Saskatoon real estate: Week in review (September 1-5 2008)
Saskatoon real estate sales activity is often on the softer side through the last week of August and the first week of September as families take a break to get kids back to school. This past week was no exception with residential real estate sales slowing to just 38 units including 36 properties in the single-family and condo categories. 23 of the 36 home sales occurred on Saskatoon’s east end. North end sellers were nearly shut out with just 2 sales being reported for the week.
If there was a retreat, most of the breaking happened on the buyer side as new listings increased from previous weeks. 167 residential properties were introduced to the market including 90 houses and 70 new condominium listings. Total actives reached a new high at 1,704 residential properties including 1,060 single-family homes and 537 condos. 686 of those properties show up as vacant, including 88 properties that are categorized as “new.” Through the course of the week, 50 residential properties were cancelled and 40 of those listings re-surfaced as new listings. 117 motivated sellers changed their pricing strategy.
Fewer than 10% of homes sold got their full asking price and the average underbid increased from last week to $13,751. The average selling price reached its highest point in a month to settle at $285,435, up from $270,911 last week.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Follow our daily updates on Twitter @SaskatoonHomes.
Norm Fisher
Royal LePage Saskatoon Real Estate
There's 92 Comments So Far
April 27th, 2009 at 7:13 pm
Norm, even though it is mentioned that this is a “buyers market”, I disagree. Even though there is tonnes of selection, prices are still too high right now for buyers. And it is not a sellers market either especially with only 38 sales this week. Long weekend though.
I think a balanced market was pre 2006. Serious sellers pretty much always sold their property and buyers got a good deal with their property appreciating with time. This is not happening now and won’t for some time.
April 27th, 2009 at 7:13 pm
Update on Alberta prices for those that care.
http://www.edmontonsun.com/News/Alberta/2008/09/04/6656661-sun.html
April 27th, 2009 at 7:14 pm
George,
Be patient, grasshopper.
April 27th, 2009 at 7:14 pm
Crikey,
ha ha.
I see Saskatoon has made it into one of infamous bubble blogs again.
April 27th, 2009 at 7:14 pm
Okay, George, I’ll bite. Which infamous blog was it?
Here’s a laugh (cry?) for you:
http://tinyurl.com/6moqqp
Enjoy!
April 27th, 2009 at 7:14 pm
George,
The link on Edmonton house prices being down 13 percent doesn’t really reveal the current reality. That’s still just capturing 2007’s late year collapse. In fact, from what I can tell, house prices in Edmonton month by month have been pretty steady throughout most of 2008. Same as Calgary. If a local realtor in Saskatoon pointed out that real estate in July was up 35 percent over July 2007, most bears on this blog would probably find that very misleading, though true. Same goes for reports of big price drops in Alberta. Last year’s news in a way. Also curious, inventory has been dropping steadily in Calgary for the last three or four months, down more than 20 percent now. Edmonton’s inventory has also been dropping for the past several weeks. So perhaps, if Saskatoon is to follow Calgary and Edmonton, as many here like to predict, then we should see a sharp 10 percent drop in prices, followed by many flat months, and a gradual turnaround in inventory. In a way, the 10 percent drop in price seems to have happened already here. Last month. Maybe October and November we’ll start to see that inventory drop too.
April 27th, 2009 at 7:15 pm
I have to agree with George. This is not a buyer’s market when the value of your house is plummeting (as evidenced by the notion of a buyer’s market alone!), and the prices are so high.
The housing market in Saskatoon still manages to make a sucker out of anyone it seems.
Now you can pay the overpriced costs to own a home, and watch the value plummet!
I wouldn’t suggest buying in Saskatoon until prices have finally hit rock bottom and start appreciating slowly.
Speculative investment is vile and should be regulated if not outright banned.
April 27th, 2009 at 7:15 pm
As far as I know, wages are growing quite quickly in Saskatchewan, even a bit faster percentage wise than Alberta’s. Not saying we won’t always be a ways behind. But curious, what is the average household income in Calgary, Edmonton and Saskatoon and Regina? Does anyone have relatively current numbers?
April 27th, 2009 at 7:15 pm
I must concur, that to me the phrase “buyers market” indicates affordability as well as selection. Having the choice of a plethora of overpriced clapboard bungalows does not make me want to buy.
I am afraid that we potential buyers must attempt to wait out the sellers. Excess supply should equal a drop in prices.
With the Conservatives calling an election at this juncture, it does make one suspicious that even the most obtuse understand that the overall economic outlook is not good.
April 27th, 2009 at 7:15 pm
Sam, George, Alex:
There are three standard kinds of market: sellers, balanced and buyers. The mere fact that Sam would suggest you wait things out as buyers is perfect evidence of a buyer’s market. It means buyers are in control, to buy or not to buy, potentially forcing seller’s to adjust.
Also Sam, call me obtuse, but the economic outlook for Sask actually is good, according to most experts. I don’t think the Federal election call can be used to speak to house prices in Saskatoon or West.
April 27th, 2009 at 7:16 pm
Mark,
where do you think that inventory in Alberta is going? Does it vanish into thin air? Cause is not due to sales.
There is more inventory, less sales, lower prices yoy. Condo developments are in big trouble with one development started, now cancelled and others rumored to be cancelled. Add in new mortgage rules in Oct and you have a recipe of a trouble future of RE in Calgary.
Tonnes of speculators getting into the market drove prices up. Tonnes of speculators trying to get out ( but won’t) will help drive in down.
April 27th, 2009 at 7:16 pm
Hey Mark,
Would you buy a house in Saskatoon today?
If so, which one.
April 27th, 2009 at 7:17 pm
Mark,
this is from a realtor in Calgary. He knows the market better than me. So take his word, not mine.
“There were almost 1,600 listing that expired (failed to sell by the end of the listing period) in August alone! Not to mention hundreds of other listings voluntarily terminated before the end of the listing period.
These are symptoms of severe Seller Apathy” – the state of mind that causes sellers to give up” and take their houses off the market. The problem is, they’re going to put them back on eventually…
That fact, combined with an increasingly large (but unknown) number of new listings that are waiting for market conditions to improve”, does not bode well for the market for the foreseeable future. As stated previously, even though the inventory numbers are coming down, it’s the increasingly large number of would-be” sellers that has me concerned.”
http://www.buysellcalgaryhomes.com/#market
April 27th, 2009 at 7:17 pm
Hey guys,
If your waiting for a correction in lower priced homes it might take awhile. For instance all the home on my block now are sold and the next block to us only has one house left on the market. Its the edge of Confed Park and none of the houses sold were to specs all to families well it looks like it anyways =o)
April 27th, 2009 at 7:17 pm
The economic outlook for Saskatchewan is good…. I suppose it depends on what you mean by good. Nationally we are quite obviously circling the drain, while provincially we may be better situated than most provinces.
I believe that the alleged hot Saskatchewan economy is a media mirage. The three resources most often indicated for Saskatchewan are the tar sands (truly a pathetic last gasp undertaking), potash (bubble de jour) and uranium (consult TSX for latest stock price).
At the risk of going completely off topic, Harper called this election because he needs a majority or to be in opposition when the economic maelstrom hits. To quote fellow curmudgeon Garth Turner “The housing market is not really a market, but more of a barometer of economic health.”
http://www.greaterfool.ca/
I must thank whomever on this blog pointed me towards this mans website.
April 27th, 2009 at 7:17 pm
Sam,
I follow Garth’s blog and have read his book greater fool. And while he does have great blog topics, and I generally agree with his opinion on Canadian real estate, he has made mistakes in the past. Just food for thought.
http://stockbullz.com/What-Garth-Turner-Wrote-In-1999
April 27th, 2009 at 7:18 pm
Mark,
SK’s housing market inflated faster and higher than AB’s, and it’s going to come down harder than AB’s. This has nothing to do with SK’s economy either, the housing boom has come and gone.
April 27th, 2009 at 7:18 pm
I have picked through the quasi-illiterate ramblings of this fellow. I duly noted Mr. Turners book was hypothesizing about the year 2020.
His lead blog sentence “I think there is a good chance we have reached a bottom” penned on January 28 on this year is a sign his cranium is firmly inserted in a body cavity where I would need my hydrocephalic grade forceps to recover it.
No one is infallible, but Garth Turner is not alone is calling this housing/economic crisis. Nouriel Roubini comes to mind and keeps a blog all and sundry should refer to: http://www.rgemonitor.com/blog/roubini
April 27th, 2009 at 7:18 pm
Armoth — “all of the houses” on your street may have sold, but there’s 36 properties listed in Confederation park.
And the 6 new houses on Blakeney Crescent are still sitting there looking new.
April 27th, 2009 at 7:18 pm
Hey Sam,
I used to find Nouriel too pessimistic, but now I’m not too sure.
You can subsribe (there’s also a free
trial) and get information specific to Canada, or any other region you might want.
I also find Mish’s blog very helpful in understanding what’s going on in the global economy:
http://globaleconomicanalysis.blogspot.com/
He does tend to be a bit too “right wing” for my liking when push comes to shove, but that’s just me.
April 27th, 2009 at 7:19 pm
George,
As I understand it, in Calgary they still have consistent sales / new listings ratios of 50 percent and higher these days. That’s pretty decent sales wise. Sure listings are coming off and may go back on, but inventory has been trending downwards for two or three months now. clearly those people aren’t relisting right away and don’t need to sell right away. considering prices have been pretty stable there for the past 8 months through the worst period of high inventory, prices may not fall much further there. maybe i’m wrong, but it doesn’t seem like it is crashing there.
Heather D
I agree the ‘boom’ may be over, but not sure we are facing too big a ‘bust’ here in Sask. I think Saskatoon will probably settle this fall around an average price of 250,000 – 265,000, that’s where Regina has been sitting for several months it seems.
Lanny,
If I was moving to Saskatoon, I would wait three or four months then lowball strongly. In average price terms, I’d wait till the average 310,000 dollar house (from a few months ago), now reduced to 280,000, sits for a few more months, then make an strong low offer of 245,000. If they need to sell, they’ll take it. I think that would be a good deal. There must be some nervous buyers our there, and deals to be had. Sure, in a worst case scenario, prices might drop a touch more than that, but I think there would be good demand if average house prices dipped below say 220,000. A seller in October with inventory still high might be more willing to take 245,000 at that time than six months later when, who knows, inventory may be heading down. In other words, a good lowball offer on a house that’s been sitting a while might get you in at a price near where the current slowdown will bottom down the road. You could rent for a year and wait, but this winter might be a good time to get in.
April 27th, 2009 at 7:19 pm
What do you guys think about this news?
The link is as follows:
http://www.cbc.ca/money/story/2008/09/08/bc-080908-real-estate-study-ubc.html
April 27th, 2009 at 7:19 pm
George — which bubble blog mentions Saskatoon?
I’m missing this, obviously.
April 27th, 2009 at 7:19 pm
Ah, yes:
The inventory is not really inventory — no-one’s actually *serious* about selling their house. They’re just testing the market. So those 1700 properties don’t count at all!
The falling sales aren’t really falling sales — everything’s just getting back to normal. So the sales dropping off a cliff don’t count at all!
The falling prices aren’t really falling prices — after all, we’ve still gained all that equity from the earlier run-up. So the current drops don’t count at all!
Every single market that’s had this pattern has lost substantial portions of their illusory gains, and they’ve all followed the same pattern. It’s the pattern that Saskatoon is following now.
April 27th, 2009 at 7:20 pm
jrochest,
you are right, saskatoon is following it. you’re likely at least 10 percent off your peak right now. Calgary and Edmonton fell 10 and 13 off their peak late last fall and have been stable price wise for several months. your sarcasm aside, how far do you really expect saskatoon to drop then?
April 27th, 2009 at 7:20 pm
jrochest,
It’s almost as funny as the arguments that the listings should still be counted as inventory if they are removed from the market.
April 27th, 2009 at 7:20 pm
I expect it to drop to where it was at the end of 2006, in December or November — since that was the last time the local market drove the bus. There was still a substantial and steady price increase between 2003 and 2006, around 10% a year, which is much better than average. Those increases will stick.
I’m betting around 175K to 200K, as an average. Possibly lower if all those condo conversions drop sharply: I think most of the 3 story walk-up conversions will wind up under 100K, even on the east side. But many might not sell to individuals: if they’re bought by landlords again, as commercial buildings, then the average price will be higher.
I can’t speak to timing: I think it will take a good long while, maybe 2 years, maybe 3.
But the condo prices will start the plummet — that’s where most of the speculators put their money, and they’re the ones who will need to get out.
I still don’t think that prices in my neighborhood will drop to where I’d like them to, alas. So it won’t benefit me
April 27th, 2009 at 7:21 pm
Mark,
we are already 10 percent off the peak prices and the 1st inning is not even over yet.
You are saying we are back to Feb, March 08 prices.
Prices are the only thing that is the same now compared to then.
Inventory is now bloated, sales are dropping, confidence in the market is sliding bigtime. Add in the October death for Canada subprime. I would not count against seeing the low 200k’s for an average price. This is with interest rates staying the same and the economy doing well here.
Just curious what you see as a bottom for Saskatoon real estate?
April 27th, 2009 at 7:21 pm
jrochest,
I agree that condo conversions will suffer sharply as well. Especially the ones that came late to the party. Not all will sell, but the bills have to get paid. Up, up, go the fees for the owners.
And the higher end spec homes as well. There just too many of these homes being built and not enough demand. The only people that can afford them are trade up buyers, but even many of them are being priced out. I don’t think Stonebridge will turn out like Brentwood or other neighborhoods in the states that were built right at the peak. But there will be many specs that will suffer. On the positive note, there will be many newer homes to rent at affordable prices there in probably 2 years.
April 27th, 2009 at 7:21 pm
Good job Mark. I agree with your comments above. A few of the same doom and gloomers on here now for months. Gets old fast. The sky hasn’t fallen in Alberta. Saskatchewan will level off to a nice soft landing. Some people will lose some money. The majority of the renters that are negative on here and want a crash will still be complaining about something. Such a negative feel to this blog. Very unfortunate. Saskatchewan is doing well and will continue to do well for years but yet the negative talk continues.
April 27th, 2009 at 7:21 pm
What makes you think Saskatoon will level off to a nice soft landing?
April 27th, 2009 at 7:22 pm
Negative talk only stems from people being shut out of the market that are normal, decent, hardworking people that aren’t getting a thing out of the province when things are like this.
If (when) I leave, i will bring my hardworking behind into a place where people such as myself can live, work, and raise a family. Right now its pay rent, pay bills, and work 2 plus jobs.
doooooooooooooooooooooooooooooom
April 27th, 2009 at 7:22 pm
jrochest,
keep income growth in mind. as you say, let’s say it took a year or two for that to happen, by 2010, average household income in saskatoon should easily be 15 percent higher than it was in 2006 at current wage inflation rates. that makes those numbers you predicted incredibly affordable.
George,
Who knows, but I think buyers will probably step back in fairly quickly if average prices sneak much below 250,000. Maybe you’ll hit a brief bottom of 230,000 before things begin to climb again. But really, what do I know? Average prices in Regina are only 250,000 and sales are similarly slow here.
April 27th, 2009 at 7:22 pm
Here’s a link to the UBC paper that jj’s article referenced to:
http://cuer.sauder.ubc.ca/download/research/working/ownercost.pdf
I haven’t yet had a chance to read it… except to find that once again, the Toronto market is currently “balanced”. Funny, that!
April 27th, 2009 at 7:23 pm
This blog does seem to have a very negative overtone to the comments. yes prices went up super fast – but they do seem to be returning to a more “normal” pace – and after the last year – our sense of “normal” is different. The reality seems to be that if you save up to 20% of a downpayment and be realistic about what your “1st” house is going to be (maybe not your dream house – but your “1st” house) there are still some really nice properties out there. Maybe it will be a condo – but come on – we are not all buying in Briarwood on our first time off the block. The realty is that Saskatoon is still an amazing place to raise a family and live – our quality of life and pace of life is hard to beat. If you are going to complain non-stop then move to where you think it is better.
April 27th, 2009 at 7:23 pm
Crikey,
“I haven’t yet had a chance to read it… except to find that once again, the Toronto market is currently “balanced”. Funny, that!
”
Even stranger that this study which originates from BC finds Toronto balanced.
What’s sad about this study is the fact that Royal LePage House Price Survey numbers have been used incorrectly once again. The authors place the price of real estate in Regina at $347,100 and state that it’s overpriced by $87,000. I’m sure I don’t need to argue that $347,100 is not an appropriate figure to use for Regina.
$347,100 – $87,000 = $260,100.
Actual average selling price in Regina over Q2 = $250,784.
April 27th, 2009 at 7:23 pm
Lori,
You’re right. We should like it or lump it really. I mean it’s a really good deal to buy a ‘condo’ apartment that hasn’t been converted for $149,000. So incredibly worth it actually to pay for 30-35 years on a 500 sq foot 1960’s apartment. What about the (barely) 400 sq ft places downtown? Surely someone wishes to buy a cardboard box to live in and pay for 30 years while working hard to own that box.
Just shows how out of touch people are when they just assume everyone wants the 2200 sq foot briarwood, stonebridge, willowgrove houses right off the hop (or at all). People I would assume, just don’t want to spend 200grand for a crapshack in a bad area of town, or the condo’s i just mentioned at the ‘entry level’ of the market.
Children always want to be able to do better than their parents. This is not a reality now in this province. It probably will be in the future, but for now open your eyes. It’s not.
April 27th, 2009 at 7:23 pm
Btw, save up to 20%?! How many people that arnen’t under 40 can save 40 grand for a 200 grand crapshack…what planet do you live on that you assume 40 grand is easy to save!? If you saved $500 per month that’s 6 grand a year. that’s almost 8 years, and of course by the time you are able to buy the crapshack, that house (if it goes like the bulls want), will be $300 grand and then your 20% downpayment is much much less.
People arne’t in touch with reality I swear.
April 27th, 2009 at 7:24 pm
Norm,
Yes, their “estimation” of the Regina Q2 price seems to be off wildly, but on page 5 they state that they only looked at the prices of detached houses, not condos or apartments. I’m sure this skewed their estimation upward. Is your average selling price in Regina over Q2 for detached houses only?
Don’t get me wrong, I’m not claiming this study is necessarily predictive of much of anything- there are clearly much greater forces at work in the housing market here. Price/rent ratios are just a piece of the puzzle.
April 27th, 2009 at 7:24 pm
And what about the election.
If the Liberals were to win, and do the carbon tax green shift thing, what then?
Wouldn’t that slow down the resource sector, in turn slowing down everything else, leading to job losses, foreclosure, mass suicides and the end of the freakin world as we know it!!!
April 27th, 2009 at 7:24 pm
Looks like we got some new specs on here. Welcome.
That report does have some obvious flaws. Vancouver only 11% overvalued? Using Craigslist in Edmonton for rental prices? Toronto market balanced?
Not too sure about that.
Housing starts rise in August
http://yourhome.ca/homes/article/495845
Every market is saturated with inventory and housing starts rise? Have not the higher ups seen what has happened with the worldwide housing bubble?
Some people seem to like pain.
With speculators holding at least 1/3 of listings, this is not a good sign for them.
April 27th, 2009 at 7:25 pm
Lori said: “The reality seems to be that if you save up to 20% of a downpayment…”
I consider myself to be a thrifty person: I don’t buy things on credit (except my house – paid cash for my vehicle), believe in the old adage of having three months’ liquid assets available in case of a job loss, and regularly contribute to an RRSP.
Even with those values, it was difficult to save for a house because first (in my mind, anyway) I had to pay off student loan debt. Between my wife and I, we had about $35k to knock down, and that’s with frugal living, working summers, and 15 hours of employment every week while going through university. I’m not complaining, I’m just stating some of the economic realities out there; I couldn’t start saving for a house for at least five years after getting out of University because I had to get rid of that debt first. After saving for a couple of years, and renting for the first ten years of our marriage, we finally decided to buy.
So when I purchased my house almost SEVEN YEARS AGO I had ‘only’ a 10% downpayment available… and that was at the prices of seven years ago. Today, that same amount would be about 4% of this house’s value. (Could have had more had I decided to empty my RRSP, but that’s not what it’s there for.) My point is that it took that long for me to have that much available. Trying to save 20% of this house’s current value would have taken me at least another 5 years… and that’s assuming that I didn’t start off any deeper in debt than I did (not a safe assumption given the way University costs have risen since then).
So you’re really saying that even thrifty people with decent jobs shouldn’t be able to buy a house until they’re approaching FORTY?? I’m a fiscal conservative, but even to me that seems like a bit much, Lori.
Hey, Norm… It’s Sep 9th already. Have you shaken out enough of those vacation cobwebs to post a your take on last month’s stats, or would that get you lynched by the realtor’s association for throwing lead balloons?
captcha: “contest worth” which is exactly what I want Norm to do.
April 27th, 2009 at 7:25 pm
Just a heads up for anybody who has bank stocks or mutual funds. Lehman looks like it is sinking. US fed bailout?
http://finance.yahoo.com/echarts?s=LEH#chart1:symbol=leh;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Who is next?
http://bankimplode.com/blog/category/writedowns-and-distress/
Merrill Lynch has fallen big time
http://finance.yahoo.com/echarts?s=MER#chart1:symbol=mer;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Citigroup maybe
http://finance.yahoo.com/echarts?s=C#chart1:symbol=c;range=2y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
April 27th, 2009 at 7:25 pm
Bookrat,
It’s nice to know there are others out there like us who decided to pay off student loan debt (4 years early by the way) rather than put a measly down payment on a condo.
I have also been married for 8 years and we are still renting. Lots of people think we are crazy for not getting in the housing market sooner, but we decided it was more important to be debt free rather than purchase RE for the sake of purchasing.
Meanwhile we are saving like crazy and hopefully we will have a DP between 10-20% in two years. We will be watching the market like everyone one else and see how it goes.
Personally, I’m one who is hoping for a crash…
April 27th, 2009 at 7:26 pm
Crikey,
I stopped reading when I saw the RLP House Price Survey was the “source” as I know that it cannot be used in this way. As I’ve said before, it’s mathematically impossible to produce a “house price” for any city using the limited neighbourhood data that is collected for the survey.
The average selling price of a single-family detached home in Regina came in at $257,947 for Q2.
Sushi,
“If the Liberals were to win.”
See that happening?
Bookrat,
We should be able to get at those numbers this week.
April 27th, 2009 at 7:26 pm
IMHO a carbon tax is inevitable. Out of western countries only Canada and the United States, currently run by climate change/evolution/science deniers that it is not implemented or in the works. The Conservative Party in Britain is advocating just such a system.
I believe Mr. Dion’s scheme calls for income tax cuts for the individual and corporations to offset higher energy costs. Personally I welcome such a proposal. If you are stupid enough to drive an large SUV then you should pay for your folly.
I believe the Conservatives promise rising energy costs, no tax cuts, no plan to combat climate change, and an anti-science, ideology based agenda.
The NDP propose a cap and trade system I do believe.
April 27th, 2009 at 7:26 pm
Thanks to one and all for corraboration on the “lameness” quotient of that study.
Nicely shredded.
April 27th, 2009 at 7:26 pm
I’m getting so tired of the whole ‘green shift’ junk too. All it is is funnelling of cash into the rich investors (and possibly the politicians) pockets. So crazy. Redistribution of wealth. Yes i’m a denier…I must hate the planet…
*rolls eyes*
April 27th, 2009 at 7:27 pm
The thing is this. With the taxes, it would cost so much money that any cost savings is wiped out. Completely. Upgrade your housing? Do you know how many houses wouldn’t meet the standards they want to have? Buisinesses? The value of it is insanity.
I totally agree, maggie mo doesn’t need an SUV to drive to work every day. I agree polluting bad. But since it still is a topic that hasn’t and will not be debated by the pro green people beucase if you deny it, then you hate the planet, and are akin to holocaust deniers, it’s not something that government should base their new laws on.
Trying to use green guilt will do nothing but shut more and more people off.
Tax tax tax your guilt away!
Sorry that’s the last i’ll say on the subject.
April 27th, 2009 at 7:27 pm
If you don’t believe in global warming then you are denying the consensus opinion of the subject matter experts. This could mean that you are a dribbling idiot or don’t like to be confused by facts that interfere with your world view, but I will leave that up to you to decide.
http://www.realclimate.org/
April 27th, 2009 at 7:27 pm
And Dion is a French guy (not like Paul Martin), so Quebec may come around and vote Liberal again. Who knows? Libs won’t get much from AB/SK, but the lions share of the seats are out east anyway.
April 27th, 2009 at 7:28 pm
Yeah i can shoot a url your way too.
http://www.junkscience.com
Glad you didn’t get personal on it. *tips hat*
April 27th, 2009 at 7:28 pm
Global warming my @$$, summer was barely here other than a couple of weeks. Same as last year. Climates have changed back and forth hundreds of times throughout the Earth’s existence.
Liberals get in, say good bye to the booming western economy.
But maybe with a economy that crashes, we just start over fresh. With less polluting….hmmm..maybe
Here is what Saskatoon Real Estate would like if the Liberals get in.
http://housingdoom.com/2008/09/09/attack-of-the-killer-tumbleweeds/
April 27th, 2009 at 7:28 pm
Plus now since the climate has been cooling now since 1998, they’ve revamped thier little theories so that global warming…no wait climage change (the new term for it) is taking a 10 year break. Didn’t you hear? They re-opened the science long enough to revamp thier theroy and then re-closed it again.
The ice is melting!!! no wait it’s thicker than it has been for years…and the antarctic ice is actually growing…but no i’m a dribbling idiot.
April 27th, 2009 at 7:29 pm
Well Jesse and George, I will put my NASA climate scientists up against your “Steven J. Milloy columnist for Fox News” and “gee it was warm last week” any day of the week. If you listen to Fox News, Rush Limbaugh and his ilk, you deserve to be lied to and your are.
And let me leave with a quote from John Stuart Mill:
“Conservatives are not necessarily stupid, but most stupid people are conservatives.”
And now back to those Saskatoon house prices…..
April 27th, 2009 at 7:29 pm
“Conservatives are not necessarily stupid, but most stupid people are conservatives.”
Damn that’s funny.
Give it up Sam, NASA climate scientists are nothing to these guys. They’ve got John Gormley on their side!
April 27th, 2009 at 7:29 pm
Which NASA scientists do you mean, the ones that also found out the ice was growing more? The ones that said the earth has actually cooled since 1998? Or do you just mean YOUR NASA scientists. The ones that only agree with your line of thinking.
Yes back to the house prices.
April 27th, 2009 at 7:30 pm
*sigh*
scientific consensus on climate change:
http://www.ipcc.ch/
April 27th, 2009 at 7:30 pm
I’m sorry to keep this off topic, but I couldn’t resist. It’s so nice to see that not everyone is swallowing the media’s version of the climate change story whole! Of course, it seems like most of the people contributing to this blog make up their own minds about how reliable the media can be. Do the journalists who write these stories have any formal education in the sciences (or in economics, statistics, and real estate, as the case may be)? Almost certainly not, and in addition to glossing over (i.e., ignoring) any conflicting theories or data, they only focus on the ‘sky is falling’ headline grabbers. I remember the day one of the most iconic climate change models (the so-called ‘hockey stick’ model) was discredited, but saw not a peep about it in the mainstream media in the following week. For anyone who would like more information about all the misinformation you’ve been fed, try this blog from the very well respected scientific journal Nature:
http://blogs.nature.com/climatefeedback/2007/05/the_decay_of_the_hockey_stick.html
April 27th, 2009 at 7:30 pm
Looks like we have a double bubble. Commodities and housing.
Commodities selloff sends TSX plunging
http://finance.sympatico.msn.ca/investing/news/businessnews/article.aspx?cp-documentid=10205901
All markets have been taking a beating. Expect a few more of the big banks down south to follow Bear Stearns in the 6 months.
Scary times in the markets.
April 27th, 2009 at 7:31 pm
It’s criminal that these big banks act very irresponsibly in the name of enormous profits (huge profits not being enough) and then have to get bailed out by taxpayers. Some of these execs and CEOs should be straightened out with a ball-peined hammer.
April 27th, 2009 at 7:31 pm
Sam, Jesse G, bona fide scientist (whatever that means) et al:
“But since it still is a topic that hasn’t and will not be debated by the pro green people beucase if you deny it, then you hate the planet, and are akin to holocaust deniers…”
If you deny it, I don’t think you hate the planet – I think you are astoundingly ignorant.
Hundreds of the world’s top climate scientists gather and write a document that is peer reviewed, checked, peer reviewed, checked, and then peer reviewed again. The document states that climate change is happening and we are (overwhelmingly) the cause. And people (mostly North Americans unfortunately) refuse to believe it??? When a doctor tells you that you have a tumour – do you ignore him because what does he know? These are people who have devoted their lives to the study and understanding of one narrow niche in a narrow field of all of our understanding of science – and people put more credibility in Larry Kudlow than the 600 authors of the IPCC report. Unbelievably and dangerously ignorant.
Interestingly, climate change deniers like to toss the IPCC away as a “political” group. They are, unfortunately, correct. For the IPCC’s fourth assessment report (2007), they were going to use the language “Virtually Certain” to describe climate change caused by human activity. This equates to a greater than 99% probability. But after intense political pressure from some governments (cough, China, cough, cough), they settled on using “Very Likely” instead – a greater than 90% probability.
What deniers need to come to grips with is that a “scientist” is not a “scientist” anymore than an auto mechanic can work on the space shuttle. Different professions have different specializations. So when “Scientist xyz” comes out and says that there is no consensus on climate change because he or she disagrees with it – 99 times out of 100 they are NOT a climate scientist. The other 1 time – check who’s writing their grant cheques (cough, ExxonMobil, cough, cough). Here’s a great article on climate change denier funding, I beg deniers to read it and learn about their “scientists”:
http://www.newsweek.com/id/32482
So the point that I’m trying to get at is that the debate that you so badly desire has been put to rest for years. Asking for it is akin to asking for a debate on a flat earth. There is no debate. Period. Zero. That’s not to say that there aren’t “round earth deniers” though:
http://en.wikipedia.org/wiki/Flat_earth_society
They even have “scientists” as members!! I guess we shouldn’t say that there is a “consensus” on the earth being round either?? Stop indoctinating children with the nonsense that the world is round!!
Wheeling out a half dozen crackpot scientists who argue to the contrary proves nothing. My personal favorite is the “documentary” feaure “The Great Global Warming Swindle” which featured the esteemed opinion of the University of Winnipeg’s professor from the “Department of Climatology” – except whoops (!), the University of Winnipeg has never had a Department of Climatology.
Yes, there are debates on the net effects of us warming the Earth (how much, how fast, how bad). Yes, there have been some gaffes in the science (the infamous “hockey stick” graph). Yes, the whole issue could be handled better (although I engage in it myself, vilifying Hummer drivers as destroyers of the world is probably not the best approach to get them on board). But the underlying scientific FACT – that the climate is warming and that human activity is causing it – has ZERO real debate. I repeat – ZERO.
The sooner the ignorant people of the world accept this – the quicker we can get on working out a solution. The problem, and I believe the underlying reason why so many deniers continue to ignore all facts and reality, is that upon accepting the reality of anthropogenic climate change – we have to reexamine the unsustainable way that we are currently living.
And one more thing. The “argument” of “there’s no such thing as global warming – look at how cold this day/month/year was” is incredibly stupid. I hate to use that word, because it comes off mean, but it’s just stupid. I always compare it to this – If you’re a million dollars in debt and you find a $20 bill in your jeans – are you out of debt? It’s just a blip in the path of your undeniable trend (in my example, bankruptcy). Snow in August does not undo decades of research and scientific fact – the Earth is getting warmer and we are the cause.
My two cents…
April 27th, 2009 at 7:32 pm
Little ice age.
Here is a good read too about the whole ‘consensus’.
http://www.nationalpost.com/story.html?id=22003a0d-37cc-4399-8bcc-39cd20bed2f6&k=0
April 27th, 2009 at 7:33 pm
Haven’t been on here in a while, so much bad information to debunk. Back to real estate:
Mark wrote:
“Sure listings are coming off and may go back on, but inventory has been trending downwards for two or three months now. clearly those people aren’t relisting right away and don’t need to sell right away. considering prices have been pretty stable there for the past 8 months through the worst period of high inventory, prices may not fall much further there.”
Could you please explain how “prices have been pretty stable” in Calgary?
Here are the facts on Calgary:
http://www.bobtruman.com/Condo_Monthly_Summaries/page_1869405.html
http://www.bobtruman.com/SFH_Monthly_Summaries/page_1869385.html
Condo prices have fallen now for six consecutive months, and are now lower than they were in September of 2006. If you bought at the peak, you have lost 13.1% on the median (13.3% on the average).
SFH prices have (with room for statistical error) also fallen for six straight months now, and are now lower than they were in February of 2007. If you bought at the peak, you have lost 9.3% on the median (12.9% on the average).
In no way are these “pretty stable” prices. And let me tell you first hand as someone who almost bought this year – it’s worse than the numbers make it out to be (at least in the suburbs where I’m looking). I’ve been watching select neighborhoods here for a year and have seen sellers cut their prices to a new floor after new floor after new floor.
What’s more problematic than the losses though is the trend and the underlying fundamentals.
Yes, inventory is decreasing from its astronomical high earlier in the year. It’s called “seasonality”. Inventory (and sales) are highest in the spring and summer. They then decrease in the fall and winter. I don’t know why bulls are seeing such hope in a time and time again proven real estate trend.
But most of that inventory that is disappearing has not been sold and will come back onto the market sooner or later (my guess is Jan/Feb 2009 in time for the always hoped for “spring bounce”). Yet we still have higher inventory right now than this time last year. And if you look at the numbers in the links, you can see what this last year has been like for Calgary real estate.
My prediction is the exact same as it was at this time last year. We will not shed enough inventory to come into 2009 in anything except a strong buyer’s market. There will be a flood of new and returning inventory, likely driving supply to all new highs. And we will repeat the same thing as this year. Just with lower numbers.
Although the elimination of the 0% down, 40 year mortgage does stand to make things a whoooooooole lot more interesting…
April 27th, 2009 at 7:33 pm
Jesse G:
Wow. Stunning rebuttal. Intricate. Detailed. Well thought out. You have sir, without a doubt, opened my eyes to how wrong I was. Thanks.
April 27th, 2009 at 7:34 pm
Warren,
I respectfully (and obviously) disagree with your views on the climate, but on other things, we’ve agreed on as well in the past. I know there are people in both camps and that will always be the case. I have however, always found you to have very well thought out real estate and job talk.
I assure you there is no animosity from my end, and that I will enjoy (as I have in the past) yours, and ohters entries on this site.
April 27th, 2009 at 7:34 pm
Jesse:
Thanks for the kind words, I appreciate them.
My apologies for getting heated, it’s just that I am a very, very passionate environmentalist (and have been through this argument a hundred times before – I do live in Calgary after all). I will leave us at agreeing to disagree.
Back to real estate?
April 27th, 2009 at 7:34 pm
Sure thing. You know, it would be interesting to get all the bears in a room as well as all the bulls. I’d wager that among the bears (or bulls) there would be VERY varying beliefs, methods, morals, and followings. Sometimes I think (not referring to your post Warren) that generalising people, say the bears for instance, as poor, non working, lazy bums, is obviously false, just as false as saying every bull is a self made millionaire, or millionaire wannabe.
It would make just an interesting paper on human behaviour and beliefs in groups. (or something to that effect)
Back to real estate for sure.
April 27th, 2009 at 7:35 pm
Warren,
Your charts make my point exactly. Prices dropped in Calgary 10 percent last fall, but have been pretty stable since, throughout the worst of the inventory glut. A SFH average price was what 440,000 to 460,000 in November, December last year, guess what, 440,000 this August. As for median price, off about 2 percent through the course of 2008.
Seasonality? Inventory seems to grow through summer months in two previous years on your chart, only to drop off in the fall. This year inventory has been dropping through the summer. High in May, but lower in June, July, August. Different. Sorry, but prices in 2008 are sticking through all that inventory, give or take a couple percent. Can’t say what comes next.
April 27th, 2009 at 7:35 pm
Jesse G,
I want to be a millionaire
George,
Im heavily invested in the TSX and I bought some more BQI at 3.71 again even tho I said i wouldnt lol. Now every1 can watch me ride the wave of destruction har har
Personally I think Merryl Lynch will be a buyout target or fail and as for Citigroup they are too diversified to fail with all of their various spinoffs that could be sold to make up for write offs.
To All Bears,
Hope you buy some houses for the cheaps!
April 27th, 2009 at 7:35 pm
Re: Politics that are off topic.
Don’t vote conservative. If you normalize every bit of persuasive nonsense out of BOTH sides’ campaigns, you’re left with the reality that conservatives hate people. The one thing Harper never talks about is his goals for the middle class.
I drive a lot for my job and I am plagued with guilt over how much fuel I use. The green taxes will start to put innovation and a gentleman’s concern back in the hearts of businesses’ today. Something that has been sorely lacking.
On the subject of real estate, Saskatoon has to return to normal prices. Even though we’re seeing prices drop now, there’s damage that we will be squaring up for the next ten years. The 0/40 mortgages will be sorting people out based on who paid too much for a house due to greed and who did not.
I’m hoping I won’t be in the worse of those two categories having paid 120k for my house. I hope that because I’m in Winnipeg – a more stable market – time will heal any risk I took.
The most important thing I said though: For the love of Canada, don’t vote conservative and gamble away everything you love about this country. They don’t stand for it. I don’t care who else people choose to vote for, but these greedy thugs are so transparent.
April 27th, 2009 at 7:36 pm
Sorry to beat on this, but prices are not “stable” in Calgary, unless you’ve been reading the press releases of the CREB.
I encourage you to look again at the data I linked to (especially the condo data, since it is usually considered a precursor to SFH activity). And for what I said about the more problematic underlying fundamentals – look at the absorption rate. Calgary’s problem is not going away anytime soon.
You’re trying to compare a number from last November to the current August number. Again, there is a seasonality to real estate prices. Read this link for a better understanding, it’s titled “Why houses cost more in the summer”:
http://www.slate.com/id/2199371/
If you want a true comparison of your “stable” prices, look at year over year, not random calendar month to random calendar month.
Again though, as someone who lives here, I encourage you to talk to someone on the ground (ie. someone trying to sell their house). Ask the person who’s cut their price $50,000 so far and still has no buyer interest if they think that prices are “stable”.
Mark, you would know more about this than I would – what is your opinion on seasonality (ie. generally accepted real estate trends over the course of a given year).
April 27th, 2009 at 7:36 pm
I wrote:
“Mark, you would know more about this than I would – what is your opinion on seasonality (ie. generally accepted real estate trends over the course of a given year).”
Whoops.
Change “Mark” to “Norm”. My mistake (sorry).
Norm, any comments on the usual seasonal trends in real estate?
April 27th, 2009 at 7:36 pm
Warren,
I understand the concept of seasonality but I have no idea how “seasonal adjustments” are made.
Truth be told, this isn’t something that can be identified as a clear trend here in Saskatoon. Looking back over the last few years, I see sort of a slow gradual increase through the year (with some minor ups and downs) with prices often peaking in December for the year. Perhaps it’s because prices have traditionally been lower here?
I have noticed on the NAR website that they never compare this month to last month. Interesting that both the average and the median price of a US home has increased for six consecutive months but they still use the year over year comparison in their media releases. They use the “seasonality” explanation for that.
April 27th, 2009 at 7:36 pm
Good article that explains exactly WHY there are seasonal adjustments are in simple terms.
http://www.slate.com/id/2199371/
April 27th, 2009 at 7:37 pm
Since I’m posting good articles, here’s an interesting read.
“How Counter-Productive is Realtor Association Spin?”
http://bigpicture.typepad.com/comments/2008/03/how-counter-pro.html
April 27th, 2009 at 7:37 pm
“Interesting that both the average and the median price of a US home has increased for six consecutive months”
Hey Norm,
Could you provide a link/info for this, please? From what I’ve been able to glean, sales may be rising slightly (large amount of foreclosure activity), but I haven’t heard anything about prices rising in the US.
Thanks!
April 27th, 2009 at 7:38 pm
Crikey,
From NAR’s website. I see July’s numbers have been posted since I last visited. They broke the developing trend being down .6% from the previous month.
http://tinyurl.com/5s4zof
April 27th, 2009 at 7:38 pm
Thank you.
Could you tell me what “existing sales” means? I’m not being obtuse, really.
Real estate is not my forte. Does this include pending sales or “got financing-took possession” sales? Does it include bank-owned properties and/or foreclosures?
The Western US certainly seems to be taking a disproportionate beating, but I suppose this is where much of the speculation was rampant. I find the fact that the state of California (if it were an independent state) reportedly has the 8th largest economy in the world to be truly frightening, considering the financial mess they find themselves in.
Thanks for the indulgence. I won’t talk about the US anymore (today).
April 27th, 2009 at 7:38 pm
Crikey,
The link to methodology is here.
http://www.realtor.org/research/research/ehsmeth
My assumption is that “closed” means “no longer conditional” but I’m guessing on that.
April 27th, 2009 at 7:39 pm
For the bulls
House prices need to fall 10% more: BMO
http://www.financialpost.com/story.html?id=787746
April 27th, 2009 at 7:39 pm
Ok, my wife and I have been keeping a close eye on the situation in S’toon since we ALMOST decided to move back (from Red Deer) during what was almost the absolute peak of the house pricing insanity (early May). We’re both from Saskatchewan and moved to Red Deer in 2000, be got into the housing maket here before it went crazy and have done quite well as a result. Planned to move back to S’toon purely due to family but when we arrived to look for a place, things just didn’t add up. We were prepared to pay $400000+ for a beautiful home we could afford and grow our family in…except for $450000 all we could find were unfinished basement/yard 2 stories with little to no upgrades on cramped streets or backing some crazy busy highway or next to major rail lines. Now we live in Alberta, both work and make a very good family income and we couldn’t figure out how we were going to really afford to move back. We looked at the market and said, no this thing is going to slide and slide hard, we’re not giving all our equity to a greedy builder or flipper and stayed put. Well thank God, because I’ll be honest, I don’t see an end in sight to what’s happening in S’toon. I think everyone needs to wake up, face reality and realize it is going to take MAJOR price corrections to get anything moving in this market…any thoughts?
April 27th, 2009 at 7:39 pm
Happy We Stayed,
check back in 2 years for Saskatoon house prices.
I’d bet that we lead or are close to the top for biggest percentage loss in that time frame.
Looks like the commodity bubble is popping following the Saskatoon real estate bubble.
Speculators are gonna get creamed in these two markets the next while. Some have already if they bought at the peak. It will take some time to play out.
April 27th, 2009 at 7:40 pm
“for $450000 all we could find were unfinished basement/yard 2 stories with little to no upgrades on cramped streets or backing some crazy busy highway or next to major rail lines”
That sounds a tad excessive. We were looking a few months earlier than that, and we found quite a bit about 300-325K for something halfway decent in a neighborhood that was livable (to us). Nothing fancy. Something decent in the neighborhood we’re in now, however, would have been priced well over $400K. We didn’t buy then, either. Way too out of whack with income/price ratios, which has traditionally been “around” 3x annual income, prior to the credit/debt party days. Today, people don’t seem to blink an eye at buying something well over 5x annual income, which is clearly unsustainable, particularly with the economy slowing. You clearly couldn’t expect prices to continue to rise ahead of incomes- how much debt can you expect people to take on? We quickly realized it had nowhere to go but south (did you see the average income doubling in 2 years?).
So, we wait. Just like a whole lot of other people, it seems.
April 27th, 2009 at 7:40 pm
Norm,
Love your blog…especially the long, numerous and usually hilarious comments that follow. Not to mention all the great information and stats that can be passed on, knowing that you are right on top of things as usual!
You make my night!!
April 27th, 2009 at 7:40 pm
I completely understand and agree with “Happy We Stayed”..My family recently moved from Vancouver to Saskatoon and we were seriously looking for a home last spring/early summer. As home owners from Vancouver, we thought we could find something that could make us happy even if we had to buy when the market was high. However after searching for a bit, and seeing some very nice over priced homes, and a lot of not so great homes super overpriced, we decided to put things on hold. We honestly felt that despite the doom and gloom reports of a west coast real estate decline, that we were better off holding onto our property three blocks from the beach in Kitsilano than buying here at the moment. Without any troubles we were able to find renters to cover the mortgage and decided to become landlords. We would like to call Saskatoon home, but we are not willing to pay 400,000 for a partially renovated (as in new laminate flooring) 60’s bungalow.
So like many, many others out there, I guess we will just sit and “wait and see”. However, during our process of searching and thinking, we have noticed that several of the homes we have been interested in have been reduced a fair bit….so we may not have to wait for all that long.
Norm, I have a question for you, a while back, we saw a property on your website in the Grovesnor Park area, a lovely character type home, completely reno’d for about 539,000…I noticed it was gone one day, and wondered what ever happened – it looked fab.
April 27th, 2009 at 7:41 pm
Out of curiosity I wonder what % of people’s incomes on average goes towards their monthly mortgage payments? I’m presuming it’s over 40% if many are getting into mortgages 4-5X their annual salaries. Does anyone have any stats on this? Back in “the day” you weren’t supposed to use more than 25% of your monthly salary towards payments. This is partially indicative of lagging wages not keeping up to rising house costs.
Happy We Stayed/Watching the market,
You can always take comfort in Merril Lynch’s report stating Saskatoon’s market is nearly 50% overvalued! LoL If we came to realize even HALF of that I’d be satisfied.
April 27th, 2009 at 7:41 pm
April H,
Thanks…I think.
Good luck to you!
Watching,
I don’t recall the listing that you’re asking about. I participate in sharing of listing data with several local brokerages and agents so there is a lot of product which finds its way to my listing pages. I’ve searched the “sold” and “expired” listings on the MLS and can’t find anything that meets the description you’ve given. Sorry.
April 27th, 2009 at 7:41 pm
Yes, there was a lot of homeowners who made a lot of money with little effort to sell their home, and taking advantage of the people desperate to get in before they got priced out. I know even looking at some of the prices in the spring where a house was 400 plus which required a lot of money to get it up to par, and I think it made a lot of people start to question when you are spending 425 to 450 and not having a developed basement or yard start to think..uh, who is going to spend half a million dollars on this if I ever had to sell this place? And just looking at MLS now tells me there was alot of people that got screwed last year, as they are now trying to sell this year and are finding that they were last in line of the gullable fools!
April 27th, 2009 at 7:41 pm
Thanks for checking Norm. As we are new to town, I may have gotten the area mixed up – I can’t recall the street name. Also, thanks for the effort and time you take to maintain the blog – the information you post is very useful and interesting to read.
April 27th, 2009 at 7:42 pm
Have to say I don’t believe the sky is falling. Not in regards to our climate nor the housing prices in S’toon. Changes in either don’t mean the end of the world. Always amazes me the people who seem to work on the side of “doom and gloom” no matter the subject.
Al Gore has made a lot of $ of his spin on global warming while it’s been reported that his “mansion” uses more energy per month than the average home in a year. http://www.snopes.com/politics/bush/house.asp His “Inconvenient Truth” is that he doesn’t practice what he preaches.
April 27th, 2009 at 7:42 pm
On September 9, I made a couple of rather flippant comments about the recently released UBC paper titled, “Are Canadian Housing Markets Overpriced?” My good friend Larry Yatkowsky included my comments in a post on his blog which challenged the validity of the report. I did note in my comment above that “I stopped reading the report,” and now that I’ve actually taken the time to do so, I have to say that my comments were probably out of line. You can see me eat crow here.
http://www.yattermatters.com/real-estate/vancouver-real-estate-heresy-unplugged/
I’m not sure what to make of the “assumptions” which the report makes but the researchers use of the Royal LePage House Price Survey data seems much more reasonable than it did at first glance.