The Saskatoon Region Association of REALTORS® (SRAR) released the residential real estate statistics for September 2009 today, accompanied by this release.
The real estate market in Saskatoon and surrounding area was brisk in the month of September. REALTORS® assisted 351 homebuyers in the purchase of a home, that number up 43% from September 2008 when 242 homes were sold. Year to date, residential unit sales stand at 3048, up 3% from 2008 when 2996 homes changed hands.
The average residential selling price in September was $279,457, that number down 6% from September 2008 indicating more activity in the low to middle price range homes. The average selling price has remained steady throughout 2009 beginning in January at $278,545.00 reaching a high in July of $283,871.00. The strongest sales activity remains in the $300,000 to $350,000 dollar price range.
REALTORS® sold $98,089,304.00 of residential real estate in the month of September, up 34% from 2008. Year to date dollar volume stands at $848,202,479.
Listing inventory continued to correct with fewer properties being listed and more current inventory being sold. REALTORS® placed 516 properties on the market in September that number down 37% from September 2008 when REALTORS® listed 825 homes.
Home buyers had 1097 properties to choose from at the end of September.
Sales activity in surrounding communities remained strong with 119 homes being sold, up 65% from September 2008 when 72 homes changed hands. The average selling price was $271,401, up 18% from September 2008 when the average selling price was $229,271.
Similar sales activity is expected throughout the fourth quarter of 2009. Market stability will continue to improve as inventory levels decline. The resale and new home market are being fueled by low interest rates, product availability and consumer optimism in the local economy.
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Norm Fisher
Royal LePage Saskatoon Real Estate
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{ 12 comments… read them below or add one }
Things that stood out for me:
Unit sales appear to have broken a record for the month of September.
The decline in active listings slowed significantly in September. Combined with seasonal declines in unit sales, “months of inventory” actually grew for the first time in many months.
Prices appear to be steady as they ever have been.
I don’t think we’re necessarily going to see a substantial drop in inventory by year-end (at least not anywhere near as drastic as last year), though I’d be really surprised if we dropped below 700. I’m still taken aback a bit by September (it’s not usually a banner month).
Jason, I second the surprise and am somewhat concerned.
To me \The resale and new home market are being fueled by low interest rates, product availability and consumer optimism in the local economy\ sounds like \ The underlying causes of the housing bubble are complex. Factors include historically low interest rates, lax lending standards, and a speculative fever\. The second statement is the hindsight reasoning of the US housing crisis. Stated under background.
Huh. Record sales with historically low interest rates but prices stay essentially flat. The government is pouring billions of dollars into the economy, and we still couldn’t avoid a slight contraction in GDP from June to July, when most economists predicted a rise.
Nahh. Not at all concerning.
Steven, I think there’s probably less speculation this year (at least I hope so, anyway), although a lot of the mortgages being taken out will almost certainly reset at higher interest rates in a few years, so there’s definitely that ’sub-primish’ aspect. If there are any similarities to the US housing correction, I think they may take a few years to reveal themselves.
I think the biggest wildcard right now is the economy: GDP numbers of 0.1 and 0.0 (for June and July, respectively) don’t exactly point to the recovery the Bank of Canada has been harping about, and this will almost certainly ensure a longer period of historically-low interest rates. I wouldn’t discount the notion of a second stimulus in the near future, either.
Jen, a hint of the stimulus yet to come…
Flaherty admits risk of jobless recovery
http://www.financialpost.com/news-sectors/story.html?id=2060063
“Canada’s economic recovery could end up missing one key element – more jobs – unless Ottawa keeps the stimulus money flowing, Finance Minister Jim Flaherty says.”
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
According the Canadian Banker’s Association (see site above) Saskatchewan mortgage in arrears are at approximately .23 of 1% and are tracking at about 1/2 the Canadian average for the first half of 2009. At approximately .45 of 1% these Canada overall rates of arrears are similar to the rates found throughout the last couple of decades according to my overview of the charts.
Steven,
“I second the surprise and am somewhat concerned.”
It must be difficult for someone with such acute foresight to admit that.
Jen,
“Record sales with historically low interest rates but prices stay essentially flat.”
Ah, but we had a rather nasty supply problem just six months ago that seems to have been sorted out. Still, while affordability has improved, I think we are likely operating close to our limits right now. I doubt there is much room for price increases at this time. With very little speculation we’re really seeing what average people can afford to pay. I hope that rates can stay low, at least while incomes are seeing some downward pressure.
Tim,
I also note that .21% is the lowest rate of “mortgages in arrears for Saskatchewan in the past thirty years. Compare at 1.56% in 1992. Only 227 households in arrears in the entire province.
Jason,
Thanks for the link. I’ve always thought of employment lagging the economy, so I’m not sure how the author of that article (or Jim Flaherty) would have expected this recession to be different!
Tim,
I was looking at that report just the other day, and was also impressed with how Saskatchewan’s economy and most consumers have held up so far, particularly considering past recessions, as Norm has pointed out. Provinces more dependent on manufacturing and construction haven’t fared as well. I’m not sure how the balance and diversification of SK trade have changed since previous recessions, but I’d be interested to find out. Keep in mind, though, that report tracks mortgages that have been in arrears 3 or more months, and anyone with a job loss that was hit last fall or winter might still be slogging through with whatever work they can find plus EI payments. I’m not sure I’d expect an increase yet, but yes, the report is encouraging.
Norm,
I think I’d agree with just about everything you said.
“With very little speculation we’re really seeing what average people can afford to pay. I hope that rates can stay low, at least while incomes are seeing some downward pressure.”
Interest rates are the kicker, for sure. What the average person can afford to pay might vary considerably depending on what happens with those.
Jen,
“Interest rates are the kicker, for sure. What the average person can afford to pay might vary considerably depending on what happens with those.”
Absolutely. I think home prices are at the mercy of interest rates and incomes.
“The average residential selling price in September was $279,457, that number down 6% from September 2008 indicating more activity in the low to middle price range homes.”
or, since the median is actually similar to last year, but the mean well down, we are seeing less outrageously high prices than during last year’s “boom” to skew prices up? median is the better indication of distribution
The average sale price is down 6% year-over-year, while the median is down 3.5%. From the peak (June 2008), the average has fallen 13% while the median is down 10%. I actually think that the change to the average more accurately reflects what has really happened in the market. Low interest rates have people buying more house, rather than spending less money, and that is propping the median up. Royal LePage will release its house price survey next week, which looks at specific types of housing in specific areas. I’m seeing drops there, mostly from 4-6% over Q3, 2008. The average drop would be closer to the change in the average than the drop in the median.