A closer look at the Saskatoon real estate statistics for March 2008
My mid-month “closer look” pretty much always follows SRAR’s month end stats, but then SRAR pretty much always releases month end stats at the end of the month. Due to issues that arise from the way that SRAR normally reports the numbers, combined with the quirks of a new MLS system, those numbers are still not available. SRAR’s reluctance to release their numbers leave me feeling somewhat concerned, but I’ve gone through the data pretty closely and I believe these numbers are probably reliable (yes, that’s a disclaimer, and I have already updated them once so tread carefully). In any case, I’m throwing caution to the wind and releasing my numbers because I know that some of you are seriously thirsty for some monthly stats. So drink it up folks.
Please note that I’ve added a new column to our charts that provide the average price per square foot in each category. Hopefully this figure adds another bit of perspective as to what’s happening over the long term.
Starting with the “house and condo” category, we can see that the average selling price of a Saskatoon home reached a new high of $287,959 for the month of March. This number is up from $266,573 in February, and represents a 40% increase from March 2007 when the average came in at $203,605. Unit sales saw a small decrease from 388 units last year to 364 units this year. Given that inventory has increased substantially over last year, we can really only conclude that demand is also starting to soften somewhat. This is a natural effect of rising prices. As prices rise, fewer buyers can afford to buy.
The drop in unit sales is significantly deeper when it comes to single-family homes (houses). 233 houses sold during March of 2008, compared to 295 in March of 2007, a drop of 21%. On the other hand, prices went through the roof rising to an average of $326,633, up a whopping 57% year over year. Houses averaged $208,123 in March of 2007, and had risen to $310,533 through February of this year.
Unit sales in the condo category showed remarkable strength due to a better affordability factor. Sales actually increased over March of 2007 from 93, to 131 sales, a gain of 41%. The average selling price showed a weakness that is equally remarkable when compared to the tremendous gains in house prices.
The average selling price of a condo was up just 16%, year over year, from $189,275 to $219,173. This relatively small increase can be attributed to a number of condo conversion projects that offered small, entry-level units priced at $125,000 or less. There were enough of these units sold early this year to skew the numbers down. When I look to a specific condo development and compare sales from March 2008 and March 2007, I see differences that are closer to 40%. For instance, three level town homes in Lakewood were trading at a high of $190,000 in March of 2007. Sales from March of 2008 show comparable units selling for $265,000. These numbers are probably more reflective of what’s been happening with condos.
In any case, year over year gains have been far stronger in the single-family category, and this seems fitting, given the fact that condos saw far greater increases than houses through 2007. The prices in the two categories had just become too close.
See a Google map displaying the boundaries of Saskatoon real estate “areas” here
Data collection and calculation for our statistical reports
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Norm Fisher
Royal LePage Saskatoon Real Estate
22 comments so far. We'd love to hear your thoughts.
May 14th, 2009 at 9:28 AM
$290,000 huh.
Whew!!! Thanks for the stats Norm. It’s amazing how markets 10 times the size of Saskatoon (ei Vancouver) are able to come up with monthly stats well before us.
May 14th, 2009 at 9:30 AM
“$290,000 huh.”
Indeed. Kind of makes last year’s $200,000 average look pretty reasonable.
“It’s amazing how markets 10 times the size of Saskatoon (ei Vancouver) are able to come up with monthly stats well before us.”
I’m thinking it’s not a real fun time to work at SRAR. Soon after the launch of their new system, two IT guys took a walk and never came back, and of course, the simplest things take twice as long when you mix up the interface. I’m loving the new system though. It’s much easier to get at the data I need.
May 14th, 2009 at 9:30 AM
Very interesting that over half of the properties for sale are not owner occupied, can we say investors? How many more of these investors are going to try and pull their cash out this spring? I’m guessing many. But I guess only the future call tell us that!!
May 14th, 2009 at 9:31 AM
Wesco,
Not that I had mentioned that in the past or anything. But of course, anyone in support of the fleecing going on will always rely on making you feel like an idiot for piping up on reasonable observations.
Just as much as people spin us into this problem, we seem to be forced to rely on spin to get us out.
Why can’t people just admit that greed is fueling this and allow a solution to finally manifest itself.
Anything happening in Saskatoon over this is just profitable denial.
May 14th, 2009 at 9:33 AM
Hey Norm, Is Wesco’s investor comment true. I read the numbers to mean that of the 104 vacant single family homes 37 of the houses have been purchased.
does this means
37/104 = 35% of the vacant houses are investor properties. Does this seem like a larger number?
May 14th, 2009 at 9:35 AM
Carl,
No. I guess all of these numbers are a little confusing.
37 of the “94 new or near new homes (houses and condos)” are owned by individuals. It’s probably a safe bet to assume that these are speculators and that the balance are builders. When you take the 94 new or near new homes out of the equation there are still 131 vacant resale properties. Roughly 40 of those are condo conversions. I suspect that a good portion of the remaining 90 are also speculators. There’s no other good reason to have a vacant property for sale right now. Of course, all of the tenant occupied properties are investor owned. Probably not possible to draw any clear conclusions here but some strong suggestions that a good portion of the seller market is investor resales.
May 14th, 2009 at 9:36 AM
If and when worse comes to worse, which area and more specifically neighborhood, will see the biggest hit and which would see the most price retention….
May 14th, 2009 at 9:37 AM
Hi Norm,
Thanks for explaining the numbers to me. It seems to me that alot of condos will be put on the market. Do you think that given the entry level pricing of the units that they will be absorbed by the market, or will the over supply push the price down. I know, tough question.
May 14th, 2009 at 9:40 AM
Carl,
“Oversupply” seemed like an obvious consequence of all of the conversions that we saw last year. To this point, they seem to be selling quickly with continued upward pressure on prices. With the talk of a “freeze,” it’s entirely possible that we’ll pull through this without seeing a real oversupply.
May 14th, 2009 at 9:41 AM
Ron,
I don’t mean to be flip but you’d have a better chance of winning the lottery than answering that one correctly.
Typically, area 4 has been last to benefit from a better market and the first to suffer some in a slower market. I’m not sure that would be the case moving forward. It seems to have become a much more popular area because of the lower prices.
May 14th, 2009 at 9:43 AM
I simply do not see anything more than a minor price correction happening. The economy is just too strong and the news is just too consistently good both short and long term. Every day there is more good news about the Saskatchewan economy. Today, I see that the potash price contract for this year is triple from last year. Oil revenues are high and rising. Interest rates are heading down or stable. I just don’t see the ingredients for a bust in Saskatoon. For that, we would need much higher interest rates and/or a commodity price bust. Neither of these things are happening.
May 14th, 2009 at 9:43 AM
Northstar,
Re: stats before Saskatoon. We can track daily changes to some extent but they are tricky as the paper flow of listings, solds, expires don’t necessarily reflect the date on the paper. Weeklies are a little better and the monthly numbers are probably the best. Giving my head a shake to find reality, what’s 20 to 100 houses when you are dealing with about 14000 listings. Next question is does a $100,000 price drop on a $3,000,000 list mean the market is collapsing? It’s all relative.
Norm,
Todays ‘Sun’ news is that we have apartment dwellers screaming about being kicked out because of greedy (stated without prejudice) landlords wanting to raise rents. Next will come the conversions and I’ll have to borrow all the good stuff you have written in the past month or so.
from Saskatoon’s Joni Mitchell’s “Circle Game”
And the seasons they go round and round
And the painted ponies go up and down
Were captive on the carousel of time
We cant return we can only look behind
From where we came
And go round and round and round
In the circle game
May 14th, 2009 at 9:46 AM
A quick look at MLS listings now shows there are a lot of properties available, often at a lot lower prices than were even a few weeks ago. I think investors are trying to get out while they can. The “crash” may not be huge, but is likely coming, and why risk even a loss of a few percentage points of value? Also, many places have been on the market for months and are *not* selling
May 14th, 2009 at 9:48 AM
Don,
It’s possible that there may be some reductions if some speculators get panicked but I still see people pushing the upper limits in terms of asking prices. There were some reductions coming through this week though but mostly resulting from gross miscalculations in initial asking price.
I’m not sure where the ‘on the market for months’ is coming from though. This is what I see today.
668 active listings (three times what we had last year but still a low number)
On for more than 90 days – 18
on for 60 – 90 days – 27
On for 30 – 60 days – 80
On the market less than 30 days – 543
May 14th, 2009 at 9:49 AM
Norm,
Do you have any stats concerning how many houses have been on the market for 30 days or less (per month) over the last year – year and a half? I think that might be a sign of how many speculators are gonna try and pulll the 100% (at least) return on investments over a year or better. I wish i could make hundreds of thousands of dollars multiply in a year. Now thats investing smartly!!!!
May 14th, 2009 at 9:51 AM
Still no SRAR numbers or media release? That is weird. Hope everything is ok.
Hey SRAR, I know some great people who can rebuild your system for you, if it has gone a crapper. No joke. I know people who have created databases of every land sale in BC and have done so for the last 12 years. I’m not trying to solicit business, I’m worried for you… I can help, or I can recommend people who can help.
May 14th, 2009 at 9:51 AM
Not sure about your numbers about how long places are on the market, there do seem to be a lot of places around me (east end) for sale and maybe they are on and off the market, but some seem to be for sale for ever! I’d suggest, some people are just sitting and waiting to see if they can get an obscenely high price and if not just holding out. Either way, there are a lot of places in the east end for sale right now, and the number of signs never seems to decrease.
May 14th, 2009 at 9:53 AM
Why would investors buy here? Sure there are okay jobs out there, but better jobs are elsewhere, where houses are cheaper, you think people and investor house ownership would move to these areas.
May 14th, 2009 at 9:55 AM
Wesco,
No I don’t. I can only pull those numbers on active inventory. I can tell you that the average “days on the market” for single family homes and condos is 16, dating back to January 1, 2007.
callum,
Still nothing from SRAR but I don’t think you’re going to find any better stats than the ones you’re looking at here.
Kenton,
It’s certainly possible that there are some properties which have been canceled and re-listed at different prices skewing days on the market down. At the same time, you have about 1500 new listings between Jan and March. Approximately 1,070 of those have sold. 75 have run a full list cycle and expired, 107 have been canceled or withdrawn from the market. No doubt, some of the latter two categories have made at least one appearance as a “new listing” and may again appear as an “expired” or “canceled” listing. No matter how one slices it, a market which absorbs 71% of available listings in an average of 21 days is leaning towards “as good as it gets.” If a property is lingering for months in this market, the seller either needs a serious cleaning job or a good market evaluation.
May 14th, 2009 at 9:55 AM
If in doubt as to the over supply, I’d recommend a drive around the east end condo ghettos of Saskatoon, there are up to half a dozen for sale signs per complex. Also, that saskhouses.com is likely not taken into MLS numbers, but it seems that a lot of new properties have come onto the market under that independent service. Their website isn’t nearly as good as yours though, too slow. Still a lot of unaccounted for houses out east end.
May 14th, 2009 at 9:56 AM
Kenton,
Yes, there are an additional 175 Saskatoon properties for sale on the SaskHouses website.
May 14th, 2009 at 9:56 AM
make that 176 listings, it goes up on a regular basis. Also they have open houses like crazy on there