CMHC's 2007 Housing Market Outlook misses mark for Saskatchewan

Canada Mortgage and Housing Corporation (CMHC), Canada’s national housing agency has just released its “First Quarter Housing Market Outlook” forecasting what will happen in real estate markets across the country through 2007.

In an article titled, “Soft Landing for Housing Starts in 2007 and 2008,” CMHC predicts that housing starts will moderate in 2007, dropping to 209,500 from 227,395 units in 2006.

I read almost every report that CMHC releases and I’m not sure why, but most of them make me nuts! Perhaps it’s because they’re always wrong! Alright, I’m being a bit of a jackass here. They’re not always wrong, but they often fail to recognize what’s really happening in a market area.

I know as well as anybody how hard it is to predict the future and I have to come clean and admit that I have fallen flat on my face, at least once. J At the close of 2005, I predicted the following year would see a marginal drop in resale units, and more moderate price increases, “likely in the range of 4-5%.” In fact, resale unit sales increased 7% and prices went up close to 11%. My bad. What I didn’t see coming was a significant improvement in net migration. So, with that out of the way, here’s what CMHC has to say about housing starts in Saskatchewan for 2007 and 2008.

“In Saskatchewan, the improving net migration as well as the strong job market and robust income growth bode well for housing demand. Total housing starts are forecast to decline slightly from 3,715 units in 2006 to 3,600 units in both 2007 and 2008.”

Huh? Anybody else confused?

I can only say that I hope CMHC has missed the mark this time. The City of Saskatoon recently announced that they will attempt to prepare 2,192 lots for construction in 2007. There are hundreds of lots ready for homes in Martensville, Warman, Clavet and other communities. I’m hoping we’ll see close to 2,300 to 2,500 starts within 50 kilometers of Saskatoon.

2007 has the potential to be a great year for Saskatchewan but we must have homes to put people in. Here’s a comment I received the other day on another post .

“Hi, I have been looking on MLS for a suitable property for myself and my family in the Saskatoon area, there is a definite shortage of property and almost none that would be large enough for us. We were hoping to move to Saskatoon from the United Kingdom in the summer of 2007, but because of the shortage of suitable property we may be forced to look at another province entirely. This is such a shame as I know that Saskatchewan is trying to encourage people in at the moment.”

You’re right Lynn; this is such a shame.

There are 237 active resale listings on the Saskatoon MLS® system today. Half of those likely have sales pending on them. You almost can’t buy a house in this city if you wanted to. If I were a home builder I’d have no problem building spec homes as fast as I could find the manpower and the money to put them up.

Housing starts are not going to decline in Saskatchewan in 2007. I’ll meet you back here in early January for a review.

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

Forbes list of Canada’s most expensive homes

Forbe's List of Canada's Most Expensive Homes

Forbes recently released their list of Canada’s Most Expensive Homes. As far as I know, this is the first time that Forbes has compiled a list of prestigious Canadian homes, so we’ll take it as a positive sign for real estate in the Great White North.

The list consists of 10 properties, currently offered for sale which range from a low of $10.9 million to a high of $38.3 million US. Seven of the homes are located in British Columbia and three are in Ontario. That’s right, not a single Saskatchewan home made the grade. L It must be the weather.

You might look at this list and think, “wow, I can’t believe people actually spend this much money on a home” but I was impressed by how affordable a high end Canadian home really is (not for me of courseJ). I recently wrote a post on the most expensive homes in the US.

Number one came in at $135,000,000. In reviewing the Canadian list, I found that you could actually purchase 9 of the 10 most expensive homes in Canada for less money than the home which tops the list in the US. Cheap!!

Read the Forbes story here

Saskatoon home prices see significant rise in January 2007

January is not normally one of the biggest months for real estate. We’ve just been through the holiday season, blown a wad of cash and on top of all that, it’s damned cold. Normally, only the most motivated buyers manage to get out and look at homes. This January, they were out and the numbers indicate that most of them were motivated!

Sales statistics just pulled from the Saskatoon Real Estate Board’s MLS® system show a 60% increase in dollar volume for resale homes traded in January, 2007 as compared to the same month last year. There were 219 homes which traded hands, up from 173 the year before. The average selling price of a Saskatoon home jumped 27% from $149,922 in January of 2006 to $190,037 this past month.

Total active residential listings stand at just 272 homes. That’s 46% fewer properties available now as compared to last year at this time. Look for more increases to come as buyers continue to fight for a place to live.

I’ll share a couple of real examples which I think give a pretty good indication of what occurred through the month of January.

Shorebird Watch is a condo complex which is being marketed in Lakeview. They offer 2 bedroom units of approximately 870 square feet. These units hot the market in May and were priced around $80,000 at that time. A series of small increase occurred through out the coming months and they reached $90,000 by the end of the year. January brought two $5,000 increases to boost asking prices for these homes to just over $100,000.

Consider next, Pine Creek, a Jastek project in the Lakewood area offering town homes of approximately 1,150 square feet. They’re very nice two-storey homes with open basements and the units which are selling today are scheduled to be completed in November. On January 13 these units were priced at $153,400 for a base model with no extras. On January 14 the prices rose to $158,400. Today, the same unit is selling for $169,400, an increase of over 10% during the month of January.

Of course, not all housing units will be affected to the same degree. Properties priced below the average selling price often go up quicker as entry level buyers scramble to try to firm up a deal before they get priced out of the market.

Make no mistake, it’s a hot market! My advice to buyers? Be prepared to pay a little too much today at the risk of paying far too much tomorrow. You must be prepared to write an attractive offer if you have much hope of seeing it fly.

My advice to sellers? Make darned sure that if you sign an MLS® listing that the home actually makes it to the MLS® system. Additional reading below.

Premium Saskatoon Houses Sell While Market is Still at Work

Deceptive Agent Practice Could Cost Sellers Money

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

A note for Angela – a Saskatoon home buyer

A note for Angela, a Saskatoon home buyer I was browsing a blog I frequent when I came across a reference to a post that appeared on from a 25 year old Saskatoon woman who just purchased her first home. I was moved by her excitement and very much wanted to leave her a message. However, it seems that I need a MySpace account to place a comment there and I soon learned that I’m either too stupid or too old to sign up for a one. 🙂 Since I was unable to leave her a comment on her blog, I thought I’d post her a note here in the hope that she or someone she knows might see it.

Here’s what Angela had to say:

So, I decided that it was high time I jump into the Saskatoon real estate market.  I have been looking for over a year now, but always felt that I didn’t make enough money, or that my credit wasn’t good enough.  I am full of excuses.  Anyway, I found a 2 bedroom apartment style condo that was in my price range.  I went to a mortgage broker, worried that I was subjecting myself to imminent failure.  Nope.  Approved for the full amount I needed.  Too bad from the time I found the place to the time I actually went to the broker the price went up 7%.  I am still kicking myself.

Read the rest of Angela’s post here

My message to Angela:

Congratulations! What an exciting move. It does take a lot of guts to step out there and dream big. I gather from your post that you’re feeling your guts a little more than you’re used to? That’s pretty normal for someone who has just made the biggest purchase of her life. It will soon go away. I expect that you’ll eventually be feeling very proud of this tremendous accomplish. I hope you will.

You can probably stop kicking yourself anytime now. Any hesitation that you might have felt is normal for such a huge decision and only fools drop tens of thousands of dollars without a lot of thought. I expect that you will be well rewarded in the coming years. These homes should continue to do very well and I’m sure that your willingness to “put yourself out there” will open many doors for you. I remember being 25 and how hard it was to sign on the dotted line but now that you’re in, I think you’ll find that equity growth in a home of your own is an excellent way to begin to build a little wealth and some net worth.

Of course, it’s not really about the money. More than anything, I hope you’ll find comfort in your new home. Having your own place is pretty cool. It’s nice to be able to invite your friends in, invite them to leave, and occasionally just close the door and shut the whole world out. It’s your place. You make the rules. You now have the freedom “to rip out EVERYTHING and make it all pretty and nice.” Hope you have fun with that.

You also provide some pretty good insights as far as “the bear décor theme” is concerned. I have to agree with you. That look is so yesterday! In fact, sellers would be wise to pack all of their animal carcasses and coats away prior to placing a home on the market. I realized this a few years ago while I was showing a house that had a few of those little ornaments. Suddenly, my client was gone. 🙂

Best wishes Angela and thank you for an inspiring message. You make me want to do something big today.

A tip of the hat to Larry Cragun for the heads up on Angela’s post.

Preparing your home for showings and picking a list price

After a fairly long week, I just needed to grab a bit of a break this weekend. I haven’t been able to crank out a single thought worth digitizing so I thought I’d share a couple of the best posts that I’ve read this week on other excellent blogs.

Both of these posts are most relevant to home sellers.

Teresa Boardman, “the goddess of blogging” from St. Paul, Minnesota writes an engaging post titled, “Sellers, can we talk?” It recounts her experience in attempting to show a home which has been left in total darkness. I couldn’t help but relate to most of the issues she encounters. Her experience brings home the importance of properly prepping your home for each showing. You’re going to be much better off as a seller if the showing agent can focus on the home, and her client, as opposed to chasing the cat down the street or stumbling around looking for lights.

Read Teresa’s post here.

Doug Quance, of Atlanta, Georgia recounts a rather sad but true story of a stubborn seller who is cheating himself out of hundreds of thousands of dollars in “When do you know the listing price is too high for your home?” Even in a good real estate market, a listing price needs to make sense to prospective buyers. They almost always look at several homes and an overpriced listing serves nobody, except your competition. In a declining market, proper pricing is paramount. If the price is too high to start, it can only look worse as prices decline (not a real concern in the Saskatoon real estate market at this time).

Read Doug’s post here.

Teresa and Doug, thanks for letting me lean on you this evening. Nice work with these excellent posts.