The Canada Mortgage and Housing Corporation (CMHC) released their Spring Housing Market Outlook for the Saskatoon CMA today. Here’s the gist of it.
After the strongest two-year performance since the late 1970’s, Saskatoon single-detached housing starts will decline to 600 units in 2009 and bounce back to 725 units in 2010. The 2009 singles forecast represents the lowest number of housing starts since 2001 when 542 single starts took place.
Statistics Canada’s New House Price Index (NHPI) measures the increase in the price of a house where the detailed specifications pertaining to each house remain the same between two consecutive periods. Given the decline in production, we forecast a 6.6 per cent decline in the NHPI in 2009. Next year will see a partial recovery of these losses with growth of three per cent.
Saskatoon resales will continue to slow in 2009, slipping 15.3 per cent to 3,000 sales. Sales were last at this level in 2004 when 2,999 resales took place. Price reductions should contribute to a rebound in 2010 with sales of 3,150 units, a five per cent increase over the 2009 figure. Slower in-migration and a cooler economy combined with elevated housing prices have dampened demand and restrained sales from the historically high levels seen in 2005 to 2008. MLS® sales peaked in 2007 with 4,446 resales recorded.
Seasonally adjusted monthly sales are trending downward, but the severity of the decline has eased in recent months. In June 2008, the monthly trend was down close to five per cent compared to the previous month while seasonally adjusted sales were down by only one per cent from February to March 2009.
By the end of the first quarter, year-to-date new listings were up 16 per cent from last year at that time. March seasonally adjusted new listings were down 0.8 per cent from February 2009. March marked the sixth month-over-month decline in seasonally adjusted new listings activity. This suggests the new listings trend has peaked.
A slower decline in the number of sales and lower new listings have not yet worked their way into the inventory of homes for sale on the MLS® service. In March, there were 2,399 active listings, more than double the 2008 March figure. Seasonally adjusted active listings increased by 4.8 per cent compared to the previous month and reached the highest level on record in March.
Our forecast calls for average price to slip to $275,000 in 2009, a 4.4 per cent decline from the 2008 annual figure. Historically high active listings and buyer resistance to higher prices will result in the 2009 fall off in average price. There will be a modest increase of close to two per cent in 2010, bringing the aver-age price to the $280,000 mark. The firmer market expected in 2010 will allow modest price gains.
The full report is here.
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