Saskatoon real estate: Week in review (June 16-20 2008)
Active residential listings in the Saskatoon real estate market saw a net gain of approximately 60 units this week, climbing from 1,326 units last week to finish the current week at 1,387 units, including 1,283 homes (houses and condos). 228 residential properties were listed on the Saskatoon MLS including 161 houses and 56 condos, bringing total available listings in those two categories to 891 and 392 respectively. Approximately 60 of those “new listings” were actually reintroduced as new listings following a cancellation of an already active MLS listing. An additional 49 properties are flagged as “conditionally sold.”
This graph represents the growth of the total active residential listing inventory (houses, condos, duplexes, semi-detached, mobile and vacant lot) over the past 16 weeks.
A total of 82 properties were reported as firm sales for the week, including 76 in the house and condo categories, which represents a drop of 17 homes when compared to the previous week.
Slowly, but surely, overbidding continued its downward trend with just 6 of 76 Saskatoon homes drawing offers that exceeded the asking price. The average overbid came in at just $4,214, the lowest number we’ve seen since the week of April 28-May 2. At the same time, the average underbid also fell, settling at $7,397, and reaching its lowest point since the week of January 28-February 1. 86% of the homes reported sold published sale prices below the seller’s asking price.
Average sale prices for houses and condos combined bounced back from $303,453 last week to $317,145 this week. So far in June, 248 residential properties have traded at an average selling price of $312,445. In those totals, there have been 164 single-family home (houses) sales averaging $339,238 and 70 condo sales averaging $251,657.
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 287 Comments So Far
May 4th, 2009 at 1:45 pm
So, small but steady gains in inventory. Still will be interesting to see how much more inventory is required before prices start to drop off more sharply.
At least most places are going for under asking.
1,387 houses/condos to only 76 sales = 18.25 weeks inventory. Those who aren’t willing to wait 4 months, 2 weeks and 2 days to sell are going to have to reduce prices well below average.
Norm, the graph is awesome. A visual is always good.
You’d think the ongoing increase in inventory would be good enough evidence to suggest a “buyers’ market” and see prices fall. I just think that in the same way it took a while for people to accept that Saskatoon was under priced 2 years ago, it will take them a while to realize that it is overpriced now. Either that, or just not sell their place.
Not too bad if renting out in interim.
Sucks if actually trying to move,
or cash out at peak to retire to Kelowna (which will just keep going up, due to limited space in valley)
May 4th, 2009 at 1:47 pm
Jim,
Small?
To be clear, it’s 1,283 houses/condos in the current inventory. 1,387 includes everything “residential.”
May 4th, 2009 at 1:48 pm
Small week over week increases in inventory, but significant because gains are ongoing, with each week having more places listed than sold, and a big trend towards a huge increase in inventory over the past half year.
I copied down the wrong inventory number, either way a LOT more places for sale than are actually selling. And inventory growing constantly/slowly/ steadily each week, so that the cummulative effect is a big glut of inventory.
Let’s not forget, private sales are a bigger fraction of market now than in past, with saskhouses, kijiji etc., plus massive bedroom communities of Warman and Martensville, I wouldn’t be surprised if the actual number of available places in greater Saskatoon was over 2,000. I remember people saying we won’t be in a bust housing market till we have 3,000 houses etc. Well, 2/3’s of the way there. Maybe by the end of the summer, buyers in Saskatoon are over whelmed by 3,000 Saskatoon area options.
I bet that finally drops prices.
Doesn’t seem prudent to buy at record prices in the face of that potential for falling prices. And conservative 10% drop estimates.
May 4th, 2009 at 1:49 pm
To add to 1,387 MLS
Saskhouses Saskatoon + 355
SH Saskatoon Area + 2
SH Warman + 30
SH Martensville + 28
=1,802 + MLS for Saskatoon area + other private
Easily 2,000 places for sale in Saskatoon and area right now
May 4th, 2009 at 1:49 pm
I’m pretty sure that some of the private sales are also listed on MLS: I know that the Kijiji places I’ve seen listed are also MLS listings. I think a lot of people are taking the ‘wallpaper’ approach to listings: “If I list it, they will come”.
But yes: the graph is awesome: a nice, steady build of inventory. I’m thinking that this matters more than anything else to the overall market: the ups and downs of sales matter less than the sheer fact that there is SO MUCH on the market.
May 4th, 2009 at 1:50 pm
Jim and Doug,
I can hardly blame you guys for wanting to paint a picture that’s worse than it is. You have 1,387 on MLS and you have 355 on saskhouses. There is some duplication between the two. I have three listed properties which appear on both, and I’m just one of 400 agents. At the end of the day, if it’s not on MLS or saskhouses, it’s hardly even for sale. The real number is probably closer to 1600. Ya, I know, not a stretch from 2000, but if I lowered the MLS listings by 20% you’d call me a liar, and rightly so.
jrochest,
Yes, all of my listings are also on kijiji.
Frankly, it’s also the diminished demand that is having a large impact on active listings. If sales were on par with last year, we’d have well under 1,000 units.
May 4th, 2009 at 1:53 pm
Norm,
Just wanting to know if there were any sales that would have skewed the avg selling price.
May 4th, 2009 at 1:54 pm
Buying is an interesting position to be in….avg price was up this week but houses I’ve been watching seem to be falling in price…for example: one was originally listed on sk houses at 299K has seen some reductions and is now listed on mls down 25K…there’s another one on 3rd that’s down 30K from the original listing.
May 4th, 2009 at 2:03 pm
“or cash out at peak to retire to Kelowna (which will just keep going up, due to limited space in valley)”
They’re not making any more land! Get in now or be priced out forever!
May 4th, 2009 at 2:04 pm
missylu,
Nice to see ya.
“Just wanting to know if there were any sales that would have skewed the avg selling price.”
Nothing significant. There were five sales over $500K but that’s become fairly typical. Last week stands out as the low one in comparison to the last four weeks. This week’s average is just a little higher than the average for June, so far.
309 price reductions in June, and another 189 cancellations, most of which came back on with a new MLS number and a new price. A bit of an indication that sellers are starting to realize the market has changed and are getting priced closer to right.
Mithan,
Like I said to missylu, there were probably close to 500 adjustments so far in June. I think it’s more of an indication that buyers are still prepared to pay “current market.” I find that if a house is obviously over-priced, offers don’t come at all. If it’s close to where it should be based on recent sales, it’s likely to attract reasonable offers that aren’t that hard to put together.
I’ve had three listings sell this month. One went at list, one went above list, and one went below list by $2K. Two of the three did make an adjustment before receiving offers.
May 4th, 2009 at 2:06 pm
Mithan,
July and August are typically slower than April, May, June but better then most of the other months.
May 4th, 2009 at 2:06 pm
d. cornwalis,
There’s miles of land in every direction from Saskatoon.
May 4th, 2009 at 2:08 pm
Jim,
I have mentioned 3000 listings before for a significant drop and just on MLS not including Saskhouses and other private sales sites.
Why?
3000 listings would give us 1 listing for every 66 person, man, woman and child.
Now Calgary is close to reaching this number and they have seen some drops from last year.
Phoenix is at this number are experiencing drops.
I believe the city did a great thing in the 50k payback if you are flipping a new home within 4 years.
This will stop the problem of speculation we are now seeing in some of the new areas.
I have no problem with people who renovate and flip or build and flip. For some this is their way to make a living.
For the next while I believe we will see softening demand. First time buyers, investors who buy long term and cash flow properties and speculators(smart ones at least) have been priced out the market and won’t be entering until prices are attainable for them.
Will we reach 3000 listings on MLS? Time will tell. On one hand I don’t believe speculation and overbuilding has lasted long enough to reach that.
But on the other hand demand is falling and if supply keeps up like this for the next year we may go over it.
Time will tell.
May 4th, 2009 at 2:08 pm
Great graph Norm.
Here’s a question: I’m wondering how comparable the Saskatoon and Regina RE markets are these days, Particularily regarding inventory build up?
Sask is booming; demand is rising; property values are rising. But I think a lot of the spectacular price jumps in housing reflected a shortage of supply – something that won’t be an issue in the long-run (even though houses aren’t getting any cheaper to build). Optimism in Sask exploded quite suddenly, and the housing stock wasn’t really adequate for the inflow of people and capital. This led to a severe supply crunch, which drove prices beyond the “legitimate” price increases resulting from economic expansion. I’m expecting short-term softening. But in the long-term SK has got more potential than AB.
May 4th, 2009 at 2:08 pm
Uh, regina guy –
Demand is rising? With the largest inventory ever?
I think the spectacular price run-ups reflected the entrance of speculators from outside the market. I think the ’supply crunch’ of last summer — which was artificial — is being balanced out by the startling number of empty houses with nice new countertops, floors and paint jobs which have been sitting on the market for the past three months.
May 4th, 2009 at 2:11 pm
Just from a glance at the Regina MLS, it looks like they have about 1,000 listings — and lots more small houses at the bottom of the market. There’s quite a bit available under 100,000.
May 4th, 2009 at 2:12 pm
First of all , I’m not an investor or speculator , but I just took a drive trough Stonebridge after reading about it a lot on here and I was not expecting much after hearing people bash it on here. I must admit I was pleasantly surprised. It reminds me of Mackenzie Towne in Calgary which a lot of young fmilies find a desirable place to live. I know some of the houses are small , but to me the area certainly has potential. There’s a nice park and the retail centre nearby. I think in 5 years when there’s more trees and it’s more established it will be a lot more attractive.Of course I don’t know what the pricing on those houses are , so maybe that’s influencing the lack of sales in the area.
May 4th, 2009 at 2:14 pm
Norm said:
“d. cornwalis,
There’s miles of land in every direction from Saskatoon.”
Yeah, I was being sarcastic. Kelowna is sprawled out all over the place, despite the constraint of the lake and surrounding hillsides.
May 4th, 2009 at 2:14 pm
I don’t think anyone hates Stonebridge as a development, per se: it’s just used as as good example of bad flipping.
Sure it will be quite nice in a few years. Be interesting to see what the South Bridge does to traffic patterns in the south of the city.
May 4th, 2009 at 2:15 pm
Does anyone have any thoughts on why prices aren’t dropping faster, given the current level of inventory?
May 4th, 2009 at 2:17 pm
Well, the US market peaked in 2005, but things just flattened. I was paying attention to this stuff by 2006, and all through 06 and early 07 there were lots of people arguing that “there is no bubble, this is just a new plateau”. Then in the fall of 07 the wheels fell off and removed all doubt.
There was plenty of growth in inventory, but people don’t like to drop their asking price until a market falls on them from a great height.
Saskatoon really only had one lunatic year, so things might untangle more quickly, but I’d assume that it will take a couple of years for things to devolve.
May 4th, 2009 at 2:18 pm
guy in regina,
Regina is showing 897 MLS listings on the system today. Not as bad, but the trend seems to be the same.
d cornwalis,
Sorry, I didn’t catch the sarcasm.
May 4th, 2009 at 2:18 pm
But in a couple years Jrochest the prices of houses wont be any cheaper than now because whatever the price goes down now will be made up with normal average increase in house prices from year to year. Ex if prices drop %10 to %15 now we will be right back where we started in 2 years with %5 to &7 percent invreases per year. We wont be the same as the states because our prices were way to low to begin with and there was a correction. Then it got out of hand and went to high. The prices we have now are in the right range for late 2009 early 2010.
May 4th, 2009 at 2:23 pm
Ah. By that logic, though, there would have been no decrease in the US housing market.
I think falling markets fall, period: there’s no year-over-year increases south of the border, for example.
I could be wrong, but I don’t think so.
May 4th, 2009 at 2:23 pm
When using the US as a comparable, we tend to think the market is monolithic. Some parts of the US have corrected severely while others are rising. A lot of the regional variation has to do with the local economics. For example, Florida and California are going lower in a big way as is Detroit and the auto belt. On the other hand, North Dakota, Oklahoma and Texas are hanging in there and even rising modestly. Seattle Washington is down a little but not much. So you see, real estate prices are a very localized phenomenon. I just don’t think you can say because the average US price is down that a specific city in Canada must follow.
May 4th, 2009 at 2:24 pm
jrochest,
The reason house prices fell were because of the sub prime mortgages handed out like candy. In Canada less than 5% of all our mortgages are actually sub prime. For example if I was given a subprime mortgage I could literally afford near 500k for a house on my meager 45k income. There will be no crash unless credit is given to people who suck and cant pay their mortgages =o)
May 4th, 2009 at 2:25 pm
I agree there are lots of listings on the market right now, but really how many of them would forclose if they could not sell not many I think. Our lending institutions are way more strict giving out loans as you could ask many first time buyers. And alot of young kids require co sighners on top of that too so not like the states at all.
May 4th, 2009 at 2:26 pm
What’s the percentage of new mortgages that are 40 year?
That’ll be Canada’s sub-prime equivalent.
May 4th, 2009 at 2:27 pm
Moving Back:
I am no expert on Real Estate, but everything I have read, seen and heard says that unless something “big” happens, bubbles in real estate generally take a matter of years to correct, it doesn’t happen over night or in a short period of time (months) or because somebody here wants to buy a home and is hoping for a crash or because somebody wants their house value to go up.
The US peaked in 2006 and has gone down in value by about 15-20% nationally since then (some areas are worse, some are actually still going up), with most of that decline being this year and in areas that were driven up by huge factors over the preceeding 10 years (California, Vega, Florida, etc) however it is a trend that has been ongoing for 2 years now and caused by numerous factors such as recession, lending factors, job loss, etc, etc.
We have NONE of those factors affecting Saskatchewan right now, the ONLY negative we have here in Saskatchewan is Speculators, and the truth is we have NO IDEA how many homes Speculators have boughten in Regina and Saskatoon and STILL HOLD.
It is my guess that most Speculators flipped out of the market at the end of the 2007 and early 2008, but who knows, if they still own 4000 homes in each market, well, things will come down. We have no idea what they own still and that is the main factor that pushed up prices.
Inventory is increasing in Regina and Saskatoon, but where is it going to stop? Again, we don’t know because we don’t know how many homes Speculators still hold.
Homes inventory could increase by another 500-1000 and then inventory could start going down again into historical “normal” levels, which will keep prices level.
Remember too that people ARE still moving into Saskatchewan (more to come this year), Rents are at a record low vacancy level which indicates that there are numerous people priced out of the market and renting, but waiting to get in.
Basically, there is a LOT of demand out there for homes and once prices drop a bit, those people will buy in, so I don’t think this market will have much room to “correct” before it falls steady.
So how far will they go down?
Unless something “big” happens or speculators dump 3000 homes on the market in the next 6-9 months in Saskatoon or Regina (I don’t believe that sort of inventory is being held by Speculators), I personally believe that prices are going to correct a lot less than most of us think. I think that all we will see is a correction wiping out the early 2008 gain, and a leveling off of home prices for years to come. Is that 5-10%?
My worst case scneario is this:
Saskatchewans little “boom” is all a bunch of bullshit and at the end of 2009 when the major construction projects are finished, people start leaving the province again. If that happens, things will correct, but thats years in the future. 2012 and up…
Either way, we don’t know. There are so many factors out there right now that nobody knows.
Just remember that a lot of people are posting here by self interest. Some think the market will correct by 50%. Others think it will go up 50% more.
Shrug.
May 4th, 2009 at 2:27 pm
Larry:
I keep reading that here but that is a misconception, 40 Year Mortgages are nothing like Sub Prime. They are just an extension of 25 or 30 year mortgages which were the normal mortgage rate and just extend the payment period by 10 years, and lower your payment by a couple hundred a month. Most of that 10 year difference is killed if you throw even an extra few thousand onto the principle in the first 5 years.
Sub Prime are totally different.
Imagine getting a 2% mortgage and then 6 or 12 months later somebody tells you that your mortgage is now at 7% and your payments are going to double.
That is sub-prime.
40 year mortgages are nothing like that.
Vancouver has been doing 40 year mortgages for 30 years.
May 4th, 2009 at 2:28 pm
Re: Stonebridge
Wanna know what happens to suburbs that have gone through rampant speculation and a mortgage meltdown?
http://www.startribune.com/business/17932454.html
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/05/11/MNGE1095FT.DTL
These are extremes in the states, but I believe buying in Stonebridge is a gamble right now. It may turn out to be one of the most beautiful neighborhoods, it also has the potential to do the opposite.
Now everybody knows about the speculation in Stonebridge, thats a given, the wild card is the mortgages. Are most people buying there using 40 years? Are most people stretched financially?
A downturn in the economy and or a rise in interest rates will slow the growth of this suburb. If the rise in energy prices continues, so will inflation, that in turn leads to higher interest rates. That is why the BoC did not change the rates a couple of weeks ago. But banks raised mortgage rates.
I think our commodities boom could be a double edged sword right now for us.
Our economy is more globalized than ever. Inflation is starting to climb throughout the world. Will it come here as well? If it does, and you are stretched finacially right now, you know the rest of the story and it played out in the early 80’s.
Here is a good article on inflation
http://www.moneyweek.com/file/48698/how-inflation-is-robbing-3-billion-people-worldwide.html
May 4th, 2009 at 2:30 pm
Subprime or 40-year/no or low-down-payment mortgages, call them what you will, we are merely arguing semantics.
At the end of the day, these are all tools designed to inject increased demand into the equation of the housing market. This creates a vicious circle, however; house prices rise, and now in many cities in Canada the only way first-time buyers can “afford” to pay for a mortgage is to spread the payment over 40 years instead of 25, even if it cost them 30% more in interest payments over the term of the loan.
Granted, there are many variables to an individual’s situation (you my not take the full 40 years to pay it off by accelerating payments, etc.).
Unfortunately, what usually collapses any “boom” is the weight of the last people in. Consider this: buyers are now often taking 40-year mortgages with little or no money down, and they are (a large majority of the time) sacrificing other consumption, savings, and long-term financial freedom to do so. What else can one sacrifice to buy a house? Nothing.
After the people who take out these mortgages are in the market, who’s left?
May 4th, 2009 at 2:30 pm
That is a low number for one week of new inventory! I wonder what the reason is behind it? If this trend continues the inventory will start to errode, but unless sales really pick up it’s still not going back to a seller’s market anytime soon.
I was just driving around in Willowgrove this evening. There are a LOT of signs around the new construction with “for sale” and not many “sold”. I think builders are starting to feel the difference too.
Mithan,
A lot of it is going to ride on how much speculation is still happening, definitely. I don’t think there are many people though who’s predictions fall into either category of up 50% or down 50%.
May 4th, 2009 at 2:30 pm
Heather, I don’t know if we can say inventory will “start to errode”. After 228 new residential properties, and total MLS listings increasing from 1,326 to 1,387, listings are still up.
Sales << Listings, to the tune of a net gain 61
Mithan,
Very few places experience Saskatoon’s rapid price increase, That should set us up for a more rapid price correction
May 4th, 2009 at 2:30 pm
George, not sure about your whole 3,000 listed houses meaning an over supply, but why not take into account the hundreds of saskhouses.com houses? the hundreds of rural MLS? and the other private sales?
Inventory is inventory. And now with private internet sales and a pretty hefty saskhouses volume, the actual inventory is probably way over 2,000 already in the Saskatoon area. If 3,000 is the mark for a major correction, I’d say we’re getting very near with all the inventory from other sources available. After all, without suburbs, Saskatoon is a relatively little city of 200,000 ish. And suburbs are often cheap and can be a shorter commute than in city limit places on opposite ends of town.
A new home buyer looking for a place in Saskatoon area at current already has well over 2,000 options to look at. They just aren’t all on MLS.
May 4th, 2009 at 2:31 pm
Bob, “But in a couple years Jrochest the prices of houses wont be any cheaper than now because whatever the price goes down now will be made up with normal average increase in house prices from year to year. Ex if prices drop %10 to %15 now we will be right back where we started in 2 years with %5 to &7 percent invreases per year.”
Wouldn’t you rather be the guy who waited for the 10 to 15% drop and then bought a house?? It may recover in a few years time, but why suffer the initial 10% plus drop if you don’t have to?
May 4th, 2009 at 2:31 pm
I looked at a few homes for sale by medium sized builders. What I can’t believe is that they seem totally oblivious to the market conditions. The one guy (who is the owner) was saying how lucky he was to get a bunch of lots when private people were backing out. He said they must have backed out because they did’nt get the lot they wanted. I was shocked, the guy had no clue.
They seem so busy building they aren’t even noticing the tonnes of other new homes with for sale signs as well. If and when they finally do notice their homes on the market for months maybe they will manage their inventory better.
May 4th, 2009 at 2:31 pm
Bob:
“the prices of houses wont be any cheaper than now because whatever the price goes down now will be made up with normal average increase in house prices from year to year.”
But with the normal average increase over a couple of years, people have the opportunity to build equity and hopefully have a wage increase in that time.
We should all want the RE market to grow but the rest of the economy needs to grow along side it at a more steady pace.
May 4th, 2009 at 2:33 pm
This was an interesting article about the RE in Canada:
http://ca.pfinance.yahoo.com/ca_finance_general/732/real-estate-where-to-buy-now/
In their scoring, there is a lot going for Saskatoon, but where it hits short (I’m sure many people have commented on this block), is the “VALUE” – as defined in the article “…sense of a city’s Value, we looked at local wages and figured out the number of years of average household income that it would take to purchase the typical local home. We downgraded communities where local residents couldn’t afford to buy homes easily; we gave highest marks to cities where they could. Our reasoning was that places where homes are affordable are places where real estate prices are solidly rooted in economic fundamentals and are therefore unlikely to plunge. ” Saskatoon had one of the lowest scores for this, even though it was ranked overall as one of the top cities for investors.
What isn’t considered in the article (even though they compare the big cities to the smaller cities), is that big cities have more diverse economies, which over time stabilizes and may not see as huge increases – but becomes more sustaining. Whereas smaller cities may have fewer avenues of growth, on only rely on these few.
Anyways – have a read and make up your own mind.
May 4th, 2009 at 2:36 pm
Whoa, I should have checked here last night:) Sorry this rant is long, sorry.
Ron & Armoth:
Not all US markets are falling, no. It’s the places in the US that had massive year-over-year runups are having equally massive year-over-year declines. Florida and Southern California are in deep, deep bullpoop, while Texas & Oaklahoma didn’t have a bubble to pop. The markets that skyrocketed, fall. If last year’s 100,000 dollar hike had never happened, I’d say Saskatoon was safe, but it did happen, and prices will go down.
Armoth
Like Crikey says, 40 year mortgages do the same work as sub-prime mortgages: they make unaffordable houses affordable. Affordability is a ceiling, and both ’sub-prime’ mortgages and 40 year mortgages allow you to break through it.
40 year mortgages make it possible for people to buy houses at intrinsically unaffordable prices, and thus allow the price to drive higher. Sub-prime mortgages bring people who wouldn’t be able get a loan into the market, increasing competition and driving prices higher.
Lots of people talk about the US as if the only reason for this collapse was people with lousy credit getting sub-prime mortgages. But if prices go high enough — 7-10 times the average salary — then EVERYONE is sub-prime, since it doesn’t matter how much money you make if the carrying cost for a two-bedroom bungalow is 7,000 a month. And in the worst markets — Florida, Southern California — that’s exactly what happened.
At that point, EVERYONE lies about their salary or their broker does it for them to get them the loan, and no-one worries about this because the appreciation on the property is supposed to cover the cost, and you can ‘just re-finance’.
In the USA, the big triggers for the crash were option ARMS and interest-only loans with teaser rates: people went into default when the rates re-set. But the underlying problem — prices that people can’t afford — is the same here, and in the UK, and in Spain, and in India, and EVERYWHERE. Japan’s bubble wound up using 60 year mortgages eventually: the bubble still burst and deflated over a decade.
The problem is that prices got out of wack with incomes, and eventually that’s going to correct, no matter how frantically everyone claps for Tinkerbell.
Mithan:
I wouldn’t assume that all the tenants are ‘waiting to get into the market’ — this is a university town, and lots of those kids wouldn’t want to buy if you gave them a house. It’s a major mistake to assume that everyone wants to buy: I prefer renting, because a) it’s much cheaper and b) property values are falling.
I can afford to buy — it just makes no sense right now.
The tight rental market was caused by the condo conversions last year; you take 1/3 of the rental stock out of commission and the number of available apartments drops. And even so, those condos are sitting on the market at prices too high to compete with rents, not selling. Even the newly increased rents will not cover the carrying costs, although they’ll eventually have to drop the prices or rent them out.
Eventually, the prices will fall.
Some of the stuff on the market is old rental units that landlords are putting up as a flyer, and they don’t care: the property will cash flow with a tenant, they’re just seeing what they can get, and don’t need to sell.
But if 600 of the nearly 1400 units we’ve got on the market now are vacant or tenanted, many of those people and organizations were expecting to sell quickly at a profit and will HAVE to sell or go into foreclosure. That will drive prices down.
May 4th, 2009 at 2:36 pm
What dates were used? Saskatoon becomes much less affordable if average house prices from April on are used…
Interesting article though
May 4th, 2009 at 2:38 pm
Oh, and BTW — when you say “people post out of self-interest”, I don’t think that makes the least bit of difference.
Prices went up, and they will come down: it’s like gravity. The only question is when and how far, and none of us can know that. In the long run, markets aren’t affected by blog comments!
May 4th, 2009 at 2:38 pm
Yes — most of these “everyone invest in Saskatchewan real estate!” articles are based on old numbers.
May 4th, 2009 at 2:39 pm
The link below is to Money Sense magazine’s 2008 “Best Places to live” in Canada.
http://list.canadianbusiness.com/rankings/bestplacestolive/2008/DisplayProfile.aspx?profile=17
Saskatoon ranked 17, but at the time the data was collected the average house price was $225K.
Ahh, the times, they are a-changin’.
May 4th, 2009 at 2:41 pm
Norm, thanks again for the stats (always appreciated!) Do you see there being a lot of inventory on the market after October, or do you think a lot of these listings will get temporarily pulled and possibly re-listed again next year?
May 4th, 2009 at 2:42 pm
Sorry Drake. I don’t have a good feel for where we might be in the fall.
May 4th, 2009 at 2:42 pm
There is NO reason to buy now, when in another month, there will be another 400 listings on the market (seems to increase about 100 listings more than sales each week) and reductions and bargains are just getting better.
May 4th, 2009 at 2:43 pm
Possible economic consequences ahead…
Mon, June 23, 2008
U.S. mayors pass resolution urging cities not use oilsands-derived fuel
UPDATED: 2008-06-23 12:14:20 MST
By THE CANADIAN PRESS
http://calsun.canoe.ca/News/World/2008/06/23/5963261.html
May 4th, 2009 at 2:44 pm
I don’t know if anyone, even the Mighty Norm, can do the Amazing Kreskin thing with the market that specifically.
Although I’m pretty sure that we’ll see 1500 listings in the next month, and probably 2000 listings at some point between now and November….(creeping out on limb).
But I think lots of the apartment condos will wind up back on the rental market, with the sales listings still sitting on the MLS.
May 4th, 2009 at 2:45 pm
http://www.cbc.ca/canada/edmonton/story/2008/06/23/us-mayors-oilsands.html
Same story, different source, USA does not want oil sands oil because of environmental impact
May 4th, 2009 at 2:45 pm
JJ and Dirk,
Pretty picky bunch for a country that is completely desperate for oil.
I hope that someone down there gets a clue about the terrible position the US is in when it comes to energy before the bottom completely falls out.
May 4th, 2009 at 2:49 pm
cam,
I think the guy you talked to is in total denial! ;’)
My builder knows exactly why so many individuals dropped out of the lot draw. He also knows houses in the lower and higher price ranges are the ones still selling, not much inbetween. There will be some builders who are going to regret having taken on too many lots.
The City of Saskatoon called me this morning!
May 4th, 2009 at 2:51 pm
Jroch, I think we’re already well over 2,000 actual listings available on the market now. I’d fully expect to see 3,000 in the next few months if the current pace of new listings keeps up.
Saskhouses, kijiji and just plain classifieds all count, as does Warman etc. when looking at what buyers have to choose from. The record market is even more saturated than we think!
May 4th, 2009 at 2:52 pm
An wow, Saskatoon was the 17 th best place to live, back when houses were barely half of what they are now. Is 17 th best really a big deal? Sounds pretty average to me. Wonder have far down we’ve fallen with the now unaffordable housing?
May 4th, 2009 at 2:53 pm
OOh Heather, good! I assume this call means you got your lot, eh?
I hope you’ve got a good contractor. I know a couple of good architects, but no contractors.
Jim — I’m not so sure about the 2000 units. It’s probably true if you add in areas 6-9. My much less-accurate-than-Norm’s count gets 1425 properties in areas 1-5 and 510 in the outliers — but I don’t know that Vonda and Rosetown really qualify as ‘part of Saskatoon’.
That said, Martensville and Warman certainly do: those developments are all bedroom community stuff.
May 4th, 2009 at 2:54 pm
And I think most of the Kijiji and Saskhouses stuff is also on the MLS: the free or cheap sites are useful if you’re already marketing online, and a good many people are, of course.
Besides that, many of these folks are hoping for an out of province buyer. Thems of us as live here are much less likely to bite on an overpriced property, but I just finished talking to a guy in the East who was hoping to buy a house in Saskatoon and flip it for a profit
.
After all, prices were so CHEAP compared to Toronto…
May 4th, 2009 at 2:57 pm
Oh, and one more note:
Just checked Kijiji rentals, and found an ad for the condo conversion at 1013 Lansdowne: 2 bedroom apartments, fully renovated, granite countertops, stainless appliances, etc, July 1st possession date. One Year Lease required.
Rent? 1350 per month.
Who is it, do you ask? Yep, it’s these guys:
http://tinyurl.com/cftxov
Asking price for the 2 beds: 217,500.00 (there’s some listed for 179,000 but that has to be the one bedrooms).
So: Mortage payment on 217,500, assuming zero down and 6% financing over 25 years: 1400.00 monthly. Condo fees (basically, heat & property maintenance) 278.00 monthly. Taxes: estimate 100.00 monthly. Insurance: estimate 75.00 monthly. Won’t count hydro, because the tenant pays that anyway.
Cost to own: 1400+278+100+75= 1853. Cost to Rent: 1350. “Pride of Ownership” premium? $503 a month.
Oh, and what the unit USED to rent for? 640.00 a month.
Remind me why I’m supposed to buy again? Remind me why ANYONE would want to buy these, again?
Oh, and these are the good guys: they actually did a nice job on the redecoration.
May 4th, 2009 at 2:57 pm
jrochest, don’t forget market value increase, if the price increase over 3.5% you should have bought
May 4th, 2009 at 2:58 pm
The units are still for sale: go for it, and be successful doing it.
But keep in mind — the 640.00 buck a month rent was from June of 2006, which gives you an idea of where rents were sitting before the increases of last year. It’s not inconceivable that they could wind up down at that level in a few years time — especially if all the converted apartment/condos move back into the rental market.
At which point the difference between carrying costs and rents become 1,000 a month, not 500 a month.
Thanks, I think I’ll pass.
May 4th, 2009 at 2:59 pm
Sorry — it was for June of 2007, not June of 2006.
May 4th, 2009 at 3:00 pm
I feel pretty uneasy about the idea of buying a condo. I don’t want to be stuck with something that might depreciate. And some of these “condos” are money-pits, just waiting to happen, too.
(I’m still waiting for people to wake up from their zombie-slumbers and exclaim “Holy CRAP! I just bought a $300,000 300 square foot home in -SASKATOON- of all places? Am I *INSANE*?!?!?)
May 4th, 2009 at 3:01 pm
I’ve been known to use sarcastic humour from time to time…
; )
(like most of the time)
May 4th, 2009 at 3:02 pm
(I meant to write “sarcastic, exaggerative humour…”)
May 4th, 2009 at 3:02 pm
Houses are going for a thousand bucks a square foot now? You guys are crazy
May 4th, 2009 at 3:03 pm
Norm — I used the zero down because it duplicates the renter’s situation. If you were to buy rather than rent, that’s what you’d wind up paying.
I find it kind of fun to see my assumptions confirmed, though: upthread I said that I thought the unsold apartment conversions would be rented through Craigslist while leaving the MLS listings up, in case they could sell.
But 1350 is a ripoff for that unit: I knew people who have just moved out of the Pinnacle on Victoria, and they were paying 1300 for a two-bedroom you could *bowl* in.
May 4th, 2009 at 3:04 pm
“But 1350 is a ripoff for that unit: I knew people who have just moved out of the Pinnacle on Victoria, and they were paying 1300 for a two-bedroom you could *bowl* in.”
jrochest:
Welcome to Saskatoon.
May 4th, 2009 at 3:04 pm
$1,350 for a condo conversion?
You can still get a nice 2 bedroom basement deal for $800 a month in a good area, and some of those conversions are basement anyway, with half windows and NO new home/condo waranty
I see rent dipping once some of these investment condos are put back on the rental market. Instead of one company renting 50 units, we’ll have 50 owners renting 50 units, just with a brief rental shortage while ownership was changing hands!
2,000 + available properties, half empty, that’s a lot of potential rental property, or cheap/reduced sales, either way, not selling at sticker price
May 4th, 2009 at 3:05 pm
Jroch, when you add in Saskhouses and bedroom community MLS, Saskatoon area is above 2,000
It’s great to compare apples to apples, but in terms of record inventory, saskhouses wasn’t here back in the 1980’s, now private/online sales are a bigger trend, and as much as I find saskhouses to be over priced and they all seem to end up on MLS, they are still available and on the market,
Hence, big surplus in supply, much bigger than the 1,387 suggests
Would be nice to find an actual: Saskatoon/Warman/Martensville/that trailer park east of sutherland etc… MLS and private inventory number
May 4th, 2009 at 3:05 pm
I’m curious to see how the sales numbers this coming week will match up to next week. I am thinking it will be a big week for sales this week and very small next. Could it be “like a tap is shut off.?”
Come this weekend I think most open houses will be dead. ( Who would have a open house on a long weekend anyway?) If I was a realtor and was asked to do a open house on a long weekend, I think I would be grumbling about it?
Norm, what are your thoughts on long weekend open houses?
May 4th, 2009 at 3:06 pm
I copied Doug’s numbers:
“To add to 1,387 MLS
Saskhouses Saskatoon + 355
Sask Houses Saskatoon Area + 2
Sask Houses Warman + 30
Sask Houses Martensville + 28
= 1,802 + MLS for Saskatoon area + other private
Easily 2,000 places for sale in Saskatoon and area right now”
1,802 and I’m sure more than 200 MLS from Warman/Martensville/trailer park/other little 10 minute commutes/acreages + In Saskatoon private/clsfd.
So…
Already likely well above 2,000 in Saskatoon
With steady increases maintained, I bet in 10 weeks, the Saskatoon area exceeds 3,000 listings, when all potential sources MLS/Saskhouses/Kijiji/the paper etc
are included, then maybe price drops/correction/media attention??
Still, 2,000 + is a lot and an over supply/buyers’ market already in my opinion.
May 4th, 2009 at 3:07 pm
Jim,
Didn’t you guys read what Norm said they are duplicates on Saskhouses I will repeat again they are duplicates on Saskhouses!!
May 4th, 2009 at 3:07 pm
jrochest,
You bet baby!!! :’D
Well actually my builder picked a lot for my husband and I last week when there were still some good ones left. Then the city called today offering us the LAST lot. Wow, we were #136 on the list! Gives you an idea how many individuals dropped out. (A LOT! — no pun intended)
jrochest/Robin,
I agree, renting for now is a good idea IMO. Until we see where the market is headed it’s less risky to stay put rather than buy in and lose $20K or more on a property. Rent increases will hopefully stop too due to more rental units becoming available.
There are still a handful of places that have “reasonable” rent. Our 2 bedroom (1 1/2 bath) Lakeview apt is $745. My brother’s Sutherland 1 bedroom apt is going up $100 July 1 to $755. He’s paying more than us, and it’s not like he has granite countertops, renos, etc. That cr@p won’t fly for much longer.
George,
That’d be nice to see, but I’m not so sure this week’s sales are going to be lower considering 49 properties were conditionally sold from last week. I suspect sales are remaining stronger than (I) expected because the people who were on the sidelines are starting to buy in now.
Norm,
What is the migration factor looking like over these past few months? Are there still many people coming in from out-of-province/country? I was visiting the Peg last weekend and saw a billboard promoting SK. Looks like the SK party are continuing the old NDP campaign.
May 4th, 2009 at 3:09 pm
I have been reading this blog for a while and this is my first post. Thanks Norm!
I read this ad on chuckled to myself on the last sentence.
http://www.saskhouses.com/listing/detail/?listing_id=13641
specuvestor anyone?
May 4th, 2009 at 3:09 pm
coffemate,
Good one. At least he has a local number. I would hate to be competing with Jastek on their own project.
Heather,
Does this mean yu now own a lot?
I haven’t seen anything recent on migration though my experience suggests some are still moving. I’m out with a Kamloops client tonight and I have another from Calgary on Thursday. A number of my more recent listings are on their way out though. It would be interesting to see some current “net” numbers.
George,
I’m not big on open houses any weekend. I like to know that somebody knows everybody that walks through my client’s home.
jrochest,
Gotcha! $1350 does sound like a huge hunka dough but it’s hard to imagine being into a 2-bedroom apartment for close to $2K a month.
Robin,
We need a sarcasm symbol.
May 4th, 2009 at 3:10 pm
jrochest, I agree that renting might be a better option than buying right now for some… but I’d say that you’re calculations are a bit off, since you seem to have included the principal portion of the mortgage payment in your ‘pride of ownership premium’. I think the interest portion of that mortgage would be more like only $950, meaning that buying vs. renting that unit would be a similar monthly cost.
Of course, that also means that the owner is probably breaking even (if it rents for asking), will hang on to it for at least a few months to see where the market is going, and is probably planning to evict and sell fairly short term…. I had a co-worker get a condo-conversion eviction notice the day after he moved in to one place. Owning is about more than pride of ownership for me; it’s also about personal freedom, not being turned out into the streets, and stable housing costs (my mortgage will stay the same over time, but in my experience rent only moves in one direction).
May 4th, 2009 at 3:11 pm
When I came up with the number 3000, I have just used MLS. Why? Because I have been looking at Edmonton and Calgary’s market to get a feel of what will happen here.
Edmonton and surrounding area has 14,984 properties on MLS.
Comfree has just about 3,000 listings comparable to our saskhouses
Welist has 32 homes for sale in Edmonton
Kijji and other private sale sites have a couple thousand but duplicated on other sites
Total listings are at about 20,000
But to truly see what the market is doing, MLS is the best indication.
Even though Saskhouses and other sites add to the number of listings I have not used them in looking at the market. Except for the fact that when a market slows down, these types of sites experience it first. When buying or selling a home MLS is your biggest audience.
May 4th, 2009 at 3:12 pm
Heather D.,
good point. I know of two buddies in Calgary. This is a good story. They both moved there in 99 and 00 and rented. The one guy bought in 02 and his mortgage was just under 1000 bucks a month, while the other guy kept renting. He wouldn’t buy cause it was cheaper to rent. Well, he kept renting and moved from place to place. He now rents downtown for 1450 a month. They both have comparable jobs ( moneywise) but the one guy I’m guessing has 400k in equity and saves a bit more than the guy renting each month.
I know this is an extreme case and those boxes on Lansdowne(rented for $400 in 98) will take many years to justify a mortgage of 200,000.
While rents do on average always go up; once you buy something, your mortgage is locked in. The amount you owe on that house does not go up or down.
I’m sure the first time buyers who bought at the peak in the 80’s had a tough time at the start. Having a mortgage of 50k was tough and if they waited a few years, they could have bought for less. But their mortgage was locked in. By 2007, I’m sure their 300 mortgage was better than renting.
May 4th, 2009 at 3:12 pm
Soft landing seen for Canada’s housing market.
http://www.reportonbusiness.com/servlet/story/RTGAM.20080623.wrrealestate24/BNStory/Business/home
What where they saying in 2005 in the US?
No housing bubble here
http://www.deloitte.com/dtt/article/0,1002,sid%253D15288%2526cid%253D87952,00.html
Overheated housing market cooling
http://www.usatoday.com/money/economy/housing/2005-11-01-real-estate-usat_x.htm
http://www.floridahomeloan.com/2006/01/california-housing-market-remains.html/
Just a soft landing
http://findarticles.com/p/articles/mi_qn4176/is_20051206/ai_n15901484
And to think last year I was a bull for the housing market here. How the mighty have fallin!
I have said before and will say again, we will see declines the next few years, but if you bought for the long term, it will not impact you much.
May 4th, 2009 at 3:13 pm
Rents will rise, while a fixed mortgage payment will not.”
Not entirely true.
Rents may be driven down by the large glut of available housing.
Rising rents are also counted as inflation, so if rents rise significantly, interest rates will probably also rise as the government tries to prevent inflation from from overheating the economy. That means it may still be a worse deal to buy, because it will cost more to borrow money. Property taxes, maintenance, and insurance will also rise with inflation.
If you own and interest rates rise, then the value of your house falls, because fewer people can borrow enough to buy it.
May 4th, 2009 at 3:13 pm
Heather — re: ‘the principle included in the ‘ownership premium’ — nope, I wasn’t being that sophistimacated, as George Bush would say.
I just added up the total monthly costs to the buyer (mortgage payment = 1400 condo fees = 278, insurance= 75 & taxes= 100) and then subtracted the rent they were asking (1350) to get a difference of $503.00.
It’s a back-of-the-envelope thing, not a sophisticated calculation.
The landlords-of-necessity seem to be the development corporation — the Kijiji ad directs all queries to the display suite — so they didn’t pay 217,900. My point is that it doesn’t pay to buy the unit at that price.
But still, they probably paid 80-100 grand a door, plus put a good deal of cash into each of the units, and they’ve been holding it for FAR longer than they expected. They bought the unit last spring — I know, I’d actually signed a lease on one of the apartments when they announced they were going condo. And the big “SELL ‘EM” sign on the building suggests that perhaps they are, uh, “motivated’??
And I don’t think they went into this to be landlords, poor bloody sods.
I agree on all the non-monetary reasons for buying: settling down, wanting a particular kind of property (building makes sense) and not being evicted. If I had kids, I’d buy a house, or at least rent one long term.
But I have to say, in RE costs — your mortgage won’t rise, but all the other costs will, from taxes to maintenance to heat to insurance. I got much less excited about buying when I realized that the mortgage payment is about half to two thirds of the actual costs of ownership — and the only fixed one
. When rents & purchase are close, then the equity argument makes sense, but when there’s that much distance between the two — well, I’ll wait.
May 4th, 2009 at 3:14 pm
George,
The majority of people buying now from what I see in my neighborhood is families. Thinking they are similiar to mine I would probably say all of us are in it for at least 10 years till our kids grow up. If the housing markets crash I dont really care to be honest, if it goes up who really cares again cause im not using the equity. The only spec house in our neighbourhood in the house on the far end of 33rd and its been there for awhile now all the others houses except for the 1 in my block is sold.
May 4th, 2009 at 3:17 pm
It’s a slow day at work today.
I was looking at Norm’s household income data. First time buyers are totally shut out of the market. I didn’t think affordability was this bad.
The average list price in the new areas is about 450k.
To afford a 450k home. Household income of 100k,you need a 130k downpayment. Household income of 70k; you need a 240k downpayment. You couldn’t have any debt or vehicle payments either. And this would make you financially stretched out. Few households fit this bracket. It may explain why so few sales are happening in the new areas.
Wifey and I make 110k no kids and if we traded up for a 450k house, our mortgage would be at 225k and we couldn’t do that. We want to have kids in a few years so we would have to survive on one income for a few years. I don’t know how others are doing it.
Oh, boss is back, time to go back to work.
May 4th, 2009 at 3:18 pm
Will our economy save us?
Four years of gains in home prices wiped out
http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BEB1B0595%2D37FA%2D4542%2D88A2%2DCE470ACAF101%7D
“What goes up, comes down
Home prices surged in 2003 through 2006, climbing by a cumulative 52%, according to Case-Shiller. Since then, however, the housing and credit bubbles have burst and homeowners have given up half of their gains from earlier in the decade.”
“peak-to-trough drop of 30% to 35%”
House prices have historically been 2-4 average household income throughout the world. So on the low end Saskatoon should be at $140,000, on the high end $280,000.
If our peak was 305k and the trough is 30% down from that. Saskatoon average house price (should, could be) 215k.
Where do I get 30%?
30% of homes on MLS are spec homes.
Interest rates are low and our economy is doing well so the average house price should be somewhere between 215k and 280k right now.
I will mention we were undervalued before, now we are overvalued. How much, we will see. Every market corrects.
May 4th, 2009 at 3:19 pm
I’m getting damn sick of houses, how about all you.
May 4th, 2009 at 3:20 pm
Oh, I’m not sick of this at all. It’s curiously compelling (although yes, I do have sympathy for the unfortunates caught in the powerful machinery — rather like rubbernecking at a car wreck).
And I am annoyed at those who actively encouraged the car wreck.
May 4th, 2009 at 3:21 pm
On CBC National news tonight, they are doing a feature piece on the booming economy of Saskatchewan. This is their description:
“SASKABOOM!
Tonight, we feature the economic boom-province of Saskatchewan. As prices for its natural resources – potash, uranium, wheat and oil – soar sky high, the province has gone from have-not to have-lots, and in a hurry. From roughnecks on oil rigs in Weyburn, potential homebuyers in Saskatoon, and the aboriginal workforce, we meet the people hoping to cash in on, and make the most of, this economic turnaround.”
Peter Mansbridge was on Blue Sky at noon saying that a lot of people in Canada don’t yet know what is going on in Saskatchewan and tonight’s feature will peak a lot of interest. He also described Saskatchewan as having one of healthiest economies in Saskatchewan if not the world.
May 4th, 2009 at 3:21 pm
Whoops. Should have read “Saskatchewan as having one of the healthiest economies in Canada if not the world.”
May 4th, 2009 at 3:30 pm
Actually, I think Mansbridge may have said strongest economies, not healthiest. My husband was telling me what he heard–I did not hear it for myself. Yikes, this is my first blog entry and I’m messing up!!
May 4th, 2009 at 3:39 pm
Well, things can change quite a bit in a year.
May 4th, 2009 at 3:39 pm
Touche George
May 4th, 2009 at 3:42 pm
Alberta just announced a $4.6 billion surplus.
How do we possibly compete with that?
Just more proof that their economy continues to kick our economy’s butt!
http://www.cbc.ca/canada/edmonton/story/2008/06/24/edm-surplus.html
What a good time to get into a bidding war over nurses with Alberta…
And, you can buy condos at least in Edmonton for
cheaper, newer etc. and make a far higher wages, and with these surpluses, likely pay even less taxes!
May 5th, 2009 at 11:26 am
http://www.bobtruman.com/Edmonton_SFH_stats/page_1918017.html
Apparently, Edmonton has 5,600 MLS listings right now, about 4 times Saskatoon’s 1,387. And their prices are going down, and we always hear abou their housing surplus…
May 5th, 2009 at 11:26 am
“The average list price in a good neighborhood is 450K”???
Define good neighborhood. Geez, I can’t imagine a first time buyer realistically considering a double-car attached garage 3 level in stonebridge. It’s a compelling picture though
May 5th, 2009 at 11:27 am
Eventually that whole ‘Saskaboom’ term will be for the tipping point when young folks start moving out in droves (that have careers in other job areas than the ‘booming’ uranium, oil etc parts of the province) and will stand for the implosion of a province instead of the posiboom atmosphere that is continually covered by the media.
I would love it if the news would simply go to actual students, in other fields besides the ‘booming’ ones and ask them what their plans are and if they plan to stay here… but then again it could all just be edited out to keep only the positive ones to fit with an adgenda. The only reason the whole ‘boom’ thing keeps hitting the news is beucase the province is so dead newswise they need a story to cover, so why not just prop the province up and themselves at the same time.
I am sick of the housing thing. Completely sick of it.
May 5th, 2009 at 11:38 am
Jim.
Using that stat of 5600 mls listings in Edmonton, it is a reasonable assumption, based strictly on population (1mil Edmonton – 250K Saskatoon) (never mind more work, higher wages and lower taxes), that Saskatoon is just as saturated with real estate listings as Edmonton. Hmmmmmmmm, now everyone go and buy a house in Stonebridge or Willowgrove, hurry before their all gone!!!
May 5th, 2009 at 11:39 am
Yep…
It’s called a property “ladder” for a reason. If the first-time buyers can’t get onto the bottom rung, the whole lot comes tumbling down as no-one else can move up the ladder – unless they reduce their prices, which is what is already happening. So the newly-weds in a 600 sq ft apt can’t go somewhere bigger to start a family, and the 2-bed condo people can’t get a townhouse, and the townhouse peeps can’t get that detached place, and so on…
May 5th, 2009 at 11:42 am
I think right now for “average” first time home buyer in Saskatoon, the property “ladder” is a property “noose”, because they just hung themselves for the next 40 years!!
May 5th, 2009 at 11:43 am
Saskatoon has 208,000 people, best case, it’s own estimate, if we want to go to 250,000, we need metropolitan population, in which case we’re about 2,000 total MLS/Saskhouses places available, well over a third of Saturated Edmonton’s 5,600
But, Wesco, I do agree with you that our market is saturated, and prices are on way down, especially when similarly (less?) saturated Edmonton provides:
far higher income, lower taxes, and no provincial debt
May 5th, 2009 at 11:44 am
I read something on CBC website and remembered all that “no one likes Red Deer” sentiment on here.
Well, apparently, 5 of the most recent medical graduates from Saskatoon just signed on to move to Red Deer for at least the next 2 years. Maybe partially because even a young doctor would like to spend $100,000 less for a new house in Red Deer, that and they pay doctors more in Alberta.
When new doctors are moving to Alberta for cheaper housing, we know housing here is WAY too high!
I checked, there are about 60 doctors graduated a year, so 5 is almost 10% of entire class. To Red Deer!
May 5th, 2009 at 11:45 am
Wesco and Jim,
that link you have is just single family houses. Edmonton has 5600 houses, we have 900.
Edmonton and surrounding area has 15,000 listings on MLS http://www.polarissells.com/search_mls_map_form1.php
add comfree and private sale sites they have about 20,000 listings for 1 million people.
I suspect Saskatoon and surrounding area (Martinsville + Warman etc is at about 2,500 for 250,000 people. I think there is a ways to get to the level of overbuilding and speculation as Edmonton or Calgary. But we are climbing.
May 5th, 2009 at 11:46 am
I’m sure those young doctors are gong to love Red Deer!!! Red Deer is 10 km from Sylvan Lake the hottest resort lake in Alberta, beautiful cars, beautiful houses and especially my personal favorite and probably the favorite of the young doctors (assuming they’re male) the car loads of beautiful women from Red Deer, Edmonton and Calgary!!!
Those doctors are so lucky !! 
May 5th, 2009 at 11:48 am
Check out this cbc news item and check in the comments….we do this to ourselves, and people in calgary do the same…the posibuzzers seem to say it’s great because it’s not like we’re toronto or vancouver in prices….and the negative’s are called poor saps.
Just found it interesting.
http://www.cbc.ca/consumer/story/2008/06/24/astoria-condos.html#socialcomments
May 5th, 2009 at 11:49 am
Somehow “carloads of beautiful women” and “Red Deer” aren’t really associated in my mind.
And affordable housing isn’t the only thing that draws people to a place — but rents and prices that rival those of a place five to fifty times Saskatoon’s size will do that.
May 5th, 2009 at 11:50 am
Hey jrochest, believe me when I tell you there are beautiful women in Sylvan Lake and actually I’m pretty sure that the women out number the men in Red Deer 2-1, something to with the community college there. And I bet this weekend the 10km of highway in between Red Deer and Sylvan Lake will be lined up from Sylvan Lake to Red Deer, I’ve seen it (I’ve been there for the last two Canada Day Long Weekends, it’s one hell of a party there!!!!)
May 5th, 2009 at 11:51 am
I’ll have to take your word for it, Wesco
.
Oh, and both Calgary & Edmonton have 15,000 units + on their MLS listings. Ten million dollar penthouses notwithstanding, Calgary is oversupplied with condos.
May 5th, 2009 at 11:53 am
Actually that quote of 2-1 is a lie, it is actually 1-1. Sorry about that.
Cheers
May 5th, 2009 at 11:53 am
I thought young doctors these days were all female anyway … wait, that’s worse, we just lost 5 young women with awesome jobs to Red Deer. Just increasing their odds at our expense!!
May 5th, 2009 at 11:54 am
Norm,
Yep, my husband and I are the proud owners of a nice chunk of dirt in Willowgrove!!! Now we can tent on our land to save on rent. My parents are in Erindale, so we can just use their shower. ;’)
I suspect there would still be decent migration into Saskatoon, but it would be interesting to know how many are also moving out. Have those nurses from the Phillipines arrived yet with their families? What about all of those engineering positions someone here mentioned? (or is that still to come?)
Grrr,
That property ladder is a good point. When few people are able to buy in, the starter homes don’t sell, then nobody can upgrade into larger homes either.
May 5th, 2009 at 11:55 am
Heather,
You mentioned your brother being in sutherland at $755…well if he’s in the same building as i, we just got another rent increase today set for Ocotber 1st of another $100 bones.
This brings up my rent control yelling again..i know i know, it would limit upgrades etc…but i wonder…so the handrail and closing in the milk openings in our walls are code items…this is true..but in raising rent on the way to a conversion…when the units sell doesn’t that really nullify any reasoning for rent increases covering ‘needed code upgrades?’. i mean if the new person will be paying thier full price, then the people renting before (aka me) are just boned for the rent increases.
blah blah blah…
May 5th, 2009 at 11:56 am
Heather,
What am I? An immigration official?
Congratulations on your buy. You gonna bust some ground soon?
May 5th, 2009 at 11:56 am
“Yep, my husband and I are the proud owners of a nice chunk of dirt in Willowgrove!!! Now we can tent on our land to save on rent. My parents are in Erindale, so we can just use their shower. ;’)”
Good plan. You might need some heaters for, oh, February
Congratuations, as well.
May 5th, 2009 at 11:59 am
Lando and Jesse,
“I’m getting damn sick of houses.”
“I am sick of the housing thing. Completely sick of it.”
Apparently, you are both unable to keep yourselves from showing up at a real estate blog.
May 5th, 2009 at 11:59 am
Jesse G.,
That is AWFUL news! I’d better call my brother as soon as I get off work, when you mentioned those milk boxes it sounds like the same building. It’s dirty how the owner is bullying you guys to buy or move because the owner wants to sell those units as condos. Now that the market is saturated with listings I don’t think it’s a wise decision to try and sell when they’re pulling in $755/mo rent per unit! Maybe karma will kick in, all the tenants will leave to greener pastures, and the owner’s “condos” won’t sell! Hehe.
Norm,
Maybe you do it for a hobby? :’)
Breaking ground would be most excellent if the city had the lots serviced. Unfortunately that won’t be until the end of summer. We plan on getting the basement dug and house framed ASAP so the workers can keep going through winter.
Thanks jrochest and Norm for the congrats. It is truly a miracle!
May 5th, 2009 at 11:59 am
Heather,
Yeah i wonder if it’s the same building. old 1960’s nothing renovated yet. Units in the next building are renovated, one is up for rent for $1050….for a 1 bedroom. lol. Yeah my rent is going from $750 (which is going to be from July 1st) to $850 as of october 1st. horray!
I’ve noticed not only 1 unit on kijiji from the 25th st/4th ave pizza boxes, but now 3 more ads. Very interesting. Lowest rent for the 400 sq foot mammoths? $755. Highest i’ve seen is $950.
On a different note congrats heather!
May 5th, 2009 at 12:00 pm
Norm,
Yes but you do realize, you, AND this blog, both rock. Where else can we see real numbers and real people talking. Honestly if i were to ever go to a realtor in this city (and i’m sure i speak for many that have visited this site) you would be number one on the list.
May 5th, 2009 at 12:00 pm
Jesse G.,
Outrageous!!! I’m going to encourage my brother to keep looking high and low for other places to rent. I don’t want him buying a condo because he feels pressured to.
They sure removed all the good features from that apartment building! The bizarre carpet and trippy lights in the hallways, and NOW the milk boxes? Sheesh.
May 5th, 2009 at 12:02 pm
Oh man i LOVED that trippy carpet. Didn’t have to even have a drink to get woozy!
It’d be nice if the washers and dryers actually worked decently too..but since it’s converting in 2010 they don’t need to do a dang thing to improve it. They’ll still charge a bunch though. I was going to move but i looked elsewhere for July and most were around the same price, so i just stayed put. In the ‘contract’ they state how they will only raise the rent comparibly with properties in the area…but what if one ups it and the other ups it because hey those guys did we can too!
*dreams of the old carpets*
May 5th, 2009 at 12:04 pm
Jim said: “But, Wesco, I do agree with you that our market is saturated, and prices are on way down,”
Jim, Jim, Jim, quit spreading misinformation. Granted the April to May average price declined 5k but you have no idea what the June average is going to be. Unless I have been drinking too much coffee I’m pretty sure we’re going to have a respectable June price-wise, judging from Norm’s weekly numbers.
May 5th, 2009 at 12:04 pm
Jesse G.,
Man they can charge WHATEVER they want, WHENEVER they want, for WHATEVER reason! Having no established rent control is a recipe for disaster when vacancy is low.
Those carpets were SWEEEEET!!! The pattern was all blurry as if it were in a paint shaker – it really messed with one’s vision! :’O
May 5th, 2009 at 1:55 pm
Averages may not be down, but all those reductions out there sound like prices are on way down.
Like Norm mentioned before, less condos (cheaper) are selling. So average house may be down, but prices are being reduced, properties relisted and individual places are selling under list, and well under list before reduction.
With inventory up each week, I’m pretty sure everyone would agree we have surplus inventory. Just check out Norm’s graph for the year.
—
Did any one catch CBC national?
Wow, was that one sided.
Ignores that more places are being listed than sold.
Still talks about not being able to build houses fast enough to keep up with demand: Do they mean for example in Stonebridge, where 3 of 60 available places were sold in May? with more being built quickly to try to cash in at the peak?
Maybe Norm should send CBC National his inventory graph, which shows sales aren’t fast enough to keep up with all the building and new listings!
Any housing “shortage” is now purely imaginary.
May 5th, 2009 at 1:56 pm
Saw the CBC not up there and with all the Red Deer or wherever is better than thou talk, thought some food for thought on why Saskatoon isn’t so hot would be in order.
http://www.cbc.ca/canada/saskatchewan/story/2008/03/13/miffed-mcleans.html
May 5th, 2009 at 1:56 pm
“sound like prices are on way down.”
The blog is probably under national attention again, can all you debuzzers please stick to the facts?
Or, how’s this – make a prediction for year-end average price, one you will stick to. Ok, what will the avg (as defined by SRAR) be when numbers are tallied in Jan 2009?
May 5th, 2009 at 2:07 pm
Callum, if you’re just here to pretend the market isn’t weaker and buzz some conversions you’re holding onto, just take an ad out in the paper.
Average in January 2009 of 10% below average sales price for April 2008 (the peak).
Could fall more, if inventory continues to rise to unprecidented levels, but given current huge supply and lack lustre demand, a 10% drop in sales prices is a pretty safe bet, since there is no reason to buy now and no reason for prices to go up with the huge supply out there.
Yes, January 2009 will be up over January 2008, and that’s what all the “boosters” will cite then, but it will be LOWER than right now!
May 5th, 2009 at 2:13 pm
And not sure about Red Deer, but I have a friend who just graduated medicine and is going to Edmonton. Oddly enough, he says 5 of his 59 classmates are going to Edmonton. So of 59 grads, that’s 10 doctors to either Red Deer or Edmonton. Not even including those leaving for BC, or even Calgary. Think Saskatoon is gaining 10 doctors from Alberta’s graduating class? I bet not!
May 5th, 2009 at 2:15 pm
Think that the CBC National Report will be the stimulus to get a bunch of potential sellers to list to try to cash in on a mini boost of buyer confidence, before the market goes back to stale and over saturated, where no one in their right mind would buy now, since there are just going to be more places available in a week, and the week after that??
No way prices are going up with so much supply.
Just a matter of when and how much they drop.
No reason to buy now if you’re guaranteed something pretty similar’s gonna be out there next week, and 2 of the same the next week after that. For cheaper.
May 5th, 2009 at 2:19 pm
I am not pretending sir. I have real dollars invested in the Saskatoon market. Real money, cash I’ve put where mouth is. See my previous posts. All those who will pretend to preach the downturn shall quote REAL FIGURES. Can we make that rule?
May 5th, 2009 at 2:34 pm
Callum, aren’t we all entitled to an opinion? You say things will continue to get better and you’ve proven that by investing into the market. I myself predict that the market can’t sustain this kind of growth so I made my choice and left my money out of it.
None of us can predict the future, but it’s sure fun trying
May 5th, 2009 at 2:34 pm
I have been reading for months of a big market decline, and every week when it doesn’t happen the unbuzzer get upset, and start the propaganda machine again and again. The same talk every week “don’t buy now, we have high inventory, the price is comming down”. The number of units selling still is respectable, and the avg price is not flutuating large amounts. I know this will start the propaganda machine again, I will hear nothing but “it’s a matter of time”. When? now?
Can the unbuzzers stop with the fear mongering.
I too have been trying to find current immigration numbers too, anybody have any luck. I heard our numbers are up, but I would like proof.
May 5th, 2009 at 2:35 pm
Carl, like I said to Callum – we are all entitled to an opinion. It’s what makes this site (and the internet) so great.
You buzz, and some of us un-buzz(?). What’s the big deal?
May 5th, 2009 at 2:35 pm
Fear mongering? I would say it’s just an evening out of things. If it’s such fear mongering, then why doesn’t every one of you buzzers buy up that building with the 400 sq foot condo’s that must be so worth the prices they are asking…come on…go ahead…it’s win win win win right?!
Pass the crack pipe.
May 5th, 2009 at 2:35 pm
Fear mongering? Fear mongering is what drove the Saskatoon real estate prices to where they are!! “Oh if I don’t buy now i will be forever priced out of the market…” Now that is fear mongering and it was generated by the media and buzzers alike.
May 5th, 2009 at 2:37 pm
It’s nice that all the bears have congregated at this nice little blog to have their pow-wow’s and pat each other on the back for predicting a slow down in activity coming into the traditionally slower summer period. Inventory is building but we’ve seen that wave coming for a year, as everything that happens in Calgary happens in Saskatoon a year or so later.
However, the interesting question I’ll be waiting to see play out is that in Calgary there has been a ridiculous condo overbuild that is just starting to hit and will get much worse this year, luckily the new house starts have dropped off to 13 year lows there as they have much shorter lead times and can correct the overbuilding much faster. In Stoon I wouldn’t say there’s been a ridiculous amount of houses built due to the massively slow way that the City of Stoon has released and serviced new lots which I think will actually help in the end because it artificially throttled the amount of new houses that could have been built on spec during last year, and now that the speculators are being flushed from the market that shouldn’t be a problem and people like Heather can get their hands on a lot a build a house to live in which is good for them and good for the market. As far as condo’s, thank god everyone has always been terrified of building condo buildings in Saskatoon over 3-4 stories tall so I don’t think the condo market got on an overbuild roll either. Just the normal amount of condo buildings that go up in new burbs and the conversions is all which in the end isn’t a huge amount.
So who knows, I think the biggest factor in Calgary and Edmonton was the massive amount of overbuilding that got wound up by the speculators and then the construction industry there was able to ramp up very quickly to meet that demand, just due to the different way that new developments happen in those cities vs Saskatoon. So the fact that city hall has it’s thumb on all the land in the city combined with their ineptness and glacial pace may just wind up being the factor that saves Stoon from the crazy inventory build up that happened in Calgary and Edmonton.
Granted there is a record amount of inventory in Saskatoon, but in the big picture I actually think that once the city accepts that a new pricing floor has set in that the inventory with be absorbed and the people that just decided to through their house on the market on a whim to see if they could cash in will go away and it will return to the normal pace. I would predict it will stay flat the rest of the year and then in ‘09 it will be a normal 5-9% growth rate and by then the big wave will have subsided.
Just one view of it.
May 5th, 2009 at 2:38 pm
Yes Fear mongering, a twig snaps and the unbuzzers are off to the races. If the weeks doesn’t go the unbuzzer way they pour on the coal and unbuzz more and more. Facts, what is the market doing? Lets look at the whole picture not just housing inventory.
May 5th, 2009 at 2:39 pm
Ok so what is the whole picture? Overbidding is pretty much a thing of the past, many properties are reducing on MLS and sask houses, the reason the average sale price is high is because of higher end homes continue selling and entry level homes are not selling.
Also Quoting Norm “There were five sales over $500K but that’s become fairly typical. Last week stands out as the low one in comparison to the last four weeks. This week’s average is just a little higher than the average for June, so far.
309 price reductions in June, and another 189 cancellations, most of which came back on with a new MLS number and a new price. A bit of an indication that sellers are starting to realize the market has changed and are getting priced closer to right.”
So what is the whole picture?
May 5th, 2009 at 2:40 pm
My word – talk about twisting words. Now everyone that tries to speak rationally is an “unbuzzer”. A few months ago they were “negative” or “naysayers” or some other derogatory comment.
If this is an open forum for discussion, then thats what it is and leave it at that.
I think the “negative” people were called fools for believing that their word on this blog would impact the decisions of the market. I believe that is correct.
Callum, many months ago, I posted a few links showing that Canadians are at record levels of debt and that potentially a US like phenomena could happen right here in Canada. Oh, but that was torn apart by people saying “we don’t have subprimes here”. Ummm, well, it turns out, that the economy as a whole sort of determines movements of people, demand/supply….you know all those fundamental things that determine a market.
I think they say that 2/3rds of the GDP is consumer spending. But, what happens when the consumer hits the limit? Do we just keep buzzing and telling people to buy because they will gain in equity? Isnt that based on a sure movement upwards in demand?
You want facts – a 70 grand a year average income per familly is allocated approx 200 grand mortgage. There are record levels of property on the market. We don’t yet know what the net migration to Saskatoon will be, however, that is determined by market forces larger than this bleeping blog.
Jobs, wages, housing affordability, lifestyle (schools, crime, ammenities)determine familly decisions.
Reality is what it is and stop trying to say its either buzzing or unbuzzing. 6 months ago, I believe we herd the words “overvalued”. People still went nuts and bought like crazy. So, maybe it is time for sanity to return to the market. Maybe its not. The cool thing is that a market is not 100 percent predictable – you laid your cards on the table and took a risk. maybe you come out with millions, and maybe not.
Its not you that I would be concerned for, as obviously you have enough money to risk. Its the people that don’t have the money to risk and purchased beyond their means that can ultimately create a recession. Gas is out of control, food – we don’t know where it will end up. Consumers are maxed out. Where will the GDP go?
Well, the states offer us some crystal ball-like visions. Sending out a stimulus cheque to artificially pump up the economy, which, as I recently read, was similar to a fly taking a crap on an elephants back.
So – as I mentioned before – each individual is responsible for their own financial course. The banks, and buzzers are not out there to be your freind, they are there to make a profit
May 5th, 2009 at 2:45 pm
Most speculators are gone a long time ago. People are just trying to sell extra properties they have when they can get a good price for it. Most dont have to sell because they have clear title on their own houses and their rental properties. Seriously how hard is it to pay off a house when you bought it for 50,000 to 150,000 back in the day some new cars sell more than that lol.
May 5th, 2009 at 2:45 pm
Carl,
Facts, what is the market doing? Lets look at the whole picture not just housing inventory.
Ummm….yeah lets look into everything….in that case then, when our ‘average’ wage goes up by a few grand because the nurses got a 35% increase, people like you buzzers, can say it’s the province moving foreward…that we’re a have provnice now! Sure good for the nurses…as it’s good for other places that get the high percentage raises…but what about the other 90% of the population…
Be careful when you say look at the whole picture becuase the whole picture WILL paint what’s reality and what’s not.
But then again anything ‘negative’ has to be some pick against people confronting the plastered smiley face of the buzzer…so yeah i’m just whining wah wah wah.
May 5th, 2009 at 2:46 pm
If people had a brain in there head they would not be in debt besides school loans ,mortgage. People buy new cars when they can buy used, the have to have big new houses instead of a nice older affordable ones. They buy cabins and boats drive gas guzzling suvs and wonder why they are broke. I have never had any debt other than school loans and mortgage both are gone now. I buy everything with cash and I consider myself lower middleclass. They should make mandatory money management classes in highschool, I swear kids now dont even know how to count lol.
May 5th, 2009 at 2:47 pm
It’s pretty easy to just throw out a blanket statement of how well you’ve done and how everyone else must suck if they aren’t exactly like you.
Everyone’s life is exactly the same right? Also, what nice old houses are affordable here (in an area where you won’t get stabbed for walking your dog at 8pm on a weekday)?
May 5th, 2009 at 2:47 pm
Adster,
I think you have posted something along the lines of what I have been thinking for awhile. Calgary and Edmonton’s boom has lasted about 4 years. Where Saskatoon’s has been 16 months.
There has been MASSIVE speculation and overbuilding there.
Right now Calgary has around 3,000 condos listed and sales are at about 500/ month but there are over 20,000+ multi-family residential units that are in construction, approved or proposed.
http://forum.skyscraperpage.com/showthread.php?t=151592
This would be about a 40 month supply of condos in Calgary
Granted, in the next while many of these will not be constructed but the majority will be.
At the height of Miami’s bubble they had a 25 month supply of condo’s.
Hmmmm.
May 5th, 2009 at 2:48 pm
Because this province was always full of complainers and socialists compared to bc and alberta. So even when you have a legitiamte complaint no one wants to hear it anymore. People on this blog sayin lets move to Albetra where there is higher wages and no debt so lower taxes. Why do you think they have these things. When the new goverment tries to do that here pay down the debt create new jobs people whine about social programs and cheap housing. I remember not to long ago Ralph Kline giving bus tickets too anywhere in canada people on welfare who wanted to leave. Wonder where they all went to, Saskatchewan was there with open arms. And when are taxpayer to nontaxpayer ratio hits 25-75 Im moving to Alberta too.
May 5th, 2009 at 2:48 pm
Ah yes: I figured that the CBC special report would get the boosters out here in force. Nice to see. I assume that they’re hoping that out-of-town buyers looking into Saskatoon real estate will find this blog and think ‘Ah! look at all those people predicting massive increases in the market!” and buy.
Unfortunately, the facts that callum, carl and others mention aren’t in their favor: inventory is up, prices went too high for the local market, and are correcting, and in the midst of a global real estate downturn, Saskabush’s chances of having an independent boom are pretty slim.
This doesn’t mean the province’s economy won’t improve — it probably will, assuming potash, wheat, oil and other commodities stay high, and assuming a growing market for uranium. But if I’d think it would be safest to invest directly in THOSE commodities, rather than making the magical leap from ‘the economy as a whole will improve’ to ‘housing prices will SKYROCKET!’
Just sayin’.
I don’t think the realists among us are in the least bit of distress. Supply is up, prices are falling and will fall further, back to where an average family will be able to buy an average house.
And no-one is going to get rich on Saskatoon real estate.
May 5th, 2009 at 2:50 pm
Adster,
You may have some points in your blog post, but this one is WAY off:
The “traditionally slower summer period” for real estate transactions.
Yes, summer might be a bit slower than spring, but it’s a heck of alot faster than fall or winter.
May 5th, 2009 at 2:50 pm
And, of course, the inventory built even more rapidly than now in the traditional peak period of March and April.
But why let facts get in the way of a nice argument.
Sorry about the double post, people: Captcha had a problem with me entry!
May 5th, 2009 at 2:51 pm
http://www.saskhouses.com/listing/detail/?listing_id=12919
Some speculators are drowning in debt if they can’t sell, renting units out bought at the peak is like putting on a bandaid on a gunshot wound. It kinda feels good at first and some loss is stopped but the loss eventually is cumalative and fatal.
Speculators = financially bent over (either for the speculator or person who buys from them)
May 5th, 2009 at 2:51 pm
Migration anyone?
http://www.edmontonsun.com/News/Alberta/2008/06/25/5982356.html
May 5th, 2009 at 3:07 pm
George,
That link is truly scary.
I’m renting a 2,000+ sf beautiful house in Varsity View for about what they’re asking for that place.
Delusion city.
May 5th, 2009 at 3:08 pm
George,
That place looks nice and new, given what I am seeing for older apartment condos, I don’t think this is sooo bad.
jrochest
“Supply is up, prices are falling”
I guess it depends on what timeline you look at, last week the avg price is down, and this week it’s back up. Perhaps for the month it will avg out.
May 5th, 2009 at 3:17 pm
Grrr,
you’re getting a good deal, I don’t think you represent the norm.
$1100 for brand new 2bdr doesn’t seem strange for our market.
May 5th, 2009 at 3:20 pm
Grr — That’s actually not that bad for a one-bed with den.
The worst was the people who wanted 950 for the 400 sf elderly bachelor suites at 4th and 25th.
I’m moving into a new place when I get back: top two floors of a century house in Varsity View, 1,000 all inclusive. Pricey but stable, and I love the house, the landlords and the neighborhood: I was in another unit in the same house before this.
But I’m not skint for money, which so many tenants in this town are (students, seniors, low-income) and so have wiggle room. And I suspect rents will fall a bit as condos come back on the market: rental ceilings are based on local wages, and if people can’t afford to live here they’ll simply leave town.
May 5th, 2009 at 3:20 pm
Carl — was there a week this year where inventory fell? Or where sales numbers weren’t down YOY?
Weekly averages are influenced by whatever sells in that week: lots of small sales drop it, a couple of high-priced properties raise it. Over time, with inventory building, underbids and dropping asking prices, prices will fall.
Oh, and the ‘1100 for a one with den’ is reasonable: in the current rental market, you’re right. If you’d tried to get that last year at this time, you’d have been laughed at. Rents are much more volatile than sales.
Captcha words: “Invest stock”
May 5th, 2009 at 3:21 pm
Carl,
Yes, it is new and is not too crazy high for what the market is at now. It seems to show really well. But if rent is 1100 a month, factor in tv/phone/cable/power/heat. Thats about $1500/month for 2 bedrooms in the suburbs.
This is a pretty small apartment 600 sq/ft. To buy this, you are paying over 330 sq/ft. And you are basically paying for air. No land is bought when buying a condo.
May 5th, 2009 at 3:21 pm
“‘1100 for a one with den’ is reasonable”?
Really? The place I’m in is a 3br, and it’s fabulous.
I just moved here last year, so rents must have really shot up in a short period of time if THAT is reasonable.
And no, the landlard isn’t a family member, either.
I didn’t know a soul when I moved here.
May 5th, 2009 at 3:22 pm
Ooops- now that’s a Freudian slip. I meant to say “landlord”, not “landlard”. LOL
May 5th, 2009 at 3:26 pm
Yep, rents have doubled, easily, in a year. Pull a substantial amount of stock from the rental market and turn it into condos and you’ll get an increase.
It’s now no cheaper to rent here than it is in much larger cities with much higher wages. I think it’s unlikely to last, though.
May 5th, 2009 at 3:26 pm
Please, no links to listed property with a “look at this crap” message.
I hate to shut that down, but as a Realtor, I have some obligation under our Code of Ethics and that kind of stuff could land me in trouble.
May 5th, 2009 at 3:26 pm
We’re experiencing an increase in the amount if inventory in Saskatoon, and this is a good thing. Why? Well for starters, buyers now have a choice, and it will become only too apparent which houses are overpriced and those gems that are undervalued. Another is that rampant (amateur) speculation is probably going to end disastrously for some; perhaps their purpose in life will be to serve as a waring to others…
There’s a reason why we’re going to see a glut of “conversions”, and the reality is that on a per square foot basis they’re cheaper to construct with a higher rate of return. But this isn’t anything that cities like Calgary, Edmonton and Victoria haven’t also experienced. The upside is that a surplus inventory will certainly see many of them converted to rental units. At the very least rental rates shouldn’t continue to rise and perhaps we’ll see the quality and standard of living increased as a result of the investment in improvements (which has not seen as much in the past as it has recently).
With respect to actual number of listings, I think Norm indicated we’re juts shy of 1,300, with some (non-duplication) on SaskHouses.com. And if we’re drawing a direct comparison with Calgary in terms of MLS listing, let’s be sure to recognize that the base numbers for Calgary and Edmonton don’t include surrounding areas, either.
While the (overall) number of listings is increasing, the numbers for June indicate a weekly decrease in listings for Areas 2 and 3 (this despite Stonebridge being a relatively new area). By contrast, Area 1 is seeing a weekly increase in listings. The average sale price for June also seems to indicate that despite more underbids (or at-listings), units are generally selling for more money, which could be indicative of a lack of (cheaper) inventory. That or buyers figure that for the money, they’re better off spending more on something that’s going to retain a higher resale value in the long-run.
May 5th, 2009 at 3:30 pm
I think what some buzzers are forgetting is it takes a LOT longer for things to come down than they do to go up. It’s just a matter of time.
Wesco,
Thanks for the link. Good to see more people are going to AB.
May 5th, 2009 at 3:48 pm
My fault,
sorry Norm.
May 5th, 2009 at 3:50 pm
That $1100 per month is reasonable in this neighbourhood. I am a little surprised at the Sale price on that unit (those units used to sell for 250-300K last year), to drop it that much, they must be really taking on water and just want out. I am living in an apartment about 2 blocks from that building, paying a bit more for rent that they are advertising to rent that place, hopefully they can find somebody, I don’t like to see anybody lose money like that. I’d guess housing prices have slowed the migration down somewhat so there are clear choices to be made this summer. There are certainly units not currently rented in this building, which differs dramatically from the same time last year.
Between Univ Heights and Willow Grove, little is selling here. If all the “For Sale” signs caught on fire, you’d have a 4 alarm blaze. As well, there is another building currently being built in this neighbourhood, with nothing to attract people here
Once the University Heights SC area is built up a bit (ie: you don’t have to drive to Lawson Heights or 8th to find a Tim Horton’s) it might be a different story.
What keeps me from buying in S’toon? Prices, and that’s the only thing… I believe things will go a bit lower than they are now (and to be clear, I hope there is NO crash as that would hurt a lot of honest people, both residents and speculators – and I love Saskatoon). Prices have started coming down, people like us who won’t buy into the craziness have the control over the situation, ultimately, nobody is forced to buy anything
… we just have to be a little more patient.
Sorry buzzers, you aren’t getting my $$$$$
May 5th, 2009 at 3:58 pm
Looks like Saskatchewan’s growth in population was about 3500 people from Jan 1 to April 1 in 08. We were 2nd to Alberta in terms of growth.
http://www.statcan.ca/Daily/English/080625/d080625b.htm
May 5th, 2009 at 4:05 pm
Drake: you say “With respect to actual number of listings, I think Norm indicated we’re juts shy of 1,300, with some (non-duplication) on SaskHouses.com.”
Norm’s numbers are 1387 SFH & Condos on MLS alone: the independents has some duplicates but probably also some additions.
You’re under by 100 units. That’s more units than sell every week, so it’s worth mentioning.
At the rate inventory is increasing, we’ll be at 1400 this Friday.
May 5th, 2009 at 4:07 pm
I keep hearing prices are coming down, by how much and when? I mean really, I could predict a price increase for someday in the future.
May 5th, 2009 at 4:11 pm
jrochest,
I counted 74 new properties up until Tuesday, 3 more days of listings, may reach 1500 – minus ones sold this week.
May 5th, 2009 at 4:12 pm
Drake, Norm had pointed out 1283 homes or condos (excludes duplexes, mobile homes and other low end junk)
1,397 is the total of all MLS listings for Saskatoon
+ 355 Saskhouses in Saskatoon
Norm had also pointed out condo sales were dropping (inventory still up!) so less cheap places selling, but not due to a lack of sellers.
However you slice it, there are a lot of places for sale, the inventory is rising, we’re seeing reductions and places just aren’t selling
Definitely good news for buyers, if they can hold off and not jump too quickly at today’s “bargain” that was a rip off even in January 2008 and will be over priced in even a few months.
Some one asked for predictions:
A 10 to 15% drop from peak prices of $306,000 ish by January 2009, still up “year over year”, but down monthly from last month onwards
May 5th, 2009 at 4:12 pm
Jim,
I have a feeling that our population is a bit higher than 208,000.
I live a couple of blocks from a recent condo conversion. Before the conversion there was only a few vehicles parked on the street. Now parking spots on the street are at a premium. It seems like it is always packed. Either that, or they are always having parties.
I have a feeling young people are stretching themselves to own a condo and they are getting roomates to help make the monthly payments. I’m sure there are houses loaded with people as well.
I think some of these people get lost in the stats. I believe the higher is probably higher than recorded.
May 5th, 2009 at 4:13 pm
Carl, Dan predicted prices down by 10% average by next year, January 2009.
I predict prices down by 10 to 15% by next January.
And Carl, you could predict a price increase, but you’ll be wrong, so you’ll just vaguely predict that a crash will not happen, almost conceeding that a moderate price correction over the coming months will happen. I’m predicting to the tune of a 10 to 15% drop by January 2009. That’s my number. Could be more.
May 5th, 2009 at 4:13 pm
George, City of Saskatoon says 208,000 Stats Can only says 203,000, condos always have bad parking, for every students crammed into a condo, another went to the U of A. No reason to expect Saskatoon exceeds what the optimistic city forecast would be. And if it does, likely by no more than it did a decade ago, and no more than every other city in Canada’s population could be higher.
May 5th, 2009 at 4:13 pm
W.R.T CBC National story, as I posted on saskhouses blog, but they don’t seem to publish my comments
”
There is NO rush to get houses up fast due to demand,
There is a rush to get houses up to sell at high prices before prices fall and the inventory on the market is even more over saturated than it is now.
Therefore, this CBC story is out of date.
Apparently I’m not allowed to say that though!!
If you only want one sided comments, why don’t you get rid of the blog? and just post your own thoughts?
“
May 5th, 2009 at 4:14 pm
Okay, Carl — so prices are going to go up? By how much? When?
Predicting exact numbers is like predicting the weather: you can’t predict exact cm’s of snowfall for a particular day in January, but you can say that it’s likely to be cold.
I look at the weather, so to speak, and it’s getting chilly.
I’ve already said that I think we’re going to lose the whole of last year’s ‘big bubble bloat’, and land roughly where we were at the end of 2006. I only suggest this because the steady increases that we had up to that time were driven by the local market, and seem to me sustainable.
Norm’s got a graphic, here: I think that spike will be flattened.
http://www.teamfisher.com/Saskatoon_at_a_Glance/page_1723426.html
How long will this take? Who knows? Two years?
Now, if the flood of arrivals from Toronto/Alberta/Vancouver does arrive, and the population doubles or quadruples, of course things will go up. But I’m skeptical on that one.
May 5th, 2009 at 4:14 pm
And Saskhouses inventory is going up too!
No longer the 355 of earlier this week,
Now 364 listings in Saskatoon alone
Kind of an indication that all kinds of inventory swelling beyond sales, both MLS and Saskhouses
Maybe the “buzzers” should post on Saskhouses, as they are ignoring the stagnant sales market and the majority of comments to that effect.
May 5th, 2009 at 4:15 pm
George — I’d assume that the units are rentals, and there are extra roommates in each suite. I don’t think many people rent two bedrooms for themselves any more.
Or maybe they’re just charging for parking!
May 5th, 2009 at 4:15 pm
Jim,
what I was getting at, is that I believe there are way more people in this apartment (sorry condo) unit than there was before the conversion. Rents in this apartment were probably 550-600 2 years ago. Mortgages payments are probably now 1100-1200 a month now.
I think some of these people buying these units were probably renting similiarly units a couple of years ago. Their wage has not gone up to justify the increase so they get a roommate(s)
I am not saying that we have 22k people above the 208k number being reported but maybe a couple thousand.
I also suspect there are people piled up in houses and apartments in the hood that are not accounted for. But this is probably the same in every city.
May 5th, 2009 at 4:16 pm
A few of the single people that I know who bought condos in the last year went from renting a 2 bedroom apartment with a roommate to paying a mortgage with a roommate.
May 5th, 2009 at 4:17 pm
Oh, and apparently the increase in population is more substantial than we’ve thought: 30,000 arrived, 19,000 left, for a total of 11,000 plus the 4,000 or so from abroad.
I’m not sure how they add 11 to 4 and get 18, but anyway: population’s up.
http://www.canada.com/saskatoonstarphoenix/news/story.html?id=d3435bc2-e931-4808-8cf5-105966e8948c
Off to the movies…
May 5th, 2009 at 4:17 pm
jrochest,
Historically average house prices for a city should be between 2-4 times average household income.
I figure we should be anywhere between 215k and 280k. Probably closer to the lower end of that.
I posted an article about the house prices dropping 30-35% from the peak in the states. Will the same happen here?
May 5th, 2009 at 4:18 pm
I think only nosebleed lunatic places had a 30-35% drop: Southern CA & Florida, Las Vegas and Phoenix.
Massive speculation on a long term scale. We didn’t get that.
But I think low 200,000’s for a median price, maybe a hair under: that’s still up from 2006, but it takes into account the three years of boom-and-correction.
All the condo units will swing statistics down, too. I think they’re one reason inventory is so high: there’s more things to list.
And now I really AM leaving….
May 5th, 2009 at 4:18 pm
Norm,
My appologies. Won’t happen again.
Jesse
May 5th, 2009 at 4:19 pm
Re: the doctors moving out of the province …. I’m not sure of the specifics from what’s been posted, but please keep in mind that medical students graduating from medical school (there have been references to graduating class sizes) are now simply entering the second part of their training. Where they move is determined by a national “match” system. And they aren’t going to be making enough money to buy a house anyway
The real test would be, where are the doctors going who are currently finishing their residency programs in Saskatoon. Those are the people who actually have a choice about where to live, and have huge earning power.
May 5th, 2009 at 4:19 pm
I think at least half of the kids I grew up with who became doctors, nurses, engineers etc. ended up in BC or Alberta. Doesn’t seem to be much of a shortage of a lot of stuff in Saskatoon anyway, but seems they’d all rather move to Alberta than accept a job in rural Sask or even Saskatoon for less money
May 5th, 2009 at 4:20 pm
jrochest, my points was that the rate of new listings is slowing while the pace of sales is remaining fairly consistent. You’re going to start seeing the number of listings reduced towards the end of Summer and certainly once we’re into the Fall. I found 1,429 listings as of today (plus indepedents).
Jim, yes, you’re starting to see more inventory (which is to be expected, since this is prime buying/selling season), but I’m not sure where you’re obtaining your information that “places just aren’t selling”. As of last week we were at 236 sales for the month of June and we’ll probably end at over 300 for the month. And the average sales prices is up to $315k in June so far.
And since we’re theorizing, I think the average selling prices is going to continue to *increase* up until the end of August, at which point I think a rollback of about 5-10% through the Fall and Winter season is probably realistic, ending the year in the low $300k’s.
May 5th, 2009 at 4:21 pm
I’m going to go with 7% drop in average sale price by January 2009 from $306,000… just to be different! Oh what fun to predict. I wouldn’t be completely surprised if it went down 10% though.
May 5th, 2009 at 4:22 pm
Doug,
nothing new to this blog to tell us that alberta pays more money, and has more jobs… no shock.. If you stay in stoon you stay for other reasons. If you don’t like it here you’re free to leave. Don’t take this the wrong way, I don’t mean this as an insult. I like stoon over calgary or edmonton for other reasons.
May 5th, 2009 at 4:23 pm
Further to jrochest’s comment; StatsCan population stats just released today.
http://www.statcan.ca/Daily/English/080625/d080625b.htm
May 5th, 2009 at 4:23 pm
To start, I just want to say that I love all the different opinions on here and find them very useful. Even the bickering is entertaining…so keep it up!
I just moved here at the beginning of 2008 so I’m pretty unfamiliar with the market. So I’d like to go a bit off the topic of the future of the market. Before I can form my own predictions/opinions on that, I need to know more about the past and present. I have a few questions that I’m hoping some of you can answer. Any feedback you may have would be greatly appreciated.
1) How much has the market REALLY boomed in the last couple years? The way I’m reading it…did things double since 2006? Were the homes I see listed now for 400k, 200k in back? For 300k, just 150?
2) What is this rejuvination of Riversdale I keep hearing about? Is it a myth or is the city really going to try and spruce up that area. And if so…how? And to what parts?
3) All these homes I see built in 1912. Is there any chance of them lasting through a 25 year mortgage and still be standing afterwards?
May 5th, 2009 at 4:23 pm
Sean,
About three years ago you could find a number of good houses for around the $75-$100,000 range. These same houses today would be priced in the 250-300 range. This happened because apparently the Saskatchewan economy boomed and everyone’s income trippled in the period of a year thus justifying such ridiculous increases. /sarcasm
In regards to Riversdale – it has tonnes of potential – but it is going to take a lot more than some fancy buildings and throwing cash at the neighbourhood to turn things around. In my opinion, nothing is going to change until the city looks at why Riversdale is Riversdale and tries to address some of the issues affecting the community.
In regards to the 1912 home – I would take one of these in a heartbeat over many of the newer homes built in the past ten years. Many of these older houses were built to last 100+ years, whereas todays homes are built to last within the period of the homebuilders warranty. With untested long term gluenail construction, and other “features” such as paper thin exterior stucco applications, my gut tells me many of these new homes are going to be looking ghetto 15 years done the road than the old character homes.
May 5th, 2009 at 4:24 pm
When I got here in 2005, I had went looky-looing with a friend who was buying (I wasn’t) from 2005-2006: we saw several old character houses (one and 1/2 stories, big bungalows) in Nutana for 150-180. My friends bought theirs for 120 and 100 respectively, a few years earlier. My landlords bought a three-story unloved and under-cared for ‘century home’ for 100,000, then put 100,000 into it.
So, yes, prices are up 100,000 at least: prices are by and large double what they were. Check the link to Norm’s “Saskatoon at a glance” page.
The pre-20’s houses are fine, but they are prone to foundation issues: something about the chemical mix of the concrete. Fixing this means essentially re-doing the whole basement: very expensive.
Riversdale has great old houses but HELLA poverty/crime issues: gangs. Arson. Drug houses. Hookers. The poverty/street crime doesn’t give me pause: gentrification will move people along, and I’ve lived in loads of bad neighborhoods before. But the gangs are different: these people will kill you, or burn your house down, in order to get you to stop calling the cops on their meth lab.
May 7th, 2009 at 1:31 pm
Oh, and these kinds of questions are really good ones: since the values in Saskatoon are so low, it’s easy to look at 200,000 house in Mount Pleasant and think “A bargain!”. Or to look at rents of 1000 for a one-bedroom and think “well, that’s reasonable, I guess I could up it to 1400 without losing my tenant”.
Then you realize that the house in Mount pleasant used to be 65,000 and the rent for the one-bed has historically been 550, and you realize that you’ve overpaid for something that you can’t now sell or rent.
May 7th, 2009 at 1:32 pm
Sean, jrochest and Jason gave you some excellent information. I might also add that you may be able to find homes occasionally built in the 1930’s or 1940’s that also stand up quite well, are not that dissimilar from those built prior to 1920 and have the potential to be really nicely redone.
Personally I would look at Areas 2 and 3 and the northern parts of Area 1 and 4 if you’re looking for long-term potential with good possibilities of re-sale. I’m not necessarily keen on some of the newer areas, simply because while affordable, it’s really hard to gauge the long-term potential of those neighborhoods.
May 7th, 2009 at 1:33 pm
Thanks for the replies!
Drake. I agree. I’d really like to keep my mortgage affordable for me (I’m a writer ahah) and stay under 200k. If possible I’d like to get into Mount Royal or Mayfair, Holiday Park is nice too but doesn’t have many listings up right now. I checked out a couple in Mount Royal that were in my pricerange… terrible. One was 9 hundred square feet, had 2 dogs, 6 cats a rabbit and something else that hid in the back of it’s cage. Maybe that explained theap ugly linoleum in every room. The other had water and mold behind the washer/dryer and wasn’t in much better shape. Then I stumbled on a great one that was having an open house…but it was just under 290k. Ah well. Nice area though! Caswell…I think those houses are just too sandwiched together for my liking.
What part of area 4 do you think has the best long term upside? I was hoping for more positive responses on Riversadle, since housing is so cheap and bountiful there…but I appreciate everyone giving it to me straight up. How many blocks away from 20th street do I need to go to feel safe in a house? It’s funny how a few blocks can make a huge difference in this city.
May 7th, 2009 at 1:33 pm
Sean — welcome, brother! I’m *supposed* to be writing, but I’ve got to disable the wireless on this laptop — here I am in a library and what am I doing? Reading about Saskatoot real estate. *sigh*.
I think gawdawful ugly lino, mould and water damage is probably your best bet right now. Rent for a while. The houses will still be there in December, and in those neighborhoods the prices should so fall.
I’d be interested in Norm’s answer to the ‘how far from 20th’ question.
Back to the supposed work…
May 7th, 2009 at 1:34 pm
I believe Riversdale will be revived, but it will take a long time. There are tonnes of great things happening. Farmer’s market, the Barry closing, close to downtown, close to the river and there are people willing to investment time and money.
But this will not happen overnight. This will be a 10-20 year project. After decades of neglect, many buildings are run down and need to be torn down or major restoration. The Barry is the only building needing this. I wonder if the city shouldn’t just bulldoze from Idylwyd to Meadow Green and start over. Just a thought.
The best long term upside without a doubt is close to the farmers market and close to the river.
May 7th, 2009 at 1:34 pm
I lived through the Calgary boom and then the Saskatoon boom and during the Calary boom everyone initially had similar comments to the “unbuzzers” on this site. However , as time went by people realized that prices were not going to drop and everyone gradually became used to the new reality of higher house prices. I know inventory is high , but prices really haven’t dropped and if they have it’s insignificant compared to how much it had gone up. I think most people especially those left out in the cold are still in shock about being left out of the market and are hoping for this big drop which if we’re following Calgary isn’t realistically going to happen.
Sean the main benefits of Riversdale are the same as it’s bad points , drug houses and hookers. You don’t have to travel far to get both .
May 7th, 2009 at 1:35 pm
I could be wrong but I believe I read an article in the Star Phoenix last year that said 33% of the crime in the city happens between 15th street to 25th street between Idylwyld and Avenue W.
May 7th, 2009 at 1:35 pm
Real Deal
“Sean the main benefits of Riversdale are the same as it’s bad points , drug houses and hookers. You don’t have to travel far to get both.”
Well stated. ahahahahah.
May 7th, 2009 at 1:36 pm
“net migration to Alberta from other provinces was only 713 people”
The comments section is from regular folks who say it is too expensive to live there. Same kind of talk here.
http://www.cbc.ca/canada/calgary/story/2008/06/25/edm-statscan.html
May 7th, 2009 at 1:36 pm
Sean, I would say if you’re really set on Area 4, stay north of 33rd Street and East of Idylwyld. I drove through Hudson Bay Park and Mount Royal not too long ago and was really surprised with the number of parks in the area! It reminded me of some of the older areas of the city like Nutana, City Park, etc. I think some of the homes in these area are attracting long-term buyers and have good potential.
While there has been rampant speculation throughout the city, areas like Riversdale saw higher speculation because prices initially went up on the North and East ends of the city, which made properties on the West side look quite affordable by comparison (and attracted that kind of speculative buyer). I think you’re going to see a lot of listings in those areas unloaded in the future. And George’s comments are on the mark.
I found this new listing on MLS today (312328) for $184,900. Might be worth checking out.
May 7th, 2009 at 1:36 pm
Open houses this weekend.
My feeling with the long weekend and hot weather there will be more open houses than people actually viewing them.
I’m going to the lake, no open houses there.
May 7th, 2009 at 1:37 pm
Oil just hit $140/barrel this afternoon and they’re now predicting $170/barrel by the end of Summer. Maybe $200 or more next year. From a real estate standpoint, it’s important to note for several reasons:
1. This will continue to fuel inflation leading to higher interest (mortgage) rates.
2. This will translate (eventually, but sooner as opposed to later) into higher construction costs.
3. Real estate in prime locations (within walking or short driving distances) is going to become increasingly more valuable and sought-after.
Note that this is despite Saudi Arabia adding +200k barrels/day in new production throughout June and planning for an additional +300k barrels/day in July, for something like a total increase of +9.7M barrels.
May 7th, 2009 at 1:37 pm
Real Deal,
I don’t know if you can directly compare the Calgary boom to Saskatoon. While we are seeing population growth and high demand for housing, I just don’t see the large influx of people and jobs (let alone wage increases) to justify what’s happening here.
May 7th, 2009 at 1:37 pm
Uh, Calgary isn’t the best example to point to, Real Deal.
Here’s a link to the Calgary real time inventory:
http://www.realtyexecutivesapex.com/search_mls_map_form1.php
That many units for sale in a city of a million? They’ve got problems. Prices aren’t falling like rocks yet? Patience. They will.
May 7th, 2009 at 1:38 pm
I’m only mentioning Calgary as a comparison because it’s frequently mentioned on this blog about there rising inventory. JR , you’re right , prices may fall , but it’s been a few years and prices still haven’t fallen , so I know people out there waiting years now to get into the real estate market.
Sean , ahhh , Hookers and drugs and a view of the river , what more could you want.
May 7th, 2009 at 1:38 pm
Sean,
I have a book on home inspection problems written by Mike Holmes. He thinks the best houses were built between 1960-70. For example, the infrastructure was “overbuilt” according to today’s standards.
There will be a boatload of repairs with a 1912 house – probably electrical and plumbing to meet code. Still, if you’re into a lot of hard work, I’m sure the payoff is very rewarding. That and those houses do have a lot of character!
May 7th, 2009 at 1:39 pm
jrochest…
Thanks for the welcome!
Real Deal…
Have you ever noticed on 20th street…there’s a pawn shop that has a list of the items it carries on a sign. Guess what the first item on the list is. Guns! ahahah. I bet that pawn shop does well…
May 7th, 2009 at 1:41 pm
Heather. Great tip! Thanks!
May 7th, 2009 at 1:41 pm
So just out provincial population up 18,000 year over year, yet… housing inventory is still swelling, with weak sales.
Just think how many more places will be on the market once those who wanted to move back from Alberta have done so?
Record inventory during record growth?
Doesn’t seem promising for when that record growth levels off…
May 7th, 2009 at 1:42 pm
George, key comment about Alberta
14,000 people gained there in first quarter
v
3,500 here
Alberta is still out growing us
We’ve got anecdotal accounts of people coming here from Alberta, big whoop, Alberta is still growing faster
I saw another key CBC comment, some one asked without the “booming first nations population” how much is Saskatchewan really growing? A segment of the population that will be booming regardless of the economy, and likely can’t afford expensive housing. Not engineers and professionals moving here from Alberta. Stories about people moving from Alberta are typically based on finding a random couple and interviewing them on why they moved, I could do the same thing about buddies who moved to Manitoba for school. A couple people who moved here does NOT count as a boom. Alberta’s 14,000 people in 3 months apparently is a let down there. Why are we so pumped about 3,000 ish over the same period?
May 7th, 2009 at 1:45 pm
Just a comment about life in Saskatoon …
I moved to Saskatoon and took a little paycut , but still earn a good salary. I find the house taxes incredibly high , utilities are not any cheaper , food and fuel prices have skyrocketed , so basically things are tighter financially , but I find it all worthwhile when you factor in quality of life and shorter commutes .
Sean , I haven’t noticed that pawn shop , but can let you know where the porn shops are.
May 7th, 2009 at 1:46 pm
Jrochest,
I think you follow some of the websites that I follow. I see that you have posted on Garth’s. I feel you have a good handle on what is going to happen here.
May 7th, 2009 at 1:50 pm
Real Deal…start at 20th and Ave P and head towards downtown. The one with the sign is on the left. You’ll pass at least 3 pawn shops.
May 7th, 2009 at 1:51 pm
I believe there is one across from that sign. 20th really does have it all!
May 7th, 2009 at 1:53 pm
http://www.theglobeandmail.com/servlet/story/RTGAM.20080626.wrubin0626/BNStory/Business
Higher oil will eventually cripple the world economy. Scary if that happens.
May 7th, 2009 at 1:54 pm
Real Deal — where did you come from?
George — there aren’t too many RE blogs in Canada, are there? I know Garth has his detractors (and I don’t think Southern Ontario is going to tank as badly as he assumes, except for condos, which are overpriced and overbuilt everywhere) but the blog is useful and intelligent, like this one. The Alberta Bubble one is staggeringly dreadful: volleys of impossible insults, usually sexual. It’s like — well, like a Calgary bar ten minutes after closing, come to think of it.
20th has nothing *but* pawn shops and porn shops. And some of the best thrift stores in the city. Sad, really, because it could be and should be a nice, vibrant community.
May 7th, 2009 at 1:55 pm
Anyone else tried posting on saskhouses.com lately?
Their blog, usually boosterish to the point of being incorrect, seems to be ignoring any posting that is critical of current real estate market fundamentals (ie big and increasing supply, smalle demand) or points out errors in their posts…
Not sure if anyone else has experienced this?
Crikey?
Is the lack of posts just because everyone is using this blog isntead
May 7th, 2009 at 1:56 pm
Doug,
Why are you so hard on Saskatchewan?
We’ve just come off of a huge immigration year after years of losses. Q1/08 shows our largest gain ever for the first quarter of any year and all you can say is, “Alberta is still out growing us.” Who cares?
May 7th, 2009 at 1:56 pm
Sean,
Also other points to remember with houses that are early 1900’s, many of them have less than 2×10 floor joists esp on the upper floors, AND NO insulation, probably no air vapour barrier besides that waxy paper junk.
Just things to think about too.
May 7th, 2009 at 1:57 pm
Doug has some good points IMO, and can be seen as negative for sure but thing is, the people that love and enjoy the province and all it’s done for them and all it’s let them do for the province, will always have the positive spin to things. What happens when the province takes a downturn again…people will try to still say it’s a great place to work live and raise a family (to coin the gov’ts site)…and for a lot of people it will be, but for a lot, it simply won’t be either.
Can’t have a Peanut butter and jam sandwitch without the peanut butter AND the jam.
PS. An older house around turn of the century probably won’t have weeping tile either.
May 7th, 2009 at 1:58 pm
THIS HOUSE MUST SELL!
Offer 400k tops. Seller will still make money and the house will be more affordable for the buyer. Win, win situation.
ps( we are not suppose to link anymore, you’ll never guess where it is, after a reduction)
May 7th, 2009 at 1:59 pm
Doug,
No, SaskHouses has posted everything I’ve written, although to be fair, I haven’t written anything in quite awhile.
On another note, an interesting link as of today:
http://www.reportonbusiness.com/servlet/story/RTGAM.20080626.whousing0626/BNStory/Business/home?cid=al_gam_mostview
Canada’s housing boom is over, bank says
VIRGINIA GALT
Globe and Mail Update
June 26, 2008 at 10:44 AM EDT
After a long run of rapidly-rising prices, the Canadian housing market has cooled to the point that it is no longer a sellers’ market, Toronto-Dominion Bank said Thursday.
“The long-awaited end of the Canadian housing boom has occurred, reflecting more moderate demand and increased supply of properties for sale,” TD economists Craig Alexander and Pascal Gauthier said in a report.
“The year-over-year price growth for existing homes in Canada’s major markets fell to only 1.1 per cent in May, down from 8.6 per cent just four months earlier,” the TD economists wrote.
“The trend has been broadly based, but is has been particularly sharp in some of the markets that had experienced the most dramatic price growth. Calgary and Edmonton home prices in April and May fell to below year-earlier levels.”
May 7th, 2009 at 2:03 pm
Just pointing out that even at our best, Alberta is better growth wise, yet for some reason with slower growth than Alberta, lower wages and higher taxes, a house in Saskatoon demands the same price as those in richer, faster growing Alberta cities, except for Calgary.
It is key that Alberta out grew Saskatchewan, because we’re always hearing about people “moving back”? Well, apparently less than are moving “to” Alberta.
For Saskatoon prices to be higher (or even the same as) higher paying, faster growing Alberta communities, points to how “over valued” Saskatoon housing really is. That and the big run up in inventory. And the price reductions. And the relistings to highlight properties that weren’t selling, due to the bloated Saskatoon inventory. And low sales below listings, despite apparently “record” growth?!
May 7th, 2009 at 2:04 pm
I’ve got to agree with Doug, in that Saskatchewan does compete with Alberta for skilled labour and as a a place to live. If Alberta, as Crikey points out, is experiencing prices BELOW last year’s levels and is leading Canada in housing price correction, it stands that Saskatchewan prices can’t go up and may well fall from last year, and at least fall from the past few months, given that a place which is growing faster and paying more (Alberta) becomes a better option with its falling prices.
Alberta housing should be more expensive, if it is cheaper or even similar in price (or similar rent as well), people will again leave Saskatoon for Alberta in droves, as they are paying a similar amount to live in either province, but are paid better in Alberta.
Saskatoon’s housing is more over valued than similarly priced places in Alberta due to the substantially lower wages in Saskatoon and better job opportunities for super high earning professionals in Alberta.
Norm, “We’ve just come off of a huge immigration year after years of losses. Q1/08 shows our largest gain ever for the first quarter of any year and all you can say is, “Alberta is still out growing us.” Who cares?”
I think it is quite important that our population growth at its best is underperforming Alberta. A province with falling real estate prices.
For everyone who points out their prices are only down a couple percent from last year, how much are OUR prices up? 30%? 50%? from that same period last year? Moving to Saskatchewan all of a sudden becomes a pretty darn tough sell.
May 7th, 2009 at 2:05 pm
Link re: potential economic consequences ahead:
http://www.theglobeandmail.com/servlet/story/RTGAM.20080627.wdion27/BNStory/National/home?cid=al_gam_mostview
Dion’s plan targets oil-rich provinces
Tax to hit Alberta, Saskatchewan hard
CAROLINE ALPHONSO
From Friday’s Globe and Mail
June 27, 2008 at 4:00 AM EDT
TORONTO — Liberal Leader Stéphane Dion says 40 per cent of Canada’s carbon emissions come from Alberta and Saskatchewan and the two western provinces will have to do the most to change their habits under his new green plan. But he said it will be good for them – and he’s taking that message to the Calgary Stampede next weekend.
“If we do this plan, Alberta and Saskatchewan will be better off 10 years from now than if we don’t do this plan,” Mr. Dion said. “Their economies will be more diversified, their universities will be at the centre of something big happening around the world, and investments will grow.”
May 7th, 2009 at 2:07 pm
I agree with Norm, we have had a good year in Saskatchewan. Unfortunately it will never meet up to some peoples expectations…why?
I remember years back when everyone was leaving the province, people were saying “Alberta is way better the Saskatchewan, more jobs and $$”, and people are still saying this. We could have a better year then Alberta, and the pessimists would still cut it down, I am sure we would hear “can’t keep that up, or it will never last”….
If you don’t think Saskatchewan is doing well then you haven’t been around long enough
May 7th, 2009 at 2:09 pm
Doug,
nice shot at saskhouses, I think it’s pretty crappy how you are using this blog to cut them down. There is probably a good reason why they don’t publish your posts. Lets just say you lack discretion.
The blog is owned by them, and they are allowed to set their content. They don’t have to publish your comments. Common sense tells me that they won’t publish your posts.
Why not ask them to publish a post saying that nobody sells a house through them, and act siprised when they reject your post.
Why would you expect anything else. To tell the truth most blogs try to keep sh*t disturbers out, which is what you are trying to do with your post about saskhouses.
May 7th, 2009 at 2:11 pm
I think some people are trying to cut Saskatchewan down by saying our economy is not doing well and there is no immigration and by comparing it to Alberta.
Fact:
Our economy is doing very well. There are jobs and opportunities every where. Wages have not gone up too much but its still early in our growth. Companies will be forced to raise wages in fear of losing their workers. Wages will increase.
Fact:
Like it our not, people are moving here. Saskatchewan’s population has increased by 18,000 the last year. Not heard of for 2 decades. This will continue to increase as well. And don’t tell me people will go to Alberta, they are too late for that one. Unless it is Fort Mac. If anything people will (should) move to the states.
Fact:
House prices are way too high. They don’t need to come down. They WILL come down. Never in history anywhere have house prices gone up like we have seen in such a short time and stayed there. The market always corrects. If they have please show the link, cause I have not found it. We should be at just over 3 times average household income. A healthy house market is one that sees increases relative to wages year over year.
These are my facts. Take it for what its worth. (2 cents)
May 7th, 2009 at 2:12 pm
Long-term view key to real estate in Calgary
This does not give the speculators much hope does it?
http://calsun.canoe.ca/Business/2008/06/27/6002766-sun.html
“average prices, which, in July ‘07, hit an all-time high of $505,920, at the peak of a demand cycle that started in late 2005″
“was slightly above $470,000 yesterday.”
If you bought a house last year for 505k and tried to sell this year, you would be out on average 60k inflation adjusted (5%) and this does not even count closing costs and the cost of maintaining the property for a year. 90k,100k + loss in Calgary RE in one year. Yikes.
Oh, one last thing, they are double the inventory right now compared to last year with higher mortgage rates. Where are they headed?
I’m glad its different here.
May 7th, 2009 at 2:14 pm
George said:
“The market always corrects. If they have please show the link, cause I have not found it. We should be at just over 3 times average household income. A healthy house market is one that sees increases relative to wages year over year.
These are my facts. Take it for what its worth. (2 cents)”.
Calling your opinions facts is a little bit much, no?
Anyway, here’s something to think about. You assume that the housing market MUST move in order to reflect wages, given their historical relationship. But isn’t it also possible that the housing market has efficiently priced in future wage increases? If changing A alters B, doesn’t changing B do the same to A?
What anyone who blindly cites wage/housing ratios as the market will tank ignores is that collectively, the market has anticipated substantial future wage increases. If the wage increases never happen then sure, there could be a collapse. But is anyone seriously predicting that uranium,potash, oilseeds, grain and oil are all going to tank simultaneously?
Those who cite the global and north american economic concerns ignore the fact that our commodities are seriously inelastic.
Those who say oil is going to tank- well, frankly you’re just nuts, but let’s remember that the provincial budget assumes oil at $60 LESS per barrel than it’s been trading.
May 7th, 2009 at 2:15 pm
Lawtalkingguy,
you are right, I should have said they are my opinions, not facts.
“But isn’t it also possible that the housing market has efficiently priced in future wage increases? If changing A alters B, doesn’t changing B do the same to A?”
I agree with you that changing one alters the other. But to say that the housing market has priced in future wage increases, you are looking at about 5-7 years of good wage growth with no increase of housing prices with everything staying relative ( mortgage rates, good economy) for our house prices to be justified.
TD just released a report of 8-10 percent soft landing decline for Alberta. We seem to always follow suit.
And this soft landing stuff was the same talk in the US in 2006. Was it subprime that led to the US crash?
If it was subprime, that led to the crash what about these countries that are also experiencing declines in prices and sales while listings have rose?
UK, Spain, Austrailia, Italy, New Zealand, France, Greece, the Netherlands and more.
To find the links just google “Spain housing market” and so on.
May 7th, 2009 at 2:19 pm
Please tell me why we should be moving to the states??
we have universal health care, they do not.
I would really like to know what is so desirable about
the states that canadians would want to move there for
May 7th, 2009 at 2:20 pm
http://www.reportonbusiness.com/servlet/story/RTGAM.20080627.whousing0627/BNStory/Business/home
Housing drop looming in Canada?
LORI MCLEOD
Globe and Mail Update
June 27, 2008 at 1:20 PM EDT
After months of holding fast to the view that Canada will not follow the U.S. into a housing decline, one economist is now raising the spectre of an overall drop in prices north of the border.
Canadian home sales are down by 13 per cent year-over-year so far in 2008, and price appreciation has slowed markedly to a 1.8 per cent year-to-date gain.
When charted out, these data suggest Canada is tracking the U.S. housing market fairly closely, at a two-year lag, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc.
“It’s a bit unnerving to see how Canadian performance is beginning to look like that of the U.S. two years down the line,” Mr. Porter said.
May 7th, 2009 at 2:21 pm
Most of the bulls seem to mention the economy as the driving the housing market here. The economy is only one factor in determining a housing market.
Interest rates, affordability, economy, access to credit, supply and demand, speculation, consumer confidence all have a role in determining a housing market. There are others as well.
The bidding wars were not caused by people coming out of caves and the hills. The demand we experienced was people getting 2 or 3 mortgages and holding on to them and then selling for a year later. This worked for them when prices were increasing. But when prices get too high and they can’t sell, prices start stagnating and declining, and listings rise.
This is a version of our subprime. Easy access of credit with the expectation of selling for a profit down the road. Same idea in the states. We see how that is turning out daily.
Why are there so many houses for sale in Stonebridge and so few sales in such a strong economy? It is a beautiful and great area. There are too many amateur speculators seeing $$ signs and not looking at the proper fundamentals. I don’t have a problem with them losing their shirts, it is the poor sucker who panic bought at the peak. I feel sorry for them
My reasoning to why we experienced high house prices was easy access to credit. If people were only allowed one mortgage, that would have taking away the speculation we are seeing right now. The bidding wars of 2007 would possibly be nothing to talk about. And house prices would be affordable.
WAGES OR FUTURE EXPECTATION OF HOUSE PRICES have not led to our increases. When I think of that, I think of the tech stocks. We know how that ended.
May 7th, 2009 at 2:22 pm
Jackie,
what I meant for people moving to the states is that Alberta has no advantage over us if moving because of housing affordability. Moving to Alberta right now is too late. There are some pretty nice houses in Phoenix that speculators are just praying to sell. If I was close to retirement, I would seriously consider it, but I wouldn’t take on any debt right now.
May 7th, 2009 at 2:22 pm
George, I think Alberta still does have a price advantage over Saskatoon. Its houses are priced at a similar level, cheaper in Edmonton/Red Deer, more in Calgary/Fort Mac, but their wages are higher.
People moved out of Saskatchewan in droves when Alberta had higher housing prices, now for any home or condo owner, Alberta is a lateral step for house prices, but a big step up in pay and room for advancement.
Agreed, that some bargains exist in the USA. For a mobile person aged 55 to 65 I’d say this is the perfect time to sell their Saskatoon house, and buy a place in Phoenix, Florida etc. and health insurance, while they can still afford both. Or move to Victoria to retire like everyone else, still more money there, but Saskatoon closed the gap a lot in the last 2 years, and while Saskatoon prices looked topped out, Victoria is a retiree’s dream (no slippery snow in winter) so no time like the present.
May 7th, 2009 at 2:24 pm
Steve, I have never made an anti saskhouses comment on sask houses blog, they do publish really one sided booster ish posts, so I think it’s reasonable to be able to counter their CBC “where home prices are soaring faster than new houses can be built” with my comment that this was the case earlier in the year, but now inventory is actually increasing a lot and prices may in fact be topped out.
Just trying to balance out their posts.
And I think if they are going to pretend to publish comments, they need to allow 2 sided comments.
Norm’s blog lets pretty much anything go, and is a much more popular and fun place to discuss opinions because of it.
May 7th, 2009 at 2:25 pm
I agree that speculators’ influence in the market has meant that the increase that housing prices have seen (in anticipation of higher wages, amongst other things) reached TOO far, and will pull back some in the short term.
My main point is that those dreamers who suggest that the average house price will return to the low 200k range, or even to the “natural” 150k’ish mark, have to assume that the Sask economy will absolutely implode- and I don’t see how anyone in their right mind can imagine that will happen, given the nature of our commodities.
May 7th, 2009 at 2:26 pm
240 posts. Norm, do you read all of these?!
May 7th, 2009 at 2:27 pm
Lawtalkingguy,
“I don’t see how anyone in their right mind can imagine that will happen, given the nature of our commodities”
where were our commodities 30,20 even 5 years ago? If you think that commodities are THE driving factor of our housing market, you are wrong.
That kind of thinking was prevailant in Calgary in the early 80’s, in Toronto in 89, in Japan in the late 90’s, in the States in 05. They all thought it was different this time.
In Vegas they thought with 80k pop immigration every year with a great economy justified their increases.
In Phoenix they thought that huge amounts of people immigrating their with money (retired folk) with great weather year round and a strong economy justified their increases.
In Calgary the bubble is starting to pop as well. With over 60k loss from last year inflation adjusted, an obese inventory,mortgage rates going up; prices have nowhere to go but down.
Want to know the same reason why the States and Canada experienced the same run up in house prices in such a short time?
Easy access to credit.
For the booming economies this allowed the people who made more money get more credit. See Phoenix, Vancouver, Calgary and Saskatoon. There has not been a house market that experienced huge run ups in price over a short period of time that was justified by wages.
We are no different.
Doug,
Saskatoon closed the gap on Victoria?
Yeah, but their average price is 604k for a house. I doubt there are many here who can afford that. I’d say go to Phoenix and buy a mini mansion for half that by a golf course with great weather year round.
May 7th, 2009 at 2:28 pm
Here is a good story for the Saskatchewan economy for investment. Better than Alberta.
http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=a9286c9b-4c0a-45f6-915a-694805ed22d3
“In Canada, I’d say Saskatchewan is the best place to be in the oil and gas industry. Alberta is great because it has a lot of oil, but it’s the royalty changes”
I have said it before. In the long run, Saskatchewan is the place to be.
May 7th, 2009 at 2:29 pm
CA Student,
“240 posts. Norm, do you read all of these?!”
Some days it’s more of a skim, but yes, I try to get the gist of every comment that’s posted here.
May 7th, 2009 at 2:30 pm
Well George, old people were retiring to Victoria back when their house here was worth $200,000 now that it’s worth $450,000 a few years later, that’s an okay smaller Victoria house or condo, or house in Sydney, or Cranbrook or wherever.
I think now is the time to retire some where warmer in the winter. Old people’s #1 fear is usually falling on ice and breaking their hip. Often fatal. Really. They were moving to warmer climates to retire already, the difference is with their houses more than doubling over the past few years, many more can now afford to retire to: Vancouver Island, The Okanagan, Fraser Valley, Phoenix, Flagstaff … wherever.
May 7th, 2009 at 2:31 pm
If Saskatoon will be the place to be some day, why not work in Calgary or Edmonton making way more money and putting it in the bank, and then move here when we actually have wages even close to on par with Alberta? With the ever growing housing inventory, house prices may stay the same (v. a drop of 10% from peak) but it’s not like they will go up. Inventory, construction and new lots are all catching up to, and apparently exceeding, actual population growth.
Doesn’t really make sense to buy a place now, v. making more money elsewhere and coming here when some day Saskatchewan finally adds equivalent jobs, and wages, to Alberta.
May 7th, 2009 at 2:33 pm
Personally,
I honestly believe if the numbers are correct, that Calgary will be the motherload of all crashes.
They currently have 3,000 condos on the market, 500 sales a month. But there are over 20,000 multi units under construction, being converted or approved this year. This is a bigger monthly supply than Florida ever had. They are known as having the biggest amount of condo speculation. They may have to move over. Alberta always does things bigger.
For a first time buyer, it does not make sense to buy anywhere in Canada right now, nevermind Saskatoon. If one wanted to make a bunch of money, their best bet is to go to Fort Mac. TD is forecasting a 10 percent decline for Calgary and Edmonton. Last year, this would have been a joke. Now, it is reality. And it is just the start.
May 7th, 2009 at 2:34 pm
Will Stonebridge look like this next summer?
Same recipe for disaster.
http://www.greaterfool.ca/wp-content/uploads/2008/06/langely-houses.jpg
I just feel sorry for the people who bought to stay there long term.
For the speculators in Stonebridge, are you happy you have that 2nd and for some 3rd mortgage? That’s ok, following Calgary’s yoy loss of 60k, you will only be out at most 50k next year, since we are cheaper. This is inflation adjusted.
This may help.
http://www.icantsellmyhouse.blogspot.com/
May 7th, 2009 at 2:35 pm
George,
Stonebridge won’t stand alone regardless of the direction the market takes. If it happens there it will happen in every other Saskatoon neighbourhood as well.
May 7th, 2009 at 2:35 pm
“Anyway, here’s something to think about. You assume that the housing market MUST move in order to reflect wages, given their historical relationship. But isn’t it also possible that the housing market has efficiently priced in future wage increases? If changing A alters B, doesn’t changing B do the same to A?”
How can one make a purchase based on *expected* earnings? The supposed wages aren’t being earned yet.
In general, the speculator’s gamble is on the expected appreciation of the property, not on what their expected salary increase.
May 7th, 2009 at 2:36 pm
“What their expected salary increase will be” is what I meant to say.
Sorry, guys, it’s been a long, long day. Beer needed, then bed…
May 7th, 2009 at 2:36 pm
Well, the hysteria has taken hold. Have been reading closely all week- blogs, analysts, commenters, housewives, househusbands – everyone is negative. Markets are the stories we tell and hear and all I’m hearing is massive price drops. Guess what we’re gonna get?
I asked a Vancouver realtor what was going on. She said everyone was scared. “Of what?”, I asked. She didn’t know.
There you have it, fear takes hold and all bets are off. Hope I’m wrong.
May 7th, 2009 at 2:37 pm
Callum.
I just sold my mobile home in kelowna, FINALLY and the same thing is happening there now. Way more on the market and way less buyers. If I hadn’t gotten out now I would have been completely screwed. I’ve been carrying it since moving here at the beginning of the year. It’s correction time across Canada as incomes haven’t gone up to match the housing increases and everyone is afraid of suffering the same fate as the U.S. I don’t know if everyone understands that situation, I don’t really. But bottom line is, as with any investment…if people think the price will go up, they buy…and make it go up and if people think prices will go down, they don’t buy and prices go down. It’s not rocket science. My advice to anyone who needs to sell right now, quit holding on and cut your gains. If you’re battling against a bunch of other people with similar properties in the same price range, drop your price and be the best bargain of the bunch. That’s what I had to do in Kelowna and it worked. I had my mobile home, (which are tough to sell period)listed at 98k. That was a fairly competitive asking price. But about 2 months ago I started seeing a lot more competition pop up. I immediately dropped it 78K. Sure it cut most of my gains from when I bought it. But I made a little profit and am out of the Canadian housing market and free of stress. Your choice now is either cling to the hope of your unrealistic asking price or be realistic and drop it now instead of waiting for everyone else to. There are still buyers out there, but you have to fight for them now.
May 7th, 2009 at 2:39 pm
I think Stonebridge’s massive supply will drive prices lower, for all of Saskatoon, as people will have the option of one of the 57 (of 60 total) properties in Stonebridge that didn’t sell last month, plus all the new ones …
Stonebridge may end up being worth a bit less, because it lacks an established area, is a bit out in the middle of no where, and there is a LOT of variety of houses and townhouses out there competing for buyers, but …
At the end of the day, I bet lower prices in Stonebridge, and increasing new supply in Stonebridge, drags downt everything but river front and near the U, as buyers will refuse to pay top dollar for some out dated Austin Powers pad, in favour of reduced Stonebridge speculation properties.
Norm, this is me agreeing fully with your “Stonebridge won’t stand alone regardless of the direction the market takes. If it happens there it will happen in every other Saskatoon neighbourhood as well.”
I just think that the increasing and not selling Stonebridge inventory will drag down prices elsewhere.
May 7th, 2009 at 2:40 pm
The answer to whether Saskatchewan will crash or not is found in a simple question:
What percentage of all the new “jobs” created (and the reported “labour shortages”) revolve specifically around NEW HOME construction?
That my friends, is the answer to all our questions reguarding the future of Saskatchewan (and its real estate) and I admit I have no idea what that answer is.
IF this entire “boom” is entirely driven by new home construction, I don’t care what Sask has to offer, when the construction dies at the end of 2009, Homes are going to crash around that as all the people who moved into the province to help build homes, leave the province for employment.
IF Sasks big “labour shortage” is due to construction of actual INDUSTRIAL related facilities that will create jobs and employee people long term, with good wages, then yes, we have a very bright future and our homes prices and everything else will remain strong and probably increase in the long term, though ya, a short term correction will still happen.
Unfortunately, nobody has been able to answer that question for me and I have asked it since the summer of 2007.
I keep hearing about “billions” to be invested here in Saskatchewan in the next few years and I know I have posted the same before, but the truth is, where are the concrete plans for these “billions”?
-Why is Oil Sands Quests the only company in the far north buying Tar Sands? Why do they not have any real history and why did they let past Alberta land claims lapse and not get developed?
-Why do I care if they drill some oil wells in the Bakken reserves down in Estevan?
-Will 2 or 3 new potash mines translate into thousands of new jobs, justifying what has happened?
-Where are the head offices with actual employment opportunities for Saskachewan residents?
I mean, christ, for all we know all this economic boom is driven by initial money that came in from Alberta Speculators buying up all our homes in 2006 and 2007. Once that dries up, what do people think will happen in 2009 and 2010 as debt wracks up and people put the brakes on spending?
On the flip side, all the doom and gloomers here forget that in the 70’s Sask had a similar up trend where home prices basically shot up for a few years. Later on when interest rates went up to 20%, the real estate market didn’t collapse, it stayed flat.
May 7th, 2009 at 2:40 pm
Sean,
Glad to hear you sold your mobile home, that is great news! It’s nice you made some equity too. When the market is headed downwards it’s a wise move to get out while you can instead of taking even more of a cut further down the road. All across Canada the real estate market is weakening, and it’s not going to start booming again anytime soon.
Reasons for wanting a correction (it’s not self-serving):
With every year that passes more young adults will want/need to buy into the market. Without affordable real estate, smaller downpayments, longer amortization, and more debt will become the norm. Why anyone would wish this for their city and their youth is beyond me! Wages don’t necessarily catch up to balance it out either. Look at Vancouver. A correction for our market would be a positive thing, even though a lot of bulls on here view it negatively. Generally speaking, the only group it really disadvantages are speculators.
May 7th, 2009 at 2:41 pm
Yep, things seem to be sinking in. Although I think a quick correction is a good thing, not a bad. It’s probably best for the economy of the city (and the province) NOT to be dealing with high housing costs hung around its metaphorical neck. The global economy is on a downswing: I don’t think Saskatoon or Saskatchewan or the West or Canada as a whole is going to be different.
And Callum seems to be having a crisis of faith…come to the Dark Side, Callum…
May 7th, 2009 at 2:42 pm
Oh, and congratulations, Sean — although looking at the Dow I guess the problem now is where do you put that equity…
Mithan — you’re right, but I don’t think there are all that many jobs that are directly related to construction. But I’m sure that the improved comsumer confidence goes back to higher housing prices: people spend more if they think their house is worth more.
As things get nasty, globally, people will pull in their horns here, too.
May 7th, 2009 at 2:42 pm
Oh, and the oddest people are being hit hard by economic hard times:
http://www.thisislondon.co.uk/standard/article-23501446-details/The+royal+recession%3A+Queen+hit+by+credit+crunch/article.do
Does this mean a couple of illegal suites in Buckingham Palace?
May 7th, 2009 at 2:43 pm
Heather said:
“Generally speaking, the only group it really disadvantages are speculators.”
Plenty of real everyday Saskatchewan people will be “disadvantaged” as well, unless you consider them all to be stupid for buying a house over the last 2 years.
May 7th, 2009 at 2:44 pm
Mithan:
Although I will get trashed for saying so – let’s not say that anyone who bought a house in the last 2 years is stupid, let’s just say that a lot of people made a stupid decision.
I know soooooooo many people my age who bought when they had no need to because they didn’t want to get “priced out of the market” and miss “the next wave of the boom”. They could have continued to rent, but decided to make the biggest purchase of their lives without doing enough research.
And just as many Saskatchewan people have been “disadvantaged” by prices going up as will be by prices going down. Go explain to the single mother whose landlord has doubled her rent in the past two years that prices going down will hurt people. See how much sympathy you get from her.
May 7th, 2009 at 2:44 pm
Mithan,
Check into your info on Oilsands Quest a little more its completely wrong.
Edited by moderator.
May 7th, 2009 at 2:45 pm
Armoth:
Check into who Oilsands Quest was before it became Oilsands Quests.
Warren:
Rent wont go down for many years to come (if ever), regardless of home prices.
May 7th, 2009 at 2:45 pm
Mithan:
The rental market operates on simply supply and demand just like the resale market. Living in Calgary, I can assure you 100% that rents can indeed fall. There are 8 times the homes available for rent today here that there were two years ago. What do you think that’s done to rent prices? More homes get put on the rental market, more competition for the same renters, more landlords reducing their prices.
Condos, for whatever reason, tend to throw in a whole bunch of specials (free first month’s rent on a year lease for example), but it’s the same net effect.
Or the demand side can change, leading to the same result. If home prices were to fall 50%, there would probably be a lot of renters who would decide to purchase a home. Less renters available with same number of rental properties, landlords would reduce their rents to attract the few remaining renters to their properties.
It’s pretty basic supply and demand economics.
May 7th, 2009 at 2:47 pm
Mithan:
I read your previous post about what is actually driving the boom, very well written and asking good questions. I have also been asking the same thing since the “boom” started. Norm may chide me again, but one new Credit Union downtown a boom does not make…
Ultimately, you are dead on with the question of whether the construction is for residential or industrial. If it is for industrial, could someone point some of it out for me please?
From my experience there is still a lack of high quality jobs available in Saskatchewan (or Saskatoon at least). People talk about the labour shortage, and yes Boston Pizza is probably hiring, but all the engineers and commerce students I know are still leaving the province because of a lack of jobs. These are the professionals that tend to work for very large companies, of which there are still very few in Saskatoon (to the best of my knowledge, Cameco still only has their two CFA’s and they’re both so young they’ll be there forever).
I personally still think that this “boom” was driven by Alberta speculators who missed the bubble here in Calgary and Edmonton, creating their own second chance in Saskatoon and Regina. That being said, the most recent quarter of migration numbers were pretty damn good for Saskatchewan, so maybe it’s partially just putting the cart before the horse (as my father would say). Kind of a self-fulfilling prophecy boom to some extent.
My big question since the whole “exodus” from Calgary back to Saskatchewan began though is – what demographic of people are moving back to Saskatchewan? Is it your twenty-five year olds at the beginning of their work life who will be working and growing your economy for the next forty years? Or is it your fifty year old empty nesters who cashed out on their place in Alberta and moved back to Saskatchewan for an early retirement and will drain your social programs for the rest of their lives? One of these spells good things for Saskatchewan, the other does not.
My opinion on your questions:
- Nobody is buying land in the Saskatchewan tar sands because nobody is going to be developing it any time soon. Much harder geography than Alberta, growing environmental opposition, no existing infrastructure, etc. A much more likely area of development is…
- The Bakken oil field. I believe will see a lot of development over the next decade, which will lead to a lot of oilfield jobs. If nothing else, will put more money in the government coffers. The province won’t revolve around it, but every piece of the puzzle helps.
- New potash mines will translate to a lot of jobs during their construction and not a lot of jobs afterwards. I grew up less than a half hour from two mines. They aren’t that labor intensive. Very good paying jobs, but just not that many of them.
- As I said before, I’ve been wondering about the head office question myself for a while. Calgary is about to dump so much office space on the market in the next two years, that I don’t think any head offices will be leaving here anytime soon.
May 7th, 2009 at 2:47 pm
Mithan,
Of course I wouldn’t call people who bought homes last year stupid. (Those who bought earlier than that are pretty darn safe) It’s not a choice I would have made (and I didn’t) but nobody really ever knows 100% where the market is headed either. I also wouldn’t say those people will necessarily be disadvantaged when a correction occurs. Unless they are the minority who decide to move out of the city within 5 years after purchasing at the peak, they won’t lose money. And I agree somewhat with Warren, there are a LOT more people who have been negatively affected because they are shut out, and/or have experienced huge rent increases then there would be with a correction. Once you’re in the game it doesn’t much matter where the market spikes or dips.
May 7th, 2009 at 2:48 pm
Hi Warren,
I don’t recall “chiding” you.
Here’s a link to SREDA’s Q1/08 report which answers many of your questions.
http://www.sreda.com/resources/pdfs/quarterly%20report/Q1%202008%20Report%20SREDA.pdf
Nobody will argue that housing isn’t well ahead of the rest of the economy, and I’d agree that it was largely fueled by speculation, but isn’t that fairly typical?
May 7th, 2009 at 2:48 pm
I’m told there’s virtually ‘no action’- I know we’ve had no one walk through our place in over a month. Friends say ‘lower your price’ but how do you re-act to nothing?
No traffic. If the market was active we had something to gauge our price but the market seems to have stopped. (market correction?) It’s like buyers and sellers are staring each other down – who will blink first?
May 7th, 2009 at 2:50 pm
I’ll also include a little bit from SREDA’s 2007 report.
“Total value for non-residential permits for the City of Saskatoon increased by an impressive 81% compared to 2006, while the surrounding areas experienced a staggering 1000% increase. Year-over-year, the region experienced an increase of nearly $260 million in non-residential construction investment.”
New Facilities
Maple Leaf Meat Distribution
IRD Manufacturing Plant
ACE Manufacturing
Dymark Industries
Doepker Industries
Q.A. Structures
SJ Irvine Foods
Wanuskewin Museum
Expansions
NORAC Systems
JNE Welding
Croatia Industries
CNH Global
PotashCorp-Patience Lake
Cargill Canola Plant
Bayer Crop Science Greenhouses
Livestock Barns
CLS Synchrtron
Gems Lab
VIDO Intervac
College of Law
End quote.
Looking ahead, we have the completion of Circle Drive running above $200 million, the River Landing project which will easily exceed $200 million. Can’t recall who’s doing it but there will be a new office building constructed in downtown Saskatoon over the next couple of years.
As you point out, migration numbers continue to look fairly impressive.
Saskatchewan continues to post impressive job growth and income growth stats. Now rank #4 amongst all provinces for incomes.
$2 billion dollar budget surplus for Saskatchewan, which waxes Alberta by the way, on a per capita basis.
Year-to-date, land sales for oil and gas at $605 million. Previous record was $250 million which accounts for all of 2007.
Things don’t look all that bad for Saskatchewan’s economic future from where I’m sitting.
May 7th, 2009 at 2:50 pm
robin,
60-90 homes are selling weekly. 321 residential properties traded in June. There is “action” out there.
Given the high level of inventory that exists, you’re facing some tough odds but if you have no showings it’s probably a sign that you’re not competitive compared to other options available. Buyers will look at what they perceive to be the better values first. Chances are, they’re making a buy before they get to your place.
May 7th, 2009 at 2:51 pm
Warren:
On Rent not going down:
I realize it is supply and demand, but I still feel that my point on rent not going down is correct, at least for the next 4-6 years. I think that rent is going to go UP another 25% in the next 2 years, putting average 1 bedroom rental units in Saskatoon and Regina squarely into the $800-900 a month range.
My reasoning is this:
If the housing market does go down 10-25% over the next 3 years (Despite some people here expecting a crash over night, it wont happen), rent will further increase as people stay on the side lines waiting for prices to go down more, causing more rental demand.
Plus, we ARE going to have a lot more people moving to Sask over the short term, and they will no doubt opt to rent in many cases where possible, even if they are renting homes.
Plus2, if homes drop 10-20% over the next 2 or 3 years in Saskatchewan, it also means that consumer confidence went down the toilet and it becomes a self fulfilling prophecy where people dont buy in, even with a slight correction and remain on the sidelines (rental market), stoking rental demand.
That leads to all sorts of other problems as well, such all the people who can not afford homes now, also not being able to find a job period. Heather asking for a crash so poor people can get a house may not be the best wisdom either. Poor people always get screwed
After 2 or 3 years people would obviously take advantage of the reduced home prices and start buying again, if the economy is ok and people have money.
However, it would then take rental demand destruction another 2 or 3 years to happen, at the end of which inflation will have caught up to prices and the rents wont come down regardless.
See what I mean? Long term, ya they could go down, but I highly doubt that happens in the next 5-6 years and if the economy does take a turn for the worst, the rental market actually gets better or that is how I see it.
As for the rest of your comments:
I pretty much agree. We are being told so much about Saskatchewan right now that I am having a very hard time determining what is real and what is bullshit.
So it really comes back to my original question:
How much of our economic boom is real, based on industry and long term jobs? I wish somebody new. We all know what happened in the US in 2005 as everybody though that they were in the midst of a perpetual boom that would last forever. Ya, they really got a “boom” alright.
Sigh. Why cant people be content with slow, measured and secure growth? Why do we have greedy fucks that screw everybody over?
May 7th, 2009 at 2:51 pm
Norm:
Thanks for the info, very helpful.
I’ve always said that I believe Saskatchewan’s economy to have way more potential than Alberta’s (so we have no disagreement there). I know about the population growth (I was pretty impressed by that one), and the budget surplus, and the land sales records. Personally, nothing makes me smile more than having the #$@*-hole province I live in now get knocked down a peg or two off its high horse by my home of Saskatchewan.
That’s particularly great news if Saskatoon is getting a new downtown office tower (I may actually stop ranting about the head office jobs bit).
That being said, this is a real estate blog, and I just don’t see support or justification for the housing activity that has been going on in Saskatchewan for the last couple of years. I think Alberta prices are out of whack (even with the nearly 10% correction from last year that has happened), but it’s a heck of a lot easier to afford the crazy prices in Calgary than it is to afford the crazy prices in Saskatoon. That’s just been my experience anyways.
P.S. I thought Maple Leaf Meat Ditribution left town? Am I confused?
May 7th, 2009 at 2:52 pm
robin,
Are you moving out of the city or wanting to upgrade? Just curious.
May 7th, 2009 at 2:53 pm
Mithan:
“Poor people always get screwed
”
We have never been in more agreement, lol. With George Carlin’s passing this month, there’s a clip of one of his bits about “the big club” making the rounds on the internet. Very funny stuff, and same conclusion – poor people get screwed.
Your logic all makes sense, I’ll just tell you what’s been going on in Calgary (my interpretation of it anyways). It seems like Saskatoon always lags Calgary, just like Calgary lagged the States.
- Home prices shot way up, some of it justified, some of it not. People were moving in droves so rental rates started to climb as well (increased demand, constant supply).
- There was the whole condo conversion craze too and landlords selling their rental properties (increased demand, decreasing supply).
- Eventually though builders caught up and then surpassed demand (check out the scary numbers on condo starts right now in Calgary). This is being coupled with a bunch of mini Donald Trumps who are looking to sell their spec properties. This is being coupled with people cashing out and heading for greener pastures.
- Calgary has had unheard of levels of supply for going on a year now in the resale market. Sellers are increasingly facing two choices. Cut their price and sell the house. Or rent it out and wait for the market to “recover”. End result is that there are a lot of properties being taken off of mls and rented out (the Herald even had an article on this a while back, talking about what to do with the 3,000 condos that are for sale).
- This is coupled with a lot of people, particularly lower income earners (who would more likely rent than buy) moving away from Calgary after finding out that the streets aren’t paved with gold after all. If you’re going to make lousy money and pay too much for everything; you may as well do it somewhere that isn’t an hour commute to your job.
- Net result now is that supply is skyrocketing while demand is flat to falling. This is being reflected in rent prices (from what I’ve seen on rental sites anyways, compared to when I moved here).
So not necessarily how it has to play out (as I said, your logic makes sense), just an example of how it can play out.
The only quibble I have with what you said is that things sometimes move quicker than you think. Sales in Calgary have been pretty constant this year, part of which I would attribute to people who are long term bullish on housing buying on what they think are the lows. It may not take 2 or 3 years for people to snap up what they perceive to be “deals”.
Also, Calgary prices are down almost 10% from last year and I think consumer confidence is still pretty high. Housing prices are a part of consumer confidence, but not all of it. A possible explanation is that prices here went up so fast that people didn’t even get a chance to get used to the peak they hit – and therefore it doesn’t seem weird to them that prices have fallen? If you have gotten used to your house being “worth” $400,000 – and last year you could have got $500,000 – but now it’s back down to $400,000 – do you really notice?
May 7th, 2009 at 2:54 pm
Warren,
“Office tower” would be a bit of a stretch.
It’s 50,000 square feet over 4 levels.
http://www.realestateappraisals.com/News/NoPr0408.pdf
I guess I sometimes forget that we’re talking real estate.
i don’t put these things forward as a justification for house prices and I’ve had as much to say as anyone about prices in Saskatoon. Discussion often goes into basic “economy” stuff and there are many here who still think Saskatchewan is a losing province.
Maple Leaf canned it’s “kill” operation in Saskatoon and opened a “distribution” centre. I believe the city now owns their former spot on 11th Street. That will be demolished to make way for the Circle Drive extension.
You make good points about the comparisons between Saskatoon and Calgary and I think you’re pretty much right about what we can expect. I said last week, “I can sell your house in a few days for a price that would have had you doing backflips in April.”
May 7th, 2009 at 2:55 pm
I think it’s still key that Alberta’s wages grew by a greater percentage, to lead all of Canada, and Alberta’s Surplus was like 8 times bigger.
They are widening the income gap.
Their economy is still much better right now than Saskatchewan’s.
I think this is important, because now with house prices nearly equal (actually a bit more in Saskatoon than a lot of moderate sized Alberta communities) the allure of Saskatoon as an affordable place to live is gone. It is cheaper to live pretty much any where but Calgary, and each year moving to Alberta will actually see more of a wage improvement than the year before. I still don’t see any reason for new grads other than family to stay in Saskatoon, when you make more, pay less tax, and get equivalent or even cheaper housing in Alberta. Half of my friends from college moved to Alberta already, so I’d know almost as many people in Edmonton, Calgary, even a few in Red Deer, as I do in Saskatoon… it’s just a matter of being at a point in your career/education where you can make the move up to Alberta.
May 7th, 2009 at 2:56 pm
Warren:
I think you took my point about the “speed” of a correction the wrong way, but to clarify what I mean about the 10-20% over 2-3 year thing…
Lets say that in 10 years we look back and see that from July 1 of 2008 to July 1 of 2011 that there was a 25% correction in the marketplace before things leveled off and then remained the same or started going up again with inflation and the normal course of events.
In 10 years if you plotted the “average home prices” on a graph, I think it will be a curve that happens over a 2 or 3 year period from peak to trough. That “correction” wont have happened in a 6 or 9 month period, unless some catastrophy happens in the next 6 months that basically makes people refuse to buy homes.
I make that comment because it seems to me that some people here have this idea that the market will correct 10-20% by January of 2009. I can understand seeing a 5-10% correction THIS YEAR, but expecting to see the higher end of that is TOTALLY unrealistic, especially with 250-400 homes still being sold per month.
As I said, I can see a 5-10% reduction in the next 6 months, but I think the “worst case” correction, would be something that will take a few years to take place.
As you said, Calgary has corrected 10% over ~1 year. It is possible that Calgary could correct an additional 10-20% over the coming years, but the key here is “years”.
Even the US has taken 2 years to see its “15% average price correction” and what most people do not understand is that the average is dragged down by Florida, Nevada and California having lost almost 30-40% of their home market. The REAL average for the rest of the United States without those 4 states is much less than 15% actually, but it looks a lot worse.
My point is that I think that Saskatchewan will correct, and while it COULD be deep, it will take a period of 2 or 3 years to reach the deepest part of that correction.
Its just something that bugs me about this forum where some people think it will see a huge correction happen in a few months. Even Nevada and California didn’t see that and they were more run up than us.
May 7th, 2009 at 2:57 pm
Mithan, I think the idea of a 2 – 3 year long correction, of up to 25% is a lot scarier than 10% over a year. Not saying it won’t happen, but I think a lot of people are hoping for a smaller 5 to 10% correction over the coming months, so they can buy for the long term. A 25% correction would be a really big deal, and other than the past one and a half years, normally, gaining back 25% of value is a long process. The potential for 2 to 3 years of correction is strong incentive to rent for a few more years, rather than risk almost $100,000 lost value on a new home while making payments that barely cover interest.
May 7th, 2009 at 2:58 pm
Mithan, “Rent wont go down for many years to come (if ever), regardless of home prices”
I disagree, I think once a lot of these conversions are put back on the rental market because they aren’t sold, or as they are sold for well below list price, a lot of cheaper student/young working adult housing is going to come on line. A big increase in cheaper places to purchase, which then may be rented out, or places that are rented out when they can’t be sold, should drive rental rates lower in Saskatoon.
May 7th, 2009 at 2:58 pm
Jim,
I think it was you that mentioned Alberta’s surplus was 4.6 billion. I don’t need to crack out my calculator to understand that 4.6 is not “8 times” 2. Given that Alberta has a pop of 3.5 million, compared to just over 1 million in Saskatchewan, I’ll stand by my comment that our surplus was far greater than Alberta’s on a per capita basis.
By your logic, there should be about 33 million Canadians living in Alberta, but of course, there isn’t. People have various reasons for living or moving where they move.
Doug,
I agree. The idea of a three year correction is far less palatable. I say, “bring it on, and get ‘er done.”
May 7th, 2009 at 2:59 pm
Sorry Norm, but surplus was $641 million in Saskatchewan, v. over $4.6 billion in Alberta.
http://www.cbc.ca/canada/saskatchewan/story/2008/06/27/public-accounts.html
While Sask revenues were $2 billion higher than projected, there was also increased spending, and apparently other stuff, that ended up in the government announcing a $641 million surplus. Eyeballing it, it looks like Alberta’s surplus is about 7 1/2 times greater than that.
Plus that whole thing were Alberta wages grew by more so are actually opening up even more distance on Sask wages …
Gotta agree with Jim, Alberta’s surplus is still A LOT bigger than our, they have no debt, and their already really high wages are increasing by more than our middle of the pack (4th out of 10 provinces) wages, so they STILL have the hotter economy in terms of results and what they mean to actual residents.
May 7th, 2009 at 2:59 pm
Doug and Jim,
Oops. My apologies.
May 7th, 2009 at 2:59 pm
Ya, it will be interesting either way but so far it looks like things are still going up for June, even with inventory increasing.
Unless I am mistaken reading your “averages”, the averages for Home and Condo sales based on your blog have been:
April $306k
May $305k
June 1 to 20 $313k (though I know you left a note that some expensive sales have lifted the average)
Seems pretty flat to me, with a “possible” increase in June over April and May and thats with a lot of homes on the market.
It boggles my mind.
May 7th, 2009 at 3:00 pm
Mithan,
I’m equally perplexed. Here’s what I have for June as of today.
Total residential – 321 units at $310,386
Houses – 212 units at $339,548
Condos – 87 units at $248,681
House and condo – 299 units at $313,109
Median price in June (house and condo) $299,900
Median price in May – $278,500
Median price in April – $285,000
May 7th, 2009 at 3:02 pm
There is something going on that I think neither “sides” are seeing.
Though it may be what a Real Estate friend told me two weeks ago. He said that sellers are pricing homes better, but the buyers still have the mindset that they are going to pay big bucks, so instead of buying “cheaper” they are just spending the same money buying a better home, while skipping the riff raff, which is not coming down in price enough yet to offer enough of a deal to be worth buying yet.
He figured that would go on through July and August and then when the good stuff is sold, prices will finally start coming down as sellers expecting to get top dollar for their crap, are forced to start lowering prices to get rid of it.
Does that make sense?
Another way to say it is:
If you are mentally prepared to pay $250k on a home, you will probably still pay the $250k and buy a BETTER home that has just been price reduced as opposed to paying $200k on a crappier home.
Interesting logic. Who knows.
May 7th, 2009 at 3:03 pm
Mithan,
That does make some sense. While the average selling price is going to come in higher for June, the actual cost per square foot has dropped from $276 in May to $271 in June. The largest drop is in condos which went from $262 to $253.
May 7th, 2009 at 3:03 pm
Mithan,
In regards to BQI I do know who they were before they were Oilsands Quest and to be honest I wish I bought there stock while it was 35 cents like some people did. The fact of the matter remains their land which is in Saskatchewan called Axe Lake discovery has a low estimate of 1.2 billion barrels of oil by an independent firm. Now tell me why should I not buy their stock which I have already made thousands on and will make more please tell me why. Indirectly the money from such corporations will affect Saskatchewan in a positive way with tax cuts and surplus vastly superior to precious Alberta. Causing more jobs, more money, and more migration for everyone already living in Saskatchewan.
p.s.
Shouldve bought BQI stock before they were BQI you wouldve had enough money to buy 4-5 houses.
May 7th, 2009 at 3:04 pm
“And Callum seems to be having a crisis of faith…come to the Dark Side, Callum…”
Hardly, I’m merely being realistic. And my above comments were directed at the Canadian real estate market as a whole. As you can see from Norm’s numbers Saskatoon is still doing fine. I’m worried about the major markets of TO and Vancouver where buyer sentiment has obviously turned.
Anyway, I’m a real estate cash flow investor. With my rental properties I don’t care too much about their month-to-month price. I look for properties where the renter can cover my mortgage and fees/taxes. A drop in prices is a good thing for me. I will probably be in your neighbourhood sometime soon buying up discounts.
I’m more concerned about interest rates and the overall health of the economy where I’m investing. Sask. is still a great place for my money, as for interest rates well, they may have nowhere to go but up.
May 7th, 2009 at 3:05 pm
Thanks Doug for the reference to Alberta’s always superior budget surplus, I had read the same in the paper. Not to be confused with Alberta’s superior:
wages, wage growth, taxes, no provincial debt, GDP growth (before adulteration by whomever) etc…
May 7th, 2009 at 3:05 pm
Jim,
“(before adulteration by whomever)”
Thank you for handling my apology so graciously.
May 7th, 2009 at 3:06 pm
GDP growth? Norm, I don’t remember you editing GDP financial data yourself, in fact, you were the only one who seemed to give decent coverage to lower than the rest of the west GDP growth during the supposed “boom” of 2007. In general, I found it funny that the media ignored the actual GDP data that said Saskatchewan under performed huge on GDP, and trailed western Canada. Then Conference Board of Canada says “real” GDP growth here was high, and it’s back to top news story on the supper time news.
This was months ago.
Are you thinking of the surplus thing? this weekend
The surplus thing was you just looked at the wrong number, no biggy, apology not even needed but appreciated and accepted.
I’m bothered by intense media coverage of Conference Board interpretations, while ignoring Statistics Canada’s earlier disappointing actual GDP numbers, when they had given so much press to the overly optomistic forecasts. I wouldn’t make fun of media outlets either if one reporter had given the wrong number, to retract it later. But they keep ignoring or down playing negative reports of actual results, but going in depth to cover already disproven predictions. I can’t stand people who won’t admit when they’re wrong. I am willing to say “my bad” when I mess up, and I will if prices Aren’t down by at least 10% in Saskatoon from now to January 2009.
May 7th, 2009 at 3:06 pm
Heather D.
Retiring..moving to BC.