Saskatoon real estate: Week in review (February 11-15 2008)
The inventory of active Saskatoon real estate listings slipped marginally to 361 units by the end of the week including 189 houses (single-family detached homes) and 133 condominiums. At the same time, this week brought the largest number of new residential listings since the week of October 22-26 and I expect that we’ll continue to see this trend continue in the weeks ahead.
It was also an exceptional sales week with 94 Saskatoon homes trading hands, the highest number of unit sales for any week since the week of July 16-20, and well ahead of the same week last year.
Interestingly, the average selling price of all houses and condos took a fairly big dip from last week to $244,248, the lowest weekly average since the week of November 5-9. This large drop can be attributed to an unusually high percentage of condos which appeared on this week’s sold list. For instance, 24 of the 31 homes sold in area 1 were condominiums. It strikes me as strange that only six house sales were recorded in this huge area, especially considering that there are 62 active single-family home listings. A closer look reveals that all but two of them are priced over $300,000. Over 50% are priced above $500,000 so they’re a little out of reach for typical Saskatoon home shoppers.
The percentage of homes which drew “overbids” this week declined by about 10% from last week and the average overbid dropped by about $4,000. I’ll also mention that each of the five areas had one or two very large overbid sales which skewed the numbers up. The majority of homes which sold high were not particularly exceptional.
Notable sales
- Brevoort Park bungalow at 1,088 square feet, no garage at $355,000.
- Massey Place bungalow at 860 square feet, no garage at $252,500.
- 1,180 square foot bungalow in Parkridge with a single garage is $305,000.
This week marks the first anniversary of the “week in review.” My thanks to all of the loyal readers who have contributed to some terrific discussions over the past year.
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 31 Comments So Far
May 20th, 2009 at 2:07 pm
Happy Anniversary! Thanks again for not only providing a discussion form, but up to date statistics and a variety of relevant real estate articles. All on top of your other real estate duties. Your hard work is much appreciated.
Jedi
May 20th, 2009 at 2:08 pm
Congrats on 1 year Norm! I really enjoy your blog and the useful stats/info you provide.
I’d love to see the average selling price dip even lower by the end of the month, think you can swing that for me? ;’)
May 20th, 2009 at 2:08 pm
BTW you had mentioned 94 homes sold this week compared to the same week last year with 83 sold. I wonder though if there was less inventory 1 year ago, compared to the 361 homes listed this week?
May 20th, 2009 at 2:08 pm
Thanks Jedi and Heather. I appreciate your participation here.
Heather,
Good point. There are definitely more properties on the market this year, though clearly not enough to restore anything resembling balance. I’m just amazed that homes are still selling at this pace. I mentioned in my post that there are only two single-family homes under $300K in area 1. I realized today that there isn’t a single one in area 2. The under $300,000 east-side house is pretty much extinct.
May 20th, 2009 at 2:09 pm
I think that the pace sale of sales a has a lot to do with economists saying that Saskatchewan and Manitoba are going to be the best performing markets in Canada. From an investment prospective performance = profit. Affordability has nothing to do with it.
May 20th, 2009 at 2:09 pm
Brian,
I know it really seems skewed because we have two running sets of effective meanings on this topic. One speaks to the sellers and the other speaks to the buyers.
The wording we see is very misleading because if people bought into news items wholesale, they would have every reason to be confident.
That is not the case however and all the positive sentiment is wasted on painting a big red “x” on the real estate market.
At this point, it’s no wonder the money obsessed types are swarming. I’m sure there are many other types of investment that have seen this kind of pounce and if the government ever wakes up and realizes just what is going on, they’ll move on to the next unregulated necessity.
It’s all greed, and the investors who post here make that transparently evident. They have no shame in raking the people for their quick buck and driving the quality of our society down for their gain.
May 20th, 2009 at 2:09 pm
I bought almost a year ago now and I still check this weekly to see what is happening in the market. Thank for your work here, Norm.
May 20th, 2009 at 2:10 pm
Nice hearing from you Carrie.
May 20th, 2009 at 2:10 pm
I ran accross a post that came up with some similar findings as me. One of the most important stats I’ve found is just a combination of sales relative to inventory which I define as inventory turnover. I ran accross another fellow who calls it market velocity and market absorption:
http://curbed.com/archives/2008/02/07/three_cents_worth_absorbing_velocity_until_we_explode.php
What you’ll see is that price seems to jump when inventory is turning over in very short periods of time. When you compare Saskatoon to the United States in this post, we’re turning over inventory every month versus every 4-12 months. You may recall from a month or so back when I forecast turnover to get even shorter soon.
While investors are having an impact in the market, I think the overall problem now is that there are always people moving in and out of town and when supply gets too small relative to demand – price climbs rapidly. It appears that when it comes to houses, prices are inelastic (consumers aren’t as concerned about price) when supply is crunched. There are those who just want a house that badly (likely residents and investors both).
I’m not sure how much of this works its way into the banks and their analysis but I’m sure it does. In any case, I thought someone out there might find it interesting.
May 20th, 2009 at 2:11 pm
Oh, this weekend I also ran accross this chart and some of you may find it interesting as well. Basically in-migration to Saskatchewan (blue) is bringing more and more housing demand to the province.
http://creastats.crea.ca/sask/migration.htm
Its interesting that we’re seeing more out-migration (Saskatoon folks who can’t aford to stay I assum) quarter by quarter. But The increase in migration to Saskatchewan is increasing quarter by quarter for net in-migration that is actually growing (fairly substantially I might add), quarter by quarter.
Its pretty obvious to me that prior to the last quarter of 2006, Saskatoon was building for zero net (or negative) migration. All of a sudden we start getting all of this in-migration and we don’t have the supply to manage it. Prices go up as per my last post. We’re getting bought out by Alberta! (mostly Albertans anyway… a lot of international folks too). When will it stop is the big question…
My own thoughts are that the Alberta economy is softening just to the point where people are looking at their options. Probably 1/3 of Alberta is former Saskatchewan residents with personal connections to home so its no surprise some are moving. I’m thinking that if AB economy takes off again, maybe wages go with it and migration starts to fall. If oil drops like a stone and AB tanks… maybe lots of people want to come back but they can’t sell houses for steep prices anymore and they become more price sensitive too. It could be this is the perfect condition to mix the perfect storm – I can’t say for sure but I have little doubt of the impact they’re having on prices.
May 20th, 2009 at 2:11 pm
Doug,
Makes sense to me. Thanks.
Where are the medians lately?
May 20th, 2009 at 2:13 pm
Longtime reader, first time post!
Thanks for all the info Norm. I have read this blog every week for a year and the sale of my house had been one if the first notable mentions at the start of the boom.
Being under the age of 30 the sudden increase in home equity allowed me to move to BC. In the last year I feel that Saskatchewan has lost the affordabilty that made it so attractive for a person starting out. As much as I loved Saskatoon, a condo in Vancouver or Victoria is much more appealing to the younger generation than a suburban house in Saskatoon for the same price these days. And if I did leave BC, Montreal is cheaper than Saskatoon now with much more global appeal to youth. That said, Saskatoon will always be a special place to me.
Cheers
May 20th, 2009 at 2:13 pm
Doug,
you posted a real good stuff. thanx
May 20th, 2009 at 2:14 pm
Doug,
I was also gonna ask where the medians were at. I am guessing around 280-285. Also, does anyone follow saskhouses.com closely? It looked like the DOM were longer (although they have been picking up) and sales over there are picking up also. I don’t know if they offer much in wway of statistics other than someone number crunching.
May 20th, 2009 at 2:15 pm
Abdul,
Glad I could help.
Norm and Jedi,
The mediah list price for a house is now $360k. I started tracking these figures back in November and the median list price back then was 280k… its been a pretty steady rise week by week.
The mediah list price for condos is 215k. This has actually come down some since my november tracking when it was 230k. It looks like a lot of cheap, low quality units hit the market which I think may be bringing down the median.
I don’t think the trend will continue though – the spread between housing and condo inventories was getting shorter to a point in mid january when we almost had as many condos as houses on the market. The inventory gap is now increasing and either condos are moving a little more or houses are moving a little less.
May 20th, 2009 at 2:16 pm
The housing market in Saskatoon makes no sense at all. There is no reason for realestate to be in the same range as Edmonton or Calgary. For one, people in Saskatoon don’t make close to same amount of money as Albertans and also the amount of work in the Sakatooon Area pales incomparison to Edmonton. Edmonton has has 40 Billion in work scheduled for the next 15 years and thats just in oil and gas (spin offs are numerous), what does sakatoon have? An extension of Circle Drive? Moving of Mitchels? It just doesn’t make sense, sorry to say Saskatoon is a market blown out of proportion from outside investors and it’s not Sask money.
May 20th, 2009 at 2:18 pm
Norm,
mls.ca invetory is down about 10-15 from earlier this week. Has it been a busy week?
May 20th, 2009 at 2:20 pm
Wesco, Saskatoon actually leads both Edmonton and Calgary in GDP growth. Edmonton may be putting a tonne of money into oil and gas but I’m really not that envious of commodity based economies. I grew up in Lloydminster and have first hand experience of a cyclical oil economy.
Saskatoon continues to put millions towards building more capacity for the synchrotron. VIDO, the center for Vaccine and Infectious Diseas Organization is going through $140 million dollar construction – thats the largest investment to date in vaccine research in Canada. The university just built a new building for law and expanded their veterinary science building. Innovation place just built a new building for AMEC and other tenants because they’ve reached their limit (I think they have about 130 technology tenants). The sciences are happening here and thats long term sustainable economic activity – and great jobs.
Sure we have commodities too and potash and uranium mining is going to see major investments in the next few years. We are also the second largest oil producing province in Canada (after Alberta) and have tar sands that are being explored. This activity spins off to Saskatoon but the big growth industry this year will be construction with record lot development and housing construction for 2008.
As kind of a cherry on the top, all of the Alberta residents moving back with their money, contacts, and experience is going to boost things. I think you’re going to have to get used to being second place for a few more years – and thats if oil stays strong.
Finally, I should correct you that Saskatoon is not selling like Edmonton or Calgary. The average sale price in December for Calgary was $408k, in Edmonton 332k, in Saskatoon 260k, and Regina 200k. Basically the price disparity between Saskatoon and Edmonton is the same as between Saskatoon and Regina (and between Calgary and Edmonton). There is a pecking order in pricing and we are very clearly in third place.
May 20th, 2009 at 2:20 pm
But isn’t our boom primarily due to commodities speculation in saskatchewan. That’s all I hear is Saskatchewan oil / Saskatchewan grain / Saskatchewan uranium. Aren’t we headed for (if not there) a commodities based economy? I realize that saskatoon is building new buildings but isn’t Edmonton building new buildings as well or just oil wells?
May 20th, 2009 at 2:21 pm
Jen,
You’re right, Saskatchewan is primarily a commodity economy, although I’ve been told we’re more diversified than Alberta. The knowledge-based sector and technology is what’s going to give us long term economic staying power (in my opinion) and all I can say is that we have good things happening there.
As for construction, Calgary and Edmonton are definately building too. Growth in their construction and trades sectors was their leading sector based on the last stats I saw. It was also ours so its pretty important to both provinces.
May 20th, 2009 at 2:24 pm
…And don’t forget about the 140 million dollar River Landing project, the new hotel that will be going out by Stonebridge, two major big box malls in recent years, almost certain downtown office tower, several new schools in the last few years with more to come, and have you been out north of Silverwood lately?
Having said all that, I still think residential real estate in Saskatoon is out of whack but there’s no doubt things are happening here, at least as fast as they can be managed.
May 20th, 2009 at 2:24 pm
Jedi,
Listings are actually up this week. mls.ca is often a couple of days behind but I see 383 actives on the agent mls.
May 20th, 2009 at 2:26 pm
I have heard rumblings, of some big companies in Alberta looking here for investment and setting up shop. Oil is getting big play here in the southwest and southeast(Bakken oil formation) the tarsands up north. Land is being bought up by oil companies in the Preeceville area as well (story in SP) as in the North Battleford area. Saskatoon will be at the center of this.
Everything is booming here from the airport expanding to handle more flights this year (no air show in 09) to construction and trades.
Uranium, potash, agriculture, diamonds, biofuels, ethanol plants are all in various stages of development and these commodities are what the world wants.
When I was in school (10 years ago) my economics prof said that Saskatchewan should be doing better than Alberta with all our resources. He compared our economy to a car with one foot one the gas pedal and the other foot on the brake. One day that brake will let go and the car( economy) will take off. That day is now.
Doug,
I agree with you that our economy will see greater growth than Alberta in the long run. Alberta’s economy is approx 25% oil and gas. Quite a few eggs in one basket.
Like it or not, Sask is the place to be. We just need the wages to retain and attract workers with this boom especially in the 25-40 age group. I think it is starting to happen but more time will see how this plays out.
May 20th, 2009 at 2:26 pm
My brother lives in Stoon and is making more money than he ever did as a trucker. But he took the time and money to upgrade his skills and was rewarded for doing so.
May 20th, 2009 at 2:28 pm
More money is why you upgrade skills
Smart move!
J
May 20th, 2009 at 2:28 pm
Doug,
I made all those same arguments 6 months ago and got crapped all over for it. You’re a smart man
.
I do think the Saskatoon market will be out of whack after this spring as Norm says though.
May 20th, 2009 at 2:29 pm
Lol! You sure can take a shitkicking though!
May 20th, 2009 at 2:30 pm
The knowledge based sectors and technology will not thrive under an economy based on high prices.
Those areas typically pay the lowest possible wages for the highest skill levels. Nowadays the employers do not put an emphasis on long term employment, but more treating people as expendable resources. They aren’t concerned with ensuring their employees live good lifestyles – quite the opposite in fact! They would rather ask them to work longer hours and spend more time away from family.
For those of you with your brains stuck in persuasive-neutral, there is plenty of statistical evidence out there to back that dark and miserable reality.
I don’t think any contradiction can stand given what is happening in Alberta. Right across the board, businesses can’t retain their employees because they just won’t pay enough. Jobs are easy to get, but a job that can help you cover the 1000-2000 and growing cost of rent or mortgage?! Forget it. You live in lala land if you think Saskatoon is going to realize a benefit from all this “growth”.
What this is – if it isn’t already – is infrastructure and a lot of posturing from the rich (sorry, but who else?!). How about I say wealthy instead? I’m not trying to sound derogatory here. I just don’t want to put these people above those they impact.
Either way, we can see this proof right outside our very windows. It comes in waves and as I’ve said before, you boil the frog slowly. The islands of wealth form, you end up with an economy with no options because it is wrapped up in big business conservative thinking.
Depending on big business and the ideas that come from them is lethal to the people. Take Edmonton for example which just recently had around 1000 jobs cut from the Dell call center. Only a few years after much fanfare – big business reveals the iron fist under the velvet glove all to readily. And let’s not kid ourselves, they likely didn’t offer sterling conditions for their employees outside of the workplace (wages).
Low wages don’t entice anyone. High house prices don’t compliment low wages. What are all you nutjobs thinking this money is going to do? It is an exclusionary force.
We have to stop thinking like all these financially endowed dynamos are going to do anything but position themselves for maximum profits with zero consideration to the economy, communities and lives they impact.
In short, businesses just don’t give a hoot. We need to bring them in line or else they will continue to swell in this most convoluted and difficult to fix fashion.
But hey, with the proof just down to the South AND to the West, why listen to the rantings of an uncomfortably un-moderate leftie. Again, another deprivation of reason we can observe with our politically malnourished friends in the USA.
May 20th, 2009 at 2:31 pm
Yes I agree that Saskatoon has a more diversified work force in comparison to Edmonton. And I do beleive that the research and development sector is a good business to be in. However these companies don’t pay the big money like oil and gas. I’ve had job offers from these sectors and quite fractly they do not compare to the salary that I am currently receiving in the oil gas sector in Alberta.
Also in comparison to housing prices between Edmonton and Saskatoon, i find that they are quite comparable. A house that I feel is a comfortable dwelling for me to purchase in Saskatoon is selling for 350-400k and I’ve look in Edmonton recently and have found the prices to be comparable. 480sqft bachelor pad in Saskatoon selling for 115K is absurd!!! My brother is currently attempting to sell is house in Edmonton for 379,999 and the exact same house last year across the street sold for 440K. Edmonton is definitely taking a hit and I see the same thing happening in Saskatoon next year. Saskatchewan is always a year behind Alberta, and Alberta is currently on its way down for housing prices (excluding Fort McMurray of course)
May 20th, 2009 at 2:32 pm
Any thoughts on why the “average” price of a home is so much higher in Edmonton? CREA shows it as $332,000 in January vs. $260,000 for Saskatoon in the same month. That is at odds with what you’re suggesting but perhaps there’s a logical explanation for that. Maybe the higher incomes in the area brings more upper end sales?
Thanks for the comment.
May 20th, 2009 at 2:32 pm
All the more reason why I’m glad I stayed in my home of Winnipeg where I’m not subject to the slow-moving whims of the three governments.
Instead, I can benefit from a modest response to every situation with a focus on ensuring that people come first.
Absolutely essential and irrevocably the highest order in our value system has to be preserving society. If you disagree, it’s just greed.