Saskatoon real estate: Week in review (March 23-27 2009)
It was a pretty strong week for Saskatoon real estate, at least when compared to the softer activity that we’ve seen in recent months. Unit sales showed further signs of life and new residential listings eased off from last week, finishing substantially lower than they did during this same week last year.
Forty-six single-family homes and eighteen condominiums pushed unit sales to sixty-four this week, up from fifty-eight last week but still well below the ninety-four homes that sold during the same week last year. Six additional sales in the duplex and semi-detached categories pushed total residential unit sales in Saskatoon to seventy and produced the second highest sales week this year giving some sellers and agents hope that a spring market might be lurking somewhere around the corner.
New listings of houses and condos fell to just one hundred and thirteen properties, down twenty from last week, and well below the one hundred and sixty-four units that were offered for sale during the last week of March 2008. In spite of stronger sales and weaker listing activity, total residential listings managed to continue to grow, gaining twenty-nine units over last Friday’s close to finish at 1,422 including eight hundred and seventy-seven houses and four hundred and fifty-nine condos.
Click the image for a larger version of the graph.
Sixty-five sellers adjusted their asking price using an old fashioned “price reduction” while another seventeen introduced a new price point by canceling and re-listing their home.
Prices gained some steam over the previous week in all three of our pricing measures, but year-over-year price drops became a little more pronounced as we finished our second week of “down from last year” stats. The average selling price of Saskatoon houses and condos came in about $15,000 higher than last week at $275,978. The six-week average picked up just a few hundred dollars to finish at $268,575, down from $281,070 for the same week last year. The four-week median gained $5,500 over the previous week but fell short of last year’s number by more than $10,000.
Click the image for a larger version of the graph.
It came as a surprise to nobody that the vast majority of sellers who managed to bag a deal gave up some dollars off of their asking price to make a sale go. The average underbid grew slightly to $11,907, up from $11,363 last week. Calculated as a percentage of list price the average discount was nearly identical to last week at 4.2%. For the most part, our underbid chart looks a lot like last week’s with about sixty-four percent of sales completing within $10,000 of the asking price. The larger discount categories did manage to steal a point here and there pushing the percentage of sales closed with a discount greater than $20,000 to eleven percent, slightly more than double last week’s number.
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.
Norm Fisher
Royal LePage Saskatoon Real Estate
There's 63 Comments So Far
April 13th, 2009 at 9:09 am
Low interest rates and price drops are attracting buyers. And if the weather ever smartens up, there just might be something that resembles a spring market.
I don’t think inventory will be going up much more.
Housing starts have dropped and are basically reflecting true demand.
Prices are down to about Dec 07 levels. And when you factor in CMHC, lawyer, realtor, bank fees and underbids most investment properties bought summer of 07 and are sold now will probably lose money. Also most of these properties were bought with the hopes of appreciation and not with cash flow. Many of these have been rented and we won’t see them on MLS anytime soon.
April 13th, 2009 at 9:10 am
Interesting thoughts George.
I’m wondering if a few months of lower housing starts will do it but if we avoid the big spike in new listings that we saw last spring things might start to balance some as the existing inventory gets picked over. Still, I suspect inventory will continue to grow through April and May, but it may climb slower than last year over the next couple of months. We’re starting with much higher numbers this year in the existing inventory so we may not see those +200 listing weeks through spring. Perhaps there aren’t as many “wait until spring” sellers as some thought.
You’re right that prices have softened considerably. It’s not so apparent when you look at the entire inventory of Saskatoon homes for sale as a lot of it is overpriced and not likely to sell (example: town homes priced at $250K in communities that already have numerous sales recorded below $225K), but you can see it on the weekly sales list. Really struck me yesterday when I saw a near 1000 square foot Silverwood Heights bungalow with a double detached garage priced at $265K. New furnace, windows, a/c, shingles, etc. “Not bad,” Norm thought to himself. “Not bad.”
April 13th, 2009 at 9:10 am
Norm,
Regarding inventory, I agree that if listings continue to grow, it will be at a slower pace than last year. I think many of the investors would rather pay a few hundred a month to cover the difference in a rental than sign a cheque for 20k+ to the bank to cover the difference in the investment mortgage. With housing starts down and a few more people moving here than leaving, supply probably will not get much higher. Demand, while ok for all things considerated, won’t make much of a dent in inventory, me thinks. If there is a dent in inventory, it will happen mostly because of sellers becoming frustrated and not moving up or just renting the place out if a second property.
I have always believed a property priced right will sell. But it seems our market has too many people still trying to hit a home run, while a double or a single would do. Sadly, most are striking out.
But not Norm and his team, I see they go to batting practice faithfully
Great stats again.
April 13th, 2009 at 9:10 am
Norm,
Once again another great job preparing the stats. I wonder how the board will write this up next week. Sales are down and inventory is up compared to March 2008. But the big news is that prices are down from last March. This will come as a big shock to many when they read the Star-Phoenix. Sellers and buyers will realize that last years price gains have disappeared and are now history. I bet you will see more “lowballing” as buyers and their agents get more aggressive. The underbid numbers will be much bigger in a few weeks. The current listings will need price reductions in order to move because new listings will probably come on the market with more realistic pricing.
Do you agree?
April 13th, 2009 at 9:11 am
I know this discussion was going on another thread, but there was some discussion about rents in Saskatoon vs. Edmonton. This is again CMHC data, but it looks to be recent CMHC data. The comparison between the cities is on page 6:
http://tinyurl.com/bq5nkn
Saskatoon: “In response to the recent rise in
vacancies and competition from the
condominium market, the average
rent for a two-bedroom suite will
increase from $841 per month in
October 2008 to $860 per month
in October 2009.”
Edmonton: “The average two-bedroom
rent will increase from $1,034 in
October 2008 to reach $1,070 in
October 2009.”
Saskatchewan’s housing market outlook is on page 11, for those who’d like to check it out.
Here’s hoping you all got to enjoy the day outside today- warmth! What a concept.
April 13th, 2009 at 9:11 am
George,
I must admit that we’re not knocking them all out of the park but having some success at selling most of what we list, eventually. Some are tougher then others and occasionally there’s one or two that you may not be able to help. Every property is marketable and there’s no question that price is a key ingredient to success especially in price ranges where the selection seems endless. Everyone would like to think that they have something unique, but of course in condos and SF above $500K there’s an awful lot of this and that. It’s not the hard to find another one just like it, or darned close so you do have to be sharp with that price pencil.
Roger,
“Do you agree?”
With much of what you’ve said, yes. It’s remarkable to me, from one week to the next, how similar that “underbids” chart looks and I do wonder if it will change a lot. If sellers list at “more reasonable prices” then buyers seem fairly willing to be reasonable as well. Of course, if every listing was priced reasonably, they’d probably all be seen as unreasonable as long as inventory remains high. Thanks again for your input.
Crikey,
Thanks for the rental stats. I got out for a bit today and it was sure nice to be able to roam around without a big coat. This is one crazy province as far as the weather goes.
April 13th, 2009 at 9:11 am
Every year is unique: 06, 07, 08, …09. There was a different story in listings and prices every year. Predicting this year’s listings on last year’s listings may seem simple enough. Will it really be the best strategy?
Let me ask you this question: If you wanted to sell last year and did not sell (because a significant number did), why would you not already be listed this year?
Also, for the people who bought a year to 18 months ago, some got prime minus .75 mortgages with five year terms. They are sitting at just over 2% on the mortgages. Lines of credit are under 4%. Carrying costs are low and renters or purchasers have already paid off more than anticipated. Therefore, purchase price is just one variable. Cost of ownership needs to be looked at with all the variables. Looking forward, how are you going to protect yourself against inflation (the typical strategy for governments to devaluate government debt)? Paying locked in low interest when inflation is picking up looks a little more attractive.
On another note, the pressure is still on to find affordable housing. With 300,000 immigrants a year, there is a need for 180,000 new units a year in Canada (we are expected to be 60,000 short this year). We are building up pressure which will gradually be felt since the builders are not making them for free and city infrastructure charged back to buyers is not getting cheaper. I admit there is an affordability issue but that may be addressed by other adjustments than reduced prices. One approach: New houses and appartments will be getting smaller and the density of housing will need to increase in the lower and middle price ranges (more renters in basement suites and smaller lots).
As for the renter vs owner experience at anywhere close to the same money (aside from long term protection from inflation), I’ll leave the conclusion up to you to determine if it really is worth the time that debate has being given.
Those are my thoughts for what they are worth.
April 13th, 2009 at 9:12 am
Roger: “Sales are down and inventory is up compared to March 2008. But the big news is that prices are down from last March. This will come as a big shock to many when they read the Star-Phoenix.”
I agree the lower prices are the big news. News so big and loudly proclaimed in all the media, however, that it will generally not come as a shock. (regret and disappointment perhaps) After all, the global financial crisis whose root was the US housing collapse was the biggest story of the year, so for that to coincide with the correction of our local bubble means most people are expecting it. Listings are down 33% from December in the three older neighbourhoods I have been watching and recording.
April 13th, 2009 at 9:12 am
Real estate may be rebounding in San Francisco
http://cbs5.com/video/?id=47401@kpix.dayport.com
April 13th, 2009 at 9:14 am
“Real estate may be rebounding in San Francisco”
One would certainly hope so! Have you seen the CAR numbers? Here they are, and they’re something:
http://tinyurl.com/c29zqb
Peak month for San Francisco Bay was May 2007, with peak median price being $853,910. In February 2009 that average is $399,040. That’s a whopping 53.72% decline. Check out some of the other counties- the percentage decline has actually been worse. Norm, do you think that the fact that these are median numbers and not averages that these are being skewed down due to the sheer number of distressed sales?
Median nominal prices in CA are now down 59% according to CAR and 54% according to DQNews – and those declines are in 21-22 months. For those with stable incomes, multiple offers on some of these properties don’t surprise me!
April 13th, 2009 at 9:14 am
Crikey, here are some specific houses in California.
Sacramento Area Flippers In Trouble
http://flippersintrouble.blogspot.com/
April 13th, 2009 at 9:14 am
Crikey,
“Norm, do you think that the fact that these are median numbers and not averages that these are being skewed down due to the sheer number of distressed sales?”
Wouldn’t distressed sales have a similar effect on the averages?
George,
Ouch!
April 13th, 2009 at 9:15 am
“Wouldn’t distressed sales have a similar effect on the averages?”
Well, yes.
I guess what I’m trying to say is that in that market, the drop in the median might overstate the decline in house prices- or am I off base here? The more affordable inland markets with most of the foreclosures account for a large share of sales (well more than half of sales in some counties), while homes in the upper half of that market have slowed to a trickle.
April 13th, 2009 at 9:15 am
To add to my previous point, a repeat sales index like Case-Shiller would a better indicator of price changes.
Sorry to be long-winded about it.
April 13th, 2009 at 9:15 am
Lol. Okay, I see where you’re coming from and I think you make a good point. Both the median and the average may have fallen more than the actual price for, say, a 1,000 square foot bungalow in Heavenly Heights because of greater activity in the lower end market. In much the same way our average was being propped up over the past few months by a lack of condo sales.
April 13th, 2009 at 9:15 am
Saskatoon 2,
“Looking forward, how are you going to protect yourself against inflation (the typical strategy for governments to devaluate government debt)? Paying locked in low interest when inflation is picking up looks a little more attractive.”
I have been struggling with the same issue and you make some good points. There is no doubt that if inflation gets going it will ultimately force house prices up but it’s hard to say the timing of the two events. What I am afraid of is an initial drop in housing prices as buyers find it difficult to afford their mortgages with higher interest rates. That will ultimately work it’s way out as wages rise but could force prices down for an extended period.
e.g.
$300 K mortgage relative to interest rate.
2.75% interest – $1390 / month
4% (current best 5 year fixed) – $1583
7% (more typical rate from the 90’s) – $2120
9% (mid to late-80’s?) – $2515
15% (early-80’s) – $3840
If we have inflation and mortgage rates start getting into that upper 10-15% range, is it really believable that housing prices will stay put? There is going to be a major shock for home buyers / renters if that ever happens with many bankruptcies. I think that will force prices down.
I would also add that during the early 80’s there was extremely high inflation and it was not a good time to own real estate. Now much of the decline has to do with the resource bust rather than inflation but nevertheless, there can be a delayed effect before inflation starts forcing the house prices up.
April 13th, 2009 at 9:29 am
I would Love to know where in stoon, someone is paying only 860 for a 2 bedroom….and if they even think that it’s the slew of condo’s on the market…good luck…most of those are still WELL over the $1000 a month mark to rent…
I don’t mean to dispute everything CMHC puts out but so far even just by phoning around rental wise over the past few years, their numbers have been WAY off ‘updated or not’. I know people in OTTAWA paying less rent for a 2 bedroom on the 10th floor of a relatively newer building than people here. Still glad i didn’t dive in and buy though…way too scary.
April 13th, 2009 at 9:29 am
Interesting,
read on San Fran. I know of an Alberta based investment company that was picking up mass houses (like 50 at a time) from the banks in San Diego. These houses were all $600 – $850k 3 years ago and they were getting them for around 180k a piece.
Saskatoon 2,
I wanted to sell 1 of my properties last year as it was the only one in my portfolio that was negative cash flow for me. I couldn’t as the tenants that were there significantly damaged this house at that time. I’m not listing it now because I’d rather be negative the $200/mo in cash and hold it long term than sell it for no profit.
As for the inflation question,
since inflation is actually the devaluation of the dollar I would suggest buying gold and silver if you’re worried about it. These 2 things traditionally rise steep in value as inflation ramps up.
Jesse G,
The property I just mentioned above is rented for $1000/mo. 3 bed, 1 bath full house in Nutana, 3 blocks from Broadway. I also know many people in 2 bed apartments and basement suites in the $800 range. I don’t think those numbers are far off.
April 13th, 2009 at 9:29 am
I do agree though and have mentioned in the past on how out to lunch CMHC’s numbers and future outlooks are.
April 13th, 2009 at 9:33 am
Peter,
Good points. If I were a first time buyer I think I’d be looking at some of the ten-year offerings for security. Nothing wrong with 5.25% for the long term.
Jesse,
One would like to assume that CMHC has the resources to get it right when it comes to what people are currently paying but I’m not hearing of many $800 apartments.
Northstar,
“I wanted to sell 1 of my properties last year as it was the only one in my portfolio…”
You timed that pretty right didn’t you? Are you taking an new investment advice clients?
April 13th, 2009 at 9:34 am
$1000 rent is avail if you lucky, and the landlords don’t know what others are charging…there will always be anomalies
April 13th, 2009 at 9:34 am
Cheap rent can also be a sign that a landlord is not planning on having a tenant long-term… just want to get it rented for a couple months to a great tenant until it’s time to sell (but they probably won’t tell the tenant that!). Market timing, maybe, and also, (I think) gains from sale of a rental are taxed at 50% like a capital gain, while a speculator/renovator type investment is taxed at 100% as regular income.
That’s what happened to my friend who got evicted twice last year. He got some great deals on the rent, but I don’t think he was to thrilled with the continuous showings/packing/unpacking/searching for a rental in a tight market. Renter beware, I guess.
April 13th, 2009 at 9:34 am
Interesting blog on Home Reno’s and the tax credit:
http://gailvazoxlade.com/blog/
April 13th, 2009 at 9:35 am
has anyone seen this ad on kijiji? some flipper here in saskatoon is buying houses in DETROIT thinking they are going to make a killing reselling. I emailed the person and they said they are a saskatoon resident. I just couldnt imagine anyone from detroit who knows what it is like trying to pull a fast one on some uninformed canuck. however it looks like this local person has taken some really bad advice and bought down there expecting to rope others in saskatoon into buying, or is just the dumbest person walking the planet. you decide.here is the link.
April 13th, 2009 at 9:36 am
Jesse G,
“I would Love to know where in stoon, someone is paying only 860 for a 2 bedroom….”
If you are referring to apartments (not condos or houses), we rent a 2Bdrm in Wildwood for $875.
April 13th, 2009 at 9:36 am
Norm,
“You timed that pretty right didn’t you?”
Ya… Too bad my judge of renters isn’t as good as my judge of the market
“Are you taking an new investment advice clients?”
I’d be willing to on a casual basis as my pizza place has been quite time consuming. I wouldn’t want to commit to something that I couldn’t give my full energy to. I’m definately getting more time with every month and I’ve got some good ideas that I’ll be looking to put forward with in the next year.
April 13th, 2009 at 9:36 am
Hmmm. Another house sale above $1 million (1.19) on the Saskatoon MLS. That’s one a month for 3 consecutive months.
25 unit sales today as well.
April 13th, 2009 at 9:37 am
Stronger sales weak? Sort of. More like Less Weak, since new listings (ie supply) still outpaced sales and cancellations (ie demand) for a net increase in available supply
Also, figured out part of the reason we don’t see more for sale signs, many condos have rules limiting the time posted (ie only 1 week) to an outright ban!
Norm, are condo complexes actually allowed to ban for sale signs? Seems unfair. But definitely hides the weakness in the market, and does mask how many units available in a building!
April 13th, 2009 at 9:37 am
Norm,
“25 unit sales today”
You would not mention that if it was not impressive.
That is almost half way to what the average week has been like the last month or so. I think the weather has quite a bit to do with that. I am thinking it might be a strong week for this year.
Nick,
no worries, I am sure that listings will still outpace sales.
April 13th, 2009 at 9:38 am
Nick,
“More like Less Weak, since new listings (ie supply) still outpaced sales and cancellations”
Listings are pretty much always greater than sales. Even in May of 2007 when 85% of sales were above list price, there were consistently more listings than sales, often 50% more.
“are condo complexes actually allowed to ban for sale signs?”
Condo rules are set by the condo owners at each condo project. They’re allowed to do pretty much anything that they can agree on as long as it doesn’t violate human rights. That said, I don’t think there are that many with an outright ban on signs. I’ll bet I’ve had twenty condo listings in the last two years. I can’t think of more than a couple where I couldn’t place a sign.
George,
Monday is often on the stronger side for reported sales. Stuff that firms up Saturday and Sunday can’t be reported before Monday. Likely a fair bit of stuff that firms up Friday doesn’t make it in in Friday. 25 is a larger number than we’ve been seeing almost any day. I expect it will probably be another decent week.
“I think the weather has quite a bit to do with that”
I don’t know. These “firm sales” were probably written at least a week ago. Warmer weather certainly won’t hurt going forward.
April 13th, 2009 at 9:38 am
norm, isn’t the take home point that total available listings grew? sales AND cancellations combined were still less than new listings
if total inventory is growing isn’t the market getting weaker? supply more than demand?
my building has multiple places for sale and no for sale signs
April 13th, 2009 at 9:38 am
“if total inventory is growing isn’t the market getting weaker? supply more than demand?”
I won’t tell you how you should see it but when I see the sales and listings lines move closer together, rather than further apart, that strikes me as a decent week relative to others. That’s all. I’m not claiming that you should run out and buy a house tomorrow so you don’t miss out.
April 13th, 2009 at 9:38 am
Looks like the sun in shining again for some hopefully the market turns so some people i know can retire without having to work part time. There was a post on Forbes of a canadian bank who was trying to relocate to the US for TARP money but my computer wouldnt play the vid so i dont know which one it is does any1 know here?
April 13th, 2009 at 9:39 am
Armoth,
Is this what you meant?:
http://tinyurl.com/cthedy
“Oppenheimer Holdings Inc., based in Toronto, asked shareholders to approve an incorporation switch to Delaware, which would make the firm more likely to qualify for the rescue funds, according to a March 13 proxy statement.”
Speaking of financial institutions, I thought this was interesting information. Check out the “Top 20 Financials by Market Cap” 2009 vs. 1999. RBC and TD have moved right up there, comparatively speaking:
http://tinyurl.com/dxn8ms
April 13th, 2009 at 9:40 am
Does anybody see financial rally as a speculative rally? There is always talk about how good our banks are but why do they keep issuing new shares. Since late last year the Cad banks have each issued more shares 3 times. TD has already raised over 1.5 billion in shares. Either they are planning a takeover or planning to write down a billion in bad loans. I wish we could get some transparency in the banks.
April 13th, 2009 at 9:40 am
Crikey,
That 2009 list is a little light on stars and stripes.
April 13th, 2009 at 9:57 am
Vinny,
Dont forget also there is incoming credit card writedowns from bankruptcy that is going to start hurting their bottom lines. There has been a big increase in bankruptcies in Alberta Ontario and BC but not hardly anything here which is nice =o)
Crikey,
Thanks thats what i was looking for i was hoping it wasnt RY because i found out through their dividend reinvestment plan if u buy the shares and they reinvest the dividend for u there is a 3% discount off market. With TD its only 1%…. =’(
April 13th, 2009 at 9:58 am
Hey sugar,
Sorry I missed you yesterday.
I understand that there are quite a number of opportunities to buy homes in Detroit for pretty much nothing.
April 13th, 2009 at 9:58 am
The Detroit,
topic has peaked my interest. I will eventually be buying U.S. property when I think the time is right and Detroit is one of the cities on my list.
With the future socialization of the States there will be redistribution of wealth. Since Detroit is considered a lower middle class city it will surely benefit in the long term (20yrs).
All my opinion of course
April 13th, 2009 at 9:58 am
I think I’ve decided against buying in Saskatoon.
If prices, ever, come down maybe.
But Regina is nice and in my line of work Alberta pays way more. Might consider a move to Alberta. Don’t really want to. But sooner or later I’ll get tired of renting and long term, I still think Alberta with no debt, lower taxes and better wages is the better deal. Regina remains a bit cheaper than Saskatoon or Alberta, but one day I’ll have to sit down and figure out the “cost of living” argument, looking at the instant 10% raise, and potential for much more, raise in Alberta.
On that note, I’m should try to cut back on blogging.
Chance I decide to buy in Saskatoon is pretty small.
No chance denying the inevitable move to Alberta, or purchase in Regina?
Doesn’t mean there won’t be the rare check in, or letter to the editor if T*** T****o get back to the “buy now” fear mongering.
April 13th, 2009 at 9:58 am
Norm,
“That 2009 list is a little light on stars and stripes.”
Indeed! The hangover from the debt party is going to be painful for the good old US of A- let’s hope they learn something. Eventually.
Northstar,
If you’re looking for investment properties in the US, some places CA or FL are going for 70%+ off of peak. It might be a bit more economically stable than MI in the shorter term (not to mention a much nicer climate). I’m not sure if you’re interested in the oceanside tourist/retiree market, though. On the other hand, don’t forget about this:
http://tinyurl.com/6p4c3d
They may be largely through sub-prime, but there’s alot more pain coming yet, I’d say.
April 13th, 2009 at 9:59 am
Crikey,
“there’s alot more pain coming yet, I’d say.”
I agree. I have no interest in buying anything in the U.S. right now. You’ll see me buying there when 1 can dollar gets you 2 U.S. dollars. I’m thinking somewhere around 2012
I’m also staying right away from California for 2 reasons.
#1 their government is ridiculous and so are a good chunk of the people!!! If any of the individual States go bankrupt I predict this one will be the first.
#2 I’m waiting for the big quake to buy
I do like Florida though, but only the inner areas like Orlando, as well as the West coast. A little more protected from hurricanes.
The reason I have Detroit as #2 on my list of U.S. places to invest (In the future, for long term)is:
-The redistribution of wealth causing lower middle class cities to benefit.
-Extremely cheap property that cash flows easily and can be paid off within 10 – 15 years.
-I see Can/U.S./Mexico going they way of the E.U. as more globalization takes place. This will open up cities like Detroit and Buffalo to the huge southern Ontario market.
April 13th, 2009 at 9:59 am
“The redistribution of wealth causing lower middle class cities to benefit”
Could you explain this when you have a moment? Most of the wealth redistribution I see in the US seems to be trickling up, not down! Thanks.
April 13th, 2009 at 9:59 am
Crikey,
Sure… It’s a bit more than a simple answer so bear with me.
The overall direction that the U.S. is going in is socialism. There’s already talk of their health care system turning in to what we have here in Canada. In order to change an entire political system to socialism you need to get the “proletariat” (or working class) angry with the “Bourgeoisie” (the upper class). The U.S. did this by loaning as much credit as the corporations wanted in the early 2000’s. This started driving the price of everything up as the fed reserve kept printing dollars. Then they opened up the credit to the upper middle class which inflated things more. Then finally in the later stages they gave money to whom ever wanted it regardless of social status. The masses didn’t care because everyone was making money.
However as soon as things turned around, now the working class gets screwed over and they point the finger at the upper class for causing all this. Now the government can step in and change the system in the name of “never letting this happen again”. They can do this because the masses are blinded by emotion. What people don’t realize is that the government is just taking control of everything. This is why people like George Orwell write books like 1984.
In a socialistic society, there’s still classes of people, however the gaps aren’t as severe. This is done through taxes (almost fully of the upper and upper middle class) to subsidize the lower income earners. Examples of this in Canada are our Welfare and Health care systems. The same will now be done in the U.S. As the years go by, more and more taxes will be put on to the upper and upper middle class to subsidize the lower class.
In fact this is already happening. There are now government grants in the U.S. for lower income earners to buy houses. Some of these grants in combination with each other near $50,000 that the home owner doesn’t have to pay back if they live in the property for more than 5 years. Obama is also talking about a $1000 tax credit for low income earners. He also talks about tax increases for high income earners.
The trickling up rather than down that you speak of isn’t wrong at this moment in time. It’s just a temporary show being put on by the propoganda machine to fuel the rage in the masses. AIG execs are definately lining their pockets… However all this will end shortly. I expect to start seeing a slew of executives going to jail as the years unfold so the masses have some feeling of justice.
April 13th, 2009 at 10:00 am
Northstar,
Agree with you on Detroit. My thinking is that the rust belt will eventually look less rusty. I can recall when oil and agriculture were junk and Saskatchewan was hurting. That has sure turned around, even now, Saskatchewan’s industries are doing okay compared to other places. It is no different in Detroit, they are just at a different phase in the cycle. Ultimately those manufacturing operations will become very valuable, if there is anything left of them. Ultimately the western world will be forced into a position where the rest of the world doesn’t want to make our stuff and that’s when things will really start to turn for Detroit, and Ontario soon. Anything positive that happens sooner is just gravy.
April 13th, 2009 at 10:00 am
Thank you for your thoughtfully written response, Northstar.
April 13th, 2009 at 10:01 am
This is a reply to Northstar,
The health care system in the US plus entitlements, shall, in 50 years, bankrupt the country of the US. It is not a question of socialism, but of reality.
The US Treasury does not loan money as much as it borrows it and loans it out. It borrows it out from China, Russia, Saudi Arabia, pension funds and mutual funds.
What drives prices up is greed. People have been taught to be greedy so well by the media. As a rhetorical question, why should your house pay you for sheltering your life?
The working class is not being screwed over. They can understand contracts as well as anyone. If they can’t then they need not enter in them but for greed.
The “government” is a group of semi-professional middleweights at best. Do you seriously believe they could be allowed to ‘take over’?
So the gaps in socialism are not quite so bad as there are middle class and upper middle class remaining. I’ve got news for you about Canada. If you earn over $10000/year, you are paying into welfare and health care. Is $10000/year middle class in S’toon?
A handful of people are engaged in an effort, and succeeding, to drain the wealth of the world into their coffers. The wealth of us, our children, our grandchildren, ad infinitum.
I am sure you are not one of them.
Peace be with you.
April 13th, 2009 at 10:01 am
Interesting thoughts on politics. Pretty straightforward and tempered. My turn!
It’s important to internalize a core description of society which I won’t say is forced to be likened to socialism just because of the letters “soci”. That said however, government has has to exist for the people and I don’t thinkit all came to exist so that people could collectively be worse off.
US health care is one of those things that has to happen, but I don’t think their pockets *or* the health care system down there are prepared for the tidal wave it will produce.
biberkoph is totally right in saying that some people are engaged in draining the wealth of the world. In 2000, somebody pulled the stopper out of the tub, and it’s been draining ever since.
The lenience of debt is the only thing that has stopped the global economy from buckling under the pressure of baseless greed. But now we are seeing the backlash from that.
The middle class has suffered the most over the past 9 years. We’ve been forcing the system to invent the money to sustain excessive and arbitrary inflation. It’s not right, but the greed created an adversity that left only two options: Debt or the creation of the most unprecedented, instantaneous and widest social restructuring in history.
Look at the housing market as a perfect example. Price averages need to be much lower before the market doesn’t exist through stretching – and that’s only with current interest rates!
My skills grant me perspective into technology and I’ll tell you people are getting fire-hosed there (cell phones, consumer electronics, other network services).
I’m sure automobiles are no different considering people have been content to pay equal prices for lesser American vehicles. Chrysler, GM and to a lesser extent, Ford are finally being called out for decades of lazy greed.
Socialism for the people is mandatory for governments worldwide. There are more people than businesses, so by the numbers alone – we need government for the people.
Of more importance however is the need for government to step in and eliminate the sponges at the top of all economies. Without being protectionist, this is as broad as clamping down on the exporting of labour, taking a huge swipe at reducing debt *on the ground*, to establishing better employment and market regulations.
Damage from some market consolidation also needs to be reversed: Devastated local markets need to be redeveloped with increased focus to local media and empowerment – but with an eye for global context (which may not always be sitting at the table, but *can*).
Neo-conservative sentiment had a good run in North America over the past 9 years. But it’s finally taking it’s toll on the people who mistakenly bought into it. Excessive lenience and consideration for business only results in higher prices and dangerous public/private coupling.
Millions of dollars in cuts doesn’t result in millions of dollars flowing to your bank account. It just means your infrastructure crumbles, your social programs collapse and you’re stuck paying higher bills as everything up to and including air becomes privatized.
All that for a few hundred bucks come tax time?! At least in Canada: We’re engaged in some very dangerous fad-voting.
In the end, if businesses can’t be honest, they must be made to be honest. Anyone who disputes this point is simply in favor of the reckless dishonesty that has brought us here.
April 13th, 2009 at 10:04 am
Big growth in Saskatchewan and Alberta incomes again.
http://www.statcan.gc.ca/daily-quotidien/090331/t090331c1-eng.htm
April 13th, 2009 at 10:04 am
Average income = $802 x 4.2 = $3370/month gross
-TAX = 3370 – 3370(0.22)=2629
-union = 2629 – 70 =2559
-CPP&EI = 2559 – 230=2329
-Pension = 2329 – 200=2129
A reasonable and historical figure for shelter is one third of income:
0.33 x 2139 = $702
Average price for a 2 bedroom apartment in S’toon is $860
Average home price is about $270000.
A $702 dollar mortgage payment at 3.99% and 25 years amortization will buy you a $135000 home.
So it is expected that every homeowner in S’toon be a couple each of which earn at least the average salary.
Do you all believe this is reasonable?
As far as growth is concerned one should keep in mind the immutable exponential function.
Without rigorous formulae it suffices to use the rule of 70.
70/growth rate =doubling time.
At this growth rate of 6.3% then 70/6.35 per year gives 11 years for the average income to be about $81000/year. Do you think that this is reasonable?
Nothing can grow indefinitely. Including bank accounts. It is a physical impossibility.
April 13th, 2009 at 10:05 am
“Do you think that this is reasonable?”
No, I just posted a link to a news story that I found interesting and encouraging given the times.
One-third income may be a reasonable and historical figure for shelter, but I’ve never heard anyone argue that one-third of the average weekly earnings for individuals should be able to pay for an average house (although there was clearly a time when this was reasonable and possible, before we decided we needed bigger houses with more features, bigger tv’s, and a couple of new cars every few years). I’ve always heard this metric used with “household incomes,” either average or median.
April 13th, 2009 at 10:06 am
I find averages bluntly misleading as they – by nature – imply lesser wages should be capable of affording higher costs. No intelligent conclusion can be observed from using averages (yet the principle behind attempting can be well meaning).
It doesn’t take many outliers to skew the rest of the measurement.
Ultimately, the majority of people in any population core will not make anywhere near the average. Yet they will be expected to perform at the level of some invisible “average populace”.
In actual fact, expressing the average in detail (and not as a single figure) illustrates the problem quite succinctly. Too many people earning too much and too many people earning too little.
April 13th, 2009 at 10:07 am
norm checked out your link http://www.statcan.gc.ca/daily-quotidien/090331/t090331c1-eng.htm
it is surprising that alberta’s average weekly earnings went up more from one year ago, 7.9%, than Saskatchewan’s, 6.3%
kind of tough to make it sound like we’re THE place to be, when alberta is getting a bigger raise
and alberta has way higher weekly earnings
$802 in Sask
$955 in Alberta?
That’s like $150 each and every week extra to live in Alberta!
No Alberta Advantage my butt!
April 13th, 2009 at 10:07 am
and ontario in a slump still averages $50 a week more than saskatchewan
April 13th, 2009 at 10:07 am
I don’t see any advantage to moving to Alberta.
It’s a horrible province and the people there are completely out of touch with reality.
Spent *a lot* of 2007 and 2008 out there and I couldn’t stand it. Nothing to do because all the markets are consolidated. No soul, no character, just people pretending to be happy about slavery and debt.
April 13th, 2009 at 10:08 am
renter,
Maybe they could use the extra $150 to pay their debts since their bankruptcies are leading the country now.
April 13th, 2009 at 10:08 am
So wages in Alberta are still growing more than Saskatchewan? Not unexpected – still surprising since we hear about leading Canada.
When it comes to what matter most financial wise,
how much money do you make, Alberta IS spreading the gap. And there lower income taxes remain. After Saskatchewan’s tax cuts.
I think Alberta is a very attractive option, for new Saskatchewan workers, couples, families etc., with wages there much more attractive and groceries and housing about the same!
Oh, and filling up the tank is cheaper in Alberta.
April 13th, 2009 at 10:08 am
sorry about the bench boycott but norm lets me say what ever is on my mind, too bad since we thought so much the same
April 13th, 2009 at 10:09 am
bottom line is right now a move to Alberta still results in a big raise for most, often with no change in housing costs, maybe even a savings!
April 13th, 2009 at 10:09 am
“sorry about the bench boycott but norm lets me say what ever is on my mind”
Too bad that it’s the same thing every time something is on your mind. “Better in Alberta, better in Alberta, Oooooooh Alberta.”
If you moved today it wouldn’t be soon enough. Give us a break please.
April 13th, 2009 at 10:09 am
thanks carter, typical saskatoon attitude of leave if you spot our flaws, maybe i will, problem is sooner or later that attitude is going to bight saskatoon in the butt, because it is super expensive to live here, especially when a lot of people moved here because of promises of a lower cost of living, only to have rent jacked up for 3 straight years.
April 13th, 2009 at 10:10 am
renter,
I very much agree with you. I think the governments in Saskatchewan have been ill-prepared for the issues they have faced, and will face. There wasn’t nearly enough regulation and control to ensure the *people* were protected.
It seems like both municipal and provincial levels of government took their cues from ideological Conservatism.
To counter the “put up or shut up” attitude of most people here, I’d say come to Manitoba! I can’t speak for everyone here, but there’s still such a thing as critical thought in this province…Which I found people Saskatchewan often misinterpreted as negativity.
How long that will last depends on how quickly people can learn that lives aren’t businesses. Happy hunting and I hope you make the best choice.
April 13th, 2009 at 10:10 am
renter,
I appreciate where you’re coming from and I understand that it’s important that everyone have a chance to speak their minds. That said, I have to admit that some days I feel like I’m being sabotaged. I actually wonder if you might be one of my competitors attempting to hurt me. You’ve made four or five comments in this post alone suggesting that Saskatoon is a crap town. You’ve made similar contributions in a number of posts. I make my living working with people who want to live in Saskatoon, and marketing homes for people in Saskatoon. I can’t help but feeling that you are attempting to undermine the effort and expense that I put into this blog by strategically dropping turd bombs around my work. I’m not trying to cut you here, I’m just letting you know that your approach makes me feel like you’re working really hard to destroy what I’ve got going here. I fear that someday I will feel compelled to either turn you off or walk away from this effort completely. Perhaps I’ll go to a no comment kind of format. Something definitely has to change.