Saskatoon real estate bidding wars: How much is too much?

Saskatoon Real Estate bidding wars

If you’ve been shopping in the Saskatoon real estate market for longer than a couple of months I don’t have to tell you that the rules have changed this year, and they’ve changed dramatically.

At the close of 2006, resale inventory had dropped to an all time low of around 250 active listings and while we’ve started to see more homes being listed for sale they are getting snapped at a pace which hasn’t allowed inventory levels to rebound at all. Today, the Saskatoon MLS® system shows 244 active house and condo listings across all price ranges and in all Saskatoon neighbourhoods. 60-70% of those properties probably have offers pending and the majority of what remains are the laggards which most prospective buyers have passed on for one reason or another.

New MLS® listings are attracting attention and viewings quite quickly and in many cases they’re generating multiple offers resulting in a bidding war. Last week, almost 25% of the homes which were reported sold on the Saskatoon MLS® showed sale prices which were above the asking price. The amount of overbids ranged from a low of $10 over list to a high of close to $30,000 above list price. The average overbid in most areas was less than $5,000.

Nobody wants to pay too much for a home. One might look to the aforementioned sale which went close to $30,000 above list and ask, “Are those buyers’ nuts?” I’m going to suggest that they just might be a little sharper than you think. See, these folks now own an interest in some Saskatoon real estate. While the other 37 buyers who viewed this home continue to struggle to find a place in the market, these buyers have locked in and any gains that the market experiences over the coming months will be theirs. If you believe that the market is going to continue to grow at its current pace, you might feel okay about paying a bit too much today in an effort to avoid paying much more tomorrow.

I’m not suggesting for a moment that a $30,000 overbid will be the prudent thing to do in most situations, but you will likely need to think beyond what the home is worth today if you truly want to be the successful buyer in a bidding war. Try to give some thought to where you think the market is going for homes in your price range. Will prices increase 10-20% over the next few months? How many opportunities will come up over the next few months? How might rising prices and limited inventory affect your ability to secure a suitable home at an affordable price if you miss out on this one? Is the property you’re considering under priced for today’s market (some are)? Ask your agent for his or her thoughts on what price the home will sell for when all of the offers are in.

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

School’s out for Saskatoon Briarwood residents

They expected schools and playgrounds would eventually occupy the vacant space that sits at the center of Saskatoon’s Briarwood neighbourhood and some paid a premium for the opportunity to be close. Now that those plans have been scrapped by both school boards there are some lingering questions about what will become of this land.

North Ridge Development Corporation and Boychuk Construction Corporation are both proposing a rezoning of that land to accommodate residential development. North Ridge would like to develop 17 lots in the northeast corner of Briarwood Park and Boychuk has their eye on a parcel across the park for 27 new homes.

Residents seem most concerned that the city takes some measures to soften the blow of the lost schools by insisting that the development takes into account the fact that many of these homes were constructed to enjoy a park view, and not the backyards of neighbouring homes.

They’d like to see some green space to provide a bit of a buffer between the new and existing homes. The Municipal Planning Commission seems to be somewhat onside and has sent a memo to city administrators saying they won’t support the plan without changes which include adjusting North Ridge’s proposed orientation of the new homes and incorporation of linear or pocket parks.

Proverbial poo hits the fan in Nutana, Saskatoon

New Sewage Lift Station Proposed for Nutana Saskatonn

You might say that residents of Saskatoon’s Nutana area have their “shit in a knot” over proposed plans to build a new sewer lift station in Rotary Park and who could blame them. The idea of dealing with raw sewage in your back yard isn’t exactly appealing to anyone. City administrators are recommending council approve plans for construction of the new lift station near the Senator Sid Buckwold Bridge in Rotary Park.

It seems that there are concerns about the ongoing viability of the existing lift station located across the river in Victoria Park. It’s been in operation for close to a century and the underwater pipe which transports sewage across the river hasn’t been inspected since 1911. City administrators favour the new location because the estimated cost comes in about $600,000 lower on that side off the river. The annual cost of operation will also be lower by approximately $15,000.

The new lift station would include public restrooms and the city plans to landscape to prevent the station from becoming an eye sore. Odour control equipment would be installed in an effort to minimize foul smells but it’s doubtful that it could be eliminated totally.

Councillor Charlie Clark who represents the area on City Council says he will not support the move.

Councillor Pat Lorje who represents Riversdale where the current lift station operates is fully behind the change. “Words fail me,” she said. “I understand the ‘not in my back yard’ syndrome….when you have professional engineers recommending a specific location, they’re not doing it for frivolous reasons…I don’t think it will have that large of an impact on the neighbourhood.”

I could go either way on this, as long as they keep it operating in a public park. 🙂 Sheesh!

What’s really happening in the Saskatoon real estate market?

If you’ve spoken to a Saskatoon real estate agent lately, you’ve undoubtedly been left with the impression that the market is hot, and it certainly is. It’s very easy to lose perspective though, because we most often hear the exceptional stories repeated.

You might have the impression that all homes listed are attracting offers in excess of the listed price and that’s simply not true. I thought I’d give you a bit of an overview of the sales activity from last week to give you a truer picture of what’s going on.

The following chart shows the total number of residential sales in each Saskatoon area (geographic definitions below) followed by the number of homes which sold below the asking price, at the asking price and above the asking price.

The next chart shows the average list price, average sale price, and the average overbid where homes sold above the asking price.

Recent Saskatoon real estate activity

Even I was surprised to find that over 50% of residential listings are still selling below the list price, though marginally. Fewer than 25% are actually selling above the list price. It’s very clear that on average seller’s are receiving offers which are very close to the asking price but you can’t assume that you’ll need to pay more than list for every Saskatoon real estate listing.

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

Pleasant Hill land deal nets Patrick Wolfe $1.4 million

Over the past 16 years, Patrick Wolfe quietly purchased a block of decrepit residential properties, one at a time, in the Pleasant Hill area of Saskatoon. A wiser investor may have wondered what the hell he was up to. Few would have ever thought that his investment would by a key component in renewing the Pleasant Hill neighbourhood but last night his plan became clear as Wolfe saw his land sale proposal to the City of Saskatoon move forward in a deal which netted the savvy investor $1.4 million dollars, and a $365,000 donation receipt to boot. City Council approved a deal to purchase 29 properties from Wolfe with the intent to clear the land for use in a Pleasant Hill renewal project which will ultimately include a new housing development, a much needed elementary school, some green space, and a possible community group space.

Earlier this month, Mayor Don Atchison, Premier Lorne Calvert, and National Revenue Minister Carol Skelton announced the details of a cooperative initiative between the city, the province and the federal government to begin some much needed redevelopment in the Pleasant Hill area.  The renewal project will be funded through the Urban Development Agreement with $1.71 million coming from the City of Saskatoon. The province and the federal Department of Western Economic Diversification will each pick up $789,471 of the cost.

Negotiating the purchase of the only three properties on the block which are not owned by Wolfe is underway. Once complete, the wrecking ball will start to swing and some new life will find its way into the Pleasant Hill area.

Let’s hope that this new development provides an opportunity to rejuvenate a community which could really use a boost.

Congratulations Pleasant Hill residents.

Congratulations Mr. Wolfe.

More about the Pleasant Hill renewal project here.