Saskatoon real estate week in review: February 20-25, 2011

Sales of Saskatoon houses and condos slipped again for the second week in a row, falling sixteen units from last week to fifty-six, still enough to finish ahead of sales for the same week last year when just forty-eight homes traded on the MLS® system.

New listings also came in lower on a week over week basis. Saskatoon real estate agents placed 106 houses and condos on to the MLS® system over the course of the week. That’s down twenty-three properties from last week but higher than the ninety-seven homes listed during the same period in 2010.

Click the image for a larger version of the graph.

The inventory of Saskatoon homes listed on the Multiple Listing Service® continued to climb as it always does at this time of year. Total active listings grew by thirty-four units since the close of business last week to finish a 1075, roughly 240 units higher than it was at the same time last year. Today, the MLS® system shows 597 single-family homes, up thirty homes from last week and ahead of last year by 117 properties. There are also 418 condos for sale, for a gain of just four compared to last week, but up 104 units, or thirty percent, from the same time a year ago.

Click the image for a larger version of the graph.

Listing cancellations and withdrawals softened significantly with just sixteen homes being pulled from the system. Six of those returned immediately flagged as a new listing, most with a new price. Another thirty-two Saskatoon home sellers adjusted the price on their existing listing this week.

Significantly more activity at the lower end of the market pushed the median sale price for the week lower by roughly ten percent to just $270,500. The average selling price followed slipping by more than thirty thousand dollars to $288,482. Both of the longer term measures that we track reached their lowest point so far for 2011. The six-week average selling price dropped about two thousand dollars on a week-over-week basis to finish at $298,995. That’s up about nine thousand dollars from the same week last year. The four-week median slipped thirty four hundred dollars from last week to $286,500 for a year-over-year loss of two thousand dollars. That’s the first time either of the long term prices have come in lower than the previous year since August of 2010.

Click the image for a larger version of the graph.

While I heard several agents talking about competing offers on hot properties this week, overbid sales continued to be the very rare with just four sellers bagging a deal above their asking price. Those that did find the luck picked up an extra sixteen hundred dollar, on average. An additional three sellers got all that they were asking while forty-nine of fifty-six deals that closed were reported as having sold below the asking price by an average of $7,774. That’s an average discount of roughly 2.6%.

Click the image for a larger version of the chart.

Highlights from the news this week

Consider the ‘Bank of You’ for your first mortgage – Globe and Mail
U.S. home prices expected to post biggest decline in a year – National Post
Bill Doyle’s modest return to Saskatoon – Globe and Mail
Canada’s home price index snaps slide – National Post
Carnage not over for U.S. housing industry – Globe and Mail
Saskatchewan should bring back rent control: NDP – Star Phoenix
CIBC and National Bank offer tips on getting a grip on debt – Globe and Mail
Canada home ownership costs ease again – Reuters
Four key factors that drive the real estate market – Globe and Mail
Home ownership more affordable – for now – Canadian Business
Doyle lands new digs in Saskatoon – Star Phoenix
Bank of Canada seen holding rates on March 1 – Reuters
Household debt could spark ‘made in Canada’ recession – Globe and Mail

A map displaying the boundaries of Saskatoon real estate areas is here.
An overview of data collection and calculation practices for our statistical reports is here.

Our Saskatoon home search tool offers MLS® listings from all real estate brands with the most detail and information available anywhere. Check it out 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.

Norm Fisher
Royal LePage Saskatoon Real Estate

Lower borrowing costs drive improved affordability in Q4-2010: RBC

Lower borrowing costs in the final quarter of 2010 helped drive a “modest” improvement to housing affordability for Canadians, even though house prices saw small increases across most of the nation during that time, a new report from RBC Economics states. The slight improvements are likely short lived as interest rates have recently started to rise and RBC expects that Canadian financial institutions will continue to move mortgage rates higher. The report predicts an increase of 250 basis points (2.5%) by the close of 2012.

It’s worth noting that the carrying costs for a typical detached bungalow in Canada required 39.9% of household income in the fourth quarter, significantly more than your lender would likely approve you for, but slightly less than what RBC says is the “long-term average.”

Here’s what the report has to say about Saskatchewan.

The Saskatchewan housing market finished 2010 on an enviable note. Home prices, for the most part, rose slightly in the fourth quarter, yet housing affordability improved for the second consecutive time. The provincial home resale market gained back solid forward momentum in the second half of last year (notwithstanding some softening in the final months), which contributed to re-establishing a stronger balance between demand and supply. Generally, the price increases in the fourth quarter more than reversed declines in the previous period but were too small to negate the beneficial effect of lower mortgage rates on affordability. The RBC Measures fell between 0.6 and 1.1 percentage points in the quarter, although the levels continue to be modestly above historical averages in the province. In our view, the Saskatchewan market will take its current affordability position in stride as a rebound in provincial economic growth, and, especially, continued strong migration inflows will support housing demand this year.

Read the full report 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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

How would a housing downturn affect Canada’s economy?

In a follow up to its recently released report titled, “House prices likely to fall for several years,” Capital Economics says that a housing downturn will hit Canada’s economy hard, much like it did in the United States.

The overview of the report argues the following points, and others.

  • The now inevitable downturn in the housing sector will severely constrain economic growth over the next couple of years, as consumption expands at a more muted pace and housing investment shrinks back towards a more normal size. Economic growth will rely increasingly on business investment and net exports.
  • Over the last several years, growth in consumption has far outstripped income gains, as households have gone on a spending binge, funded by credit growth and home equity extraction.
  • With household balance sheets stretched and house prices expected to fall, however, we forecast that growth in consumption spending will lag income growth for the next couple of years, as households focus on rebuilding their saving rate.
  • House prices have been growing rapidly for nearly a decade now and it has reached the point where housing is so overvalued relative to incomes that a downward correction seems unavoidable. We fear that house prices could fall by as much as 25% over the next three years.

The complete report from Capital Economics can be found 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.

Our Saskatoon home search tool offers MLS® listings represented by all real estate brands, presented with more detail than you’ll find anywhere else. Check it out here.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon real estate week in review: February 14-18, 2011

Following a week that produced the highest number of Saskatoon real estate sales since late July, sales activity of single-family homes and condos eased falling eleven units from last week to seventy-two, still well above the fifty-one units reported sold for the same week last year.

New listings continued to significantly outpace last year’s early activity for the fourth consecutive week as agents brought 129 single-family homes and condominiums to the Saskatoon MLS service®, up just one from last week, but a gain of thirty-two properties compared against the same week in 2010.

Click the image for a larger version of the graph.

Naturally, the total inventory of residential listings on the Saskatoon multiple listing service® made another move higher gaining forty-one listings from the close of last week to finish at 1041, thirty percent higher than it was at this time last year when 801 residential properties displayed an active status on our system. Today, you’ll find a total of 567 single-family homes and 414 condominiums that are still available to buyers, up from 449 and 309 respectively on a year-over-year basis.

Click the image for a larger version of the graph.

Listing cancellations and withdrawals came on a bit stronger this week at thirty-four. Nineteen of those made an immediate repeat appearance on the system as a new listing. An additional thirty-nine Saskatoon home sellers adjusted their asking prices hoping to take advantage of reasonably strong market activity.

Prices moved higher, thanks largely to more upper end market activity including one sale that closed at almost $900,000 and another at $730,000. The median price for the week closed up over twenty thousand dollars compared to last week at $300,950. The average sale price of a Saskatoon home spiked higher by nearly thirty thousand dollars on a weekly basis to $308,089 to finish lower than it did during the same week last year by roughly four thousand dollars. The six-week average price moved higher by thirteen hundred dollars compared to last week to finish up sixteen thousand dollars over the same week last year. The four-week median edged up on a week-over-week basis to gain almost two thousand dollars and close at $289,900 for an annual gain of just three thousand dollars. Overall, year-over-year gains have softened quite substantially in recent weeks.

Click the image for a larger version of the graph.

Overbid sales nearly fell off the chart as just one lucky seller bagged an above list sale with a $2500 overbid. Six others managed a deal at their full asking price while sixty-five of seventy-two closed transactions were reported to have sold at a price below the list by an average of $9902, a discount of roughly three percent of the asking price.

Click the image for a larger version of the chart.

Over the past week I’ve been asked if the pending changes to mortgage rules are impacting the Saskatoon real estate market. For those who haven’t heard, the maximum amortization period for a CMHC insured mortgage will be reduced from thirty-five years to thirty years, effective March 18. There seemed to be some general consensus that the two-month notice period might push some buyers off of the fence and encourage a quick purchase. I suspect that’s probably happening. January closed with a year-over-year sales increase of ten percent, but that increase couldn’t realistically be attributed to a change that was just announced on January 17. Most sales go through a process that requires at least a week to firm up and be counted in the sale numbers. February, on the other hand, is producing some pretty robust numbers with 200 firm sales having been reported already. There were a total of 236 home sales for the entire month of February in 2010, so we’ll clearly finish the month well ahead of last year. For those who plan to sell this year, the next thirty days may hold some advantages for you compared to the following few months.

Highlights from the news this week

Three ways to deal with rising interest rates – Moneyville
CMHC fires back at critics – Globe and Mail
Station 20 gets $500,000 pledge – Star Phoenix
Station 20 closer to reality – Global News
Resale housing market shows further improvement in January – CREA News
Home sales pace hits nine-month high – MSN News
CREA urges caution over more mortgage rule changes – Globe and Mail
Housing market heats up before rule change – Financial Post
Saskatchewan home sales increase 9.6%, double national rate – Global News
House prices hit new record – Financial Post
Average Canadian family’s debt hits $100,000 – Global News
House prices to match inflation: CMHC – Globe and Mail
Why do mortgage rates rise fast and fall slowly – Financial Post

A map displaying the boundaries of Saskatoon real estate areas is here.
An overview of data collection and calculation practices for our statistical reports is here.

Our Saskatoon home search tool offers MLS® listings from all real estate brands with the most detail and information available anywhere. Check it out 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.

Norm Fisher
Royal LePage Saskatoon Real Estate

Saskatoon’s Two Twenty comes to life with the opening of Collective Coffee

Opening day at Collective Coffee

Collective Coffee, the latest addition to the Riversdale business district opened its doors yesterday to become the first operating tenant at Saskatoon’s Two Twenty.

Located at 220 20th Street West, this charming little coffee stop immediately comes off as a fun place to be. With just four tables and a stand up bar, fifteen people feels like a party, and hey, who doesn’t want to be at a party?

We met warm and friendly people on both sides of the amazing service counter that’s constructed of salvaged pickle wood from the former vinegar factory and beautifully framed in steel strapping that was reclaimed from the old Toon’s Kitchen dumbwaiter.  Darkly stained fir wall panels, steel I-beam shelving and a display of local art complete this collection of Saskatoon treasures.

Floor to ceiling windows along the south side of the shop welcome the sun for a good part of the day and the overhead door will provide a great connection to additional sidewalk seating for at least half of the year.

Naturally, espresso, macchiato, cappuccino, latte, coffee and tea are all on the menu and were served up by a couple of baristas who actually seem to understand that a warm smile is the perfect compliment to a hot coffee.  An impressive offering of baked goods from breakfast cookies to pumpkin and chocolate chip bread was also available.

Overall, Collective Coffee is a pretty cool addition to the Riversdale neighbourhood. Take a few minutes to check it next time you’re in the area or downtown.

Learn more about Collective Coffee and The Two Twenty here.
Learn more about the Riversdale neighborhood here.

Visit our Saskatoon Neighbourhood Profiles pages to learn more about what’s going on in our city’s neighbourhoods.

Norm Fisher
Royal LePage Saskatoon Real Estate