Saskatoon real estate: Week in review (December 29–January 2 2009)

Does anyone have a read on where housing starts will be for 2009? Another year of Saskaboom?

edited by moderator

Brian,

that is a nice home, but I can’t afford it. It is 1 million dollars too expensive for me

Norm,

For every 1 house not built = 4 jobs a year lost. Adding 250 houses not built plus multi’s, there are quite a few jobs lost and/or not created. Economic activity will be less for the real estate pyramid in 09. On one hand, it is good to see that housing starts come down to get rid of inventory but then there are job losses to deal with.

To answer your question from the title post about inventory; many listings will appear again in the spring. They did not sell, so the unwanted landlords found renters, took it off MLS.

But the problem is that few properties bought in 07 or 08 can cash flow positive. And the ones that can make money are because of the artificial bubble of rent which will deflate come summer if not sooner. It is a myth that rents always go up. They can and will come down here.

Each month these landlords are losing money, not only in covering mortgage costs each month but in deflation in house prices. So I think there will be a scramble of people listing their homes come just before spring.

One wild card I will say is the elimination of the gst for a year, which will increase demand but prices will fall even more. Example. I buy a spec home from xxx homes for 500k in 08, but in 09 you can get the same home for 475k with the gst cut. This would add more downward pressure to resale home prices.

“It seems to me that resale property offers a huge advantage over new at the present time. I think that it’s far more likely that resale drags new home prices down eventually.”

For now, I can agree. But heading forward, I believe builders will continue to lower their prices and/or have bigger incentives with a possible 3.5% cut; this may swing the pendulum the other way.

Builders have quite a bit of breathing room to play with prices and incentives while people who bought a spec home at or near the peak do not. This would apply more to the new resale homes.

So, where are the next bailouts gonna happen?

Retailers?

http://network.nationalpost.com/np/blogs/executive/archive/2009/01/05/retailers-may-soon-require-a-slice-of-the-bailout-pie.aspx

Or maybe some of the 44 states in trouble

http://globaleconomicanalysis.blogspot.com/2009/01/44-states-face-huge-budget-shortfalls.html

Well Robin, you are certainly entitled to your opinion, but then again, I do get tired of people on this board always bashing my home town.

I guess I could tell stories about the times I’ve been to the states and got hustled by a taxi driver for nearly double the fair. Or the time a co-worker had a shotgun pulled on him. I could bring things like this up but I won’t because quite frankly, the politeness of people varies literally from clerk to clerk, person to person. All you do here is generate stereotypes. I mean really, what could be ruder and more hyprocritical than somebody going out of their way to tell you how much more polite and friendly they are than you. If people are so friendly, housing so affordable, if the manure smells like flowers, please fulfill your dreams and go live there.

i found people in saskatoon were quite high on themselves even before the “boom” much more so than regina’s humility, add that to saskatoon’s frequent hold ups and robbings in the affordable areas and it was pretty easy to go west

for the record, i actually find alberta people more friendly

“and I also suspect that it’s going to paint a very depressing set of contrasts as last year’s values climb and this year’s continue to flatline or decline.”

from bookrat

i agree, actually a good reason to keep graphs the way you have Norm, the instant year over year comparison will be nice after a few months when a trend develops, might finally convince some delusional condo sellers to get motivated, their crazy expectations a big part of the reason I moved to alberta, and most of the places I looked at are still on the market, or equivalent, at lesser price

Sorry to get off the real estate topic but I feel I must comment on the retailer comments. I am not sure Saskatoon people are rude. Apathetic, lacking motivation, something along those lines is more like it.

Examples: Erindale McDonalds – I don’t know who owns this shitshow, pardon the language, but I challenge anyone to walk in their, not find the kids horsing around and garbage all over the tables. Hats on sideways, dropping f-bombs in earshot of the customer, shirts untucked, making out with boyfriend/girlfriends, wearing lululemon pants. When I worked there it was a privilege and you worked your tail off.

Pizza – 3 places, Dominos, TJs, and Family – ridiculous delivery times (45mins to 1.25 hours), wrong product delivered, call to speak with manager and they basically tell you to go somewhere else.

Extra Foods in Briarwood – fruit flies and rotting spots on tomatoes, mold on at least 10 different pints of blueberries. I ask the cashier why this is so, as 4 different lines are empty and workers standing around. The answer, as it seems to be with all employers – “We’re busy”

Apparently if you are busyt nowadays you are permitted to be incompetent. Sorry for the rant, but I do fear for our “next generation”. I hear way to many stories of moomy and daddy being prominent business owners/politicians and marks being changed at the high school level. I see these kids cry when they are given the marks they were in university. And very few have any sort of regard for appearance for work ethic. I hope these kids all lose their jobs, think about their actions for a while, and then find new ones and return with a changed attitude.

Not Impressed: kids these days know that they can get a new job anywhere else, so they aren’t worried about their work ethic. That is the big downside of the Saskatoon economy right now, lots of jobs and not enough people. These are the entry level jobs, and now that housing prices and rents have risen, many people can’t afford to live here and work minimum wage.

I honestly wonder where this will lead. Will employers have to pay more and raise prices? Will restaurants and stores have to reduce hours? Already the drive thru lane at the Preston Crossing Burger King is closed over the noon hour at times.

Even though I just bought a home in Saskatoon, I hope housing prices or rents go down so that we can get more entry-level workers who can afford to live here.

A few more graphs, but maybe one graph per topic if they’ll record 2 years?

“I wonder if I should toast the weekly average for 2008.”

My vote is yes. It would eliminate much “busyness”, and IMHO the weekly data is far too variable to be of any practical use. It is interesting, but not useful.

Love the overlaid graphs, btw.

Anyway weekly average could just be a different graph?

And I think year end graphs of median and 6 week averages in the month/year in review, separate from the weekly average would be nice.

Norm and Matt;

Matt, I hate to say it, but it really is true: I’d say that about 9 out of 10 Tulsans on the street (or in malls, etc) will go out of their way to either greet you, or say “excuse me,” ask, with a smile, if you need assistance (esp. if they are a sales clerk) or even open a door for you! Or, if you offer to open a door for them, they’ll thank you (as opposed to staring blankly at you, or otherwise completely ignoring your generosity).

(You’ll note Norm, however, that I never said that Saskatonians were “assholes.” I did, however, make the observation that we seem to be walking zombies at times)

Now, of -course- one cannot call every single Saskatonian impolite. I’m not so ignorant/naive as to believe that every single person living in Saskatoon is discourteous and unfriendly. That, of course, is not the case. Of course there are those individuals who are polite and courteous to strangers on the street. I myself try to be polite

and courteous to others. I’ll hold open doors for others, and I’ll actually say “thank you” when others hold the door open for me, etc. But I have to tell you that overall, in general, Saskatonians are not very polite. (As a matter of fact, Readers Digest once did a study of the most polite and friendly cities across Canada, and Saskatoon scored second last in this study–so almost dead last. So it’s not just me who has observed this tendency for…zombie-ness on the streets.) There are always exceptions to the rule, but overall, Tulsans have us beat in the courtesy and politeness department. Matt, I guess you’ll just have to take a trip down there for about a week, and observe the courtesy-differences for yourself.

Amanda has been living here permanently since 2004. Early on, she told me how impolite and oblivious people in public are here, when compared to the people back home. *Especially* people in the service sector. (To be blunt, the level of retail service here is piss poor. I’ve experienced it first-hand. If John Doe owns a retail store, you’d think he’d want to go out of his way to serve you, or at least acknowledge your presence, but that really doesn’t seem to be the case here. Not very often, anyhow.) At first, I found it hard to believe Amanda and her observation. But I began to see it for myself, and she’s right. I guess it’s just something you have to realize for yourself. The level of service and courtesy in Tulsa is just…more prevalent I guess.

; ) And you have to remember that I’m not reflecting on people’s character or their true worth or anything. And there were plenty of examples of Good Samaritans during the crazy blizzard we experienced a few Januarys ago. I’m merely making the observation that as a whole, Saskatonians on the street, in the mall /etc, just aren’t very…polite. People will tend to walk past each other/walk in front of each other without any sort of acknowledgment. And I can’t count the number of ungrateful people I open the door for, or move aside for, etc. That’s just not the case in Tulsa. Sorry Matt, but it’s just the truth. Saskatoon people are just…different that way.

[Of course, if I were to get into an involved political/religious discussion with an average Tulsan, the discourse may not remain as pleasant (as I am pretty much a liberal, and Tulsa is right in the heart of the conservative bible belt!).]

Also, I wish to point out that when I asked earlier why I was still living here, I was, of course, reflecting on the low cost of living in Tulsa compared to here. As you all know, I firmly believe that housing prices here are grossly distorted from their actual, true value. There is just no way that a small 1920s home north of downtown is worth $300,000. It just isn’t. Not for what you get in this small city. Does that make me a Saskatoon basher? I guess I fail to see that connection, but so be it. Am I wrong to make that observation? I’m just a realist, I guess. Rather, a “realist” living in this Bizzarro world where the cost of living in this small, northern city surpasses any number of U.S. cities whose population is 3-4 times greater than ours, with many more amenities. It doesn’t mean that I think Saskatoon is completely useless, or that I think it doesn’t have any worth. There are things I really enjoy about Saskatoon. But the cost of living here has gotten way out of hand. I am definitely guilty of getting on my pedestal on more than one occasion and getting snarky and bitchy about the cost of living here, because it’s not only affecting my bottom line, but also because it’s needlessly forcing good people–especially the elderly–out of their homes, and costing them an arm and a leg just to survive. So you’ll have to forgive me for ranting about how illogical I believe this current “boom” is.

In the airport on the way home, we got to talking to a young man from Wisconsin, who’s visited Saskatoon before. He liked hanging out here earlier in the summer, but knew how small the place is, and what its limitations were, etc. He was asking me whether it would be possible to move to Saskatoon to teach (i.e., whether a U.S. citizen would just be able to do that without dealing with any sort of immigration hurdles). When I told him how much the cost of living has risen in Saskatoon, he looked really puzzled and asked “WHY?”

(That question remains unanswered…)

; )

Nick, the graph is good, but do we have to cook the books to prove a point. According to Norm’s week in review numbers, for end of each month.

December 2008 ended with 1121 not 1127

January 2009 ended with 1124 not 1156

February 2009 ended with 1298 not 1313

It’s in print just review Norm’s posted numbers form last “week in review” for each month