SASKATCHEWAN, October 6, 2008 – The red-hot house prices and wild activity of Saskatchewan’s recently explosive real estate market have both tempered during the third quarter. The combination of rising inventory levels and a decrease in buyer demand in both Saskatoon and Regina have positioned the real estate markets in both cities in the buyers’ favour, according to a House Price Survey report released today by Royal LePage Real Estate Services. However, despite the tempering activity over the past few months, year-over-year house price gains in both cities are ranked as the highest in the country.
The local economies in Saskatoon and Regina both continue to prosper as a result of the booming agricultural and resource sectors, and an abundance of employment opportunities continue to attract new workers to the province. However, the rising house prices appear to have reached a cap; after lagging behind much of the country, house prices in Saskatchewan have caught up and are now on par with other comparable cities.
In Saskatoon, the recent run-up of house prices has finally come to a tipping point, where buyers have become reticent to enter the market. During the third quarter, Saskatoon’s housing market returned back to earth, with rates of house price appreciation that are more sustainable in the long term.
In Saskatoon, the average price of standard condominiums rose by 1.8 per cent to $211,250, year-over-year. Standard two-storey homes climbed by 10.7 per cent to $358,250, while the price of detached bungalows appreciated by 9.4 per cent to $321,500, year-over-year.
“House prices in Saskatoon are still up year-over-year, but the frenzy has definitely worn off compared to what the city experienced in previous quarters,” explained Norm Fisher, sales manager, Royal LePage Saskatoon Real Estate, Saskatoon “The combination of cautious buyers, and the recent activity of many speculative sellers has led to a surplus of inventory and a decline in prices during the third quarter. The housing market is now tipping towards the buyers’ favour – for the first time in several months.”
The condominium market is mostly affected by the surge in inventory as this property type received the most attention from speculative and out-of-town buyers who were hoping to cash in on the city’s booming market. Many would-be buyers are now taking a wait-and-see approach before jumping into the market.
Average listing periods have more than tripled over the past year; since the third quarter 2007, current figures for days on market has increased to approximately 55, up from 13.
Added Fisher: “Buyers and sellers both need to understand the current market conditions before taking any action; sellers need to be aware that the market has changed significantly and must list their homes accordingly.”
In Saskatoon North, the average price of a standard two-storey home rose by 6.1 per cent to $350,000, year-over-year. Detached bungalows rose by 7.5 per cent to $322,500, while the price of a standard condominium dipped by 2.1 per cent to $210,500, year-over-year.
In Saskatoon West, the average price of a standard two-storey home soared by 22.9 per cent to $338,000, while the average value of a detached bungalow also increased, rising by 14.0 per cent to $285,000, year-over-year.
In the East End, the average price of a detached bungalow rose by 12.2 per cent to $364,000, year-over-year. The average price for standard two-storey homes increased by 12.9 per cent to $412,000, from the same period last year.
In East Central, the price of a standard two-storey home rose by 10.8 per cent to $360,000, while a detached bungalow rose by 10.7 per cent to $332,000 year-over-year. Standard condominiums also appreciated, rising by 6.0 per cent to $212,000, year-over-year.
Market activity in Regina paralleled that of Saskatoon, as buyer demand was doused with a surplus of listing inventory. The increase in available listings has tempered activity and sales prices from the frenetic pace that characterized the market in recent months; however, when surveying prices compared to last year, Regina’s housing market demonstrates substantial gains.
Of the three property types surveyed, standard condominiums showed the greatest year-over-year appreciation, rising by 49 per cent to 196,000, standard two-storey house prices also showed strong gains, jumping 39.6 per cent to $259,000. Detached bungalow properties rose, increasing by 34.1 per cent to $278,850, year-over-year.
The dynamics of the city’s real estate market has put the breaks on some would-be buyers’ activities, as many are taking time now to see how the market plays out.
“Many buyers are sitting on the sidelines right now, waiting for prices to drop; however, this is likely not going to happen,” said Mike Duggleby, manager, Royal LePage Regina Realty, Regina. “Our economy is the best it’s ever been, and I anticipate that it’s only going to get better. The city’s anticipated inter-modal facility will no doubt boost our economy even further, and draw more people to Regina.”
Added Duggleby: “Six months from now, Regina’s potash, oil and uranium industries will still be flourishing, and we’ll be heading into the busy spring market. Now is a very good time to invest in Regina’s real estate.”
In Regina North, standard condominiums experienced the largest appreciation, with average prices rising by 50.0 per cent to $180,000, year-over-year. The average price of a standard two-storey property, followed second, rising by 34.9 per cent to $228,000, while detached bungalows rose by 31.4 per cent to $262,700, year-over-year.
In Regina South, standard condominiums showed the largest gains, rising by 48.3 per cent to $212,000, year-over-year. The average price of a standard two-storey home increased by 43.6 per cent to $290,000, while the average price of a detached bungalow in the area increased by 36.6 per cent to $295,000, compared to the same period last year.
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