Housing affordability deteriorates nationally, but most sharply in Saskatoon

Housing affordability deteriorated across Canada during the first quarter of 2007, and most sharply in Saskatchewan according to RBC’s Housing Affordability survey which was released today. It probably comes as no surprise that Saskatoon wins the prize for the highest levels of change in the affordability measure when compared to the last quarter of 2006.


It is important to note that Saskatoon and Saskatchewan are still among the most affordable places in Canada to own a home. Only the Atlantic Provinces and Manitoba proved more affordable than Saskatchewan. Also keep in mind that this report examines affordability based on data gathered to the end of March, 2007. We can expect to see further erosion over the second quarter as prices of Saskatoon homes have continued to increase at a rather rapid pace.


Read the RBC Housing Affordabilty report here

Read the overview specific to Saskatchewan

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 (June 4-8 2007)

“Do you think it’s slowing down?” This is a question which is being asked by many Saskatoon real estate agents lately.


There’s no question that things have felt a little different over the past few weeks. While my last few listings have all received multiple offers and sold above the asking price, they have seen fewer showings than I would have expected just a month ago. There are still many buyers in the market for a home, and those who are active remain fairly aggressive, but it does seem that demand is starting to soften and buyers are likely to find a less competitive Saskatoon real estate market in the weeks ahead.


The “Week in review” numbers don’t reveal many solid clues but there are some marginal differences which can be seen this week, and last. The percentage of homes which are selling above the asking price has slipped below 70% two weeks in a row. We haven’t seen that since the week of April 9. The most apparent change is seen in Area 4, where fewer than 50% of reported sales were above the asking price. This past week also recorded a lower than average number of sales when compared to activity over the past two months.

Here is a look at last week’s numbers.

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

Watch for prices of Saskatoon condos to stabilize

Watch for prices of Saskatoon condos to stabalizeI read an article today written by commercial real estate/property management specialist, Don Sylvester of Saskatoon Real Estate Services which appeared in “The View,” the monthly newsletter of the Saskatoon and Region Association of REALTORS®. Don discusses the frenzy of buying activity in Saskatoon apartment buildings this year.


“The apartment sale for condo conversion frenzy is being fueled by out of province investors and first time homebuyers wanting to enter the market place.  The frenzy is heightened now by offers of up to $116,000 per unit, representing a near tripling of prices this year alone.  Multiple offers above the listing price are the norm and the demand has spread to small town Saskatchewan as well.”


Sound familiar?


He goes on to explain that when “resale prices of $180,000 to $220,000 for a renovated and converted two bedroom unit are common place” it’s not difficult for investors to justify this kind of huge up front investment and notes that developers can still “turn profits well in excess of 50% of their total investment.”


Last week, a number of converted units were sold between $215,000 and $222,000. I’ll suggest that we’re going to see a few more pushing the mid 230K mark within a week or two. Will buyers bite? Maybe, but these units are making less sense as an option with every price increase.


Don then goes to the fundamentals which are required to sustain any healthy real estate market like “affordability, new family creation, job and income growth.” He makes the point that resale prices have moved much closer to units available in Calgary.


He’s right! I see a selection of two-bedroom condos in Calgary between $250,000 and $300,000, some of them built in the last ten years.


Don reminds us that Saskatchewan lost 200 jobs in April, while seeing an increase of 200 in its labour force effectively pushing our unemployment rate to 4.1%. He points out that income growth in Calgary still outpaced Saskatoon by a full percentage point last year, never mind the fact that incomes were already 20% higher in Calgary before that.


“From a pure wages perspective a working couple can afford to spend $60,000 to $80,000 more on housing in Calgary than they can in Saskatoon.  The question is how close are we to Calgary prices and how much will our wages increase?  The answer to that question suggests that apartment prices should stabilize here soon.”


It looks to me like Saskatoon condo prices are already encroaching on that $60,000-$80,000 price gap. Consider also that the average selling price of a Saskatoon condo was up 75% in May when compared with May of 2006. Consider that hundreds of rental apartments have been removed for the rental market over the last couple of quarters and that many of them will be starting to come on the market as resale condos. Consider that the average selling price of a single family home increased just 39% for the same period outlined above and you see that the dollar difference to own a house as opposed to a condo has narrowed significantly over the last several months.


All of these factors suggest that the Bull Run which condos have enjoyed may soon come to a close. It’s doubtful that the current low inventory situation will allow prices to decline in the short term but I think we can expect to see prices begin to stabilize.


Read also: Saskatoon real estate market predictions.

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 (May 28–June 1 2007)

It was another big week for reported sales with a total of 146 units and while the “average overbid” across all Saskatoon real estate areas reached its highest level at $27,770 the percentage of listings which sold for more than asking price dropped to its lowest level since the last week of March. Contributing to the decline is a condo conversion project in Area 2 where the developer is actually selling condos for the asking price. Their agents reported 8 “at list” price sales. Area 4 sellers had some challenges pushing buyers above asking price and only about 33% found success in doing so.


Some of the more notable sales include;

  • Showy Arbor Creek bungalow (1,010) square feet on one of the main roads with a double attached garage and an open basement brings $350,000.
  • Nutana area two-storey of just 1,193 square feet with a double detached garage goes for $300,500.
  • Silverwood bi-level of 1,208 square feet with a double attached garage sells for $391,000.
  • Fairhaven coach home of 1,100 square feet fetches $180,100.
  • A tip of the hat to Metro Developments who is marketing a condo conversion project at 315 East Place and is represented by Remax Saskatoon for actually picking a list price and allowing buyers to purchase units at that price.

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

The ethics of “bidding” for Saskatoon real estate

The ethics of bidding for Saskatoon real estateI came across an interesting “Letter to the Editor” in yesterday’s Star Phoenix which I wanted to touch on. The letter was submitted by Maureen Shebelski, a Saskatoon resident and mother.


Maureen’s decrial of the current state of the Saskatoon real estate market is a testimonial to her social conscience and it’s obvious that her concerns are sincere at every level. She points to the challenges and consequences which are inevitable in a market that experiences such rapid and significant change. Rising property taxes and insurance rates, increasing levels of debt, and uncertainty about the future are all things which are on Maureen’s mind right now.


I share many of the concerns which she expressed. I am also a parent, and coincidentally I have one daughter and one son, both young adults, so I’ve spent lots of time considering how this “new Saskatoon” will affect them. I’m also keenly aware that there are many residents in this fine city who will face challenges which will dwarf those that my own kids might experience as a result of this “boom.”


Maureen also takes the opportunity to place a little blame for what’s going on, starting with Premier Lorne Calvert and wrapping up with the real estate industry. She says, “I also blame the real estate industry and its new method of taking bids on houses, instead of taking offers. When my father was in real estate, there were some ethics involved. I don’t see that now.”


This attempt to “blame the real estate industry” and suggest that there is something unethical about “the new method of taking bids” would be easy enough for most to agree with, particularly those who are facing the challenge of buying a home in this market. Ultimately, it demonstrates a lack of understanding as to the role of a “seller’s agent” in the real estate transaction.


Since it is “ethics” which are questioned here, let’s take a look at some of the ethical guidelines which may apply from the Canadian Real Estate Association’s Code of Ethics which all REALTORS® are sworn to uphold.


Article 3 – Primary Duty to Client – A REALTOR® shall protect and promote the interests of his or her client. This primary obligation does not relieve the REALTOR® of the responsibility of dealing fairly with all parties to a transaction (Also appears in provincial statutory legislation in the Saskatchewan Real Estate Commission Bylaws, section 702).


Article 12 – A REALTOR® shall render a skilled and conscientious service, in conformity with the standards of competence which are reasonable expected in the specific real estate disciplines in which the REALTOR® engages.


Article 18 – The business of a REALTOR® shall be conducted in strict accordance with all statutory and regulatory requirements.


Ethics and statutory regulation aside, we have volumes of agency law decisions which define an agent’s obligations to his or her client. Agency law provides a history of expectations which are considered reasonable and holds an agent accountable and liable for damages which result from a failure to act as a fiduciary to the person or persons who have hired them. In its simplest form, the agency relationship is founded on obedience, confidentiality, competence, disclosure, accountability, trust and loyalty.


Finally, the listing agreement used in Saskatchewan binds a seller’s agent to the following promises to his or her client;

  • obey the seller’s instructions on the Exclusive Seller’s Brokerage Contract and all lawful instructions of the seller;
  • represent the seller’s best interests;
  • fully disclose known facts which might influence the seller’s decision;
  • maintain confidentiality of personal and financial information discussed with the seller even after the Exclusive Seller’s Brokerage Contract expires;
  • safeguard the seller’s documents and money; and
  • exercise reasonable care and diligence.

I expect that most people do understand that multiple offers on a property most likely places the seller in the best possible position to negotiate a favorable price and terms. Given that are bound by a Code of Ethics, statutory law, agency law and our promise in writing to act with complete loyalty to the seller, how is it that we are viewed as “unethical” for making as many prospective buyers as possible aware that a client’s home is for sale? I would suggest that failing to make every effort to deliver the best result for a client would be unethical and unlawful.


Discussions which I’ve had with Al Jacobsen, Registrar of the Saskatchewan Real Estate Commission and with Randy Katzman, a local real estate lawyer suggest that agents who fail to provide adequate exposure for a client’s property could be subject to both prosecution and civil litigation with potential consequences including large fines, license suspension or cancellation, and damages which might result from that negligence. Personally, I’m not much into any of that.


Every time that a seller’s home is sold without a reasonable level of exposure to the market, a betrayal is committed. Every time an agent brings a seller’s property to the market and provides buyers with reasonable access, a promise is fulfilled. Seller’s benefit and so does the community of Saskatoon real estate buyers.


Please don’t call the Saskatoon real estate community unethical for doing right by its sellers. They pay us a hefty chunk of change for representation and they deserve to get exactly what they’ve paid for; obedience, confidentiality, competence, disclosure, accountability, trust and loyalty. Acting as one’s agent is an honour and a privilege that should be taken seriously.


Read also: Deceptive agent practice could cost sellers money

Read also: Who is your real estate agent looking out for?

Read also: Premium Saskatoon homes sell while market is still at work

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