop in a year, we are probably in the ball park.
But our market is also going to have to deal with no 0 down no 40 year which Edmonton did not last fall. I suspect our average at 275k after Oct.15. So if you need %5 down plus closing costs, you will need close to $20,000 just to enter. This is emptying the pool of buyers quicklier therefore prices will come down more than 10% in a year here.
April 28th, 2009 at 10:40 am
Robin,
I feel your pain. I’m lucky being in a building where over half the tennants are out and no one new is moving in beucase of our conversion here, your situation sounds much worse than mine becuase i just deal with crappy renovators turning off our water without warning.
AS for boardwalk lowering prices? I see no lowering on their website at least…it’s just as high , in fact it’s higher than it has been…
My rent is going up to 850 here in october, and i’d guess that come january, it’ll be up to 950 or 1000 bucks a month no matter what happens in the market.
I wonder how realistic it is sayign one can ‘renegotiate’ thier rents…does that ever happen?!
Maybe one can from a landlord that is private, but good luck getting any ‘company’ to lower thier rents…I would estimate people would be out on the street before that happens.
April 28th, 2009 at 10:41 am
Been out of touch for a while.
What a change in attitudes around here. Amazing how the landscape changes with the situation.
Although it’s nice to see everyone is consistent.
I still see some pretty ridiculous prices in Saskatoon and they could definitely afford to drop yet more. It may also be a good time now to start addressing the conspicuously low standards Saskatchewan maintains for renters as well.
April 28th, 2009 at 10:42 am
Yes, Jesse, rents do go down! And when a company like Boardwalk drops them — as they’ve done in Calgary — then small landlords and homeowners are undercutting them so badly that they’re feeling it. Usually big landlords only drop rents after trying incentives (iPods, TVs, vacations) and ‘two month free!’ offers.
Assuming that the ‘massive in-migration to Saskatoon!’ stories are so much piffle, I figure that the rent situation will self-correct in two or three years, tops.
No-one’s buying the current crop of condo conversions — which means that your new landlord is about to take a major bath, if they’re silly enough to try to do one. And there are already quite a few properties available from ‘accidental landlords’ who are trying to rent what they can’t sell, as well as lots of people like lawtalkingguy who need to have roommates or tenants in order to cover their mortgages. Those spaces will still be around, and will be competing with the buildings when the available stock starts to rise.
Tenants have compensated too: lots of people have left (this is anecdotal, from talk with a couple of students) and the people who can’t pay more than 500-600 are now living with roommates. There are more ‘offers’ than ‘wanted’ ads on Kijiji. In fact the only ads I see on Kijiji are from people with pets and kids (both make it hard to find a place).
Once the conversions come back on the market I’d not be surprised to see the rent on basements and other less desirable spaces drop. Then, as more stuff becomes available, prices will drop in the less appealing buildings.
April 28th, 2009 at 10:42 am
Jrochest,
I certainly hope you’re right. I’m awaiting the ‘crop’ of condoized apartments as well, to see how they all are dealt with….certainly someone is going to realize that $165k for a untouched 1 bedroom condo, or 220k for a 2 bedroom condoized apartment isn’t a good thing to purchase. I know my building hits the market (well already has a bit but with flippers mostly) in Jan 2010. That’s the date they kick us out. I wonder when the rest hit the market. It’ll be interesting either way.
April 28th, 2009 at 10:43 am
Have you been looking at the MLS at all? You can see, quite clearly, what the buying public thinks of a 165K 1 bed condo, or a 220K 2 bed.
They think they’re not worth buying
Seriously. One reason I look at MLS every week is to keep an eye on this stuff. List prices for bog-standard unrenovated stuff are down to 150K for a 2 bed on the outskirts of town or a centrally located 1 bedroom.
There’s 485 units on the market, and many have been sitting unsold since the last snowfall. Go poke around. You’ll feel better.
I’m kind of willing to bet that your landlord will choose to stay a landlord, ya know?
April 28th, 2009 at 10:44 am
one good thing that has happened with this boom and all the condo conversions is that it has cleaned up alot of the old 60’s and 70’s apartment buildings. which makes the city look alot nicer. i was in a building near the victoria bridge before it was redone and it was a complete dump i can’t believe people were actually renting them less than 6 months ago. the landlord did them a favor by making them move.
April 28th, 2009 at 10:46 am
Camping was awesome, even with some rain. Maybe everyone was out on vacation and too busy to buy a home!
So more low prices? More inventory?
George, I’m thinking there’s a further drop in buyers leading up to October 15, with expected drop in housing prices and the uncertainty leading up to the the market, after the value and number of qualified mortgages goes down!
Callum why not enjoy houses going back to where they should be? Good for new buyers, and tough to feel for speculators, or any one else who ignored that in a small market, with prices doubling, we just couldn’t justify our house prices. Also silver lining is maybe more places get rented out, after all those tenants were kicked out for conversions and house renos, with landlords trying to sell ASAP since they knew the boom wasn’t sustainable.
And Armoth, we’re not the same as Edmonton or Calgary because they have a stronger economy, higher wages, lower taxes and no provincial debt. I never said you can’t compare our prices to their’s, you can, our’s should be lower. So if their’s go down, and their wages are still out growing ours, our’s should go down more!! Saskatoon is Canada’s most over valued market. Not Edmonton.
And jrock, the year makes sense. Too bad it will take so long though. A undersized 2 bedroom off Broadway, on saskhouses for months, I looked at it before deciding it was overpriced, seller was motivated/moving, reduced a few thousand (probably just to say reduced) didn’t sell for a few months more, neither did any of the surrounding condos, now relisted – higher! – with an agent! by nearly 20,000. Hilarious. Didn’t realize the reason it wasn’t selling was that it was over priced! Apparently, the agent thought it’s problem was being under priced
People are just delusional. They want double what they paid for stuff, and still testing waters with list prices that are higher than a few months ago during the “boom”, even though none of the cheaper options are selling.
Tough to feel bad for some one who could instantly sell their condo for 225,000, when they paid 150,000 but are greedy and demand 300,000. Why can’t a bear be happy that the longer they refuse to actually reduce the price to become competitive and take their 50% profit (tax free!) the less they actually will be able to sell it for?
Until in a year, like jrock says, everyone’s panicking, because with huge inventory, and still slower sales, and even cheaper Alberta options, they’re all desparate to get out at 225,000, for fear they may end up not getting out on top at all!
Long rant, but I’ve been at peace with nature for a week, so back in stoon the shock of a half dozen more for sale signs on the way home is more striking!
April 28th, 2009 at 10:47 am
Dan,
sorry that should have meant 275k at Oct.15. Not after Oct. 15. 240-250k at the end of the year.
I see a potential flood of listings in the spring hoping for the spring rush, but just like jrochest said, but the demand just won’t be there.
As for the condo conversions, the ones that bought late in the game are the ones that suffer. If a building is not fully sold, these people are then stuck with rising condo fees. I wouldn’t surprised to see 400-500 condo fees for the 70’s conversions if not completely sold.
April 28th, 2009 at 10:49 am
A good post on bob truman’s blog. Norm this is not directed at you or other gentle realtors.
The same form of social engineering that created supposed credible sources (CREB, CMHC, Calgary Herald) which dish out skewed information, and feed it to the masses as “fact”. The same form of engineering that plays with numbers, conveniently leaves out comparisons which are “unfavourable” (talking about Mario T. and Herald now), and does not consistently report things in the same way so that the people can make a true informed decision (in this respect, Bob site has been an exception, with the maintenance of the “old criteria” page…kudos). Unfortunately, Bob’s site is not as popular or widely read and we bloggers are in the minority of real estate watchers.
Before we are too quick to place judgement on these fellow Calgarians who have fallen into the trap as “irresponsible and quick to pass the blame”….we should look at ourselves, and realize that it just takes one rash decision…one MISTAKE which we are all prone to making in our lives. Are you telling me that all the Americans who are in hard-times right now have NOBODY to blame but themselves?! That is completely narrow and callous…very easy to say when you are not in their shoes. In Calgary, when Scotia Bank tells you “you are richer than you think” and lures you into a large 0% mortgage, CMHC gets their cut, and you move into your home that your wifey is just beaming over…only to realize that what you’ve been told the “official forecasts” are by CMHC, CREB, RBC, Scotia, TD, reported by the credible news, were all largely biased manipulated statistical figures.
In the past few years there have been many very “intelligent” Calgarians/New-Calgarians who have been mislead by the media, realtors, builders, and other industry insiders….and now they are sitting in negative equity. They had the rope-a-dope pulled on them and now all we can say is “you have nobody to blame but yourself”? What is that saying to the CREDIBILITY of the supposed “trusted sources”? Boy, I can only wonder what the public would say if any other REAL professional organization (such as the Medical Association, Dental Association, APEGGA, etc) were to put out biased, false info…only to turn around and say “too bad, you shouldn’t have listened to us, you have nobody to blame but yourself. We have a vested interest in making profits and making our jobs easier, that building that collapsed because of faulty engineering is not our fault. You should do your own research”
It is that very attitude that brings out the con-artists and initiates acceptance of their presence within our social sphere. This attitude is toxic for our way of life, and is not the Canadian Way. We have laws for other industry’s to protect against things like this happening. Call me a socialist all you want, but at least I have the ability to place myself in others’ shoes and realize the scam that has been perpetrated on my fellow man.
April 28th, 2009 at 10:50 am
George – Good post. One thing I found ironic, I think Scotia Bank was one of the first to predict that Saskatoon was over priced and due to fall! We’re not as rich was we think. Unfortunately, the media and public ignored it.
They’re probably the only one’s we can’t blame the over valued market on.
April 28th, 2009 at 10:50 am
Any REIN investors?
http://crebb.blogspot.com/
April 28th, 2009 at 10:51 am
Nick,
Even if they said we were overvalued they were still pumping out 0 down and 40 year mortgages. We can blaim them.
April 28th, 2009 at 10:51 am
Does anyone know if there is a resource similar to this for Regina? Access to real data and honest discussion from a realtor is very refreshing and it would be great to have something like this in my local market.
Thanks
April 28th, 2009 at 10:52 am
J Rochest,
I won’t disagree that the Keevil townhouses will come down in price, but I think 180s is out in left field. Just before the boom started, Jan 07, one sold there for 190. I know because we just missed it;-(
If that was a pre boom price, 235-250 would be more realistic, maybe eve as high as 265. I don’t think thay will go for 180.
That being said, we will let the market decide. Your guess, mine, or anyone else’s are just guesses.
April 28th, 2009 at 10:52 am
Jedi:
190K pre-boom? Find me the data and I will believe that. Are we talking 2006? 2005?
A friend of mine was offered a condo style one in early 2006 for $120K – and that was even overpriced by 10-15K at the time. I find it hard to believe the townhouse ones would be 70K more.
Not calling you a liar, I just want to know what time period you are referring to as “pre-boom”. To me, pre-boom is any time before Spring 2006.
April 28th, 2009 at 10:53 am
Jedi –
I don’t think that they’d sell for 180, but it’s a good offer to make if you want to buy for 200.
My guess is that the boom gains will evaporate altogether in the condo market, particularly in new or newer developments outside of the core.
The list prices for several of these units are in the 260’s. And there are eleven of them, and they are not selling.
April 28th, 2009 at 10:54 am
Ryan S.
The prices in the Keevil townhouses have ranged from 115K (Jan 2006) to 301K (Aug 2007). And yes, there was one in Jan 2007 at 190-ish.
This is just MLS listings though.
April 28th, 2009 at 10:54 am
I wonder how many people will start to blame the ‘downturn’ on prices on the Merrill Lynch report. So far, I’ve heard a few in person.
April 28th, 2009 at 10:55 am
“I wonder how many people will start to blame the ‘downturn’ on prices on the Merrill Lynch report. So far, I’ve heard a few in person.”
Since the debt party/credit contraction/RE downturn appears to be largely global, I’m not sure that would be a great argument to make.
If someone did argue that, I might suggest they start reading something other than the Star-Phoenix.
April 28th, 2009 at 10:55 am
Crikey,
Soooo true. That’s the thing though, no one tends to read anything. They take the spin and buzz from the local paper and take it as gospel. My parents would do the same sadly enough.
April 28th, 2009 at 10:56 am
Interesting link from yahoo finance sales are up over 3% all over the country. This is the slowest crash ive ever seen happen if it is happening its like watching a snail run a long distance race.
April 28th, 2009 at 10:56 am
Pam Said:
“The prices in the Keevil townhouses have ranged from 115K (Jan 2006) to 301K (Aug 2007). And yes, there was one in Jan 2007 at 190-ish.”
Yep, that’s what I figured. The other poster must’ve considered 07 to be pre-”boom” – wouldn’t be in my opinion. Early 2006 was the last time I would consider Saskatoon’s market stable.
April 28th, 2009 at 10:56 am
Here’s another link to the data Armoth presented:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aAhl47f6kahA&refer=home
The thing to come away with is this, I think:
“The increase in sales wasn’t enough to keep up with the surge in properties coming into the market as foreclosures mount. There were a record 4.67 million unsold houses and condos on the market in July, representing 11.2 month’s supply at the current sales pace, matching the highest ever. The group has said a five to six months’ supply is consistent with a stable market.
The jump in inventory was driven by an increase in the supply of condos as projects started one or two years ago came on the market, the Realtors group said.
The median price of an existing home fell to $212,400 from $228,600 in July 2007.
“Home prices will continue to be soft because of the high inventory condition,” Lawrence Yun, NAR’s chief economist, said in a Bloomberg Television interview.
One-third to 40 percent of total sales last month reflected distressed properties, which include foreclosures, he said.”
April 28th, 2009 at 10:56 am
Before I forget, thanks for the info, Pam!
You’re doing a great job.
April 28th, 2009 at 10:57 am
Crikey,
The link I provided was to the Canadian Real Estate but yours is for the US I believe there is major differences between us in housing right now.
April 28th, 2009 at 10:57 am
Crikey,
Thanks! I’m trying… fortunately last week seemed fairly slow on here, so I’ve been able to keep up with you guys.
Protecting,
It might prove hard to blame it on the ML report considering the downturn started BEFORE the report came out
April 28th, 2009 at 10:58 am
Pam,
True! I wonder if that will be the scapegoat though since their realtor suggested that was to blame but that prices are going no where but up up up!
April 28th, 2009 at 10:58 am
Armoth,
Nope, I’m afraid your article was about the US. This is a direct copy from your article:
“The U.S. National Association of Realtors reported sales rose 3.1 per cent to a seasonally adjusted annual rate of five million units as buyers snapped up deeply discounted properties in parts of the country hit hardest by the housing bust. Sales had been expected to rise by only 1.6 per cent.”
April 28th, 2009 at 10:58 am
My realtor said that at least one person used the Merrill Lynch report as an excuse for backing out of buying a property that week, but it’s possible they had cold feet and were looking for an excuse.
April 28th, 2009 at 10:59 am
Crikey,
Touché =o)
April 28th, 2009 at 11:00 am
Pungo,
just wait until reports like the Merril Lynch start coming out every week.
April 28th, 2009 at 11:01 am
Armoth, not to worry.
See… I DO read what you post! ALL of it.
April 28th, 2009 at 11:02 am
Is all the merril Lynch report did was point out the obvious. People in Saskatchewan do not make the income to purchase 500 thousand dollar homes, nor the population base, and there is also no shortage of land around here to keep building. For me personally, I am glad that the market is coming down.
At least now my kids might actually be able to purchase a home, rather then having to move. I always tried to keep them into staying into this province b/c it used to be cheap to own a home. Now I almost encourage them to move some place where it is cheaper to live and to make more money. People in Sk used to think 35 thousand a year was a good wage.
April 28th, 2009 at 11:04 am
Well said Mike. I think that a key “selling point” for Saskatoon was affordable housing. As I note the tree outside my office window shedding leaves at an alarming rate on August 26, people do not move here for the weather.
I have just returned from a sojourn on the Old Sod, where the housing crisis continues unabated.
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4610816.ece
The incredible run up in prices is coming home to roost. The comparitive pattern with Saskatoon house prices does jump out. A fast hard increase in house prices followed by….
Luckily, the Saskatoon economy is renowned for its ability to remain insulated from global economic crises. Oh dear have I stooped to the lowest form of humour?
April 28th, 2009 at 11:05 am
People use to think 35,000 a year was a good wage, maybe in 1965 it was lol.
If you dont make at least 70,000 why do you expect you should be able to own a house. Everybody thinks they should be able to get whatever they want without working for it nowadays.
My paernts got refused a loan in the 60s for a 16,000 dollar house with a 5,000 dollar down payment they had to borrow another 2,000 from my grandparents.
Home ownership is not a right its something you have to work for.
April 28th, 2009 at 11:05 am
Bill said:
If you dont make at least 70,000 why do you expect you should be able to own a house. Everybody thinks they should be able to get whatever they want without working for it nowadays.
So what you’re saying is that if a person makes less than 70,000 they aren’t “working for it”? I think the implication that people who make 35K a year aren’t working hard is a little bit offensive.
April 28th, 2009 at 11:06 am
Totally offensive if you ask me. Also hey while we’re at it lets take away all the jobs people enjoy, and just leave the ones that pay above 70k a year too. It’s pretty rare to me, besides managers, to make 70k a year or am I wrong? Most jobs start pretty low, in the 30k range even now. Maybe after 20 years you could be up in the 70k range but maybe not either. I guess I don’t work nearly hard enough at my full time job, my part time job, and my contract jobs. Maybe I can afford a small 500 sq ft house by the time i’m 50.
*scolds myself*
April 28th, 2009 at 11:06 am
Yeah, despite the fact that I work 50+ hours a week and still don’t make 70K…that must mean I’m just lazy… and that I don’t deserve a house.
I think that’s a little harsh.
April 28th, 2009 at 11:07 am
No doubt. I think a lot of times people either got lucky and have high paying jobs, or they are in management and forget the entire road how they actually got there. They like to try to keep it real with the little people but fail miserably at actually BEING real.
Also they had to borrow $2000 from thier parents? Doesn’t that also qualify as ‘not working hard enough’ too? I don’t mean to get snippy but come on. You MUST realize how arrogant that sounded
April 28th, 2009 at 11:08 am
Bill,
I make a paltry sum of 26k a year along with my wife I guess we are not good enough as well for a house. I believe if you manage your money well and with a little dash of luck anyone can own a home anywhere. Example given my single coworker who makes the same amount as me managed to purchase an east side condo for 60k by herself but this was before the boom. I just dont get how condos are now worth more than my home when I bought it drives me nuts.
April 28th, 2009 at 11:08 am
So you require 70 k a year to own a home ? Really ?
My father taught me something many years ago – it is NOT what you make, but rather what you SAVE.
I have friends who make more then 70 k a year and they live from cheque to cheque…because they live well beyond their means.
There are jobs where people work REALLY hard and only get paid $ 15.00 per hour….every try unloading a traincar full of watermelons by hand ?
No wait, 30,000 lbs of produce unloaded by hand is NOT hard work…
April 28th, 2009 at 11:09 am
“People use to think 35,000 a year was a good wage, maybe in 1965 it was lol.
If you dont make at least 70,000 why do you expect you should be able to own a house. Everybody thinks they should be able to get whatever they want without working for it nowadays.”
Bill, come on.
People SHOULD be able to buy something for approximately 3x their annual income, whatever that income may be.
Just because you think the average house SHOULD be worth a certain sum (3×70K, perhaps?), won’t make it so.
While I agree that people should expect to put down a sizeable down-payment in the future (as cheap credit appears to be disappearing and rightly so), espousing the view that anyone making under $70K doesn’t “deserve” to own a house is ridiculous.
April 28th, 2009 at 11:10 am
Okay, Bill – you’re right that at the current price levels, a family needs an income in excess of 70K to buy safely (Armoth is the poster boy for why this is so…).
Now, take a look at Norm’s “Saskatoon Household Income” data tables at this link:
http://www.teamfisher.com/Saskatoon_at_a_Glance/page_1723426.html
According to Norm’s data, there are 85,063 households in Saskatoon, made up of 2.5 people on average.
9172 households — that’s 11% — make more than 100K.
10332 households — that’s 12% — make between 75-100K.
I’m assuming that any household with ONE person making 70K will have a total income of 75K, since even a non-working parent will generate a couple of hundred a month.
So: you’re going to market every property in Saskatoon to these 20,000 families — 24% of the population.
But you should notice that 63% of Saskatonians own their own home.
This shortfall is what’s going to cause problems…
April 28th, 2009 at 11:10 am
I’d like to see people like Bill live in a world without the lower income workers. See how smug he is when all the restaurants and grocery stores shut down. Everything retail shuts down. All the gas stations go under, so even the oil workers get laid off since there’s no one to dispense their oil into the cars that aren’t being manufactured, since no one is building them or buying them. All these “lazy” workers are crucial to society and to YOUR way of life Mr 70k a year. Wage has absolutely no reflection of hard work. If that were true, single moms would be the richest people on earth.
April 28th, 2009 at 11:11 am
i’m not sure of the exact numbers but isn’t the average wage in saskatoon around 70 000, and the average home price is around 295000. if saskatoon is so over valued the avarage income would not be able to afford the average house. i realized there will be a bunch of replies to how the average income number is scewed. i think house prices are high but now that unreasonable. but condo prices are out to lunch
April 28th, 2009 at 11:11 am
According to the page that I just linked to, the average HOUSEHOLD income is $65,487 a year.
Individual income is considerably lower: most households have two adults who work at least part-time.
April 28th, 2009 at 11:12 am
Come on everyone knows, the more you make the less “HARD” work you do!!!
April 28th, 2009 at 11:13 am
jason j,
I agree a lot of numbers are screwed..it’s the result of using generalizations. I mean who’s to say that the ‘median’ income hasn’t been skewed if say the small %age of people making over 100k a year got 20k a year more..could skew the numbers up definitely. Average FAMILY INCOME is around the 70k. Average wage per person is much lower for sure. I know I had a boss that got a 25k raise in one year for instance.
April 28th, 2009 at 11:13 am
Wesco…
So true. So very true.
April 28th, 2009 at 11:14 am
my point is the average household income of 65 487 can afford the average priced house in saskatoon. but you may not also be able to afford new vehicles and big screens also
April 28th, 2009 at 11:15 am
As always, Alberta has one up’d us, big time.
An $8.5 billion surplus. Think that’s going to drive their income taxes down? They don’t even have a debt.
Remember, Alberta’s house prices are already down, and still falling, often cheaper than Saskatoon. But you can make a lot more money there, and regardless of all our provincial hype, Alberta is still king of money. More money and cheaper housing. And likely a crap load of government tax cuts and new programs, while we’re paying off our debt.
April 28th, 2009 at 11:15 am
Jesse G, the Mean (not median) is skewed up wards by large outliers. The top 49% of earners getting a big raise actually doesn’t change the median (middle number) at all.
Either way, both are like 10 grand higher in Alberta.
April 28th, 2009 at 11:16 am
http://www.cbc.ca/canada/edmonton/story/2008/08/26/alberta-surplus.html
Link to Alberta’s better than though surplus
April 28th, 2009 at 11:16 am
Jrochest,
I should be a poster boy for making it with very little and did you check the price of BQI lately chalk up another several thousand dollar raise for me.
Wesco,
There was a good article about the new technology they are trying to use for the oil sands and alot of it looks promising but the world should hope that we discover a way to make oil sands feasible without a large enviromental impact or else we will discover very shortly $150 per barrel oil is going to be cheap. But more important I want to know your opinion of what im investing in should I take my profits and run or do you think it is feasible since you are in the oil field.
Crikey,
Is there any national stats for Canadian real estate that I could look at? And reading the finance reports it looks like interest rates are going to go up. I wonder how much that would effect sales and inventory.
April 28th, 2009 at 11:18 am
I do agree with Bill somewhat, buying a 300k house and only making 35k would seem crazy to me as well. I think his comment wasn’t meant the way we all read it but you never know….
Similar to Armoth, I as well would like to know how the increased interest rates will affect prices…not to mention the changes in mortgage laws coming into affect.
Also just wondering if everyone else has sensed the mood has changed in Stoon? I noticed over the last 6 months at work, hockey rink or wherever the mindset has changed from, buy now or you never will to the wait and see if prices drop 20% approach?
April 28th, 2009 at 11:18 am
Alberta’s better than thou $8.5 billion surplus, sorry for earlier confusing comment
April 28th, 2009 at 11:19 am
Dan,
The Surplus in Saskatchewan this year is nothing to complain about either. What is it 3 billion?….must be the largest ever?
Lets hope our diverse economy will keep the surpluses coming in for many more years. I think our economy is very strong but do think house prices went crazy vs the low median income in Stoon. Rural Sask still is a great deal compared to other provinces though.
April 28th, 2009 at 11:19 am
jason j wrote:
“my point is the average household income of 65 487 can afford the average priced house in saskatoon. but you may not also be able to afford new vehicles and big screens also”
No, the average household CANNOT afford the average priced house. There are dozens of free mortgage calculators, please plug the numbers into any of them (I usually use rbc’s) before you make a statement like that.
April 28th, 2009 at 11:19 am
Armoth,
I’ve posted this link before, and I find it to be fairly useful. As far as I know, the info is not directly related to any real estate or banking organization. The data is not as recent as I’d like, and much has happened in the last quarter financially, but here it is. I hope you find it helpful.
“The site provides quarterly data in both tables and figure format to describe demographic, employment, residential real estate, and non-residential real estate conditions in the eight principal Canadian metropolitan areas.” Sadly, Saskatoon is not one of them:
http://cuer.sauder.ubc.ca/cma/index.html#
As to the interest rate question, I’ve heard natterings that the US is “considering” raising interest rates, but I haven’t heard anything about what Carney might do with ours. I would imagine that interest rate rises would have a large impact on both current owners and prospective buyers. You can run different interest rate scenarios on any good mortgage calculator and find out what might happen to your payment with a change in the interest rate. A 2% rise in interest rates will raise your payment $200/month or so on a $300K mortgage.
On a MUCH lighter note, please check this out for a good laugh (thanks to jrochest for the link):
http://www.yattermatters.com/real-estate/vancouver-real-estate-french-style/
Hmm. Less-than stellar house in Vancouver suburb, or mansion in Normandy, France? That’s a tough call.
April 28th, 2009 at 11:20 am
“A 2% rise in interest rates will raise your payment $200/month or so on a $300K mortgage”.
I meant this would be *aproximately* the case if they went up 2% from now. Depending on where you start from, this would differ. Anyway, please do check it out and see.
April 28th, 2009 at 11:21 am
CIndy, such vitriol. I’m shocked. Jeez, I was being nice.
April 28th, 2009 at 11:21 am
For clarification we make 45k until we got the raise now we make 52k but things change and im starting a new job now where I make 36k but my wife is still at 26k so all in all we are making 62k yay we moving up the food chain.
Crikey,
I find that hilarious and I hope my house is worth that much….
April 28th, 2009 at 11:22 am
“I find that hilarious and I hope my house is worth that much….”
I think that’s the point… if it were “worth” that much, who would buy it? Perhaps someone from France with too much money and no common sense, looking to “expand their horizons”?
April 28th, 2009 at 11:23 am
I did not mean to offend anyone with my comment.
However I was refering to youth of today who think they should have everything their parents have now in their 60s in their 20s.
Most couples did not expect to own a house in the sixties until they were much older, much less trying to buy one being single.
The 70,000 figure was for two adults not one. I guess what Im trying to say is its actually easier to buy a house today than few decades ago where banks were much much stricter at lending.
April 28th, 2009 at 11:23 am
“The 70,000 figure was for two adults not one. I guess what Im trying to say is its actually easier to buy a house today than few decades ago where banks were much much stricter at lending.”
Thanks for the clarification, Bill. I would agree that most people in their 20’s and students should not “expect” to own houses, but if you think about it, to a large degree, they are not “owned”; they are rented from the banck for decades on end at usurious interest. The banks in the US thought this was a great deal util they hit the wall, and people started to default. It’s just a cascade of misery, now. As to lending standards, considering the global financial fallout from this cr@p, I wouln’t bee surprised to see the lending standards tighten to historical levels.
April 28th, 2009 at 11:24 am
Armoth,
here in todays paper, there are a couple of articles to do with projected rate cuts coming in the fall. A rate cut by BofC is not a guaranteed mortgage rate cut though as we have seen in the past.
But it will be good for those that have lines of credit tied to prime. Since we are leading the country in retail sales growth the last, I am sure that will be welcomed.
http://www.canada.com/saskatoonstarphoenix/news/story.html?id=6ca77200-c38c-448e-81ea-5e45243612c1&k=24729
http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=a0e03e45-a440-4e21-b1cf-65ea2b3c5124
April 28th, 2009 at 11:25 am
Modes of thinking have sure changed. I remember about 12 years ago some friends of mine (they were a couple) had a combined income of about 55k and they bought a house. Their mortgage was just above 100k and we thought they were nuts. People seem to stretch themselves way beyond that now. Is this sort of what you meant Bill?
April 28th, 2009 at 11:25 am
New blog entry by Garth
http://www.greaterfool.ca/2008/08/27/not-even-close/
April 28th, 2009 at 11:26 am
Armoth,
I do work in the oil sands, however that does don’t make me an expert in terms of investing in it. There are way to many outside influences in non-conventional oil to be able to make any type of prediction.
I know places like Suncor have been cash cows in past and continue to be cash cows now, however they are a well established organization and for the most part are self sufficient. They produce an enormous amount of oil in a day, upwards of 230,000 barrels a day. Also they are currently executing an expansion called Voyageur which will put them in the 350,000 bpd range.
I don’t think S.A.G.D projects will ever achieve that kind of production and therefore you can’t compare open pit mining to S.A.G.D operations. Have you had a chance to look at any other publicaly traded S.A.G.D operations on the tsx? I think that Nexen inc may be and they are just going to start S.A.G.D production in the spring at the OptiNexen Long Lake Project, just as long as Opti’s upgrading system works. Your best bet would be to watch Opti and Nexen stocks to be able to gauge where BQI will go once BQI gets oil flowing.
April 28th, 2009 at 11:26 am
Some people still seem to be in denial about the softening of house prices. I’ve been keeping an eye out on a house on Bourgonje Terrace on Saskhouses which was there for about a month ( probably longer ) and the price was reduced to $464 900. After not being sold I see the house is now on the remax site for $469 900. Seems crazy to me that they would list the house higher .
My brother recently bought a townhouse in Erindale. He had looked at one on Kenderdine for about $270ish and he offered $260 000 , which they flatly refused. He then bought a different condo and a few weeks later the Kenderdine condo called him back and said they would accept $ 262 000. Unfortunately it was too late. I think he’s now no longer in denial.
In my line of work I’ve also noticed a lot less Alberta Health Cards than last year . I’ve also seen people who had already arrived in Saskatoon intending to stay , leaving for Calgary due to higher rent and lower income.The last guy said he’d rather live in his brother’s basement in Calgary than the crappy place he’s renting for $1000.
I know it’s been mentioned here , but I also personally have friends stuck with 2 mortgages because they bought a new house before selling the old.
Having said all of the above , I do feel that what we are experiencing is just a correction and do not see a crash coming.
April 28th, 2009 at 11:28 am
observer,
there are many houses that did not sell on saskhouses only to be listed higher on MLS. I think sellers and realtors have to be more realistic on selling a property in a price depreciating market.
I don’t know Silverspring that well or the properties, but I had a buddy buy a four-level split in summer of 06 for 255k, built in 98.
200k in two years?
A correction is thought to be 10% to 20% decline.
Usually at the end of the correction there is great opportunity to buy something undervalued . At 240k for an average price, an average property would not be able to cash flow. So we are headed below this number.
I wouldn’t be surprised to see 200k next fall for an average price possibly lower if lending really tightens.
April 28th, 2009 at 11:28 am
Last fall I published a post detailing why I thought Saskatoon RE would hit 300k this year while I was a bull. Now I switched teams and I now think RE here won’t only see a correction but a bear market. Here is why.
1. Tightening in lending standards
At the peak of the housing boom in Canada, subprime mortgages accounted for 5% of all mortgages not including 0 down, 40 year and interest only mortgages which during the last year accounted between %30-50 of all mortgages.
As of Oct 15, all these mortgage innovations will be abolished. This is going to lead to many people being shut out of buyng for the short term. Demand will shrink even more than now. Factor in that Canadian banks are getting their wrists slapped from the subprime investing, even though the BofC may lower their rate, I don’t think mortgage rates will be lowered.
2. Affordability
We are currently at the worst affordability we have ever been at. Historically we are at %20-30 of income towards housing. Right now we are treading between 40-45%. Only Vancouver, Victoria, and Toronto have worse affordability in all of CANADA! Just do the computing yourself.
http://www.rbc.com/economics/market/pdf/house.pdf
3.Housing starts
In 2007, we had 2300 housing starts. In 2008, we on pace for almost 3000, even though sales are comparative to 2004 sales when starts where at about 1000. Until housing starts slow down the gap between supply and demand will increase. This is tied to immigration as well.
4. Immigration
Are we gaining? losing? staying the same? It is hard to tell, one recent report said we lost 2000 people in Saskatoon since Jan 07. Even if we are gaining people it has not been enough to offset the huge increase in listings the last half year. Even though the economy is doing well, affordability will hamper immigration for the next while.
5. Speculators bailing (or they will try to)
Last spring, bidding wars, places bought sight unseen. Economic reports of our housing market was the hottest in the country. RE in Saskatoon went through the roof. Speculators were the main drivers of this train.
Everyone will agree that our market has now peaked in price. And now we are trending downwards in price. The specs know it. They know what is happening in Alberta, the previous RE hot bed in Canada. Listings have flooded the market, sales have tanked and prices are dropping. Not unfamiliar to the States. This is the beginning of that here. Adding tonnes of listings.
6. Consumer confidence
The worldwide housing bubble virus has infected over 35 countries in the developed world and it is here as well. Reports are coming out like Merril Lynch that says housing is 50% overvalued here with I’m sure of many more to come in the near future. People will not be so inclined to buy a house because of lessening of confidence in this market which is lessening demand.
7. This is more of a theory but I believe many propsective first time buyers for 2009 and 2010 were duped into buying in 2007 and 2008 before they “were priced out forever”. Hence that demand will not be there in the future because some of it is already exhausted.
8. Investors are priced out of the market as well. To cash flow a property, prices have to come down quite a bit. About %30.
9. More condo conversions coming online in the next year adding to supply.
All of this shows more supply and less demand in the next couple of years.
This is factoring in that interest rates stay the same and the economy continues doing well.
I believe a pullback of at least %30 from the peak by the fall of 2010.
April 28th, 2009 at 11:29 am
George, you nor I nor anybody else knows what events will affect the economy between now and 2010. It’s ridiculous to speculate that far in advance, so why do you spend so much time on here trying to do so?
When you were a bull, you made a similar point form list showcasing your ability to see into the future – why should this one be taken any more seriously?
Fall is coming, might want to get outside before the warm weather is gone
April 28th, 2009 at 11:29 am
How long does one have to wait to list on saskhouses
or list privately after they’ve pulled their MLS ad???
April 28th, 2009 at 11:29 am
George’s list isn’t so bad, kind of common sense.
At least not talking about crime, stocks, etc.
(I know I’m bad for this too) it’s housing related
“Historically we are at %20-30 of income towards housing. Right now we are treading between 40-45%. Only Vancouver, Victoria, and Toronto have worse affordability in all of CANADA”
I think that says a lot.
April 28th, 2009 at 11:30 am
George,
There is alot of valid points and to be honest if it was myself with the choice of buying a home now this is what I would say to myself 1. How long do I intend to stay here? If the answer is more than 5 years buy real estate cause long term any price changes doesnt really matter over the long term.
Wesco,
I took all my profits out of BQI today at $4.28 when I bought in at $3.71 and I will look at those 2 companies again but I realized I am taking on too much risk if im making huge amounts of cash I have the ability to lose just as much. So back to the safety of my etf and im probably gonna buy coke stock because it is truly the oil of my life that will never run out.
James,
George is just trying to make sure all the facts are out there for prospective buyers so they make an informed choice.
April 28th, 2009 at 11:31 am
Wesco,
Have you heard any rumblings on numbers of people employed in the SAGD oil business in Saskatchewan down the road?
On a separate note, George’s 30% decline by the fall of 2010 sounds realistic to me considering the average wage in Stoon. 70k household income just doesn’t cut it for a 300k house.
April 28th, 2009 at 11:32 am
Heard some intresting stuff. Sorry to say, the bears are going to be dissapointed. I suspect I’ll be back in Saskatoon soon. See Ya Then.
As always, one eye on the beach, and one on the cash cow…
April 28th, 2009 at 11:32 am
Hun, awesome, as the Saskatoon housing market gets more bearish and inventory more bloated, the boosters get more vague.
Word on the street is starting to get critical and people are noticing the for sale signs that just won’t come down. It’s like anti-hype. Just taking a while to catch on. But the subsequent reductions and increasing inventory all back up on going drops in average sale price. Really no reason it should be as much as last year, when inventory was tighter, and Saskatoon wasn’t seeing 2,000 people leave.
April 28th, 2009 at 11:33 am
Yes, George appears to be stand-up guy, and gives a thoughtful analysis on both sides of the issues. People are allowed to change their minds and be swayed by data they feel are valid and pertinent. So what if he changed his mind?
I’ve never been a particularly bullish about real estate, but last year I was all ready to make an offer on a property in the Spring (the Banker told me “it would likely continue to rise 30% per year, conservatively.” Over what time period?”, I asked. “Oh, years. You could sell or refinance then and move into an even bigger house!”). This was the same woman that “assumed” we wanted the 40 year am as the monthly payments were lower…never mind the total interest over the term of the loan! Bidding wars were still happening and some owners wouldn’t accept the property inspection condition. I just couldn’t believe that was sustainable in a city this size. So we stopped looking last fall. Looking at the financial/credit squall that appears to moving quickly in on the horizon is making us loathe to do anything now. Why buy a depreciating asset?
So we wait. I have a feeling we’ll be waiting for awhile, but I’m patient.
“I took all my profits out of BQI today at $4.28 when I bought in at $3.71 and I will look at those 2 companies again but I realized I am taking on too much risk if im making huge amounts of cash I have the ability to lose just as much.”
Armoth. Wow. You never cease to surprise and amaze.
How does it feel? You know, I very often haven’t understood the reasoning behind your actions (in RE in particular), but it’s easy to see they were motivated to create a better life for your family. I’ve certainly got to respect that.
April 28th, 2009 at 11:34 am
Crikey,
It feels great to have made money but then again I imagine the opposite of it if i lost money and I can see why people kill themselves over the stock market =op So I will go the way of the turtle (slow and steady wins the race) and yes my family is everything to me if we lived in a box or a small 2 bedroom apartment again it would be heartbreaking.
April 28th, 2009 at 11:34 am
three more boc rate meetings this year.
any predictions?
April 28th, 2009 at 11:35 am
Rider fan,
I would not have the slightest idea on Saskatchewan. It depends on how many sites there are, how big the sites are and what type of on site facilities there are. They may pipeline the bitumen right out there, to say Alberta, or they may upgrade right on site. Your guess is as good as mine.
Also Rider Fan are you heading to the Labour Day Game? I have 8 tickets its going to be an awesome time!!
GO RIDERS GO!!!!!!!!!!!!!!!!!!!!!!!!
April 28th, 2009 at 11:36 am
rate debate,
I have this book-marked
http://www.bank-banque-canada.ca/en/monetary/target.html
I have heard rumblings about the States increasing their rates. We sometimes follow. Inflation is definitely a worry but so is a slow economy. I am going to guess the target rate will be %3.25 by Jan.08. But if our economy is close or in a recession we may drop some points from where we are now.
April 28th, 2009 at 11:37 am
Armoth,
I have been reading a good stock book you may be interested in How to Make Money in Stocks
by William J. O’Neil
A little bit of the review.
“As a young stock broker O’Neil set out to study the greatest growth stocks in history to see what set them apart from the others. Eventually this became a 40 year study he calls The Record Book of Greatest Stock Market Winners. He studied over 500 of the biggest market winners from 1953 to 1993. Stocks like Texas Instruments, Xerox, Dome Petroleum and Cisco Systems in their heydays.”
April 28th, 2009 at 11:37 am
John,
That depends on whether you’ve withdrawn or cancelled your listing. My understanding, is that you’ve simply “withdrawn” your listing, that means you’ve decided “not to sell your property” which means you cannot list it privately or with another agent until your original listing agreement would have expired. If the listing was actually CANCELLED you are free to do whatever you wish with it. However, if you sell privately, and sell to anyone whom was ORIGINALLY introduced to the property through the original listing… the commission would still be payable (up to 180 days after the listing is cancelled).
Dan,
I know Norm has said this before, but we do not take lightly to people coming on here and bad mouthing the good folks at SaskHouses. Please refrain from referring to them as “jerks” on this blog.
April 28th, 2009 at 11:38 am
LOL! So get this. The building I’m in that was being ‘converted’ has now been sold to another property management firm in the city. They didn’t barely touch the building, new guard rails, new paint in the corridors and new carpet in the hallways. The rest? 1960’s stylings.
I called to confirm and they told me that the conversion was OVER…even though they had a big plan to convert the units, they have converted none. (Save but about 2 units independant buyers have converted and now are trying to sell).
Says something to me about how the rest may go if u ask me.
April 28th, 2009 at 11:38 am
Jesse G.,
the writings on the wall, the smart investors are long gone, the lucky ones will be able to cut and run now and in the near future, the others are going to take a financial pasting.
Most of the gains we have recently seen will eventually be non-existent. Every market corrects and we are severely in need of a huge correction for both house prices and rents.
Unfortunately with a RE downturn we are about to experience, many projects will be cancelled or scaled back which means a loss in jobs and less money for the economy.
But aren’t the 60’s back in style?
April 28th, 2009 at 11:38 am
George,
Oh who doesn’t love the wood panel cupboards with non working hinges, that pop open randomly, and the good old school quality VCT flooring with the berber and the central unit dividing the livingroom with the kitchen that looks like it’s out of the partridge family…plus the old washroom fixtures and cabinets..gotta love it! Oh well, rent’s still going up but at least there is some signs in what’s happening (as you stated).
April 28th, 2009 at 11:38 am
Jesse: Thats hilarious. People are starting to panic. We were asked to do some printing of marketing materials for a townhouse project out in Martinsville and we told the realtor in charge of marketting that it would be at least a couple of weeks before we would realistically be able to get him the finished product. His response was that he would have to go elsewhere to get the brochures done up as they needed them ready to go yesterday. He said every day they wait, the more the bottom is coming out of the market. LOL. I thought it would be interesting to call the same realtor and pretend to be a person considering buying a unit in town and inquire was to his opinion on the Saskatchewan housing market. I have sneaky suspicion that when faced with a potential sale, he would quickly change his tune and say “it’s a great time to buy, get in now before prices run away from you!” .
April 28th, 2009 at 11:39 am
That is ALSO hilarious FrustratedRenter. LOL!
You should TOTALLY do that and see what he says lol. I’d never spend HALF the amount that the company wants to sell us the apartment units for on them. Okay maybe half but $0 more lol.
*smirks on the way to timmies*
April 28th, 2009 at 11:39 am
Jesse G.,
next spring, I would suspect we will see big decreases in rent prices and our vacany rate will go through the roof. I believe our pop will be + or – 1000 people.
Many housing starts will be done by then and most won’t be sold and they will be turned into rentals or the older house will be a rental. There will be many people holding on to two or even 3 mortgages.
With the vacnany rate up, many students will not have keep their property over the summer like this past summer.
Add in many conversions that will be added back to the rental market, the rental market will be flooded with listings pushing down the price for rent.
April 28th, 2009 at 11:39 am
Jesse –
Utterly hysterical
I suspected a lot of ‘conversions’ would have an unconversion experience, so to speak.
Enjoy your newly secure rental! And I love 70’s stylin’ so I’d probably enjoy the funky Partridge Family dividing wall. The bath, not so much.
And FrustratedRenter – nice to have confirmation of what’s obviously happening! Martinsville is *toast*.
April 28th, 2009 at 11:41 am
How are the sales numbers this week?
What’s it look like we’ll end August with?
Thanks
April 28th, 2009 at 11:41 am
I just sold a 2500sq ft house, 3.5 yrs old for $475k in Calgary. Fully finished basement, landscaped etc. I can’t come close to buying a comparable in Saskatoon. too expensive – and yes the property taxes would be much higher there. The report saying Saskatoon being overpriced has definitely got some truth to it. At the Calgary peak, that house would have sold in the 575-585k range. I think Saskatoon is where we we’re 1 year to a year and a half ago.
April 28th, 2009 at 11:41 am
Ralph,
39 sales so far this week.
Hard to say how August will end; we’re over 200 this month already.
There are 23 listings that are currently showing “conditionally sold” status.
April 28th, 2009 at 11:42 am
169 + 39 + 23 = 231 for August sales
Thats a huge drop from last August where there were 361 sales.
So much for the big rush before Oct.15. Demand has no where to go but down.
I can see the headline in the Star Phoenix. “We are now back to historic levels of sales as in August 05-06. We predict a moderate pull back in prices. But this is normal after a hectic 07. We do not foresee a decline like the US. Our strong economy and confidence will blah blah blah…
What they should mention in their report.
“Our market seems to be headed in the direction housing markets all over the world are experiencing. In every market, prices climbed to stratospheric heights because of mania, cheap credit and speculation, then they peaked. Throughout this time sales started dropping and inventories skyrocketed.
Even though sales are at 05-06 levels, housing starts this year are about 3 times the level as 05 . Affordability is the worst in the country except for Vancouver, Victoria and Toronto. Add the new mortgage rules coming into effect this fall, demand will continue to diminish, and supply will continue trending upwards. We do see big decreases in prices. Even though there are many properties for sale it is not a buyers market because all properties are way overpriced. And it is not a sellers market either because we have over 7 MONTHS OF INVENTORY and it is very hard to get your property sold in this market.”
Then maybe an apology to the year long writeups of being “priced out forever” “property always goes up”.
But I doubt that will happen.
April 28th, 2009 at 11:42 am
Oh our good old toilet paper newspaper (SP=TP) will print something like that i’m sure. To take focus away they’ll focus on the Riders, or something else, maybe a cat caught up in a tree …. etc..
April 28th, 2009 at 11:42 am
George wrote: “I can see the headline in the Star Phoenix. ‘We are now back to historic levels of sales as in August 05-06.’ ”
No we’re not.
Aug 2004: 296
Aug 2005: 319
Aug 2006: 350
Aug 2007: 396
A sales figure of 231 would be 20% lower than the lowest August in the last 5 years, 30% off the 5 year-average, and 40% of last year’s record.
Remember, though, we do have the weekend to include in the monthly stats… might add a few more. Still, we need a final surge like July’s just to get up to ‘below average’… right now we’re down in ‘pathetic’ territory.
Given all the factors you mentioned, can you blame people?
April 28th, 2009 at 11:42 am
“MLin Calgary said:
I just sold a 2500sq ft house, 3.5 yrs old for $475k in Calgary. Fully finished basement, landscaped etc. I can’t come close to buying a comparable in Saskatoon. too expensive – and yes the property taxes would be much higher there. The report saying Saskatoon being overpriced has definitely got some truth to it. At the Calgary peak, that house would have sold in the 575-585k range. I think Saskatoon is where we we’re 1 year to a year and a half ago.
”
Are you including the basement in the sq footage? That seems awfully low. Which area is this in?
April 28th, 2009 at 11:43 am
George,
“169 + 39 + 23 = 231 for August sales”
You’re assuming those “conditional sales” are sure things? That’s as optimistic as I’ve seen you in a long time.
Jesse,
“SP=TP”
Funny!
The proponents of our beloved bird-cage liner fervently hold beliefs that no house price is too high, and have a psychological need to rationalize losses and/or explain pullbacks. It’s far easier to blame the bears/Garth Turner/the US or whatever than say, “I made a mistake and invested way too much at the peak of an economic/financial/credit cycle”. No logical argument about economic indicators, credit contractions, overleveraging, interest rates, or anything else can possibly be sufficient to explain to these people how/why what they have *everything* invested in is falling in price.
April 28th, 2009 at 11:43 am
Crikey,
I gotta give the bulls a bone
Bookrat,
sorry, I did not look at the numbers from previous years. It’s worse than I have mentioned.
It’s almost like….like someone turned off the tap!
April 28th, 2009 at 11:43 am
George,
Most of the major banks are posting earnings this week and to be honest I thought I was going to see worse numbers. TD and Royal are still making a good amount of cash as well as the smaller breeds. I believe the US subprime exposure theory for banks was blown way out of crazyville and even I thought and here is another link for the total earnings of all the banks combined still very healthy compared to our neighbours in the south posting losses.
http://ca.news.finance.yahoo.com/s/28082008/2/biz-finance-canada-s-biggest-banks-report-4-15b-overall.html
April 28th, 2009 at 11:44 am
Just enjoying The Daily Show here, and has anyone else realized there are a lot more ads for realtors these days? On TV for realtors in general, and on radio and in the newspaper for individual companies or agents? Not sure Remax can really sell that many places, even half of the total is like 20 this week. 3 a day, for a big real estate company, with multiple offices doesn’t sound so impressive. I believe they open themselves up for criticism by their radio ad blitz, talking about how many places they’re selling in Saskatoon right now!
Seems like they’re trying to drum up business!
Nothing says housing “down turn” like an ad blitz from local realtors and national associations.
April 28th, 2009 at 11:44 am
Well, realtors need to make a living too, I guess.
I do suggest, however, if business is slow, they don’t take a job working in the auto sector.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aQtqtmhA0Ahw&refer=home
April 28th, 2009 at 11:44 am
Nick. Who are you hearing advertised on radio?
April 28th, 2009 at 11:45 am
News item from the G & M. Keep in mind these are YOY numbers:
Resale home listings hit record high
http://www.reportonbusiness.com/servlet/story/RTGAM.20080829.wmls0829/BNStory/Business/home
Sask specific items:
Listing surged the most percentage-wise in Saskatchewan (up 42.5 per cent), Manitoba (up 31 per cent), and British Columbia (up 21.1 per cent).
The average home price declined by 2.4 per cent year-over-year in July to $302,298. Prices fell the most in the Northwest Territories, albeit on a relatively small base, down by 26.7 per cent to $272,779. Prices also declined in the Yukon (down 9.6 per cent), Alberta (down 5.2 per cent), the Prairie provinces (down 0.9 per cent), and British Columbia (down 0.4 per cent).
Prices rose the most in Saskatchewan (up 29.9 per cent), Newfoundland (up 18.7 per cent), and Manitoba (up 13.5 per cent).
April 28th, 2009 at 11:45 am
Crikey,
Those are sure some interesting stats….. Definitely turning into a buyers market for sure.
On a posotive note, the province will be booming for a long time due to our resources so it will be interesting to see what prices will do in the next few years.
ps- Wesco, I won’t be at the big game Sunday, cheer hard for the Riders!! I will be at 4 other regular season games this year though.
GO RIDERS!!
April 28th, 2009 at 11:45 am
Crikey,
Interesting read it seems like they have more aggressive bloggers on that site =o) Should be interesting the next few months but I think out of all the provinces I would rather be in Saskatchewan for this downturn. We are like a penny stock poised for explosive growth and if house prices decline abit and the median wage goes up 10k I think it would be good for every1 around.
April 28th, 2009 at 11:46 am
I think Alberta is best poised to whether any “down turn” they make more, and they just keep making more money as a province, crushing our record surplus, by like 5 billion more.
If the economy ever joins the housing market in going down hill, Alberta owes nothing, Saskatchewan still has a few billion in debt.
April 28th, 2009 at 11:46 am
So if you go to realtor.ca and search Residential:
Saskatoon = 1,885 for Saskatoon and area
Edmonton = 9,925 for Edmonton and area (5.26 times)
Calgary = 10736 for Calgary and area (5.7 times)
So… both greater cities, with just over 5 times the population have just over 5 times the MLS listings of greater Saskatoon.
Aren’t they supposed to have some kind of huge inventory surplus?
Check it out yourselves, go to realtor.ca, search Saskatoon, Calgary and Edmonton. They have almost the same listings per person as we do!! And those 2 markets are experiencing on going price declines and every one admits they’re in a down turn. Well, apparently we’ve just equalled Edmonton/Calgary in surplus inventory and stagnant demand.
Regina only has 1,281 listings, 68% of Saskatoon’s listings with almost 90% of its population.
April 28th, 2009 at 11:46 am
Dan,
I think part of the problem is that many people seem to define “X city and area” a bit differently. For example, when defining “Saskatoon and area”, some people will include Area 6 and some will not. This will give you different numbers of active listings. We also have to remember there are listings “active” that are not on MLS, for whatever reason.
I think however we define it, listings seem to be “historically” high. I’m not sure about this, though. I’d like to get access to the data (listings vs. sales) farther back, perhaps to the early 80’s/last big recession, and see how now compares to then. Adjusted for population, if # of listings were lower, similar, or much higher, we may have a better idea what to expect.
How this ultimately plays out will depend on many factors, some of which many of us may not have seen or imagined yet. Let’s all hope for a positive “black swan”… I could sure use one.
April 28th, 2009 at 11:46 am
Who cares about house prices in saskatoon. Whats the worst that could happen houses drop %50.
Someone could lose only that much if they bought from the peak and not many did so more like an average %25 to %30 for most buyers and lets face it saskatoon is not New York or L.A where losing %50 could be millions or even tens of millions.
The most someone will lose here is $150,000 and will get it back if they stay for 5 years or more. Or they could just hand in their keys and lose their downpayment in any respect not a huge deal when compared to other cities losses Saskatoon or Saskatchewan is a joke.
April 28th, 2009 at 11:47 am
Now that’s putting it in perspective, James.
Perhaps not so easy to say when it’s your money.
There is much more to life than money, however….
April 28th, 2009 at 11:47 am
James, not sure why everyone thinks they’ll make back a drop in 5 years. After even a 30% correction in prices, everyone is going to be shell shocked. Probably not a lot of gains for the next few years after it bottoms out in like a year. Maybe goes up by inflation for a few years after that. Maybe keeps going down if people keep moving to Alberta, which seems to be the cool thing to do again.
April 28th, 2009 at 11:48 am
This is just sad! From an ad for a town house in Lakewood.
” Accepting all offers to at least payout existing mortgage ($339,000). Moving to a bigger house so can’t afford 2 mortgage payments.”
Listed at $345 now(was previously 379, then 355 … now appears as “new” listing at 339). Problem is the similar nice town houses around are low 300’s – almost identical neighbour for 309, and the cheaper models are 230 to 250.
April 28th, 2009 at 11:49 am
Also funny as listed as “Briarwood” when Pawlychenko is clearly “Lakewood”. Desparate to sell?
April 28th, 2009 at 11:49 am
Dan,
As a homeowner I can honestly say I dont care if home prices dropped 20-30% I wouldnt give a rats ass. Dont know why everyone is so worked up if you say they are. Only people it matters too are people trying to make a quick buck flipping or som1 trying to buy a house and the latter I hope it works out for them cause I was in their shoes once as well. But if you are talking about most of the population we dont sell our houses every year moving to and fro you buy a house and you live in it for a long time then you die. I hope I cleared up the fear for you.
April 28th, 2009 at 11:49 am
While I’m happy with the way things are going in the Saskatoon house market it brings me to a dreary realization… I have NOTHING to argue about with anyone on here, I agree with most points! :’( *sigh* What am I supposed to do with all my free time now? LoL
Armoth,
It’s just perceived value. The same thing went on during the “boom” when everyone was ECSTATIC about their property gaining value. You’re right, it shouldn’t really concern homeowners, only first time home buyers and speculators.
April 28th, 2009 at 11:50 am
Not EVERYONE is happy that house prices have gone up.
On paper I’m lucky; my ‘asset’ has more than doubled in value. Problem with that is if I want to keep it I have to buy it again but this time at inflated bubble values.
My wife walked out on me and the kids but her actions don’t matter and I still have to split the house with her.
Even with only one salary in the household I could still afford to buy her out IF prices hadn’t gone insane the last two years. Now if she’s gonna take a buyout she wants peak price or at least 90% of it. And if I won’t pay that then she figures I should sell. Don’t really want to do that because this is the kids HOME and there are enough other changes to deal with that I don’t want to add one more big one into the mix but what are my options?
So as a homeowner I would be happier if things had continued historically and this was valued closer to the $200000 that it should be at instead of almost double that. But I know I’m unique. I’m sort of a homeowner AND a home buyer.
April 28th, 2009 at 11:50 am
I am facinated by hearing the same thing from all over north-america about housing and price increases and decreases. What Canada is now going to face in the next 6 months no-one will be able to deny and hopefully the illusion will be unmasked. We have leveraged ourselfs by chasing an asset that has appreciated due to only speculative demand and not real fundementals. This is not a rant but based on fact and first hand knowledge. Saskatoon is facing what Calgary faced in july of 07. We peaked and that is it. Wages did not keep up with prices so people stopped buying into the dreamworld that speculation created . Look at California,Arizona,Nevada,Florida a couple of years back and hear the same things you are all saying today. You are at the top and denial and worry are about to replace the rich feeling.
If you search bc,alberta and toronto housing blogs and some of these are from realtors, you can see a definate mind-set change as we have all peaked and now people are realizing that this was all a dreamworld.
I am not a bitter renter but have a vested interest in the market as I work in new construction in Calgary and It has gotten ugly and I mean ugly. You are not hearing about the massive layoffs in residential construction because it is being absorbed by people switching to commercial or industrial building. But with high inventory and credit tightning new projects will be put on hold. Construction is a huge driver of alberta and when all this goes down alot of investment will disappear. Contrary to the belief that alberta is oil, I say for the last 3 years it has been in construction.
I saw this 1 year ago and realized that this insane housing vs wage imbalance could not be kept up. I started looking at the U.S. and their past history as a guide and came to the conclusion that speculation was driving prices and when the large money pulls out of a market it corrects back to wages. Sort of interesting that when calgary started correcting saskatoon took off and now saskatoon is correcting newfoundland is taking off. Curious it almost seems like it is massed investmnet money manipulating markets by huge capital and pulling out to another market en-mass. Just a pure speculation
If you are thinking of selling just a little advice use a baseline 3.5*wages = mean housing price. If you are selling for more sell it but put the price atleast 10% less than others in the area to create a quick sale. pocket the money you made in an investment greater than inflation and wait. If you are planning to move up sell your property first. I know people who are stuck with 2 mortgages out here and they are in trouble.
Pleae do not blame the realtor’s. They have a job to do and that is to sell,period. It’s damn hard, I imagine to tell someone their house is priced in the clouds. this strikes directly at ones ego and self worth and a large part of the financial wealth of a homeowner. I would hate to have that job in the downturn. Knowing your forced to price an asset that will never sell and being blamed is a hard pill.
Just a rant, check out the past in Calgary, and the U.S. and wake up.
April 28th, 2009 at 11:50 am
Armoth,
Very good point about not worrying about prices if you are a homeowner. I suppose to some people it’s a bit of a shot to their ego if they just bought because now they could have boughten a bit cheaper but if they were satisfied when they bought they should try to keep that mode of thinking and remain satisfied and not try to compare themselves with other people (sometimes easier said than done).
I guess the other group of people worried other than investors/flippers are the people caught in between houses and from the sounds of it there is lots of it happening. I was just talking to a friend of mine in Regina yesterday morning. His coworker bought a place earlier this year and tried to flip it immediately for an extra 100k. The price kept coming down and now every other condo on his floor is for sale asking around the same price he bought his for. Ouch
April 28th, 2009 at 11:51 am
Good post Timbo.
I like the front line real person stories even more than the analyst reports and statistics.
At my work in Saskatoon there’s a few first time buyers with no interest in buying at these levels, and it seems as though the Sask hype is wearing off. We’re all making vague references to moving out of province (or even country) if this doesn’t correct heavy soon.
And still I hear other friends talking of building and flipping houses!
Its a nice place this city, but a little isolated and behind the times.
I mostly look forward to a housing/credit crash so all those jackasses in their fuel-guzzling pick up trucks (never hauling a damn thing), have the beasts repossessed.
April 28th, 2009 at 11:51 am
Gettingdivorced,
Check with your lawyer to see if you could sell the house for next to nothing to family or to your best friend. Then you can give your wife half of 5000 dollars and your friend could keep the house in his name for 1 year naming it as his/her primary residence. After 1 year your friend sells the home tax free sure it will cost you closing costs and stuff on both transactions but would be a good way to screw over your wife.
April 28th, 2009 at 11:51 am
Armoth:
Im not out to screw her out of anything. We rose together and she will receive 50% of assets fair and square – for my own peace of mind if nothing else. Life happens. Learn and move on but dont carry bitterness as it hurts only you. I am happier now than I was two years ago and she is realizing that she did not make a very wise choice.
Apart from being unethical (which matters to me) I dont think your scheme would work anyway. House was bought together so both names are on the title. If I tried to sell for 5k to a friend or family member, she would have the right to match the offer, pay ME out MY half at that price, and keep the whole thing.
April 28th, 2009 at 11:52 am
Gettingdivorced,
I admire your kindness….
April 28th, 2009 at 11:52 am
Armoth, obviously those buying/selling are those who are afraid of a drop in housing prices. In general, for the next few years after a correction, everyone is going to be wary of paying a premium over previous year’s prices.
Sucks to be the guys trying to cover the $339,000 cost of a townhouse, especially when initially they tried it at $375! but hilarious they list their “Lakewood” Pawylchenko Lane place as “Briarwood” and really, what were they thinking? $339 to buy a townhouse in Lakewood? Those things were $120 new, 4 years ago. At some point, sellers like that are going to have to accept a loss. Especially, as you point out, others bought for far less. So their competition, who bought at $120 is more than happy to sell for $300.
Selling of for a loss is a demoralizer. Will drop prices, their friends are all going to get very bearish on offers. Kind of a domino effect.
April 28th, 2009 at 11:53 am
Homebuyers turn screws on desperate sellers
http://money.cnn.com/2008/08/29/real_estate/sellers_concessions_in_buyers_market/index.htm
priced out last couple of years? don’t worry, the tables are turning. This is coming in about 2 years.
If you want or need to buy a new home? Make sure it is completely finished, (landscaping, deck, fence, driveway, sidewalk, basement walls insulated and drywalled is finished otherwise I wouldn’t even look at the property). Make sure it has a new home warranty and offer at least %15 less than listing. Because within a year, it will drop more than 10-15% and if you are stretched with affordability, you won’t be able to tap the home equity like years past and finish the house.
I suspect many people won’t do this and we will see in the next few years in Stonebridge and Willowgrove as well that have gravel driveways, no fence, no deck, not much for landscaping cause they have no equity to tap. Many will be house poor. Some specs who can’t sell won’t even cut the weeds.
April 28th, 2009 at 11:53 am
The Joker says
And… here we… go!
Real estate collapse? Bring it on!
http://www.canada.com/vancouversun/features/usaid/story.html?id=560c333a-a888-4d19-aa14-d4b5108c208f
April 28th, 2009 at 11:55 am
Can I get an Amen….*AMEN*
AHEM…i wonder if the SP will print it..
April 28th, 2009 at 11:56 am
I think that some flippers are hard workers doing it part time to support families in hard times. I dont like multi flipping people though. They are the ones that drove prices through the roof. We bought 2 years ago and our home went from a purchase price of 145K – 300+ which is stupid. We did not sell as everything else was high. I hope our home settles at the 150- 160 range personally.
There is a false market in Saskatoon and elsewhere in the province. High home prices but mediocre jobs and pay. Homes will be cheaper in the next year that is true but the cost of lending will be higher which really hurts. Our home is smaller and to me they go for more money per square ft. High energy prices are to blame for this.
We are somewhat protected from the USA style fiasco. They gave loans to illegals and not just to people who couldnt afford it. They are in a world of hurt ( I see it first hand) Our prices reflect the trade and economies of commodities and some mfg exports. There are lots of variables.