Saskatoon real estate: Week in review (July 7-11 2008)
Total active residential listings on the Saskatoon real estate market saw a net gain of 28 units this week, increasing to 1,461 from 1,433 last week. A total of 194 properties were listed for sale, including 51 that made a repeat entry into the system (cancelled and relisted). Today, there are 943 single-family homes and 412 condos bearing the “active” status. An additional 41 homes are flagged as “conditionally sold.”
Sales of Saskatoon houses and condos were up about 10% from last week with a total of 75 properties hanging a sold sign. At the same time, demand was down about 37% compared to the same week last year when 119 houses and condos changed hands.
The average selling price of a Saskatoon home dropped again for the third consecutive week to $292,185, the lowest number we’ve seen since the week of April 28 – May 2. Most often, I’m warning about the potential for skewing in the weekly stats, but I don’t see that so much over the last couple of weeks. I think there’s little doubt that prices have dropped some as motivated sellers battle it out for a limited number of buyers. There actually seems to be a decent selection of single-family homes in some nice areas available for under $300,000.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
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There's 27 Comments So Far
May 1st, 2009 at 2:21 pm
Wow, only two overbids…although the 22K one is quite significant.
And why did someone overbid for something in Area 4? Was that your Caswell Hill house?
May 1st, 2009 at 2:22 pm
jrochest,
No. My Caswell listing went very close to list, but not over.
That was a $115,000 condo on Avenue X.
May 1st, 2009 at 2:22 pm
What, the same building as MLS 314640 ??
Is there something special about Avenue X that I’m missing, here?
May 1st, 2009 at 2:22 pm
Well, it’s in the building next door.
http://www.realtor.ca/propertyDetails.aspx?propertyId=6847391
Maybe Russ would have better luck with his if he removed all of the photos and listing information.
May 1st, 2009 at 2:23 pm
Heather D. said (on previous page):
“Norm/Crikey,
Coming from a person who’s talked to a few different mortgage brokers over the past year, they will actually TRY to SELL you on 40 year mortgages! I repeated countless times “no, we’re not interested” but they insisted “you can benefit from lower monthly payments NOW, and change the amortization later on”. Wow. Now why would they push this on those who have the means for a regular mortgage??? ”
You know, Heather, I can afford a traditional mortgage, and I’ve had the exact same experience. I expect many people have. The last time I got pre-approval for a mortgage (no, I’m not ready yet
), it was just “assumed” that I’d want to take the 40-year amortization. I was also qualified to borrow an insanely large amount of money, far more than I would ever dream of borrowing. Only by vociferously protesting did they run the number I wanted. I think the natural reaction to this is, “oh, they’re trying to fleece me” and subsequently to feel annoyed/angry. I did too, at first.
What one has to realize is that, yes, mortgage brokers are going to get bigger commissions the bigger the mortgage they can get you to qualify for, and banks are going to make FAR more money (interest) on you the longer the amortization you take. These people have jobs, and they are not (necessarily) acting in your best interest, they are acting in the best interest of themselves and their employers. I feel bad for those that may take these mortgages when they were not in their best interest, but anyone who makes the largest financial decision of their lives without really running the numbers has got to take some personal responsibility for their actions. I don’t mean to sound pedantic, but I think assuming that banks/brokers/etc. are working in your best interest is a bit silly. If they get a bigger commission the more you borrow, why would they?
You seem to have a good head on your shoulders, Heather… I have a feeling you’ll be fine.
May 1st, 2009 at 2:23 pm
Demand is down from last year (which was obviously insane), but still holding strong by the looks of it.
Norm:
What is Regina at now for total listings?
May 1st, 2009 at 2:24 pm
Good old mortgage brokers, makes sense though, 40 year mortgage means A LOT more interest payments to them.
.
So even though demand was up from last week, total listings are still climbing?
.
I think an average price of $270,000 (about 10% down from peak) by the end of 2008 is almost overly optimistic now, in light of ongoing increases in inventory, dropping house prices elsewhere in Canada (see higher paying Alberta), and now mortgages about to get tougher, max pre-approved amounts down…
with mortgage changes, I should have said a 15% drop in prices from April, instead of the conservative 10% drop
.
Recently talked to a U of S grad, and apparently with still much higher wages, and now equivalent housing prices, the graduating class this year (at least in this girl’s social group) is back to moving to Alberta, just like in the old times (more than 2 years ago). Better jobs, and they can’t afford to buy in Saskatoon or Edmonton anyway, so they might as well rent in Edmonton, live in a bigger city and make way more… Oddly enough, the one staying here got a job at a real estate office, with her university degree, makes almost as much as I did back when I used to have summer jobs, pre-degrees. A move to Alberta to work in an office would mean at least $5, maybe $10 an hour more, as some of her friends who recently moved to Alberta make. She makes the least.
Just find it interesting that the cool thing to do once graduating college is again to move to Alberta, and probably the financially prudent choice.
May 1st, 2009 at 2:29 pm
http://www.canada.com/saskatoonstarphoenix/news/business/story.html?id=acdde467-f85c-44b8-9330-82840d9453dc
Gotta love “cooling not dropping”, I’d say prices go down = dropping. Anyway, apparently a huge/record number of places under construction, to add to already record inventory. Mortgage changes.
Prices dropping?
May 1st, 2009 at 2:29 pm
Mithan,
1028.
May 1st, 2009 at 2:29 pm
Saskhouses total listings continue to climb too, add 394 Saskatoon houses to the 1,461 on MLS.
1,855 for sale on MLS and Saskhouses in Saskatoon, and growing
May 1st, 2009 at 2:30 pm
Crikey,
Ah yes, commission would definitely play a BIG role. I bet some brokers drool like Pavlov’s dogs when they sign people up for a 40 year mortgage! LoL
The real problem is that the majority will take minimal advantage of increasing their payments and paying down their mortgage faster. People always find other things to spend that extra money on instead of putting it towards debt. Similar to saving towards retirement, if one doesn’t have pre-authorized transfers taken out of their bank account each month, that extra money isn’t going to find it’s way into an RRSP.
I was appalled when I found out the GARGANTUAN amount of money my husband and I were approved for! We were presented with the max amount we could borrow PLUS what the mortgage insurance would cost. They didn’t ask what amount we were comfortable borrowing. We were tempted with how much we COULD borrow rather than SHOULD.
You’re absolutely correct in saying that it’s the responsibility of the individual to look out for his/her best interests – especially when making the biggest purchase of a lifetime! Unfortunately some people are easily coerced… that’s why it’s so important that lending standards improve. I hear Britain is talking about minimal 10% downpayment now.
P.S. Thanks for the compliment, my momma didn’t raise no fool! ;’)
May 1st, 2009 at 2:31 pm
I think in many ways, mortgage brokers were almost as responsible for the over-boom as much as real estate agents. Brokers convinced people who should have saved up or rented that they could afford anything, but in the end, buyers just bid each other up, when incomes and the local market didn’t justify it.
The same way real estate agents keep say the market is going up, when in private, they’re all scared shootless that there is a lack of buyers and of the mortgage changes. Behind closed doors, I’m sure both agents and brokers know the market is going down, but they need to keep comissions up as long as possible by prolonging the boom … until a possible crash (USA) or correction/moderate decline (hopefully).
May 1st, 2009 at 2:31 pm
hey norm!
just out on vancouver island right now and i was looking through the vancouver sun….it looks like the larger developers actually use “real estate marketing companies”. Just wondering if the same happens in sk….i don’t think so but i thought i would check with you. also if you could comment on what exactly they do that would be fantastic. I’m really curious.’
I also checked out prices out here and they don’t look so bad compared to boomville:)
May 1st, 2009 at 2:32 pm
hey missylu,
I’m not sure what you mean by “real estate marketing companies.” I’m sure that some of them probably utilize services of advertising agencies which would create ad campaigns including the creative work.
Hope you’re having a great holiday.
May 1st, 2009 at 2:32 pm
“…it looks like the larger developers actually use “real estate marketing companies”… also if you could comment on what exactly they do that would be fantastic. I’m really curious.’
To add to what Norm said: in Saskatchewan the Real Estate Act specifies that only registered and licensed real estate professionals (salespersons, brokers, etc.) may conduct activities which are considered a “trade in real estate”- which would include, for example finding prospective buyers on behalf of a seller.
It is permitted to do certain limited advertising activities without being licensed (saskhouses for example), but if an advertising company were to step over the line into “trading” (and they have before), they would:
a) be unable to legally collect any commission; and
b) be running afoul of provincial law
Bottom line, I’m not sure why any company like you seem to describe would exist in Saskatchewan; they can’t do anything but advertise (which realtors like Norm are already very good at, while also being able to trade in real estate), and why would a realtor pay to use their services rather than use their own advertising skills, or those of their brokerage or professional association?
May 1st, 2009 at 2:33 pm
lawtalkingguy,
Questions for you. There is an exemption in the Act for developers which allows them to have unlicensed sales people working for them. Do these people have to be employees of the company?
May 1st, 2009 at 2:33 pm
Norm-
Because of my name, I should clarify that I’m not a lawyer (yet).
Based on my understanding of the Act yes, they would have to be an employee of the company (where the “developer” is a corporation), or be the owner or partner (if the developer is a partnership or sole proprietorship).
The developer is the legal entity- whether Joe Builder, or Builder Corp. (whose employees act as builder corp, and are therefore exempt). Any third party hired by the developing legal entity would not enjoy the same exemption.
Once again, this is just my interpretation, but it would be consistent with other aspects of the Act.
May 1st, 2009 at 2:34 pm
The best example in BC is Rennie Marketing Systems, rennie.com
The owner, Bob Rennie, is a realtor and developers contract him to sell their units for him at X amount/per unit.He does all the marketing, but he’s more hands on than most – he’s usually involved from the planning stage to make sure the product is going to be sellable in the first place. There are quite a few other BC marketers, Ed Wong, Maverick, MAC etc. They’re all licensed realtors as far as I know. They live and die on pre-sales.
Theirs is not an enviable position at the moment. The pre-sale market has collapsed in Vancouver.
May 1st, 2009 at 2:34 pm
Thanks for all of the feedback. I was browsing the vancouver paper homes section and I noticed that most large developments seemed to be handled by a “real estate marketing company”. I hadn’t heard of this before so I just wanted to get some feedback. To add to this….are projects such as the Rumley & 2nd ave lofts sold by “sales reps” or “developer reps” as stated on the rumley contact page? What would be the difference between the developer rep & the remax person listed on the rumley contact page?
May 1st, 2009 at 2:35 pm
what happened to the sreb web site
http://www.sreb.com/
did they forget to renew, or is there a new url?
May 1st, 2009 at 2:35 pm
Carl,
They may have dropped the domain when they changed their name. You can find that site at srar.ca now.
Missylu,
It’s possible that the Rumley folks have some kind of a deal with their agent that allows them to sell some of the units themselves but I couldn’t say for sure.
May 1st, 2009 at 2:35 pm
I think we’re all getting away from the points that:
listings are up, way up,
sales are down,
prices are starting to go down,
lots of new supply on the way,
tougher to get mortgages to decrease the number of buyers even further!!
Already a buyers market, after bargaining.
About to become a better buyer’s market.
May 1st, 2009 at 2:36 pm
Jim,
It’s great that we have you around to repeat the same talking points day, after day, after day. Otherwise, we might get off track and someone could come along that doesn’t notice.
Don’t worry man! You will own a house some day.
May 1st, 2009 at 2:36 pm
I agree with Norm on his laat comment to Jim. I’ve been following this site and it seems that the majority that post on it are the gloom and doom people that don’t own. What would be the percentage of the Saskatoon market that doesn’t own? Basically what percent of Saskatoon rents? I’m involved with real estate and the boom obviously brought all kinds of issues good and bad. It would be nice to see a comfotable level of growth obviously but again I’m amazed that these gloom and doomers say what they say. What were they saying a year ago? Was the sky falling then as well? I’ve heard this since 1996 when I first got involved. Mostly from jealous people as usual. Anyway, I’ve noticed this week our phones are ringing and for some reason interest is higher then the last few weeks. Wait and see I guess. Looking forward to the future. Saskatoon is going to be exciting.
May 1st, 2009 at 2:36 pm
JC,
From what I understand, the people who bestow the title of “doom and gloomers” on those who desire a correction are ones who aren’t in the situation of first time home buyer. These same people somehow justify a 45% hike in real estate value over the course of ONE year, AND on top of that continue to root for further increases. I just have a problem seeing how such swift inflation is beneficial for a community? It certainly takes away more opportunities for people to own. I suppose it defines social status, the great divider.
May 1st, 2009 at 2:36 pm
You are correct Heather. I don’t think the 45% is justified nor do I root for further increases. I root for a strong economy where we can have growth in all aspects of society. I look forward to growth and don’t believe in holding it back. However we obviously have to help the people that sometimes get left behind in certain areas for whatever their circumstances for doing so. I believe for striving for better and work hard to do so.
May 1st, 2009 at 2:37 pm
I think it was 51% increase over one year, but it’s okay, because our wages increased (what was it, 4%?) albeit at a slower rate than Alberta, where house prices dropped! and are now cheaper than here.