Saskatoon real estate: Week in review (July 9-13 2007)
Saskatoon real estate sales resumed the hectic pace we’ve become accustomed to this week after recording a fairly significant drop in unit sales the previous week. 119 Saskatoon homes were reported sold, almost double the number reported the week of July 2-6. New residential listings slightly outpaced sales with 127 new listings coming on the market.
The market did continue to produce some hopeful signs that some of the heat may be coming off. The average overbid fell short of the $20,000 mark for the first time since the week of April 9, and more than 20% lower than was recorded just last week. The percentage of homes which sold above the asking price was also lower at 63% and the difference between the average list price and the average selling price of a home was just $10,240. We have to go all the way back to the week of March 26 to see a list price to sale price ratio which is smaller than this one.
Finally, you may notice that the average recorded selling price of all Saskatoon homes declined for the third week in a row. Realistically, July could bring the first drop in the average selling price of a home this year.
Are we going to see this trend continue through the summer months? Is “the boom” over, or is this just a much needed breather for buyers? Please let me know what you’re thinking.
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Norm Fisher
Royal LePage Saskatoon Real Estate
There's 19 Comments So Far
April 7th, 2009 at 2:34 pm
It would be nice to also see the pace of price drops should they continue to happen.
Will it be cumulative, or controlled and restricted?
Very helpful statistics, and I think something is in the horizon as people start to realize the folly in all this boom.
April 7th, 2009 at 2:35 pm
Hey Alex,
I can promise you this; if the market starts to go in the other direction I will be following it down just as I’ve followed it up. I’m not sure what that will look like at this point but we’ll figure something out that gives people an accurate picture of what’s happening.
I am somewhat hopeful that we may continue to move towards more balanced conditions, but I don’t anticipate big price drops over the short term. The supply and demand issue is likely to continue to favour sellers for some time. I would be very pleased though if we could get back to a market where the pace of appreciation was slower, where there was some kind of reasonable selection of property and where buyers could once again look to recent sales for pricing guidance instead of bidding blindly.
April 7th, 2009 at 2:35 pm
Norm,
Yeah, very much so. It seems to be fueling itself by how quickly the craze set in. It was practically overnight, so the statistics are in a bit of a tailspin.
Still though. The overbid dropping likely means demand is dropping, which could affect other aspects of the prices as more changes set in.
April 7th, 2009 at 2:35 pm
Alex,
The “overbid” did climb quickly and substantially over the first couple of months. If the downward turn is actually a trend, it will be interesting to see how quickly it declines. Those who are participants in the market are very, very tired. Buyers and agents would welcome a break from the hectic pace we’ve been seeing this year.
April 7th, 2009 at 2:36 pm
As the average list price’s go up the over bids will go down?.Topping off I think?.
April 7th, 2009 at 2:36 pm
I don’t think this market is sunstainable. Average selling prices are already trending downward. What do you think?
April 7th, 2009 at 2:36 pm
Drew,
I think you’re probably right, at least for the time being. It’s been a long steady upward push which can’t go on forever. Many agents are still listing properties below recent sales to create big activity. That practice, and “delayed presentation of offers” is likely to go away if things slow down for the summer.
Saskobserver,
It’s worth noting that there were several huge homes sold in June which were between 600 and 900K. Those properties did skew the average for the month up some. I would have expected to see the average drop a bit, even if the market was fairly level. I don’t think we can expect to see much for major price drops in the short term unless the demand really comes off in a serious way and inventories begin to build up some again. However, many “hot” markets have cooled off suddenly before.
April 7th, 2009 at 2:37 pm
These numbers are a good example of what burst Tucson’s bubble in the real estate business. When the numbers started to decline all the heavy-duty investors freaked and started to unload all their properties and head for the hills. This put inventory levels through the roof and home prices saw a significant decline over the next few months.
One difference that I see in Saskatoon is that we don’t have the manpower to build as fast as they were building in Tucson (a great deal of the homes flooding the market there were only 1-10 years old), so I don’t think the inventories will be overflowing when the investors decide to pull out. It would be nice to see the market begin to stabilize over the coming months though. Perhaps if the prices continue to decline we’ll see people actually moving in to these homes?
April 7th, 2009 at 2:37 pm
Batman, not sure “these numbers” will be enough to scare the investors off quite yet. While I have presented them as a bit of encouraging news for weary buyers, we still have a majority of homes selling over list at an average of close to 20K. One can hope that things continue to move in this direction but the market is still pretty darned hot by almost any measure.
April 7th, 2009 at 2:38 pm
Norm, I have also noticed a downturn in the number of offers on houses. However, people have been saying that this is just a seasonal factor, with fewer people and agents being in the city to buy houses. Have you noticed in past years a slowdown in the July/August months?
April 7th, 2009 at 2:38 pm
Hi Sam,
July and August often feel like quieter months but I think sometimes it’s because agents are in a different mind space (distracted) following the spring market. Last year, July and August were stronger than 8 other months of the year.
April 7th, 2009 at 2:38 pm
Hi Norm , great blog. We are one of the Albertans moving back to Saskatoon. We were just at the lawyers signing papers for our house sale and he told us he can’t believe how many investors have bought property in Saskatoon. This is truly what is driving the prices up in Saskatoon , not the relatively small number of people actually returning to live in Saskatoon.
April 7th, 2009 at 2:39 pm
Hi Eric,
Welcome to Saskatoon! You’re right that the market is being hugely affected by “investors” who are buying up property but much of that activity is at the lower end of the value range where first time buyers would like to be. Migration is having more of an impact on property priced around and above the average selling range. When you consider that Saskatoon might have 2,000 of these types of listings in a year, it doesn’t take big numbers to upset the market. I am seeing many offers from out of province buyers on my listings and most of them are looking for a home to live in. While you will hear some squawking from locals about how this impacts them, every Canadian has the right to move around the country, and so it should be. This is one of the natural growing pains of renewed interest in our fine city. Again, welcome.
April 7th, 2009 at 2:39 pm
Prior to the housing boom increase, I would have been able to afford a home at least slightly above starter standards.
The problem with the price increases is that Albertans (and other outsiders) are willing to upset the natural rate of inflation by accepting prices that seem good to them, yet still deliver a knockout punch to locals.
Eric, ever thought of looking at what your house is worth in spite of blind neurotic demand?
My fiancee and I take walks through the nicer areas of the city and even from the outside we can spot all kinds of problems with many new and older homes.
Quality is something I have had concern for but haven’t mentioned much. Even if I were to accept current demand as justification for high prices (which it is not), many homes in this city fail to warrant their price in terms of build quality.
April 7th, 2009 at 2:39 pm
Eric,
Welcome to Saskatoon! I have lived in Calgary, Edmonton and Toronto. This is the best place!!
Alex,
Perhaps with your ability to spot potential problems from the street you could create a sideline career. That way buyer’s could just have you do a stroll by before they present their offer.
April 7th, 2009 at 2:40 pm
Gayle,
I’m not sure I follow how that would be considered gainful employment?
April 7th, 2009 at 2:40 pm
Alex,
Lol! I think Gayle is just having some fun. With your abilty to see problems from the street, you could come in handy for all of these people who are feeling like they can’t include a home inspection condition. They now have what they call “drive by appraisals,” and this could be something like, “Alex’s Drive By Home Inspections.”
April 7th, 2009 at 2:41 pm
Yeah, I’m not entirely certain it was meant with quite so much kindness.
I don’t think anything I see is really of such a professional quality that nobody else would have a hope of seeing the exact same thing.
Of course, maybe you just have to look at the house and go “would I enjoy living in this?”
April 7th, 2009 at 2:42 pm
Norm you are correct!
Alex,
Just in fun! No malice intended!