Saskatoon real estate: Week in review (December 22-26 2008)

Having just celebrated my sixteenth Christmas holiday season as a Realtor, I’ve learned over the years that you just can’t expect much of this particular week. Close your local MLS for three of the five regular business days and pretty much expect sales and listings to fall off of the map. This year was no different.

Just 15 new Saskatoon real estate listings hit the board this week including 13 single-family homes and 2 condominiums. Total active residential listings settled at 1,292 properties, down 36 units from the previous week, among them, 782 houses and 429 condos.

Sales were equally weak with a total of 15 homes firming up a final sale including 11 houses and 4 condominiums.

Home sales and new listings met at their lowest point this year on our “Units Sold vs. Units Listed” graph.

Click the image for a larger version of the graph.

Price results for the Saskatoon homes that did sell proved to be a little more interesting, but again, with only 15 units in the review there isn’t much of a conclusion that can be drawn from the numbers. Given that the median price for the week was just $195,000 and the highest sale recorded was $356,900 it’s not much of a surprise that the average sale price plummeted to just $214,500, the lowest weekly average for the 2008 calendar year. I actually had to re-format the vertical axis on the “Averages” graph to make this week’s review work. The six-week average managed to drop nearly $8,500, falling from $279,240 last week to $270,782 this week and reaching its lowest level since the week of March 10-14 when it was $265,040. The four-week median selling price also took a pretty good dive dropping to $245,000, down a full $10,000 from the week before when it closed at $255,000 and reaching levels not seen since early this year. In fact, only two other weeks in 2008 produced a lower four-week median.

Now, it seems to me that most of the time that we see a spike, or a large decline in the weekly average, prices bounce in the opposite direction the following week. I fully expect that will happen next week but, with another short week ahead of us, it’s quite conceivable that next week could bring similar results. If it does, the four-week median would almost certainly fall again, perhaps back to 2007 territory.

Click the image for a larger version of the graph.

The average underbid fell fairly substantially this past week from $15,455 to just $12,525. However, when calculating the average underbid as a percentage of the average asking price it’s pretty much bang on with the week before. The big number discounts ($20K plus) shrunk significantly from nearly 20% last week to 7% this week. The $15,001-$20,000 underbid made a pretty big comeback accounting for 27% of all recorded sales. Action in the $10,001 to $15,000, and the $5,001 to $10,000 categories took a smaller percentage of sales while the up to $5,000 range grew from 22% of sales last week to 33% this week.

I hope that you’re all having a pleasant and relaxing break over the holidays. Best wishes for a safe and happy New Year celebration followed by an outstanding 2009 for you and yours. Thanks again for reading and contributing.

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

Saskatoon real estate: Week in review (December 15-19 2008)

It was a far stronger week than I had expected. Perhaps Saskatoon real estate buyers were in the Christmas spirit. Overall, sellers had a better week than they did the previous week with stronger sales, higher prices and smaller underbids. Oddly, multiple offers were received on a number of properties. I am familiar with four instances where more than one buyer attempted to buy the same home. Two of the four sellers low-balled their asking price and tried the old “delayed presentation of offers” approach. Both of those properties found a number of willing bidders. One of the homes is firmly sold with a $13,000 overbid, while the other is under contract pending removal of conditions.

Through the course of the week 49 sellers in the residential category placed a sold sign on their property, up three from the week before, but down roughly 20% compared to the same week last year. Included in those unit sales were 31 single-family homes and 15 condominiums. Total residential unit sales to date in December finished the week at 131. Sales will almost certainly slow through the balance of December and there’s little doubt that we will finish the month below last year’s figure of 210 units, but it’s looking like we’ll close the month above the five-year average of 157 units, making December a far better month than we’ve seen in some time.

New listings also increased over the previous week. 62 residential properties were offered for sale on the Saskatoon MLS including 48 detached houses and 12 condominiums. Additionally, 13 of 28 properties that processed a cancellation came back as a new listing.  Total active listings continued to decline for the eighth week in a row finishing down by 50 units at 1,328 including 811 single-family homes and 435 condominiums. Active listings may well slip below 1,200 units by the first of January when, based on historical trends, we can expect to see the inventory begin to grow again.

Click the image for a larger version of the graph.

In spite of the fact that condominium sales took a larger than typical share of the market (over 32%) once again, the average selling price of a Saskatoon home (houses and condos) bounced back more than $40,000 this week to finish at $290,715. The six-week average increased marginally from $275,914 last week to $279,240. Following a fairly significant slide last week, the four-week median inched down to $255,000 from $256,250 the week before.

Click the image for a larger version of the graph.

Month to date, the average selling price in the entire residential category is $270,756, up nearly 6% from last December, but down roughly 3% from the final average of $278,495 in November. Perhaps more interesting, the average selling price of a Saskatoon house is sharply lower through the first two-thirds of December than it was in November sitting at just $279,057, down from $302,508. Condos are averaging $246,475 compared to just $222,834 last month. Certainly, condo prices are driven higher by a handful of luxury sales, but even if I remove four units at the high end and the low end we see a marginal increase in the average sale price. I suppose a lot could still change between now and the end of the month but I look forward to diving into these numbers a little deeper.

The average underbid was nearly 22% lower than last week moving from $19,717 to $15,455. Approximately 81% of all sales were wrapped up within $15,000 of the asking price compared to just 62% the week before. The most significant changes occur at the upper end of the underbids chart with the $10-15K category ballooning, the $15-20K category disappearing altogether, while the $20-25K and the plus $25 category both shrunk.

It’s also interesting to note that 6 of 46 house and condo sales were reported at, or above the asking price. Hardly indicative of a trend, but just the same, it’s the highest percentage we’ve seen since the week of September 22-26.

As my family celebrates Christmas this will likely be my last post until next weekend. I’d like to wish you all the best of the holiday season. I hope it proves to be a happy time for you.

Thank you again for reading.

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

What would happen if…

What would happen if the Canadian real estate market followed a similar path to the U.S. housing market, and what would that look like a year down the road?

The Financial Post answered that question in an article titled, “How low can they go? If Canadian prices follow U.S. trends, certain cities will experience a major slide in house prices.”

Using a calculation based on the rise and fall of U.S. housing prices, and applying those same numbers to prices in Canada the Financial Post determined it would “…mean that most Canadian cities are headed for a fall in housing prices, especially those out west.”

Using their formula, the average price of a Saskatoon home would fall to just shy of $170,000 by October 2009 from it’s peak of $310,386 in June of 2008.

Is this method of comparing markets reasonable, or is it more like asking, “What would happen if we all suffered from cancer symptoms?”

You decide, and please let me know what you think.

Thanks to George for the heads up on this story.

Read the Financial Post story here.

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

Saskatoon real estate: Week in review (December 8-12 2008)

As expected, new Saskatoon real estate listings continued to taper off this week falling to their second lowest level for any week this year. A total of 58 residential properties were offered up for sale including 30 single-family detached houses and 15 condominiums. 26 residential listings were cancelled or withdrawn and just 10 of those made a repeat appearance as a new listing on the Saskatoon MLS system. Total active listings continued to slide for the seventh consecutive week dropping 28 units from the previous week to finish at 1,388 units including 850 houses and 449 condos, and reaching its lowest level since the week of June 16-20.

As residential sales activity picked up over the previous week, the listings and sales lines on our graph reached their closest point since February of this year.  A total of 46 residential property owners managed to firm up a pre-Christmas sale. 28 houses and 17 condos found a new owner over the course of the week. This was one of the better weeks for condo sales that we’ve seen in some time. The category managed to capture 37% of total residential sales, compared to just 15% the week before. Since the first of September condos have accounted for less than 21% of total residential unit sales.

74 price changes were recorded this week, a fairly sharp increase from 50 the week before. Seller motivation remains high. That motivation is certainly reflected in the balance of this week’s numbers.

Prices took a substantial dive this week according to all three of our value indicators. The weekly average fell sharply to just $247,022, down from $270,226 the week before as it reached its lowest level since the week of February 11-15, and its third lowest level for the entire year. The six-week rolling average dipped to $275,914 from $283,832 the previous week. Finally, that stubborn four-week median price dropped from the sticky levels we’ve been seeing for about three months time, falling to $256,250 from $269,950 the week before and reaching its lowest level since the week of March 10-14.

So, what the heck happened to Saskatoon real estate prices this week? There’s no doubt that the unusually high number of condominium sales brought the averages down, but still, the average selling price of a Saskatoon house also came in sharply lower compared to the previous week falling to $257,536 from $279,331. Interestingly though, the average size of the houses that traded was just 1,123 square feet, compared to 1,200 square feet for those which traded the week before. Given that the average cost per square foot for a Saskatoon house was $242 in November, nearly $19,000 of that difference can be accounted for in the size difference over the two weeks. Are higher condo sales and smaller house sales an indication that some first time buyers are beginning to get active again? Only time will tell.

Regardless of the types of homes and the sizes of houses that traded, there’s little doubt that Saskatoon home sellers who were fortunate enough to bag an offer went all out in an effort to close the deal. The average underbid soared to $19,717 and reached its highest level this year. The percentage of home sellers who completed a sale within $10,000 of the asking price did see an increase from 41% last week, to 47% this week. At the same time, there was a sharp increase in the percentage of sellers who accepted an offer that was more than $20,000 under their list price. The $20-25K category saw an increase from just 3% last week to 11% this week, while the over $25K category moved from 15% to 18%.

I expect that similar activity will be the order of the day through the balance of December. From this point forward, buyers are in extremely short supply as the focus shifts from home buying to holidays. At the same time, seller motivation is likely to reach its peak as Saskatoon home owners put a sold sign at the very top of their Christmas wish list. If you have decided that you’ll purchase a home in the next sixty days, these next three weeks may present an opportunity to grind yourself a good buy. Once we get through this year sellers may be encouraged by an uptick in buyer activity that we would normally expect over the next few months.

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

Saskatchewan housing suffers hangover following last year’s party: RBC

RBC’s recently released “Housing Trends and Affordability” study suggests that housing affordability in the province saw some modest improvements over the third quarter but the Saskatchewan housing market is experiencing a “hangover” after a year of partying hard.

“Like Alberta and British Columbia before it, Saskatchewan is about to feel the downside of frenzied markets. Housing demand in the province greatly benefited from the red-hot prairie economy (thanks largely to strong demand and prices for commodities) and the inflow of people into the province. However, housing markets got carried away as skyrocketing prices significantly overstepped historical relationships with household income. RBC’s provincial affordability measures spiked in all housing segments last year, reaching the poorest levels on records dating back to the mid-1980s. As is often the case, a wild party ends with a hangover and Saskatchewan’s fête last year will be no different. Housing resales and prices are already showing clear signs of weakening. More is likely to occur.”

Take two Tylenol and call me in the morning.

Read RBC’s Housing Trends and Affordability study here.
The Star Phoenix covers the story here.

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