New listings in the Saskatoon real estate market continued on a slow and modest decline for the fourth consecutive week as just 64 single-family homes and 28 condominiums were added to the local MLS system. Down just two units from the previous week, it’s the lowest weekly number we’ve seen since the last week of January. This past week, 60 sellers cancelled their MLS listing, 28 quickly changing their minds and reintroducing their property as a new listing. Total active listings fell again, this time breaking the 1,600 mark to settle at 1,597 units including 971 houses and 523 condos. That is the lowest inventory level since the week of August 4-8, but still represents about 7 months of supply.
Residential sales activity showed an equally modest gain to finish the week at 51 units including 35 houses, 13 condos, 2 semi-detached bungalows and 1 mobile home. Once again, the gap between new listings and sales closed just slightly.
Click the image for a larger view of the graph.
The average selling price of Saskatoon houses and condos tumbled hard, falling to $272,981, the lowest weekly average since the week of August 25-29. The weekly median price took a slightly sharper fall landing at $255,950, down from $275,000 the week before. The six-week rolling average continued to trend down for the fourth consecutive week, and the four-week median, while lower than last week, looked more or less consistent with what we’ve seen over the past two months.
Click the image for a larger view of the graph.
102 motivated sellers adjusted their pricing strategy, and those sellers that did manage to firm up a sale showed some flexibility dropping an average of $13,577 from their asking price. Just over 50% were able to keep that number to 10K or less, while the balance gave a little more to put the deal together. People who are buying today seem to understand the risks but they’re just not willing to shoulder all of it themselves.
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
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{ 80 comments… read them below or add one }
I love the detail you are providing here Norm. The graphs are great! Looks like our markets are in similar although different sized boats.
Love the new charts… especially the underbids pie chart. Keep it up!
Thanks guys! I appreciate the feedback.
Your information is getting better and better, Norm! I agree — the pie chart breakdown is very useful!
So it looks like about 30% of all sales result in an underbid of over $15,000.
Are you planning to somehow show historical underbids? That is, what was it like 1 month ago?
How low will we go???
“That is the lowest inventory level since the week of August 4-8, but still represents about 7 months of supply.”
I think the “lowest inventory level” still representing “7 months of supply” says it all about the “strength” of the current real estate market.
The green four week median line is equally telling.
Regina talks about over supply and has maybe half the listings Saskatoon has.
A weekly median of $255,000 down from $300,000 ish?
Sounds like a price drop to me
How does CMHC explain that as “growth”?
Thanks jrochest!
Kevin,
This particular bit of data is a bit harder to get at and requires a lot of manual work. I’m not thinking much about going backwards but plan to include it each week going forward. If I can find the time I may grab a week from a month back to see if there’s anything interesting there but I can’t make any promises.
Deutsche Bank: GM Is Worth Nothing.
http://blogs.wsj.com/marketbeat/2008/11/10/deutsche-bank-gm-is-worth-nothing/?mod=yahoo_hs
In a note, Rod Lache of Deutsche reduced his rating on the shares to sell (helpful) and put a price target of $0 on the automaker, saying the company has few options at this point beyond “external government intervention.”
They believe the company does not have the cash to fund its operations past December
Why Washington Cannot Prevent Economic Depression
http://www.marketoracle.co.uk/Article7224.html
The facts:
1. Based on the Federal Reserve’s Flow of Funds report, there are now $52 trillion in interest-bearing debts in the U.S.
2. Based on estimates provided by the U.S. Government Accountability Office and other sources, it’s safe to assume that there are also at least $60 trillion in contingency debts and obligations now starting to kick in — for Social Security, Medicare and other pensions.
3. Separately, the Bank of International Settlements reports that the total value of debts and bets placed worldwide (derivatives) is $596 trillion, or more than a half quadrillion !
In contrast, even after the most reckless outpouring of government bailouts in recent months, the total rescue money announced in the U.S. so far is $2.7 trillion — a huge, unwieldy amount, but still minuscule in comparison to the massive debt build-up.
Prior to the 1930s, the total debt in the U.S. was between 150% and 160% of GDP. Now it’s close to 350% of GDP.
Hey George,
I have heard that the derivatives market is actual around 1 quadrillion.
Nix
Nix,
The derivative market has grown so out of control I don’t think anybody really knows the market number. This is one thing the Great Depression did not have to deal with. And to think the derivative market could be the biggest gorilla in the room. But nobody talks about them.
Buffet called them “financial weapons of mass destruction”
I sure hope he is wrong because if they unravel…
Oh, what a difference eleven days can make:
Published: Friday, October 31, 2008
Headline: Sales easing but still strong: CREA
Prices Declining
http://www.financialpost.com/news/story.html?id=921440
Prices have now fallen for four straight months, but CMHC said it will not be enough to result in an overall decline in the average sale price this year. The agency expects the average price of an existing home sold to rise to $306,500 in 2008 from $305,707 in 2007. Next year’s increase is expected to be just $200.
“High employment levels, rising incomes and low mortgage rates have continued to provide a solid foundation for healthy housing markets this year,” said Bob Dugan, chief economist with CMHC”
Published: Monday, November 10, 2008
Headline: Housing sales to drop 12% this year, CREA forecasts
http://www.financialpost.com/news/story.html?id=946896
“Canadian economic growth is being sideswiped by financial market turmoil, slowing world economic growth and weaker commodity prices,” says Gregory Klump, chief economist with CREA. “The question of whether Canada will avoid a technical recession is moot, growth will be slow enough that it will feel like a recession.”
The Ottawa-based group updated its housing forecast for 2008 and 2009 and is now calling for sales to decline by 12% this year from 2007 and then fall by another 3% in 2009.
It expects that fewer new listings next year will help stabilize the market but not enough to stop prices from continuing to fall. The national average sale price is expected to fall by 2.1% in 2009 with conditions in the housing market not likely to improve until 2010.”
GM says GMAC mortgage unit may not survive
http://tinyurl.com/5osyqv
“DETROIT — — General Motors Corp [GM-N]. says the troubled mortgage industry and frozen credit markets have raised doubts that the mortgage business of its GMAC [GOM-N] financial arm can survive.
The auto maker said Monday in a filing with the Securities and Exchange Commission that market developments have raised substantial doubt about the viability of Residential Capital LLC.”
I’m not sure if Residential Capital LLC does any business in Canada. Anyone?
Crikey,
Along those same lines, Brookfield Real Estate Services, the company that owns the Royal LePage brand recently purchased GMAC Global Relocation Services, GMAC Real Estate and GMAC Home Services Mortgage.
Residential Capital LLC does not do business in Canada.
Norm,
Thanks for the info. One company’s loss is another’s opportunity, for sure. Hopefully they can use this as a chance to expand their market over the long haul.
Speaking of one’s loss being another’s opportunity, I’d like to ask for some feedback. Please do point out errors in my thinking.
I’m largely still in cash, but I’m finding myself getting mildly (microscopically?!) less bearish. I’m not certain if I might be deluding myself, however, at least in the short term. Given the magnitude of market drop and the concurrent P/E compression, stocks are certainly looking “cheaper”. Unfortunately, in many circumstances, the earnings in most P/E ratios is based on unrealistic expectations of future earnings. When analysts revise their forward earnings estimates lower, my concern is these stocks will not look so cheap after all and the bear market will resume. Given the amount of terrible economic news coming forth, I can’t see anything meaningful gaining on the horizon. I’d appreciate your insight.
Crikey,
I know you asked Norm, but I thought I would give my point of view.
Personally, I won’t dump money until I see a bottom in the markets and I believe the bottom in stock markets will be when good news starts to override the bad news.
At this time the only good news for the markets are countries providing bailouts, cental banks pumping cash into the system and cutting rates. And these band aids are not fixing the financial mess.
Others may tell you to buy now or you will be forever be priced out, maybe they are right. But I think you know what to do:)
Thanks, George. You’re a gem.
I didn’t ask Norm in particular, actually. There are many smart people who post on this blog, which is why it’s nice to hang out here.
I really do appreciate your input- and don’t worry, I don’t think I’m the sort to fall into the “buy now or be priced out forever” argument.
I agree any meaningful market recovery looks like it’s a long way off. Sadly enough, economically, it looks like it’s just getting started.
Crikey,
My current strategy is more like gambling than investing, which is strange, because I’m not a gambler. I’ve been in a casino about three times and it did nothing for me.
I believe that there are some good values out there, solid companies which I’m confident will be trading well above current numbers in a couple of years time. I do think that the upside is pretty limited over the next couple of months, but my gut is telling me that prices are going to continue to fluctuate. Using the TSX as a benchmark, I think we’ll see 9,000 and 10,000 on many occasions, and I won’t be surprised if we see numbers on either side of those. I am targeting about 15 decent companies, ones which I’m confident will be around for the long term, with decent assets, limited liabilities, and reasonable earnings. I have set a fairly low price target for each and I’m waiting. If they hit the number I’ll buy. I also have a sell number in mind for each of them. If they hit it I’ll sell. Following a full conversion to cash, I decided that I would invest no more than 40% at this time. If we see a sudden drop to 8,000 I’ll likely increase that percentage, but for now, I’m being a little more conservative so that I can control potential losses.
Following a near 300 point drop this morning the bell rang on one of the stocks on my watchlist and I bought. I’m hoping for one more ring today, but if it doesn’t happen I’ll wait. Wish me luck.
Homeowners’ new reality: You’re suddenly poorer
http://www.reportonbusiness.com/servlet/story/RTGAM.20081110.whousing11/BNStory/Business/home
Federal Reserve is refusing to identify the recipients of almost $2 trillion of emergency loans from American taxpayers or the troubled assets the central bank is accepting as collateral
http://www.bloomberg.com/apps/news?pid=20601087&sid=aOngFPgq7r3M&refer=home
Oil dips below $60
http://www.bloomberg.com/?b=0&Intro=intro3
Here is some good news for consumers. I believe we will hit $35.
Here’s an interesting one for today http://www.canada.com/calgaryherald/news/calgarybusiness/story.html?id=92e293c6-69c4-412d-be9d-4bcd98ce61a7
housing not expected to recover until 2010 in Canada.
I personally don’t think P/E ratios really matter in this market. Other things you need to consider are the book values of a company. Right now there are companies that have a lower Market Cap than their cash position. Basically if they bought back all of their shares they’d still have cash remaining. There are several other companies out there that are like with with other commodities like uranium, oil, coal etc. I think when you see a steal of a deal you take it but don’t dive in with two feet either. This is my strategy anyways. However, i have several things who predicted the bottom two months ago and are still kicking themselves.
Thanks for the strategy sharing, folks.
True, P/E ratios probably don’t mean alot in this market. Market cap will also mean less than book value in the short term. I like commodities as a rule but cashed out at the crest of the crash. I can see more capitulation coming, so will hang back a bit longer and see what happens.
Easist way to measure when we hit bottom is when we have a prolonged good news outweighting bad news in the markets. Until then, buckle up.
More US bail-outs – but where’s the money going to come from?http://www.moneyweek.com/news-and-charts/economics/more-us-bailouts-but-wheres-the-money-going-to-come-from-14039.aspx
Forsyth points out that the yield curve is getting steeper. All that means is that the yield on short-term US government bonds is much lower than that on long-term US government bonds. This would normally suggest that investors expect a recovery in the future, as economic growth picks back up again and interest rates start to rise to more normal levels. But at the same time, the cost of insuring the US Treasury’s debt via CDS has also risen sharply, which in short, means that investors are getting worried that the US may not be able to repay its debt.
This suggests that investors are demanding a much higher payback on long-term government bonds not because they expect a recovery, but because they suspect that the US government will try to inflate its way out of trouble, or even – unthinkable though it may be – default on its debt.
Lessons from the Great Depression: the consumer credit bubble
http://www.moneyweek.com/news-and-charts/economics/what-you-need-to-know-about-the-great-depression.aspx
A credit-fueled bubble that affected nearly every corner of the economy – encompassing everything from consumer credit, to business loans, to margin debt at stock brokerages – crested the following summer. Alas, historians have thoroughly documented what happened when this euphoria morphed into panic.
With the onset of the Great Depression, priorities for many gradually shifted from return on capital, to return OF capital, to concern that modern industrialized society was unraveling at its seams.
Canadian consumer, business bankruptcies poised to rise
http://www.canada.com/calgaryherald/story.html?id=34f0288f-3f71-4604-9f5a-44facdf2d6ac
“We’re definitely seeing an increase (in calls), I think that people are caught, they’ve been living on credit,”
U.S. announces mortgage aid
http://www.reportonbusiness.com/servlet/story/RTGAM.20081111.wcitimortgages1111/BNStory/Business/home
For those that are interested, here is a press release from the US Federal Housing Finance Agency (FHFA):
http://tinyurl.com/5nh8ge
This does not appear to include principal reduction as a solution to create an affordable payment, and is limited to: “extending the term, reducing the interest rate, and forbearing interest”.
This hopefully will not encourage US mortgage holders to stop making payments until they are 90 days late, hmmm?
Crikey,
seems to reward bad behavior. I am a little surprised it has taken this long to do something for the people, but I guess the government had to help their friends first:).
Something I wanted to follow up from before from
money week.
“This suggests that investors are demanding a much higher payback on long-term government bonds not because they expect a recovery, but because they suspect that the US government will try to inflate its way out of trouble, or even – unthinkable though it may be – default on its debt.”
http://www.moneyweek.com/news-and-charts/economics/more-us-bailouts-but-wheres-the-money-going-to-come-from-14039.aspx
If the US government tries to inflate their way out of trouble and they are printing money like crazy interest rates are set to rise. Might be a good time in the near future to lock in a fixed rate. 80’s style inflation around the corner?
Norm I can’t believe you censored my link to
“BUY THIS HOME AND INCLUDED IS A NEW 2009 DODGE CALIBER FREE!”
Can I at least post the claim? minus the link
This is hilarious!
Pretty tough to sell this as strength in Saskatoon’s housing market.
And come on Norm, they set themselves up for ridicule with this one!
Crikey, good post on the difference eleven days later, not sure why the CMHC even bothers making predictions these days.
George,
Interesting call on 35 dollar oil. I am not sure I want to live in a world where oil is 35 dollars a barrel. I am not even sure what the world would look like under such a senario. Back to the dark ages? I am still hoping for the inflation scenario over the deflation scenario. If reserve banks continue printing at this rate I believe inflation is assured. Only time will tell if they can defeat the deflationary backdrop associated with a K-winter.
Nix
Nick,
“Can I at least post the claim? minus the link”
I think you just did.
Canadian Gov’t to buy $50B of Mortgages:
http://www.cbc.ca/money/story/2008/11/12/flahertyloans.html
Nix,
I would rather have deflation, it benefits people who are savers and more responsible. Higher Inflation is risky, because the value of each dollars lessens, double digit interest rates would be the norm with the possibility of hyper- inflation if it gets out of control. Higher inflation could help those that are in over their head if their interest rates are locked in for a few years.
On $35 oil, remember it was in 2004 when oil was 28 bucks a barrel and things where OK then. Right now it is at $56 and the US, Canada and many other countries are just entering a recession. It has no where to go but down, unless there is a war started.
Ryan S.,
no trouble in Canada’s financial banks, just move along people, nothing to see here:)
More U.S. fallout expected for Canada’s big banks
http://www.reportonbusiness.com/servlet/story/RTGAM.20081112.wrbanks12/BNStory/Business/home
“The banks have been hit with about $13-billion in writedowns since early 2007 because of their exposure to risky investments and other sore spots, and analysts expect that Canadian Imperial Bank of Commerce [CM-T]could take a further hit of more than $1-billion this quarter. But that’s not what’s worrying investors right now.
What’s causing frown lines these days are ominous signs that the economy is going to be uglier than expected, and Canadian borrowers are less insulated than previously believed.”
I have been saying this for quite some time. There are more Canadian’s in debt trouble than is being reported.
George,
The problem with deflation in this environment is that there are no savers. With the amount of debt out there the whole system would come crashing down. Under Deflation the debt people do have on there books would become insurmountable. Even if you are a saver to date saving would be almost impossible as the turmoil caused by the deflation would led to 60-70% unemployment. People would starve they would not have access to medicine and the entire social fabric of society would crumble. I agree that eventually deflation will occur, but not until the inflation has reduced the burden of debt to acceptable levels, on the government level as well.
Interest rates do not necessarily need to rise to double digits. If the U.S. realizes that borrowing money is too costly they can simply monetize the debt, they do have with the all mighty printing press.Thus the argument for inflation.
Regarding oil, 35 dollar oil means no oilsands, not shale gas, no offshore oil. Oil and the dollar have been moving in an inverse relationship just as gold has. In U.S. dollars all commodities seem to be weakening, but on a world wide scale oil is holding up much better. The eventual price of all commodities depends on the fate of the currency they are denominated in. The U.S. dollar. I cannot at this time make a case for the dollar in the long run. I think eventually the spike in the dollar will look like nothing more than a small blip on the long term USD index.
Should be interesting.
“Regarding oil, 35 dollar oil means no oilsands, not shale gas, no offshore oil.”
And no coked up rednecks in overpriced look-at-me trucks making way more money than they’re worth killing the soul of my town.
Nix,
you are right unfortunately
, most are in debt, not savers. Majority wins. Deflation would not encourage spending, hence a collapse.
As the US goes, so does the world. I believe they have 2 options. Inflate money like crazy to inflate their way out of trouble ; or they could default on the dollar. Not many are expecting a default on the US dollar, though.
Canada has been pumping the system with money every week as well. This week another 8 billion.
Re: oil, I just read where there might be a 5 million barrel per day cut by spring time by OPEC, maybe the world will not need the oil sands just yet. Obama has said he does not like “dirty oil” and the US may start drilling off shore and in Utah where it is estimated to have billions of barrels, they could not drill their because of some laws. Factor in enviromentalists going ape over oil sands, maybe they are in for some trouble. The price will drop more.
This is worst case scenario for oil sands, I don’t think this will happen, but who knows.
Deflation, inflation, housing, oil, commodities etc, yes it will be interesting going forward.
$20 a barrel? Oil prices to continue slide for 6 months, analyst projects
http://www.cbc.ca/consumer/story/2008/11/12/oil-verleger.html?ref=rss&loomia_si=t0:a16:g12:r3:c0.152625:b19614669
I think $20 is quite low, but 10 years ago it was briefly under $10 a barrel with the Asian market crisis. With a world wide market crisis, how low will it go?
oil price chart since 1990
http://blog.wired.com/sterling/2008/05/oil-price-chart.html
Nobody ever seems to mention the positive stimulus effect these falling oil prices are bound to have on the American economy. And quickly. The oil shock itself played a role in crushing consumer demand this year. But now I’m guessing most two car families in North America suddenly have an extra 100 bucks a month to spend that they didn’t have three months ago. Maybe more to come. That’s quite a bit. More than any stimulus package could afford to offer. Yet I don’t hear anyone factoring this in as potentially boosting consumer demand. This is a lot of extra money suddenly in everyone’s pocket.
“Canadian Gov’t to buy $50B of Mortgages”
But of course we don’t have a problem, that’s all just fear mongering by the Liberals. And after all, it’s only $50 BILLION
Harper,
I removed your most recent comment. I’m sure that you probably hadn’t caught this but I have been asking people not to link to property listings. I have no problem with a discussion on the “free car with every home purchased” idea but I’m not comfortable hosting a venue to publicly criticize specific property sellers. Thanks.
Well, now that Harper has posted, I’m feeling a little more comfortable about coming clean.
In early October before our federal election, I stressed that we would not run a budget deficit because it would be bad for the economy.
1 month later…
Canada may run a federal budget deficit in the 2009-2010 fiscal year
http://www.financialpost.com/news/story.html?id=953037
Ooops!
BTW, Captcha= economy dying. Now THAT’S quite a coincidence.
Mark,
I’m interested in what you said because for the vast majority of the time, people have been talking about higher costs driving a stronger economy for the longest line.
Specifically, many people have been pointing at inflation (in the midst of stagnant wages) as a way to boost the economy by pumping the country’s wealth upwards to the wealthy in the hopes it will rain back down.
Obviously that’s a lemon people are going to have to stop sucking up to eventually…Your rationale – while making complete sense – also flies in the face of that notion. Specifically, the notion that the less extreme costs are, the more discretion people have over *what* they spend on.
“prosperity of”
Harper/Flaherty,
I’m not much of a partisan. Maybe the Conservatives should have had better foresight. But, things change – policies need to change too. I think punishing policy makers for being flexible sets a dangerous precident.
I just googled Nick’s comment “BUY THIS HOME AND INCLUDED IS A NEW 2009 DODGE CALIBER FREE!” was pretty easy. I agree stupid enough ad deserves bashing. Agree to disagree though.
Wouldn’t call myself flexible either, just copied the other guy’s idea to consult and bailed out the banking industry. Not as dumb as I sound either, surprising since I’m a University drop out from Toronto, I just lied about thinking the economy was good, it just crashed before I got elected. For some reason Canadian’s still didn’t catch onto my scam to get elected before the economy crashed. Sucks for them. Just think how scary it really would be if I was telling the truth and really had no idea the economy was in trouble until after the biggest Canadian stock market crash of all time. Doesn’t give a lot of hope for the future. For the only hope to be a crooked lying intelligent leader than a moron. Even Bush saw the economic down turn coming.
Mark makes some interesting points about the US consumer.
Gas/oil prices dropping are a (temporary?) boon for the average consumer, but we have to keep in mind that a great many people may also be realizing losses in real estate and/or pension and/or stock market investments. This is a much larger issue for the US consumer right now, where the value of their primary residence may have dropped substantially. The contracting value of these types of wealth will have a much more negative effect than having cheap gas will have a positive effect.
It’s all relative. If a typical southern Californian has seen the value of his house drop 20-40% and his investment portfolio drop by about as much, what will be more important? But yeah, cheaper gas a plus.
Stumbled on this sight while searching for economic information, so must get some heavy search engine status. A good economic debate.
My 2 cents? Even with oil down, americans will shy away from gas guzzling vehicles for fear of what could, and briefly did, happen to oil prices. Global down turn, coupled with more fuel efficiency by the world’s biggest consumer, may mean oil prices are down to stay. There are other options out there. Not mainstream yet, but close.
Oil may not fall much more. Oil likely will not rise for quite some time either. At least until after the end of the current downturn, predicted to be 2 to 5 years minimum. That’s discouraging for any oil producing province. Hope saskatchewan has some investment in alternative fuel and research. The university of alberta is a world class university. Haven’t heard too much about the university of saskatoon other than your big flashlight proton thing. Might be time to diversify that economy a bit more. Commodities are only good when the world can afford to use them.
Calgary’s oil and gas sector will soon be facing job losses of up to 10 percent.
http://calgary.ctv.ca/servlet/an/local/CTVNews/20081112/CGY_Oil_JobLoss_081112/20081112/?hub=CalgaryHome
This from a place that had a GDP of about 6% two years ago. Some newspaper articles are suggesting the possibility of a recession in Alberta next year if oil and NG keep tanking.
Remember it was construction, oil, construction, NG, construction and the spin off from these industries that led to the boom Alberta experienced. Now all are spiraling downwards. Bustberta?
Housing? Sales have fallen off of another cliff this month.
See for yourself
http://www.findcalgary.ca/
Harper,
As I said, I don’t have any problem with the discussion of this “promotion” but I prefer that the guy not be pointed at from here. As the only person here with a full name and a face, I don’t see much value in drawing the resentment of people who live and work in Saskatoon.
George,
Check out Larry’s post on West Vancouver.
“We regret to inform you. In the past 12 days, the Vancouver west side detached real estate market died.”
http://tinyurl.com/54pujx
Oddly, things seem to have picked up here. You never know if it’s for real. I guess the numbers in the weeks ahead will tell the full story but I was just saying at my office that my phone rang more in the past week than it has in a month and several other agents agreed. I have three conditional sales on the go.
I think the free car thing was quite funny. The wonders of google.
I notice promotions of free cars, or a limited time rebate of $25000, why not reduce the price of the house by $25000. I find the limited time rebate the most interesting… why the smoke screen, is there still this hope that the market down turn is temporary, and that the builders will be able to charge higher prices right away.
David,
“why not reduce the price of the house by $25000?”
I think that’s essentially what’s happened, no?
It’s just another way of price positioning. Someone buying a new home is often concerned with additional cost like fence, driveway, landscape, etc. Offering some kind of a rebate can speak directly to those concerns. Builders have experienced success with these types of programs in down markets. That’s probably why they do it.
Not sure how a free car works but it’s not the first time I’ve seen that either.
Hey guys,
Saw a bit of chatter about stocks on here.. the bells went off for me on this one the other day, thought I would share. http://www.wi-lan.com/ On the TSX, symbol is WIN (oh the irony). But with $100M in cash ($1/sh) hard to see it going any lower 4 strong buys and one buy.
Norm, great site you have here, I love the weekly graphs.. I found my way over from Bob Truman’s site. I am originally from Martensville, and moved to AB in 2001 for work. Have always wanted to come home, but the timing has never been right.
Now living in central AB, you can “feel” some concern from the look at me truck driving group.. though the kids don’t seem to get it, have that same invincible feeling that we all did at that age. House on my street has gone from $344,900 to $308k in the last 20 days… brand new home.. can’t even get someone to take a look at it.
I hope to become a regular contributor to the blog…
Thanks LJ, and welcome.
For those interested in housing and stock predictions
http://www.youtube.com/watch?v=8sMdpuYbjBY
He was laughed at in 2006. Criticized from policy makers to private investors.
Not to add more doom and gloom to the current situation, but to position yourself better. If everyone gets some savings, reduces some debt, the impacts and length of whatever it is we are dealing with globally, will be less severe. (IMHO)
http://tiny.cc/I5ZP8
Most expensive provinces to buy a home
LJ’s link is interesting, but omits that houses in Saskatoon are likely $100,000 above the average for the rest of the province (and when these numbers came out, were more similar to Alberta’s average house price than Saskatchewan’s)
Cindy,
Very interesting video. In the future I’m going to be listening more closely to the people everyone is laughing at.
In the U.S. they’re still laughing at Ron Paul for insisting that bailouts won’t work and that the U.S. dollar will eventually collapse, even though he has pretty much been bang on in predicting the current crisis.
Interesting that Dent forecasts a temporary recovery in housing and stock markets before the “big one.”
LJ,
Im concerned with WIN’s balance sheet it appears they are over leveraged if things go sour. What do you think of Suncor ive been following it since Wesco mentioned it a long time ago and bought a position yesterday at 24.04. With a positive debt to asset balance I think it would be a safer bet than my BQI even tho i love it =’(
But a little off topic who is enjoying these house price cuts and cheap gas!!!! I know I am =o)
You all sure speak a lot about stock markets and not so much about housing in Saskatoon. Appears that the market is weak here. More so than back in BC.
The Market is weak in SK, I advised some friends against purchasing a home in May, and they did it regardless, certainly they sold at the peak, but they also paid at the peak… I have a couple friends that are home builders, and I saw parallels between the AB Boom and the SK boom..
AB:
Xmas 05 prices start to climb, continue until fall of 07, decline, level, rise in the new year until May/June (08), then collapse.
SK:
Xmas 06 prices start to climb, continue until fall of 08, decline, level, rise in the new year until May/June, then collapse.
However, mid spring the pending economic meltdown started to surface, and here we are today…
I think prices will collapse across the country, I can’t see much support, out east the GM plants are headed for bankruptcy, Nortel, Circuit City, Oil at $55/barrel, so many people over extended on Home equity loans, and that equity is drying up fast! I read an article that suggested that the “average” albertanwas carrying $80k of debt, OUTSIDE of their mortgage.. sounds like a big truck, trailer, and a quad and a boat to me.
The rumblings around here are that 1& increase in prime could do a ton of damage.
Sigh. Everything is fine everybody. Deals abound. This depression talk on here is getting tired. Stocks are off 35 percent, real estate in Saskatoon, with a good low offer is already 20 percent off its peak. Incomes are rising. Inflation is just around the corner. All these links and posts on here about every possible doomsday scenario, and by that I mean you George, you’ll post anything gloomy, and yet not a single mention from you or link dealing with Sask’s revised budget yesterday, with a still huge surplus, and a note on the fact that even lower oil prices, given the deteriorating dollar, are still a big deal here. All gloom and no cheer is starting to feel like the ‘prices only go up talk’ on the other end. If people want to talk about investing money on this blog, let’s talk real estate. Revenue properties abound in Saskatchewan. Anyone else buying or looking at revenue properties?
Further to LJ’s point, here’s an article from CBC titled, “Big toys filling repo business floor.
http://www.cbc.ca/canada/calgary/story/2008/09/17/big-toys-alberta.html
Further to Mark’s point, anyone catch this November 4 story about Saskatchewan in Fortune Magazine featured on CNN Money?
Saskatchewan: Where business is booming.
http://tinyurl.com/5juzbw
From today’s SP, “Great in ‘08, Sask economy looking fine for ‘09″
Conference board revising Sask. economy predictions up to 5.2% for ‘08 and 3.6% for ‘09.
Says employment will grow 1.9% in 2008 and 1.8% in 2009.
Personal disposable incomes to rise a whopping 10.3%. Retail sales top grow 12%.
$500 million in infrastructure investment in 2009. $330 million in personal tax cuts in people’s pockets in early 2009.
Heard an interesting comment yesterday about a large investor who is holding at least 500 Saskatoon condos. “They’ve decided to keep them. The rental market is attractive enough now that they make sense to hold.”
I wonder if we’ll see more of that.
Mark,
Other than calling the commodity boom we had in the spring a bubble, I am pretty positive about our province and I have posted tonnes of positive links about Sask. I was out of town yesterday.
To say that everything is fine everybody, either you are misleading people or don’t know what you are talking about. Lets see, the worldwide financial crisis created by the worldwide housing bubble and
credit bubble has led to the biggest part of the economy ( consumers) to be in serious financial shape. Real incomes have not risen, only leverage has expanded. Bank failures, auto industry trouble, millions of layoffs, central banks pouring trillions into monetary systems with a few countries going bankrupt along the way.
The world economy is teetering on the edge and for you everything is fine?
My posts and opinions are not facts, but they do give people more information to be aware. Maybe I am a “doom and gloomer” or maybe I look at reality, who knows.
I have said it before, until the good news outweighs the bad news all markets will continue to go down.
http://tinyurl.com/6a35yq
“Nov. 14 (Bloomberg) — Realogy Corp., owner of the Century 21 and Coldwell Banker brands, is at risk of violating the terms of its bank loans and is offering to exchange bonds at a discount for new debt.
Leon Black’s buyout firm Apollo Management LP, which bought Realogy for $6.6 billion in April 2007, is trying to reduce debt by almost $600 million and stave off default at the Parsippany, New Jersey-based real-estate broker, according to a regulatory filing dated yesterday.”
Is anyone aware is Realogy runs the Canadian operations of Century 21?
Looks to me like Realogy Corp runs all the C21 offices, I googled Realogy Corp, click on franchise opps, and found this under “international”
http://www.realogy.com/b2b/brokers_intl/franchises/
Value for Real Estate Brokers (International)
International Franchising Opportunities
Realogy is the world’s largest real estate brokerage franchisor with more than 16,000 franchised and company owned offices and approximately 300,000 sales associates operating under our franchised brands. Realogy’s brands are currently represented in approximately 92 countries around the world. If you are an innovative entrepreneur you can put this unrivaled brand power at your disposal with the purchase of a “master franchise” of one or more of the Realogy brands including the Better Homes and Gardens® Real Estate, Century 21®, Coldwell Banker®, Coldwell Banker Commercial®, ERA® and Sotheby’s International Realty® brand names.
To receive information on international master franchise opportunities call Global Services in the United States at 1-973-407-7438, or fill out our contact form available from the link on this page and you will be contacted shortly.
If you are interested in simply joining one of our existing master franchises, please contact that particular brand’s independently owned and operated company by using the appropriate brand website’s international office locator section.
Thank you for your interest in Realogy, the world’s largest real estate brokerage franchisor.
Crikey,
LJ is right. Realogy does own the C21 and Coldwell Banker brands in Canada. Of course, they are a franchisor, so each office is independently owned. I believe that Conexus Credit Union own the franchise rights through Saskatchewan, at least in Saskatoon and Regina. Realogy is a spin off of Cendant and has only been operating since 2006. They may be in some trouble but the C21 and Coldwell Banker brands are both fairly well established in North America. They’ll be operating for a long time to come.
Thanks for the information, Norm.
The C21 and Coldwell Banker brands certainly are well established. I wasn’t sure how this information would have an effect on the daily operations of the franchisees here, if at all, but you’ve helped clear it up.
Figured I may as well be first with this little gem.
Home resales tumble 14%.
http://tinyurl.com/5pb5hk
Wasn’t this covered last week?
Are those resale numbers seasonally adjusted? Should they be? Resales down by 14% and prices down by 10% MOM seems rather precipitous to me…
“The average sale price also declined, by 10 per cent in October from the same month the year before, to $281,133. It was the largest month-over-month decline since August 1982, when the average existing home sale price also fell by 10 per cent.
Using a weighted national average, prices fell by 5 per cent on a year-over-year basis on October.”
Not sure if this was posted before.
http://clearstation.etrade.com/cgi-bin/bbs?post_id=8878161
Crikey,
Seems the story behind my link has been swapped out for another “real estate down” article so I can’t be sure. I’m pretty sure that the drop is 10% year-over-year. This looks like an error to me as the writer is contradicting herself between the three sentences you’ve quoted. Very weird story.
Looks like they have corrected/clarified the story:
“Nationally, the average price of a resale home in October fell the most, percentage-wise, since August, 1982, sinking 10 per cent from the year before to $281,133, the Canadian Real Estate Association (CREA) says. It was the fifth consecutive month with year-over-year price declines.
Unit sales fell by 27 per cent from October, 2007, declining sharply in every province except Newfoundland and Labrador and the Northwest Territories. Month-over-month sales fell by 14 per cent, the largest drop since June, 1994.”
This seems comprehensible: prices down 10% YOY, unit sales down 27% YOY, and 14% MOM.
Regardless of how you slice it … ouch.
As scary as these numbers are, though, I have to say that I’m Just Not Seeing That Here. Norm called me a ‘numbers guy’, which I am, and while we have come down about 10-15% from the peak in June… we’re still up a healthy amount from where we were a year ago, and things aren’t falling off a cliff.
I have to say… I thought things would be worse than they have been. That’s not to say that they still can’t go south on us — I certainly expected them to do so based on what August looked like — but they *haven’t been (that) bad*. And now Norm is saying that it’s getting busy again… Maybe Saskatchewan really *is* The Place To Be this time around?
I predicted that we’d end the year with the same avg. price as we started. Let’s see if that comes true.
Bookrat,
Saskatoon came late to the Canadian housing bubble party. Our peak was spring of this year. Calgary and Edmonton had their peak in the spring of 07. It does seem like Saskatoon is a year behind them. The slowdown has only really been here a few months, while there are many houses in Alberta that have been listed to close to a year.
Prices have only one way to go and that is down. How far, who knows. Even though our economy is forecasted to ride the economic storm farely well, I doubt prices will go up or even stay on par. Heck, even Dubai has seen price drops in real estate! If real estate prices all over the world are dropping, it is safe to say we will see price drops as well.
Having affordable priced houses is great for everybody. First time buyers, investors, renters all benefit will lower prices and the mortgage industry benefits with more sales and sustainable economic growth. There is quite abit to go down for the average family to afford the average house, for P/E to make sense to buy for investment, and for renters actually able to afford rental prices.
Dec 08 will probably end close to Dec 07 in prices, but the market will have less optimism for prices and sales heading into 09. Especially when you see comments like these ““We declared early this year that the housing boom was over, and these figures on the surface would suggest the bust has begun,” Douglas Porter, deputy chief economist at BMO Nesbitt Burns Inc., said in an interview.”
Bookrat,
Thanks. That makes much more sense to me.
“we’re still up a healthy amount from where we were a year ago.”
Don’t forget that we had one of the largest year over year increase up until the middle of the year. To me, we appear to be falling faster than other parts of the country, but we’re coming off of a much larger increase. I still think that the averages are not telling the whole story. I’m seeing some properties sell below where they were at this time last year.
“I certainly expected them to do so based on what August looked like”
For us, units seem to be bouncing back and forth from one month to the next. It’s a string of downs, but some are worse than others. This past week was dismal for units but I think next week will be big.
“And now Norm is saying that it’s getting busy again”
I said my phone had been ringing a lot over the past week and that other agents were saying the same thing. Busy doesn’t necessarily mean business.
Maybe Saskatchewan really *is* The Place To Be this time around?
Plenty of bright spots in this province for sure. Looking forward to seeing the Q3 migration figures. I would still maintain that if 3,000 new people continue to move here every quarter that it has to bring inventory down. We all know there’s diddly for rent and what is available is expensive.
While sales have slipped quite abit here, new listings have fallen off of a cliff. If we do have more people move here and buy housing and this eats into inventory this is good news. Having sky high inventory for a prolonged period would have a detrimental effect on the real estate industry here. With lower housing prices and strong economy, I think this real estate market could be the envy of the nation by next fall or spring 2010.
Norm,
“I still think that the averages are not telling the whole story. I’m seeing some properties sell below where they were at this time last year.”
Not that I want to add more work to your plate, but you have not had a list of notable sales recently. Would you continue this?
And is it possible it mostly people already in the market buying homes (upgrading) with few entry level buyers that keeps the average price high?
Here Comes a Bankruptcy Boom
http://www.usnews.com/blogs/flowchart/2008/11/11/here-comes-a-bankruptcy-boom.html
If you’ve been saving your cash for fire sales at bankrupt retailers, don’t blow it all at Circuit City. Many other companies are likely to end up in even worse shape over the next year.
The share of corporate bonds in default over the past 12 months, which goes hand in hand with bankruptcies, has been about 3 percent, according to data compiled by Prof. Edward Altman of New York University’s Stern School of Business. That’s near the historical average. this time next year, the corporate default rate will be somewhere between 8.5 percent and 11.1 percent. That means there could be three to four times the number of corporate bankruptcies we’ve seen over the past year.
Crikey,
Here’s an interesting story about the Realogy situation with some comments from the CEO. Sounds fairly serious.
http://tinyurl.com/realogy
George,
“And is it possible it mostly people already in the market buying homes (upgrading) with few entry level buyers that keeps the average price high?’
It’s kind of a tough one to wrap my head around but I expect that you’re correct about that. Share your thoughts please as I am still confused.
If I compare sales over the past 60 days to sales between Sept 15 and Nov 15 of 2007 here are some things I can see.
Condos, as a percentage of sales are just 20% this year compared to 24% last year.
In the past 60 days, 36% of properties sold were 1,000 square feet or smaller. For the same period last year, that size range garnered a 42% share.
Total sales over the past 60 days were an average size of 1,193 square feet. For the same period in ‘07 the average size was 1,108 square feet.
Homes larger than 1,400 square feet have a 20% share over the past 60 days compared to a 16% share for the same period last year.
Cost per square foot was $247 for sales in the past 60 days, and just $225 (10% lower) per square foot the year before. Larger homes typically command a higher dollar on a cost per square foot basis. They tend to have more pricey options while your basic starter home has few.
I’m going to do a bit more digging here and compare some specific property types of various sizes to see if I can figure this out.
Thanks, Norm- the Realogy/Apollo situation certainly does sound serious. In looking back at the company’s finances, it’s apparently been in trouble for some time. I’m a bit surprised there hasn’t been further mention of in in the press. I found an article in Bloomberg in February of this year that stated:
“The bonds show Apollo’s equity in Realogy “has no value right now,” said Sabur Moini, a money manager in Los Angeles at Payden & Ragel, which oversees $50 billion in fixed-income securities. “If bonds are trading in the 50s or 60s, the market is saying that these guys are headed toward bankruptcy.”
Standard & Poor’s cut Realogy’s corporate credit rating to two grades yesterday to CC from CCC. S&P analysts also said yesterday, “Given our previously stated view that Realogy’s ability to service its current capital structure over the intermediate term will be challenged, we view the exchanges as being tantamount to default.”
Has anybody heard anything about this in Europe with the possibility throughout the world?
Primary residence 10% down
2nd property 30% down,not gov insured
3rd property 40% down, not gov insured
More mortgage rules are coming, but I am guessing there will be ideas being floated around.
Hey George,
No, I haven’t heard anything about new mortgage rules except some new disclosure rules for US mortgages, which were sorely needed anyway. It certainly sounds like it would put a big curb on speculation. Do you have any links or further info?
I haven’t heard anything about changes of this kind here.
Prior to 2006, banks always required larger down payments for investment property (25-30%) and it would hurt my feelings to see those kinds of rules return though I doubt that speculation will be much of a problem over the next number of years.
Losing the 5% down program would be a big loss for first time buyers. I hope that they don’t do away with that. I believe it has been around since the mid 80’s and it has provided a multitude of buyers with an opportunity to achieve ownership.