Fundamentals appear to be in place for a stable Saskatoon real estate market: SRAR
The Saskatoon Region Association of Realtors (SRAR) released the residential real estate statistics for March 2009 today, along with the following media release. We’ve jazzed it up a bit with some graphs for unit sales, average prices and active listings.
First quarter residential unit sales maintained a similar pace to the last few months. Saskatoon REALTORS® sold 283 residential properties in the month of March, that number down 28% from March 2008 when 391 units were sold. Sales numbers are on par with 2005 and 2006.
Click the image for a larger version of the graph.
REALTORS® sold $75,481,000.00 of real estate in March, that number down 33% from March 2008 when $113,206,000.00 of real estate was sold. The drop in dollar volume is directly related to the reduced number of unit sales. Year to date REALTORS® have sold $193,581,000.00 of real estate.
The average residential selling price was $266,720.00, that number down 8% from March 2008 with an average selling price of $289,530.00. These numbers indicate a slight softening of upper price range home sales. Year to date the average selling price remains on par with 2008 at $274,584.00.
Click the image for a larger version of the graph.
The average residential price is derived by taking the month’s dollar volume of homes sold and dividing that number by the unit sales number. The percentage of change should not be used unilaterally as prices vary from area to area. Consumers wishing an accurate estimate of value for their home should contact a REALTOR® member to do a comparative market analysis.
In the month of March the $275,000 – $300,000 price range saw the greatest sales activity. 23 homes sold in the $400,000 plus price range. Year to date 69 properties have sold over $ 400,000 with 3 homes selling for more than $1,000,000.
An inventory correction appears to have begun. Saskatoon REALTORS® listed 662 homes in March, that number on par with 2008. Year to date 1,742 homes have been placed on the market. Buyers had 1435 properties to select from at the end of March. It will likely take the remaining part of 2009 to reduce the current larger than normal inventory level.
Click the image for a larger version of the graph.
Confidence in the Saskatoon and Saskatchewan economy remains strong. Market activity and expectation are directly related to the employment environment. The Conference Board of Canada predicts an increase in GDP for our province in 2009; in addition employment numbers are also expected to increase. The necessary fundamentals appear to be in place for Saskatoon to have a stable market for the remainder of 2009.
Drop by early next week when our “Closer look at the Saskatoon real estate statistics for March” will be posted. It includes a more extensive overview of unit sales, prices and active listings of single-family homes and condominiums.
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 @Norm_Fisher.
Norm Fisher
Royal LePage Saskatoon Real Estate
35 comments so far. We'd love to hear your thoughts.
April 25th, 2009 at 11:43 AM
Norm,
Prediction – Saskatoon average residential price will be close to 2007 levels in three or four months (June-July).
The reason is the inventory is high and First Time Buyer sales will peter out as we get closer to the summer. You are only 15K away from those prices now.
April 25th, 2009 at 11:44 AM
oger,
Wouldn’t a “petering out” of entry level buyers tend to potentially push the average up?
Personally, I’m of the opinion that prices are probably fairly similar to those we saw in the back half of 2007. Our average is propped up by some big sales (we were just over $260K for March until Monday. A 1.19 million dollar sale and a 940K sale pushed it up). Then you have the fact that condos are making up for a smaller percentage of sales today than they did a year ago (23% vs. 33%) which is keeping the average up on the higher said.
The average selling price of a condo was higher in Q4/07 than it was in Q1/09, by $10-20K depending on the month. Single-family prices (averages) remain up about $20K from Q4/07.
Inventory did grow at a slower pace in March compared to April. With housing starts through the floor I wonder if things won’t start to level out some in that area. Population, jobs, and income are all seeing pretty good growth here. Still, I had stepped up and predicted a “$260K, perhaps $250K average by the end of Q2″ and that would certainly put us back there.
As always, thanks Roger.
April 25th, 2009 at 11:44 AM
Norm,
Yes FTB’s buy at the entry level and do keep the average price down. But when they stop buying the overall sales numbers drop and there is less demand pressure. This story shows up in the press and buyers feel they are even more in the driver’s seat. When sellers hear that sales and prices are dropping some will lower their prices as they rush for the exits. In particular those condo conversions will be something to watch in 2009.
I also feel that the recession is only just starting. Another set of bad job numbers today in the US. When summer comes and Obama and crew have not solved anything it is really going to sink in everywhere, including Canada. Saskatchewan is better prepared than the other provinces but will still feel the effects.
April 25th, 2009 at 11:44 AM
Norm,
Another problem SRAR is going to have to deal with is next months average price. A visit to their site shows that it spiked to 306K last April. In a month when they release their April report it will really look like prices are dropping year-over-year. The Star- Phoenix will just echo the stat and buyers and sellers will think things are really dropping fast.
That is the problem with using average prices to reflect market conditions. That number is a poor proxy for a Housing Price Index. The median price is a much better number to use but because it is lower many boards across the country did not use it when markets were rising. They are really caught out now that prices are falling.
The rolling average technique that you and I use in our market analysis gives a much better picture of market trends especially when you calculate it for median and average prices.
April 25th, 2009 at 11:45 AM
Hello???? Did anyone notice what a fabulous! job Norm did with the report this month? The SRAR text followed by the data: “Here’s what they said”, then “Here’s what it looks like.” I particularly like the “Year to date the average selling price remains on par with 2008 at $274,584.00.” Check out the graph.
April 25th, 2009 at 11:45 AM
Roger,
“Another problem SRAR is going to have to deal with is next months average price.”
Oh man, you got that right. The next three months will be tough ones to deal with, unless S’toon’s predictions are correct and we suddenly rally to $310K.
“That is the problem with using average prices to reflect market conditions.”
Interestingly, our median is following the average at almost an identical pace most months. They’re both down by roughly 8% year over year in March. You are right that the average jumped more than the median did in April (from $279,000 in March to $287,500 in April while the average spiked $16,000). However, this is the music that must be faced and, median or average, it’s going to be a tough pill to swallow. I have to say though Roger that my sense is that buyers are getting more interested as prices come down. I have this sense that demand will continue to be reasonable good but perhaps I’m living behind rose coloured glasses. I realize that it could go either way.
Realty Reality,
Thanks very much. I think the graphs are a worthwhile addition and once they’re done they’re pretty easy to maintain. I appreciate the feedback.
April 25th, 2009 at 11:46 AM
Year over year comparisons did’nt look to bad up until now, but what are biased market participants going to use now, median, 6 week, last month comparisons? When prices peaked last summer and sales began to tank, a real estate agent with his radio commercial said it was just a little hickup, more like a whopper of a belch! Is anybody else of the opinion that SPAR is perpetually of the glass half full opinion when they describe the Saskatoon real estate market. I’ve never seen a boom without a bust, so since we are not immune to the global bust, blah blah, blah but better able then anybody else to sail through this troubling economic time it will be interesting to not see a bust. It must be true because Premier Brad Wall, Mayor Don Atchison, and Bill Gormly say so.
April 25th, 2009 at 11:46 AM
I’ve always wished SRAR would include graphs so I could get a better picture of what’s really going on. That was awesome Norm!
Good recovery by SRAR though, pulling out the YTD average price still being “on par with 2008″ after mentioning the 8% drop. Makes it sound not as bad, being “on par” and all.
April 25th, 2009 at 11:46 AM
AS long as listings remain high, there should be zero chance that prices will rise, if they do so much for the 10,000 year old rule of supply and demand. For the bears they should really begin to enjoy monthly comparisons. Bears win, Bulls win and Pigs get slautered, for all those apartment convertors, welcome to the barbeque—yours! Or there’s always renting out, how does 1 bedroom, stainless, maple, granite,laminant for $725 sound?
April 25th, 2009 at 11:46 AM
Matthew,
Thank you.
Rick,
“Year over year comparisons did’nt look to bad up until now, but what are biased market participants going to use now, median, 6 week, last month comparisons?”
Did you know that the five-year average selling price is $159,557? Bet you feel kinda silly right now, don’t ya?
“Bears win, Bulls win and Pigs get slautered, for all those apartment convertors, welcome to the barbeque—yours!”
Well, aren’t you full of compassion. Oh, pass the salt please.
April 25th, 2009 at 11:47 AM
FASB Eases Fair-Value Rules Amid Lawmaker Pressure
http://tinyurl.com/dkrmxf
“The changes to so-called mark-to-market accounting allow companies to use “significant” judgment when gauging the price of some investments on their books, including mortgage-backed securities. Analysts say the measure may reduce banks’ writedowns and boost their first-quarter net income by 20 percent or more.”
One has to wonder about allowing these companies to use their “judgement” when valuing these “assets”, when it obvious that their judgement over the past decade has been less than stellar.
The market is liking this news a bit too much for me. So everything is all good now? After all, what could possibly go wrong…
April 25th, 2009 at 11:47 AM
Rick,
“Or there’s always renting out, how does 1 bedroom, stainless, maple, granite,laminant for $725 sound?”
SOLD! Er; rather, RENTED! Beats my current 1-bedroom rent of 1,000 bucks! (Yes, I’m getting hosed, and I know it. Also included in that rent is all the noise and water shut-offs as a result of them installing sprinklers in a concrete building! Hooooraaay!)
April 25th, 2009 at 11:48 AM
Norm,
I know Regina is not your jurisdiction, but wondering if you have heard anything in regards to the market’s performance here lately? The Association of Regina Realtors released their March report which saw sales increasing from the previous few months, but down from 2008, in addition to rising inventory. However average prices are still rising.
I’m just wondering if the same phenomenon you note as happening in Saskatoon, a disproportionate decline in the percentage of condo sales in recent months, is the reason for this increase in average selling price, or if its a case of increasing demand as evidenced by the increasing sales level.
Again, sorry for the off topic question but I was just curious if you’ve heard any industry talk about the Regina market’s performance which appears to be stronger than the Saskatoon market lately.
April 25th, 2009 at 11:48 AM
Personally, I loved the juxtaposition of these two statements:
“Sales numbers are on par with 2005 and 2006.”
“Saskatoon REALTORS® listed 662 homes in March, that number on par with 2008.”
So you’ve got listings equivalent to a bubble year, and sales equivalent to an average year.
: “Where are we going?” “HIGHER!!!”
I also chuckled at this: “The average residential price is derived by taking the month’s dollar volume of homes sold and dividing that number by the unit sales number.” Norm, did you appreciate the lesson in basic math? I know you liked it when you got it from me.
April 25th, 2009 at 11:48 AM
I can understand SRAR’s motivation to spin the stats and I would expect nothing less from an industry organization. I can’t understand where the Star Phoenix is coming from covering this story, deeply buried on page C8 under the headline “Housing market stable in March” with the comments section disabled.
http://www.thestarphoenix.com/Business/Housing+market+stable+March+SRAR/1454635/story.html
April 25th, 2009 at 11:49 AM
Crikey,
“The market is liking this news a bit too much for me.”
+1.
Robin,
If there is any justice you shall have a special place of honour at the banquet.
Cory,
Regina does appear to be getting a bit of a spring bounce. Prior to that, an since the summer, the general trend has been down for some time. Here are the averages over the past 13 months.
March 08 – $234,504
April – $255,736
May – $245,391
June – $250,157
July – $253,349
August – $253,620
September – $244,164
October – $236,126
November – $229,319
December – $237,012
January – $213,167
February – $232,514
March – $244,888
They’re a little erratic because many of these month have well under 20 sales, so they’re really susceptible to skewing. In March of 2008, 53 of 266 sales were condos. In ’09 condos were 37 of 252.
At 926 active listings, you guys have just a 3 1/2 month supply while Saskatoon is around 5 months.
Bookrat,
I did seriously laugh out loud when I read your comment. Apparently Saskatonians are not particularly strong with averages. We actually did a media release in January to explain to the public how averages work.
http://tinyurl.com/cxwoq3
Stinky,
Interesting point. SRAR’s “mission” begins with “To represent the real estate interests of its members” and it is a realtor organization.
April 25th, 2009 at 11:50 AM
Crikey,
You couldn’t be more right!!
I love the first paragraph of that article:
“The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive.”
Wait a minute. How come fair-value rules are fine in an active market, but not in an inactive? Fair-value is fair-value to me. This is all smoke and mirrors. It’s only adding to the problem.
April 25th, 2009 at 11:50 AM
A little off topic, but has anyone talked to contractors lately? At Homestyles, talking to various folks it seems like there is still a lot of interest. Most of the landscapers and Reno people were expecting a slow down, but it hasn’t happened yet. I just talked to a surveyor and it’ll be at least a month before he can get to me. Maybe people are trying to get the work done while they still have a job.
Just drive around and see how many people are putting in new windows and siding. It’s rather refreshing, really, considering how many homes have had little to no maintenance done to them in thirty years. (I’m living in one now).
Whether it’s a wise move or not, it’s still nice to see well maintained property.
April 25th, 2009 at 11:50 AM
My impression (talking to framers and concrete guys about getting a garage built, and also had some spray foam done last month and a new roof last fall) is that trades don’t have any shortage of work. However, I’m able to book stuff and have people call me back and show up to do the work within a pretty reasonable time-frame, so it’s not insanely busy, either. Seems pretty blalanced.
captcha: mortgage do
April 25th, 2009 at 11:50 AM
Hey, love the show Norm. Long time listener, first time caller.
Laura,
it seems steady on our end. alot of tax incentives for renos. new construction has slowed dramatically. i feel for all the fly-by-nighters that came to make hay while the shines.
Heather,
can i get a reference for that spray foam? (that is if you will refer them).
April 25th, 2009 at 11:51 AM
Hi all,
Is there a way to checking the time and price of latest selling of a property? Thanks.
April 25th, 2009 at 11:51 AM
Each day I see older houses with for sale signs on the lawn. But what I really see is taxes,utilities, insurance,interest payments,maintenance, renovations and repairs. These expenses could easily run over a thousand dollars a month, and with property values falling it dose’nt look very appatising, oh here’s the salt Norm, excuse my manors.
April 25th, 2009 at 11:51 AM
“The Financial Accounting Standards Board, pressured by U.S. lawmakers and financial companies, voted to relax fair-value rules that Citigroup Inc. and Wells Fargo & Co. say don’t work when markets are inactive.”
Northstar,
Do you suppose an argument from taxpayers that fair-value rules for their investments and houses don’t work when the markets are inactive, so they should be relaxed too?
Didn’t think so.
April 25th, 2009 at 11:52 AM
Just to clarify…
A whois on canada.com, the host of StarPhoenix reveals why the news they publish is arms-length Conservative spin:
Registrant Name: Canwest Publishing Inc.
Organization Info:
Peter deGroot
300 Carlton Street
Winnipeg, MB R3B 2K6
CAN
Phone: 1 905 6452090
Fax..: 1 905 6452093
Email: webnames@canwest.com
There’s really no reason anybody should trust the paper knowing that they’re owned by Canwest. They are to Canada what the CNN was to the United States. A tool to leverage media illiterate Canadians.
April 25th, 2009 at 11:52 AM
Am I seeing that chart right? First time in five years that monthly yoy prices are down?
http://www.normfisher.ca/images/teamblog/averageprice0309.jpg
April 25th, 2009 at 11:53 AM
Don,
We used Superior (twice now… main floor and basement). They were great about showing up when expected, calling when delayed, and returning phone calls, which always makes me happy. The trimming of the foam wasn’t perfect either time (I had to hack away at quite a lot of it myself before drywalling… and it’s messy), but overall I was very pleased with the work. It was the perfect solution for our old house, which has 2×4 walls, and lots of awkward little crevices that would be a pain to try to insulate and vapour barrier in the conventional way.
By the way, you can buy DIY spray foam kits, but for anything over a couple hundred square feet, they will cost just as much as having these guys do the work (which for me was $4/square foot for 3 inches of foam). Bonus; it improves racking resistance (and our balloon-framed house had a little bit of sway to it before the foam), and we noticed that hearing outside noises seemed to be reduced with spray foam vs. the fiberglass.
Heather
April 25th, 2009 at 11:53 AM
Trader,
Welcome. Thanks for joining in.
Don,
“Is there a way to checking the time and price of latest selling of a property?”
An agent could tell you that if it traded on the MLS. If not, you could run a title search at http://www.isc.ca for ten bucks. You’ll get the date of the last transfer and the stated “value” on the title almost always reflects the most recent selling price.
Louise,
“Am I seeing that chart right? First time in five years that monthly yoy prices are down?”
You’re seeing that right. To the best of my recollection this is the first time it has happened as long as I’ve been in the business (1993).
April 25th, 2009 at 11:54 AM
“To the best of my recollection this is the first time it has happened as long as I’ve been in the business (1993).”
Just out of curiousity, do you know when this last did happen? Just as a guess, I’m thinking it was probably the early 80′s, but it may have happened around 1991 as well.
April 25th, 2009 at 11:54 AM
“You’re seeing that right. To the best of my recollection this is the first time it has happened as long as I’ve been in the business (1993).”
That’s because real estate only goes up! Don’t you know that? Buy now or be forever priced out of the market!
April 25th, 2009 at 11:54 AM
“That’s because real estate only goes up! Don’t you know that? Buy now or be forever priced out of the market!”
Now the tables have turned and for many specs who bought 2nd or 3rd properties it is
“Sell now or be forever priced in”
April 25th, 2009 at 11:55 AM
Yes, Louise, there is a Santa Claus.
No matter what the SRAR says, prices are down YOY.
April 25th, 2009 at 11:55 AM
At the risk of turning this into Saskatoon’s finest spray-foam blog;
Heather, was your spray-foam done through the exterior, or did you gut the home? We also have an older home with balloon framing, and there’s virtually no insulation in the upper walls. Our eco-rebate deadline is looming, so we’re looking to get something done soon.
Captcha’s got a solid vocabulary: assuage with
April 25th, 2009 at 11:55 AM
Saskatchewan hasn’t seen it’s bottom yet, but you have started your descent. http://www.edmontonjournal.com/Business/Shop+wisely+make+offers+real+estate+experts/1439184/story.html
A qutoe from this article. “We are also very concerned about Saskatchewan, where volumes are slowing, inventory is soaring and prices are bound to reverse sharply.”
April 25th, 2009 at 11:55 AM
guest,
Thanks for that.
Ozzie was a real booster for Saskatoon just a couple of years ago, but alas, it appears that he and his flock are finished with us for now.
April 25th, 2009 at 11:56 AM
Crikey,
Sorry, I missed you up there. I don’t have easy access to statistical data but I would be surprised if there weren’t some y-o-y declines in the early 90′s but it has been a pretty steady upward climb since then. Up until the past few years it was pretty much always slow and steady here.