Saskatoon real estate: Week in review (September 8-12 2008)
Following a painfully slow week for the Saskatoon real estate market, residential unit sales bounced back with 58 properties trading hands, including 57 condos and single-family homes.
New listing activity remained strong with a total of 165 residential properties hitting the market including 115 single-family homes and 40 condominiums. Total residential listings crept higher once again to settle at 1,737 units. 1,086 of those properties are single-family homes and 539 are condominiums. The balance of available units includes semi-detached, duplexes, mobiles and vacant lots.
93 sellers canceled or withdrew their listing from the multiple listing service and 69 of those homes re-entered the market disguised as a new listing. An additional 162 houses and condos were reduced in price through the week and all but a few of the re-listed properties saw a change to their pricing strategy at the same time.
Average sale prices took a large increase jumping to $312,978 from $285,435 last week. Prices came in higher in three of the five major Saskatoon real estate trading areas, but the increase was most notable in area 1 where four sales above the $600,000 mark (two above $800,000) pushed the average higher.
Overbidding made a small comeback this week with three units reporting final sale prices which exceeded the listing price. That’s the largest number in several weeks. The average overbid of $5,700 was also at its highest point since the week of July 7-11. The majority of home buyers (53) managed to negotiate a price below asking with an average discount of $12,059, just slightly lower than 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 66 Comments So Far
April 27th, 2009 at 6:46 pm
Norm,
Do you count the 69 properties that were re-listed in the “new listings” number of 165?
Also,
Where can I find a map of the “areas” you use (i.e. 1-5)?
Thanks,
April 27th, 2009 at 6:46 pm
There was an interesting snippet in Friday’s paper about CREA numbers which are due to be released Monday.
http://tinyurl.com/6ffklk
“National sales numbers for August, to be released by the Canadian Real Estate Association (CREA) on Monday, will disclose the third consecutive monthly drop in existing-home prices and the largest decline since prices slipped in June for the first time in more than nine years.
Nationwide, the price of a resale home fell more sharply in August than the 2.4 per cent year-over-year drop posted the month before, mainly because of softness in Vancouver, the country’s most expensive residential real estate market, said CREA chief economist Gregory Klump.”
Isn’t this the guy who forecast this?:
“The MLS® residential average price is forecast to rise 5.3 per cent in 2008 and a
further 4.2 per cent next year, pushing prices to new heights.”
Hmmm. I wonder if he’ll revise his forecast?
April 27th, 2009 at 6:47 pm
58 sales still sounds kind of low to me. What are typical sales for September in past years?
April 27th, 2009 at 6:47 pm
This is where that price per square foot would be key, with university in session, probably less small and cheap condos making up that total as well.
If the total number of listings grows, it is still a slow week.
“93 sellers cancelled or withdrew their listing from the multiple listing service and 69 of those homes re-entered the market disguised as a new listing. An additional 162 houses and condos were reduced in price through the week and all but a few of the re-listed properties saw a change to their pricing strategy at the same time.”
“disguised” that’s awesome
finally getting that market is not there anymore?
April 27th, 2009 at 6:47 pm
guy_in_regina,
“Do you count the 69 properties that were re-listed in the “new listings” number of 165?”
No. I’ve been pulling those out of the “new listings.” It’s a pain in the butt but I think it’s worth the time. If it’s off and on during the same week it’s not new.
“Where can I find a map of the “areas” you use (i.e. 1-5)?”
You can find a text description of the areas behind the “geographic boundaries” link at the bottom of the post. I will try to add some maps to that page next week.
Crikey,
Get ready for the “I think we’ve reached the bottom talk.”
You must watch this video in which Glenn Beck reviews NARs predictions over the last couple of years.
http://www.youtube.com/watch?v=-89orGT8pP8
Brian,
“58 sales still sounds kind of low to me. What are typical sales for September in past years?”
It’s certainly nothing to do cartwheels over but it beats last weeks number of 37. Last September was 312 units. 2006 – 277. 2005 – 266.
Dirk,
There are some cost per square foot number in the “Closer Look” post which I did yesterday.
April 27th, 2009 at 6:48 pm
Here is a link to the MLS area map of the city:
http://www.mls.ca/map.aspx?AreaID=6321
April 27th, 2009 at 6:48 pm
U.S. financial system in throes of historic shakeup, banks step in
http://www.globeinvestor.com/servlet/story/RTGAM.20080914.wlehmanwrap09143/GIStory/
Mr. Grant is expecting a turbulent session when the U.S. markets reopen for business on Monday.
“The market is going to be spooked. People will be fearful and no one outside a very small group of people knows what Lehman going into liquidation will mean.”
All I am gonna say is hold on.
April 27th, 2009 at 6:48 pm
On a week where Fannie and Freddie get nationalized, Lehman goes bankrupt, Bank of America and Merrill Lynch have to announce a shotgun marriage, and AIG asks for a $40 billion bridge loan from the Fed, there’s no way the entire banking system can not be affected. Even here.
It may benefit you to think outside the skirts of our fair city at the larger picture, Callum. Just a thought.
April 27th, 2009 at 6:49 pm
Although to be fair, this stuff is all over the news, so it probably doesn’t need to be posted here.
Thanks for the link Charles. Rather embarassing I even had to ask.
April 27th, 2009 at 6:49 pm
k, back to real estate.
3x average income for averaged priced house?
Lets take a look at some numbers.
272,000 house over 25 years at 5.5% with 15k down.
Principal & Interest: $1,568.71
Homeowners Insurance: $97.46
Property Taxes: $200.00
Monthly Loan Insurance (2.75%): $43.14
Total Monthly Payment: $1,909.31
This is what we pay not unlike other first time buyers
Energy $100.00
Utilities $125.00
Phone,cable, internet $125.00
Vehicle insurance (2) $180.00
Student loans $400.00
So far we are looking at $2839.00 and we have not left the driveway, eaten anything or buy new gotch.
Lets say $250.00 gas, $400.00 food.
That takes us to $3489.00.
Average household income is lets say 70k a year.
That is $5830 gross a month.
Net income is about %65 of gross income on average. So we are $3789 a month net – $3489.00 = $300.00.
So we are left with $300.00 a month for house repairs, car repairs, car maintainance, household furnishings, going out to the movies, hockey games,lunch, supper, shopping for new clothes and or electronics. Don’t forget gifts for weddings or birthdays, anniversaries, flowers for lost loved ones. Alcohol, tobacco and gambling should not be left out for some. And if you like to travel, you may want to save up each month. Retirement? you may want to save up for that as well.
Heaven forbid if one person loses their job, gets hurt or pregnant.
That $300.00 will have to go a long ways each month.
Honestly, I think it should be 2x average income to be at least somewhat affordable. Prices have a long way to go down before that happens.
April 27th, 2009 at 6:49 pm
George
I think you just explained why the 40 year mortgage was so popular, even with second time homeowners. Our market is not affordable for our saskatoon families, and I think it is disguesting that a lot of the news releases were about the saskatchewan housing market going up, up, up! so how many saskatchewan families are paying two mortgages because they bought their second home with out conditions (i know of two) of sale on the first, and it is hard to believe they were given a mortgage for the second one, when clearly they cannot afford it. Or, how many are now stuck with 40 year mortages, or how many bought last year realized they cannot afford their payments and now cannot sell in this depreciating market.
April 27th, 2009 at 6:50 pm
Ha ha, looks about right, George.
Except we’d be looking for a modest starter home around the 225K mark in a not-too-bad neighbourhood. Thankfully this is a *little* more plausable in Regina. Oh yeah, but our student debt load is nearly $1,100 a month, rather than the $400 in your house. And we don’t have cable
Honestly, I don’t even care to be a home owner in this environment. I’d rather, oh, I don’t know, live without crushing financial stress, raise a family and retire someday!
Oh, but I forgot; I should content myself with a 150K crap-hole in “Canada’s worst neighbourhood,” or else come up with a $40K down payment, like some posters said on an earlier thread.
Sorry folks,
Just a little bitter here. Unlike many, I’m not confident that things will improve much.
April 27th, 2009 at 6:50 pm
The CREA August nubers are out in the G&M today:
http://tinyurl.com/57on3j
The average home price dropped 5 percent in August, nationally. There’s no specific price information for Saskatoon in this release, but YOY they’re still up, I’m sure. Sales down YOY by 43%.
This was my favorite quote:
“In a sign the market is stabilizing, however, the level of new listings cooled from the record levels hit in the four previous months.”
Now, if these numbers were seasonally adjusted, I might be more impressed.
April 27th, 2009 at 6:50 pm
I’m with guy in regina with i’d rather be renting than pay the still hugely overpriced prices for even crapshacks.
The error comes in when people think ‘oh these kids these days just want it all’. I would wager that even in the past with the higher interest rates, to have EXACTLY what our parents had at the same age, with the same number of people pulling in the wages (normally one), with the same square footage house as they would have purchased back then (before people wanted their plasma tv’s and their suv’s etc), the result would be staggaring. Heck my dad paid for a $65,000 house on $800 a month PLUS bills, fed a family of 5, plus repairs, plus whatever else…. What would you need to make now a days? Could a person do it on Grade 9 education and NOT work in oil like he could?
This at least with me, is where I have a problem with things. Now the NEW standard is both people should be working full time, and / or live in a horrible area of town in a dive that is so much a starter home that people that get in these ’starter homes’ may not even get out of them beucase they won’t be able to afford it.
I don’t think it will improve either. You’ll have the haves and the have nots living here, with the have nots escaping to better paying centres, or cities that offer them MORE options etc.
We’ll be able to guage the state of this by the length of the lineups at timmies.
April 27th, 2009 at 6:50 pm
I just had to share this. It made me laugh… I’m not saying who or where or what this place is besides it’s a apartment building built in 1969 and this is the tagline in the description…
“Fully renovated building except interior of suites. One block from river and surrounded by high end homes. ”
So let me get this straight. Maybe some handrails, some paint…metal flashing….and that’s it. THAT’S what goes for the term ‘fully renovated’ now? Steal of a deal when you have to be making 55k to afford this one bedroom gem.
April 27th, 2009 at 6:51 pm
A blog site by Gail Vaz Oxlade (til Debt do you part) about the financial aspects of buying a home. If you read through all the posts she has one in May 2008 where she is advising people NOT to buy in the current market.
Discussion of rent vs. buy
http://www.gailvazoxlade.com/blog/archives/category/home-buying
April 27th, 2009 at 6:51 pm
Yeah, Jesse G.,
It really gets my goat when people say “young people expect too much.” Some certainly do; but they’re usually able to get it with the help of mommy & daddy. This is part of the problem for those of us who actually have to earn it.
They think I spent all my money on a plasma tv, new furniture, a big honkin’ SUV, trips, etc.
but the reality is my T.V. cost me $10 (it was a bonus with the used bed I bought for $250). I drive a beat-up ‘97 corolla with 365,000+ kms on it. My apartment is furnished with used furniture from ‘used regina.com’ – my couch and chair cost me $100.
I don’t expect too much and I don’t piss all my money away – which is exactly why I’m not buying a house in this market.
April 27th, 2009 at 6:51 pm
I couldn’t have stated it better. The thing that gets me too is the ‘oh you just spent your money on a tv or a trip etc…’ it takes a LOT more money than just a trip or a tv to be able to afford a crapshack (or heaven forbid a decent house…that isn’t sinking into the ground).
April 27th, 2009 at 6:51 pm
Think today was a bad day for the markets?
Wait until tomorrow. Bank of America might have biten off too much and AIG may not make it. Other financials are wobblying. Even our own banks have gotten their hands caught in the cookie jar, and this is before our own housing crash happens.
Bookmark these two websites
http://www.bnn.ca/
http://bankimplode.com/
April 27th, 2009 at 6:52 pm
Sorry, I keep going off track with the financials.
I am going to guess Sept will end with about 225 sales. With very few sales so far a few higher priced properties will skew the average price. But average price is not really the story. It will be in time. The real story is the continued increase in listings. Demand is dropping and with Oct around the corner, there are no people rushing to buy before the death of Canada’s subprime. ( Unless you consider 58 sales is partly due to the rush before the close)
By the new year, I see Saskatoon with 10 months of inventory. But there could be a lot of the expired listings that are not put back on and sellers hope for the spring bounce and we may have less amounts of inventory.
By even when the average price hits 240-250k, I wouldn’t bet on demand spiking up enough to really cut into inventory.
I follow many blogs throughout the country. The consensus is that Saskatoon and Vancouver are poised for the biggest crash in real estate in this country.
Jesse G.,
don’t worry buddy. It won’t be long before you can afford that one bedroom condo with just above 1x yearly salary. That is what they are truly worth.
April 27th, 2009 at 6:52 pm
I had to laugh this morning. My grandma called my mom this morning to tell her that she was going to be selling her Dad’s old house and that if we were interested we could have first dibs on it. She said that being as we are family, she would sell it at the value the realtor valued it at, minus what his fees would amount to. Anyways, this is a run down old house approximately 1100 square feet + basement build in about the 1950’s off of clarence avenue. It has had no work done to it, and the exterior and interior are in very rough shape to say the least. Guess how much she is going to be asking for this fine piece of property? $349,000!!!! The funny thing is mom said that her Dad originally paid about $15,000 for the place. More power to old grandma is she can actually find a buyer for the place!! It certainly won’t be me, however.
April 27th, 2009 at 6:52 pm
That’s rich….literally. Nothing like being as out of touch as the rest of the people trying for the big bucks. No offense for your grandma either. I say if anyone wants to get money, why not let it be someones grandma.
I thought of this this morning…people tend to say ‘well people can afford to have housing in vancouver’ so we’re just ‘catching up’… I tend to wonder what percentage of NEW people BUY the overpriced houses…I’d wager that it’s such a small miniscule percentage of NEW first time buyers that it’s virtually non existent. No one can afford a house at 6x or more average income…it’s all about sitting on a house you paid less for and claiming that it’s reasonable (when you think it’s your own good investment).
Glad you didn’t take the bear trap to the face with the house.
April 27th, 2009 at 6:53 pm
Don’t forget those poor 0/40 souls. Their “investment” would have to TRIPLE in price for them to just break even on the principal + interest payment.
Yep, you better rush out to sign up for that one, kids.
April 27th, 2009 at 6:53 pm
Steeper drop in Canada’s existing home prices
http://www.financialpost.com/reports/property/story.html?id=792278
Bailouts Will Push US into Depression: Manager
http://www.cnbc.com/id/26656750/site/14081545/
“We expect a depression in the United States. We expect a depression, very possibly, also in Europe,” Hennecke said on “Worldwide Exchange.”
Nobody knows where this is going, but we have not seen the worst yet. Lately, I have been thinking I wish I was still renting instead of buying over 3 years ago. Having no debt is the way to be right now.
Cash in the mattress is probably the best investment.
April 27th, 2009 at 6:53 pm
Jesse G. wrote:
“it takes a LOT more money than just a trip or a tv to be able to afford a crapshack”
Excellent point – very, very excellent point! As I always point out, it seems like the people who talk about how “all you need to do is scrimp and save” and all that b.s. have absolutely no idea how much money they are talking about. Here’s an interesting reference:
I was hoping to buy a plasma tv this past weekend (the Calgary equivalent of Audio Warehouse was having their annual sale and there were some crazy deals on). I got offered the new Panasonic 58″ plasma for $3,400.
After mortgage payments, insurance, and property taxes, the cost of an “average” home at the peak of Calgary’s bubble last year was more than that. A month. Every month. For the next 25 years.
So you could either buy a 58″ plasma television EVERY single month of the year…or you could put a roof over your head. Of course you would eventually need somewhere to put all those plasma tv’s…
This isn’t about pinching pennies to buy a home. This is about a fundamental breakdown of housing affordability for the average citizen.
Makes you think…
April 27th, 2009 at 6:53 pm
Speculators fuelled spike
http://www.edmontonsun.com/Business/News/2008/09/11/6730036-sun.html
Oil,commodities, real estate, financials, automakers, etc.
Its all unraveling now.
Putting your money into alcohol is probably one of the few safe bets.
April 27th, 2009 at 6:54 pm
Crikey,
I honestly feel terrible for people who got themselves into 40/0 at the peak of the market. However for the numerous renters, first time home buyers, and low income families a drop in market value will be of greater benefit in the long run.
George,
Nice article. “The West overshot, the rest of the country is simply leveling off” The bubble may not burst, but the air is getting sucked out of it PDQ. ;’)
Warren,
That’s sick! Of course I also think spending $3,400 on a TV (no matter how spectacular) is sick. LoL Those in Calgary who could afford monthly mortgage payments of that caliber are perhaps the ones who could afford that Panasonic TV. Everyone else moved to SK. :’P
April 27th, 2009 at 6:54 pm
haha, Gormley called you guys “SaskaWhiners” ! (Well, some of you anyways).
It’s true from what I’ve read on here today.
April 27th, 2009 at 6:54 pm
I know how much you all enjoy the positive economic news.
“TSX drops more than 500 points but strong performance locally keeps Saskatoon the jewel of the Prairies” (Conference Board of Canada predicts Saskatoon will lead the nation for GDP growth in 2008 @ 5.2%.
http://tinyurl.com/5wf5z6
Saskatchewan leads country in international exports.
http://tinyurl.com/67t8wv
Saskatchewan posts strong vehicle sales.
http://tinyurl.com/5a3yn7
“Council backs Urban Village plan” $200 million dollar River Landing project approved and to begin construction in November 2008.
http://tinyurl.com/6lj2je
Of course, it’s not all bright news. “Housing sales fall in August.”
http://tinyurl.com/6cyght
April 27th, 2009 at 6:55 pm
I think the Conference Board of Canada is getting bribes from Atch!
Our GDP growth sucks says Stats Can, Conference Board revises data and predicts record growth again.
Conference Board predicts population growth, Saskatoon loses population, Conference Board predicts further growth
And good for Gormley – I hope he has a fun time selling his house when he tries to retire to BC.
April 27th, 2009 at 6:55 pm
Havent had much time lately – working lots.
Things are going to be pretty rocky in the financial markets and I think the housing markets for the next year for certain.
Just to contribute to the above mentioned comparisons to lovely Vancouver. I spent about 20 minutes surfing the listings on MLS in only downtown vancouver, west van, north van, areas (the most expensive regions). My entry was for under 300 grand, must have one plus bed. The search results returned 37 pages of inventory. The lowest prices came in just under 200 and you could actually get a pretty decent condo for 300 grand in downtown vancouver. usually 2 bed, and condo fees maxed at 220 and were usually around 190 a month – which included heat/water.
Now – compare that to Saskatoon. I found most 1 bed condos were 150 with much higher and all over the market for condo fees.
And no, I am not stupid. There is no comparison between Vancouver (long history of net in migration) to Saskatoon (long history of net out migration). Lest I mention the sensitive topic of weather.
My gut feeling a year ago and now is the poor buggers that are in a crapshoot financially right now can also thank the big investors.
Get your life jackets ready.
April 27th, 2009 at 6:55 pm
Ah good old Gormley, still stuck in with the other media outlets eh? Everything is just so peachy and good for everyone in the city and the province. I love when the person making an argument goes into ‘attack’ the other side instead of actually using valid points or having a debate with someone that isn’t ‘hand selected’ to make it sound the way they want to.
SPIN SPIN SPIN! Buy more housing! Buy more cars! Eat out at restaurants more! Attend the same 5 summer events that they’ve had for the past 10 years and pretend like it was something new!
I knew there was a reason I never listened to local talk radio.
April 27th, 2009 at 6:55 pm
lol!
Herr Gormley is the most prolific whiner in the province (see past 10 years).
Hmmm, what to buy? Condo in downtown Vancouver for $300k… or Frustrated Renter’s Grandma’s 1950’s “very rough” ‘handyman special’ on Clarence for $350K?…. hmmmmmm,
Buy now or be priced out forever!!!
OK, I’m done whining now. Won’t post again until I have something constructive to say. Thanks for putting up!
April 27th, 2009 at 6:56 pm
Just a point on the Vancouver comparisons for under 300,00 – most of those are not freehold properties, either co-operative shares,r requires 35% down and have heavy restrictions (no kids,no pets etc)….and a lot of these units are lease holds -either to the city, surrounding First Nations, and universities – lease land is not something every buyer is willing to purchase. As well, top of the lists were for units 325, 000 was a 474 square foot unit…just a crash pad really…It is true there are some livable units is north van…however, parts of north van are druggie sketchy….
You need to move up in price a fair bit to get something decent in the Vancouver area- by decent i mean 650 square feet, with a little outdoor space/patio….and you need to know the area. And your most expensive areas are west side not west van.
April 27th, 2009 at 6:56 pm
I see Saskatoon has been mentioned over at the Edmonton journal blog. Amusingly, it is our explosive wage growth that was the topic of discussion. LOL.
http://www.canada.com/edmontonjournal/news/story.html?id=8a1b04db-2391-4bd3-a10a-f12e8243a128
April 27th, 2009 at 6:56 pm
yes!!! buy now!!! it’s only going up!!!
Yeah Vancouver is no comparison to here…
The ONLY thing that kept people here before was the cheap housing. There is a reason why housing was cheap here…lack of population, lack of amenities, lack lack lack….I mean it’s pretty similar in any part of the world. Usually housing in the middle of nowhere is cheaper than housing in the bigger centres.
I have no issue when people love the province, love where they live, and have everything they need (or are interested in). A bigger centre does it better for my interests personally.
If all I want to do is work, have 15 minute commutes (except in the summer when the city magically does construction all at the same time on all of the roads you possibly would need to take to get home so it takes you 45 minutes), have a cabin up at one of our lakes to go to for a couple weeks, like watching local football (but no other sports…anyone remember the saskatoon storm?)….then i suppose I’d be happy here and my interests would be filled.
Sorry for the rant.
April 27th, 2009 at 6:57 pm
K,
What about renting though….I know a girl in vancouver renting a nice NEW 1 bedroom apartment in a high rise for 920 a month…may i reitterate..NEW…
The buying market is whacko but the rental market not nessessarily. (I know we weren’t talking rentals but if it was me and i had the choice, i’d rather rent out there than here and then invest the rest)
April 27th, 2009 at 6:57 pm
Jesse G,
The thing with Vancouver is that is has a really well established rental market with rules in place. It is also a really large market, and there are a number of really great neighbourhoods on the west side, east side, and downtown that are great to live in. Just depends on what you want. You have to keep in mind that the rental vacancies are low….so sometimes it is hard to find a decent place. Having lived in high density dwellings, I think places have to be a min, 650 of well laid out space with access to the outside. T
There is no argument here that the rental situation in Saskatoon is awful and in my opinion unfair to the renters. As a landlord in Vancouver I cannot just turn around and give a massive rental increase in 3 months time with no improvements on a place. The max. I can do in a one year period is 10% per month. As in – your rent will go up 10.00 per month…not 350.00
April 27th, 2009 at 6:57 pm
Ahh, yes Herr Gormley indeed. If he needs me to recover his head from its current locale, I am up for the task.
April 27th, 2009 at 6:57 pm
Reading the comments in that Edmonton Journal link that Jason gave us…and they are hilarious. ESPECIALLY Re-max guy’s….Seriously check his comments out…WAY too funny…here is one excerpt. Sound familiar?
“Well said, Lou. Affordability in Edmonton is still very good. Compared to other major metro centres like Vancouver, Calgary, or Toronto, prices are still very low and priced so that any single working individual (WHO MAKES THAT MUCH MONEY BEING SINGLE AND WORKING) can still afford a nice home in a good neighbourhood. The problem with many individuals on this discussion forum is that they would rather spend their money on beer and popcorn (HOW MUCH IS THAT PER MONTH AGAIN?!) than putting a roof over their head. The latest numbers for the month just came across my desk here and I can tell you, things are picking up. Shooting from the hip, I would agree with other real estate experts that prices will rise about 35 – 40% over the next two years. For those waiting to buy, there has never been a better time. …”
April 27th, 2009 at 6:58 pm
I’m considering a move to Edmonton from Saskatoon. I’ve been offered the same job as I do here for a decent wage increase. I haven’t really been following the Edmonton real estate situation though, since well… I was living here. Can anyone shed some light on the subject for me? And where do you think would be a smarter place to buy, if you had to buy in Saskatoon or Edmonton over the next year. One thing I noticed in Edmonton is the condo fees are big…like 450. Who can swing that?
My other question, maybe Norm can feild this one…is what are the pros/cons to buying a condo from a conversion over a building originally built as a condominium complex? Or does it matter?
April 27th, 2009 at 6:58 pm
Sorry, I just can’t respond to the “good” economic views coming from that great last bastion of independent and objective thought, the Star-Phoenix, without the sarcasm-meter blowing sky-high.
In news that may likely affect mortgage rates, the LIBOR (London Interbank lending rate, the rate at which banks will lend to each other), essentially doubled on the Lehman/AIG news.
http://tinyurl.com/6pokx6
“The overnight Libor rate in U.S. dollars soared 3.33 percentage points to 6.44 percent today, its biggest jump in at least seven years, according to the British Bankers’ Association. Many Libor-linked U.S. mortgages don’t limit the size of a loan’s first adjustment, with caps of 2 percent on subsequent changes. That means a monthly mortgage bill could double or even triple when it first resets.”
If this keeps up, those with adjustable-rate mortgages will definitely be feeling the pain. Right now might not be the best time to go for a variable-rate mortgage, either. Heads up, folks.
April 27th, 2009 at 6:58 pm
Sean,
I know i’m not Norm, but a few things I would be aware of with ‘conversions’ are the following:
1. In a condo unit, the sound proofing between suites may be built thicker than in an apartment building conversion.
2. Building conversions may not have decent roofing. If they are like the old 60’s ones out here, that could come up. I’m not sure what would happen if you had a leak on the roof…
3. I’m not sure if i’m correct but condoized apartments aren’t really ‘condo’s’ in the definition are they? Condo’s usaully are walk up and have their own entrances do they not?
Basically if it was me looking into a converted unit, I would be concerned with sound (an extra layer of drywall won’t really help for that) transmission and the state of the existing structure.
My luck is i always end up beside partiers…not the ones that party until 10pm ,but the ones don’t start until midnight.
April 27th, 2009 at 6:59 pm
Sean and Jesse,
“Condo” is more of a form of ownership than a type of building. There are apartments, town homes, detached houses and office buildings which are condos. The office I work out of is a condo. Our company owns 70% and someone else owns the rest.
Conversions must meet the national building code when they’re converted but you don’t need all of the components to be new to qualify. Many of these old apartments which have been converted have older components with a more limited life span, and often, a fairly small reserve fund.
Saskatchewan legislation requires condo corporations have a “reserve fund study” completed. All major components of the improvements are examined and the remaining life of those components is estimated, and so are the future costs of replacement. A well researched study should provide some insights into whether or not the condo fees being charged can meet future financial needs.
To Jesse’s point – I think most apartments were built with the lowest possible rent in mind and in many cases they won’t have the same level of quality as a building that was built for prospective owners.
Crikey,
You saying that the SP is making this stuff up?
April 27th, 2009 at 6:59 pm
“You saying that the SP is making this stuff up?
”
Don’t go putting words in my mouth, now.
The SP has an agenda, just like the rest of us, I suppose. One must keep a watchful eye out for those whose agendas are bought and paid for- that’s all I’m saying. You spoil us by allowing more than the inane “everything’s fine, we’re different here” stories, and allowing people to decide for themselves. I think most people would agree we can expect far less from most of the main-stream media. Telling the truth is not always pretty or easy, but leading people by the nose (or their wallets) can lead to disasterous results, no? Just look south for the answer to that one.
April 27th, 2009 at 6:59 pm
Now as far as I’m aware, meeting National Building Code isn’t as hard as it sounds.
Guardrails need to be 42″ high, handrails have to be 36″ high (approx), there can’t be any penetrations into corridors (like milk boxes), and the corridor / stair doors should be on closers, or hold open closers (until fire alarm goes off and then they slam closed to prevent stack effect of smoke travelling into the other floor areas…which is why i’m driven nuts when people prop these doors open but that’s another rant).
That’s basically it. Maybe some mechanical modifications to do with fire dampers (again so smoke doesn’t travel) and there you have it!
April 27th, 2009 at 7:00 pm
Sorry I forgot another item, new fire alarm system has to be in place.
April 27th, 2009 at 7:00 pm
Just FYI, if the building is I believe 8 units (maybe 12) or less, a reserve fund study is not required. Don’t forget they need a new fire alarm system that meets modern code. Maybe upgraded electrical service & mechanical systems. It get’s expesive quick if the wrong building is purchased.
April 27th, 2009 at 7:00 pm
Thanks to everyone for the excellent conversation on this blog, it gave me a lot to think about during my recent purchase of a Saskatoon bungalow and sale of my Saskatoon townhouse.
I bought the townhouse for $106K before the prices skyrocketed. Sold it for $240K. Bought a bungalow in the same general area of the city for $334K, essentially doubling my square footage. Since I had equity built up, and I needed more room, I feel that moving now is a good decision. It’s an average sized house that is well built, nothing fancy.
If I were a first time home buyer I would try and rent for as long as possible, I believe that prices will drop. That may eat up my equity in my new house, but as they say, easy come, easy go.
I read Garth Turner’s book “Greater Fool”. In my opinion he took a long time to say “Don’t buy a McMansion.” Then there was the rather odd chapter thrown in about the coming apocalypse and how we should all have our own generators and possibly shotguns and rottweilers to protect our daughters.
Just remember that coffee and chocolate are the real currency of the postapocalyptic era!
April 27th, 2009 at 7:01 pm
Sean, Condo fees of $450 a month sound high, but if you compare it to owning a house, you will find that the costs are not much different. This is assuming that the condo fees include heat, electricity, water, building insurance, and building maintenance.
April 27th, 2009 at 7:01 pm
Have things gone totally mad??? Has anyone seen the cabin for sale on Saskhouses at Emma Lake for $725,000? Its 624 sq ft but it is lakefront. What is this fool thinking? Please tell me there is nobody stupid enough to pay that. Thats $1160/sq ft!!!
April 27th, 2009 at 7:01 pm
Good luck on selling that one…should buy that person a cake because they’d be the stupidest person on the face of the earth to buy that…the phrase more money than brains comes to mind.
April 27th, 2009 at 7:01 pm
Don’t give out Saskatoon’s secret!
If young people in Saskatoon realize they can rent a nice one bedroom basement suite for $500 or a nice one bedroom downtown NEW condo for $900 in Vancouver, they might move their after highschool, for the better university and the big city life style. Saskatoon’s best retention slogan is the “just be happy you don’t live in Vancouver, you could never afford the rent”.
I lived in Vancouver for a brief period last year, my rent was $500 for a nice basement suite, which is pretty standard, and Super Store (or Safeway) has the SAME prices in Van as in Saskatoon! And you don’t need a car because public transit to and from university, downtown, Broadway, heck even Surrey from downtown Van, is sooooo much better than the “Dart” in Saskatoon.
If you rent, Vancouver is actually probably cheaper to live than Saskatoon. Unfortunately, only jobs for accountants, nurses, doctors, finance majors, computer scientists, sales, service, engineers.
No jobs in labour for potash or oil rigs, so if it is your life’s calling to be a rig pig, stay in Saskatoon and commute.
Unfortunately buying a house probably means moving to Langley. Still, pretty tempting to live in a sky scraper in downtown Van for $900 with an ocean or mountain view, when the Saskatoon equivalent is topping $1,000!
April 27th, 2009 at 7:02 pm
Dan the man!
I’ve heard the exact same thing from a friend that moved out to Van a little over a year ago. So many amenities, within walking distance, good jobs and tons of little neat places and things to see including BEACHES, the OCEAN, any sports teams you would want, and so on.
The people that keep saying that it’s too expensive are losing the battle. If those of us that KNOW it’s different keep saying it, maybe our Sask kids will have a better happier future if they know they have options and aren’t threatened by YOU CAN’T AFFORD IT ANYWHERE ELSE BUT HERE……
April 27th, 2009 at 7:02 pm
Crikey and George,
Been a long time since i posted probably 3-4 days going through withdrawl. The link I provided answers the skewed information you guys are posting on here. For 1 take a look at the US with their billion dollars of losses and then click the link where our banks are making money. No one has posted on here about the positives of the market slamming into the ground over and over again well ill be glad to tell you. The new job at Agrium pays me a little more extra of 10k a year on my old job. Im putting everything I can possible afford back into the stock market XIU.TO while every1 is whining and saying the world is ending. While you guys talk I will wait 1-5 years and see who comes out on top. This is an opportunity for all renters and owners. I hope the house prices do fall abit so you guys buy houses and hopefully stop whining about it, heck we should just drop the price 200k for 1 month you all buy houses and we can all be happy heck you can drop it for 5-10 years im not moving.
April 27th, 2009 at 7:02 pm
Vancouver is great, if you are young, single, or a young couple, and renting. I lived there for a few years right near the beach with my wife in a one bedroom apartment. Rent was 800 bucks a month. Food prices seemed cheap. That was eight years ago. Whenever we came back to Regina for a visit, people always said ‘but it’s so expensive out there’. And I said, you know what, not really. However, it’s a totally different story when you have a few kids and need more than 650 square feet. Now in Regina, I miss quite a bit of what Vancouver had to offer, but now I have a four bedroom 1600 square foot house with a finished basement and a large yard and a five minute drive to work and daycares. Friends of mine just bought a similar sized house a short commute to downtown Vancouver, with a much smaller yard, and in need of a reno. I paid 300,000. They paid 800,000. Cheap rent might lure those in their twenties to Vancouver, but far cheaper houses may just bring them back. Plus the sunshine. Damn cold, but sunny.
April 27th, 2009 at 7:03 pm
Yeah i’m sure there are many reasons to go and not to go to a place like Vancouver, but the end result is that it IS possible.
You are right that the introduction of children into the equation IS a BIG variable and a big decision for sure. The whole game changes, but what I get from it is that you paid 300 in regina (a city which i love btw – lived for 6 years), but then again your friends could afford the 800k in vancouver…try to find anyone out here that could afford 800k…that it MUST be possible somehow to afford things out there if they could do it.
April 27th, 2009 at 7:03 pm
Jesse G,
The average hourly wage of a resident of Saskatchewan between 25-54 years of age in August was $22.43. In B.C. it was $23.05.
I have no doubt that you can “make it” somewhere else, but don’t kid yourself. Vancouver may offer some impressive amenities but judging by the house price to average income ratio it also offers far more of what you hate.
Armoth,
Congratulations on the new job! 10K is a pretty huge step forward. BTW, your links will get far more traction if you place them in the body of your comment.
April 27th, 2009 at 7:03 pm
I tried responding to this before but i ended up writing pages of arguments and getting too worked up about the validity of the ‘average wages’ argument.
The girl that i know that moved to vancouver? She got a job as a receptionist at one of the colleges out there and gets paid the same as i do (43k), and i have 9 years of experience in my field and i went to siast etc. The wage argument just smells fishy to me whenever i hear it.
I guess I’ll just have to agree to disagree.
So just a thought…average wages in Vancouver…so as we all know, it’s kind of like a pyramid from high wage earners to low wage earners. Usually the base of the pyramid is quite a bit larger than the levels to the top. Wouldn’t the average wage be thrown off by the sheer population difference? I mean if they have 10 times the high paid jobs they’d need 50 times the lower paid ones to support the massive population base…
i need a drink…
April 27th, 2009 at 7:03 pm
Jesse G,
That was a good try.
Maybe read Mark again. He’s been there, done that.
House prices are pretty tough for entry level buyers in Saskatoon. I just think you’re kidding yourself if you think Vancouver is going to be any easier. Again, I know your a sharp guy and you can certainly make it in Vancouver but it’s not going to be instant relief upon arrival.
Be patient. Things are improving here in every way.
April 27th, 2009 at 7:04 pm
Thanks Norm,
Just frustrated sometimes. Got my mountains of Duct Tape for my head to help it from exploding…
I guess my cause for Vancouver is a simple one. Parents, please…you can like this province, you can LOVE this province…but please for your kids, do not tell them that THIS province is the ONLY place where you can make it.
I’m still waiting a decent art community…
April 27th, 2009 at 7:04 pm
Jesse,
I think that Vancouver is calling you…you may be right about finding a decent place to rent for a similar price as here. I would spend some time on Craigslist Vancouver to get a really good idea of what rents are going for. It can be very competitive to find places at times, especially those that are decently priced. I don’t really feel that 900 for an apartment or 500 (someone must be paying the other half) for a basement suite is the norm. But there are always some out there. And also, living in the nearby burbs is not living in Vancouver…the commute is hell and the communities are just okay.
I think many people there have adjusted there expectations about property ownership in Vancouver. Understanding that they may never own. If you think there is angst on this site about not being able to buy a place, spend a night at a dinner party in Vancouver with a bunch of 30 something professionals not in the market…dreaming that one day they might be able to own and raise a family in a 2 bedroom condo….insanity
However, all said, I would never tell anyone not to go to Vancouver….if you can swing the bills and still have a decent disposable income, it is a good life there.
April 27th, 2009 at 7:04 pm
Reality check if you think it’s easy to find cheap rental accommodation in Vancouver
http://www.canada.com/vancouversun/news/story.html?id=671fd888-2bc6-4155-ab52-ffd5569ab654
The situation for tenants is the worst it has been in almost a quarter of a decade, said Martha Lewis, executive director of the Tenant Resource and Advisory Centre.
“The last year and a half it’s gotten especially bad,” Lewis said, adding that more than half the homes in Vancouver are rental units.
April 27th, 2009 at 7:05 pm
Jesse G,
Parents who tell their kids that are clearly desperate to keep them close. As a father of two young adults, I can relate. More than anything I want to see them get what they want out of life. Next to that, I want to be close to them so I can see them enjoy it.
April 27th, 2009 at 7:05 pm
Vancouver is a pretty place which is where I’m living but if your ambition is to own your own place, consider carefully the costs of accommodation and the rather mediocre salaries here. In London and New York, real estate is very expensive, but then everyone is paid quite a bit more – not so in Vancouver! Here, the avg. household income is in the $70,000 range which is really nothing when you consider how even a $750,000 home here is not that nice at all. Imagine going to a party where young professionals in the top 10% of the city’s income bracket with six figure incomes complain about not being able to afford anything at all! Welcome to Vancouver!
April 27th, 2009 at 7:05 pm
If Lewis thought Vancouver was bad to find a rental place, he’s never been to Saskatoon! We always hear we have the lowest vacancy rates in the country.