Saskatoon real estate: Week in review (December 10-14 2007)
This past week produced the smallest number of new Saskatoon real estate listings for any week this year with just 46 houses and condos being listed for sale on our local MLS® system, down from 73 the week before. This decline in new listings is something which we expect to see in December and we can anticipate that the trend will continue through the next couple of weeks. Only the most serious sellers will list their properties between now and month end.
Home sales were fairly brisk given the time of year. 62 Saskatoon houses and condos were reported sold, compared to just 48 the week before. With a total of 110 sales completed, month to date, it seems fairly certain that we’ll see a higher volume this month, compared to December, 2006.
Total active residential listings closed the week at just 478 units, a big drop from 540 last week. 242 of those properties are single family homes (houses) and 187 of them are condominiums. The balance are semi-detached, duplexes, mobiles, etc. I took a little trip back to last December to compare inventory levels from late in the year. While the total number of active listings is higher this year, I noticed that we actually have fewer houses for sale, but substantially more condos on the market than we did then. On December 11, 2006 the Saskatoon MLS® was showing 265 single family homes and just 44 condos as active.
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.
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Norm Fisher
Royal LePage Saskatoon Real Estate
63 comments so far. We'd love to hear your thoughts.
May 25th, 2009 at 4:04 PM
Looking at the numbers it looks like the only thing the condo conversions did was make money for speculators. It has pushed up the price and now there are a bunch of condos up for sale. The conversions have pushed out renters and they are left scrambling for a new place. It seems we have a bit of problem with rental rate vacancies and rental increases right now.
But maybe having so many condos for sale is not a bad thing. We have a really low amount of listings for houses right now. Lower than last year, only 242 compared to 265. Maybe having lots of condos will save us from the same thing happening again in the new year.
Even though I own a house, it is frustrating with prices possibly going up again in the spring. I would like to build one day, but it won’t be for a few years until the market kind of settles. A brand new house costs a cool half million in Willowgrove. I’m only short 505k right now. The sad thing is that same house two years ago would be about 325k. With those increases I could not afford a newer house. Oh well, I will keep buying the lottery.
May 25th, 2009 at 4:04 PM
Your comments on the condo/house inventory compared to last year are interesting Norm. Nobody seems to want condos these days and I’ve been watching the inventory remain steady at around 200 units while housing inventory drops like a stone.
On a more general level, it looks like we have stronger demand going into the new year than we did last year. Certainly sales for September, October, November, and likely December are higher. In addition, we have a much lower vacancy rate for rental properties than last year at .6%. We also have fewer houses going into the new year than we did last year. With these conditions it doesn’t take a rocket scientist to forecast house prices to climb.
May 25th, 2009 at 4:05 PM
I see the Royal Lepage predictions are in for next year. They don’t have a prediction for Saskatoon but they do for Regina. Royal Lepage is predicting an increase of 15% in Regina, which is the top of all of the cities they survey. Edmonton will only increase by 1% and Calgary at 4%. Winnipeg will see appreciation of 12% or so. Norm or anyone else here, do you have any predictions for % gains in Saskatoon for 2008? Will houses outperform condos and in
May 25th, 2009 at 4:05 PM
The condo conversions turned out to be a nice little scam where property owners saw the opportunity to score major *now money* for little to no work.
Just think of all the three floor walk-ups that are now “condos” reducing the quality impression of a condo – something that was supposed to be an alternative to home ownership.
The sick thing? The property owners still collect a monthly fee on top of their extortionate and totally out of balance prices.
We live in such a money obsessed moral-less society.
May 25th, 2009 at 4:05 PM
Ron, a few weeks ago I put Regina at 14% and Saskatoon at 7% growth. Both are quite conservative figures in my opinion. On types of properties, I have no doubt that houses will outperform condos in Saskatoon… not sure about Regina.
May 25th, 2009 at 4:06 PM
I just took a look at Regina and the median list price of a condo is as high as Saskatoon! The median list price of a house is $100k lower than Saskatoon. I’d say houses grow before condos for sure in Regina.
May 25th, 2009 at 4:06 PM
Ron,
15% more “at least” in Saskatoon by May. That’s my opinion. I’m also not sure about Regina as I have not done any research in to it. I would expect it to be a hot market though.
May 25th, 2009 at 4:07 PM
When a property gets converted to condos, doesn’t the property owner (usually the developer) have to hand off ownership of the common areas to a condo association, which is where the condo fees go to? Or can the common areas still be owned by an investor?
May 25th, 2009 at 4:08 PM
Alex, your inability to accept the world around you always makes me chuckle. Thanks!
May 25th, 2009 at 4:08 PM
Be careful before you bank on Saskatoon having another year like 2007. Saskatoon’s (2007) year of growth followed Calgary’s (2006) one year delayed. I predict Saskatoon’s real estate market will cool down considerably in 2008 just like Calgary did in 2007.
What economic factors would continue to drive an increased growth in housing prices for a second record year? Where are all the new professional jobs that provide the income levels to afford such housing? Prices in Briarwood are already at par with the new/equivalent neighbourhoods in Calgary, but with an inferior job market. So look out.
May 25th, 2009 at 4:09 PM
Alsask,
Although I agree that the overall year will be a cooling one, I think until May will be hot. Remember in Calgary in 07, from January to June was up nearly 20% before pulling back in the last half of the year.
Even that being said, the average detached house in Calgary, summer 06′ was $425,000. Now it’s a little over $460,000.
May 26th, 2009 at 9:49 AM
Be careful when suggesting saskatoon may cool this year, Northstar jumps on you like a hawk (only took 15 mins to reply!).
Alsask, I too feel saskatoon will slow in spring and will have corrected by end of year ’08. Condos are clearly overvalued from spec flipping this past summer. This is the reason for low vacancy, so many old apartments on the sales block vacant with an unrealistic seller who didn’t do their diligence when forecasting margin on the flip.
Relatively speaking, there is a gap for affordability out there but that gap is quickly closing. I think saskatonians and saskatoon investors are realizing where our realistic affordability sits (not the one that CMHC publishes, that’s plain garbage). Buying will most likely continue, however, the longer it continues, the harder felt the correction will be. I hope that buyers are protecting themselves for the bad times, the same way they are expecting the good times.
May 26th, 2009 at 9:50 AM
Alsask & Andres: I agree with your views on the house market. I can’t fathom another spike simply because the people of Saskatchewan can’t afford it. Our wages aren’t increasing, where’s the sustainability?
I hope people who are sitting on their condo conversions will feel the burn. Condos are outrageously overpriced and they’re not selling very quickly. And frankly, that’s what they get for being greedy and kicking all the renters out on their asses. What goes around comes around.
tb: Alex obviously has a conscience. I’m not sure what you have, but I’m hoping it’s not contagious!
May 26th, 2009 at 9:50 AM
I don’t think you can compare us to Calgary.
Saskatoon average family income 70,100
Calgary average family income 104,200
(April 2007 http://www.canadianbusiness.com )
Calgary currently has over 4000 SFH for listing at a average of 460k
Saskatoon currently has 242 SFH at around 250k.
I don’t think Calgary is going to see increases like they have before because of the big inventories. Saskatoon has only 242 SFH on the market. Supply and demand will dictate this market in the spring. If there is little supply and lots of demand we will see increases.
A bit off topic but has to do with immigration. We all know of people coming back from Alberta. But we also get people from within the province. Every year at fall time, Saskatoon is flooded with students from small towns going to University or Kelsey. (5000+) After a few years some of these grads were going to Alberta for better wages. It was (is) called the brain drain? Saskatoon is now retaining more grads now. This will help Saskatoon grow, but hopefully in healthy RE market and economy.
May 26th, 2009 at 9:51 AM
Northstar,
Did you do a 1.5 page spread in a magazine currently on shelves? (I will leave it to you to volunteer which one if you wish!)
May 26th, 2009 at 9:52 AM
Heather,
Look at some of Alex’s previous posts about his disparity for saskatoon’s housing market.
But if we are talking about condo conversions. If I was a person with apartment complexes and was able to sell and retire, I definately be converting.
If I had the choice to have either 1 dollar or 2 dollars, I would choose 2 as long as I am not committing any crimes or doing anything unethical.
May 26th, 2009 at 9:52 AM
I guess that depends on your definition of ethical
J.
May 26th, 2009 at 9:53 AM
Punting old people out of their home of 30 years into a renters pool where no one can afford to live on pensions+prescription+assisted living costs doesn’t sound so ethical to me… ofcourse who cares about the sick, the elderly, the poor in a Brad Wall province.
May 26th, 2009 at 9:54 AM
Man alive! All I am saying is that the people that own apartment blocks and rental properties are business owners, not old people shelters. They are all trying to support their families much the same as all of you. This means that they have a duty to provide to their shareholders as they see fit.
I could be mistaken but wasnt there a huge revitalization on ave U for affordable rent.
Also, its like me going to fort mac and throw up my arms in disgust about not finding affordable remt! That would be crazy.
Saskatoon is a growing city with expensive rent.
May 26th, 2009 at 9:55 AM
Half of you probably invest in companies that engage in slave labour or severe enviornmental damage or other atrocities. Why real estate investing unethical? Is it because one can witness these tragedies first hand, but not what si going on in China and other countries?
May 26th, 2009 at 9:56 AM
tb: The fine line of ethics can be blurry from person to person. I suppose no law is broken if you just look the other way…
And I sure as hell wouldn’t want to live on Avenue freakin U if I were a senior – unless I wanted to be mugged and/or beaten to death.
Hypocrite: Speak for yourself, I am a very cautious consumer. I do look for businesses that support fair trade, are that are environmentally friendly! I make sacrifices, and I am not always looking out for #1. Please take your erroneous and irrelevant opinions elsewhere.
May 26th, 2009 at 9:57 AM
Okay this is crazy – for all of you people beating up the investment community I’d like you to move out to rural Saskatchewan and live there for 8 years like I did. There you’ll find many communities where no one is investing in the community – no one is starting up new businesses and no one is buying old houses.
Do you want to know what it feels like in a community where there is nothing but ‘for sale’ signs everywhere with everyone wanting to leave except for the old timers? I’ll tell you what it feels like – people are pessimistic, depressed, and there is no hope. Folks expect that their community is going to die and they accept it. If you want a community where there is no investment then move to rural Saskatchewan where houses are very affordable – be careful about what you wish for.
My opinion about the problem is that we don’t have the supply of houses we need to meet demand. You want someone to blame, how about raising a complaint about the City not building enough lots so we can build new houses to meet growing demand? That’s a managable problem – and its a good problem – most rural communities would kill to have that problem.
May 26th, 2009 at 9:59 AM
Jedi,
Yes I did. I wasn’t going to mention it as I’d rather get respect for my predictions coming true than being in a magazine. Somehow I think with this group, respect of opinion is scarce no matter what you present. As seen with comments like this:
“Be careful when suggesting saskatoon may cool this year, Northstar jumps on you like a hawk”
May 26th, 2009 at 10:00 AM
Great post Doug. Some people just need something to complain about. If it’s not this it’ll be something else.
I’m going to go for a walk with my beautiful wife; breathe the fresh, crisp air and admire the heaven in which we live.
Deep thoughts, by Northstar
May 26th, 2009 at 10:00 AM
Bravo Doug!
We should take responsibility for our own action or inaction instead for blaming society.
The fact of the mater is that what the market does, it will do, no mater if any one of us thinks that the time is right to buy or not. If from all the information that each of us as an individual, is exposed to, he or she can choose to wait for a correction of say 10% after an increase of 15 or 30% or bite the bullet. A lot of the people that are saying that the price of real estate too high already, so they can’t go any higher, and there has to be a correction, were saying that a year ago! The litmus test is: did you catch the bus last year, and if you are still waiting for the bus next year, Who’s fault is that?! It was, is, and will be a decision that each of us has to make individually (or as a family unit), are solely responsible for the out come. The opportunities are out there for all. Don’t let what you to happen, cloud your perception of what you can see happening. Cause doing that will not hurt me but might make hurt your self.
May 26th, 2009 at 10:02 AM
I think what most were commenting on was the unfortunate experience that so many are faced with in today’s state of affordability rather than outright complaining that everything’s too expensive.
It’s pretty selfish to think that the market will do what it will do and those desperate and suddenly impoverished that Andres has pointed out will just have to make do. Not a chance people! We pay our government and our city legislators to protect that from happening to anyone! Simply put, they’re not doing their jobs if anyone in this city is out of options or forced to live in danger or forced to go on welfare when for their entire lives they’ve saved and paid into a pensions to protect themselves from just that. There is a serious problem when we need to hear about it or talk about it on a daily basis. Norm has been very diligent in pointing out the articles related to this situation. If someone’s opposed to any citizen being protected from danger or desperation so that someone else can make 2 dollars rather than 1 then that’s a serious problem and I ABSOLUTELY have a problem with that person. I guess we’ll wait and see what your perspective will be when it happens to someone you love.
And all this with christmas around the corner. Free markets still have regulatory laws, otherwise people like those always looking for 2 dollars over 1 will step over others to get it. Any landlord that feels ok about forcing someone from their home into a state of danger just to make a buck should certainly feel ashamed but those that we pay to protect all of us from dangerous situations and desperate conditions should be tared and feathered… oh and fired. And you bet your ass Northstar if I need something to complain about I’ll complain about this… enjoy the crisp air. Don’t kid yourselves or the readers on this board, there is a serious affordability issue due to inflation in saskatoon right now. Sooner or later it will be corrected as free markets always do whether it be through landlord/tenant legislation or credit issues as we’re seeing down south… this is not a bus that I’d advise anyone to get on at this point. “IMO”
Discredit me as you always do, it should be interpreted as a sign of desperation and validation in the fact that frenzied buyers are no longer chomping at what you have to say.
J.
May 26th, 2009 at 10:03 AM
johny,
I really wish the government would take care of me too, getting an education and working hard and smart has been tough!
I am also listening for the burst nest year too but really doubt it. Its all a guess anyways.
May 26th, 2009 at 10:03 AM
I’m amazed at how much of this blog moves from a discussion on housing to a debate on the merits of communisim versus capitalism.
Rather than get into this debate which to me is the same as arguing whether heads is more important than tails to a coin, I’d just like to acknowledge the frustration that I’m reading in all of these comments. My first post on this blog was based on frustration on how much prices were increasing and I can appreciate where people are comming from.
Coming back to my original point though, the housing situation today is the result of a number of parties. The provincial government has been placing adds all over the country promoting Saskatchewan as a place to move to which is increasing demand. The city has be very slow on development of lots relative to increased demand – look at Norm’s post a year ago in december talking about this.
Yes, people are moving here so why not concentrate on building the infrastructure to accomodate them rather than telling them to all go away so you can live the way you have for the past 10 years? I think you’ll find that the successful societies of the 20th century are adapting to change rather than trying to reverse it.
May 26th, 2009 at 10:05 AM
To categorize social programs and general concern for all citizens in a given jurisdiction as communism is a pretty sore admission of ignorance. Affordability and social living programs are pretty relevant to a housing discussion.
We should neither adopt nor accept a change that forces anyone into a desperate and dangerous state of living. That’s neither communism nor capitalism, it’s called a healthy society. Take a look around guys, people are really suffering (and I don’t mean Alex not affording a house) as a result of such an out of whack real estate market right now. It’s all relevant to any discussion on housing.
J.
May 26th, 2009 at 10:05 AM
Doug,
Again, good post. I don’t know how many times I’ve made comments on how “this is what I see happening in the market”, based on my experience and other factors. I’ve always based this on my opinion only but it always seems to be turned in to a bombardment of irrational, emotional argument from people who don’t want to see my predictions come true. My opinions have never been based on wanting the market to go up or down, just what I see happening. I’ll be the first to call a down market when I see things turning.
Johny,
“Discredit me as you always do”.
Please paste something from a previous post where you don’t discredit what I say. Please do it this time because I’ve called you out to paste stuff before on a number of occasions and you don’t.
By the way I won’t discredit you in that there is an afforability issue happening. If this wasn’t happening and Saskatoon was in the dumps, the same people would be complaining about that. I choose not to complain about much because I have better things to use my energy for. I’m not here to debate what the best system is or what is ethical or un-ethical. I’m here because this is a “Real estate” blog. Therefore I’m here to talk about real estate. If I wanted to debate ethics, I’d go to a ethics blog.
Do I want to see elderly people shafted? Of course not. Do I want to provide for my family so they have the best chance for success? Yes I do.
I could always count on good discussion with you “despite our difference of opinion” but you’ve seemed to turn very emotional lately. I think if there is someone here who is showing signs of desperation, it’s the one who’s emotions are boiling over.
May 26th, 2009 at 10:06 AM
Johny
Nobody’s questioning the need for affordable housing to help the less fortunate in society. And yes, the government needs a plan to provide that housing and we as the more fortunate need to tell the government to pay for that out of our taxes. Investors, business and, home owns don’t have horns and pointy tails because they purchased property in Saskatoon. They donate to charities and pay taxes to help government pay for investments into affordable for the less fortunate.
Saskatoon is growing into a great Canadian city, we can’t hide from that. I for one, think it’s great and long over due. Maybe the increase in housing demand and price is in its self a correction. We have been overlooked for too long. Consider that in some sectors of Saskatoon housing has increased over 70% from a year ago and yet we are still below the national average price. So yes the affordability of housing as I understand it (a measure price increase, over a period) has eroded. So is it still affordable … I think so. I also think the potential of Saskatchewan is as good as or better than any other province in Canada. Maybe Alberta has jump started our economy but I expect Saskatchewan and Saskatoon’s economy in particular to take on a life of its own. I’m going to be part of it. Besides we got the Riders …GO Riders
May 26th, 2009 at 10:07 AM
Northstar,
You’re right, I’m very emotional about this subject as it’s very personal and relevant to me right now.
I’ve lived in Calgary, it doesn’t feel good to see desperation in someone’s eyes nor to walk past someone who looks terrible asking for money. This gets worse as more and more find themselves suddenly stuck because so many are trying to make money… er more money.
Likewise, It’s very frustrating to see blind faith in inflation. It happened in the 70′s and it happened in the 80′s. Inevitably the market corrects itself. So many more can’t afford to live right now because inflation is being promoted as progress and boom. Half my frustration is towards those buyers both the frenzied uninformed and the speculative quick buckers. The other half is towards those who misinform and stir the frenzy to keep buyers buying but not necessarily realizing how it all affects inflation.
You of all people should agree Northstar that bull and bear markets are cyclical and inevitably correct themselves. Too expensive is not something that people just get used to.
Ofcourse on an anonymous forum like this Northstar I’m attacking your actions, position, and promotion of an inflated market… not you personally.
J.
May 26th, 2009 at 10:07 AM
I agree with the previous posters in that it is sad that people (renters and first time buyers) are put into shitty circumstances.
Whose to blame?
1. The city; for having a total lack of serviced lots, where we only have 242 SFH for list in Dec. Maybe also for the condo conv. All this did was make money for a few people while others were kicked out. Not right.
2. Real Estate Agents: if they all are concerned about their clients, bidding wars should not have happened. Everyone knew what happened in Alberta in 06( bidding wars). If Realtors are supposed to know the market, some of them should have seen that coming. They are an association, don’t they get together and figure out market trends and forecasts?
Why was there not a plan to deal with Saskatoon spring 07 before it happened?
(don’t get me wrong, I think there are great realtors out there and I will definitley use mine again someday)
3. Speculators
4. Sask. Gov. ads in Alberta
5. My ex (I blame her for everything, keeps me sane)
The latest StatsCan article came out today. Our population is growing. People from Alberta are coming back. And with money.
Supply and demand will dictate our price.
May 26th, 2009 at 10:09 AM
Northstar, it’s easy to sit there and say, “I choose not to complain about much because I have better things to use my energy for.” This issue of affordability obviously isn’t affecting you! Saskatoon’s hot housing market is in your favour. My so-called COMPLAINING isn’t about bad hair days, coworkers, or the cold weather. It’s about my HOME! (Or lack thereof) This is NOT trivial, so please don’t make it out to be something of mere inconvenience!
I also think your predictions are self-serving. If you were following the trends, you wouldn’t be predicting 15% increase MINIMUM by May ’08. Just like realtors and others with vested interests, you’re hoping word-of-mouth gossip will drive the market.
Doug, I agree the city was a bit slow to meet the demand for new lots. However, I don’t think it’s wrong to aim for slower population growth in Saskatoon, rather than have it explode exponentially. If I wanted to live in a big metropolis I would have moved to Vancouver. There HAS to be a balance between desolate communities, and booming economies!
The way I see it, there are 2 kinds of people:
People who are empathetic to other people’s situations when they themselves aren’t affected; or people who are self-involved and don’t care about other people’s situations because it doesn’t affect them.
I’ve always been Type 1, but I’m young, and an idealist. Perhaps in another 5-10 years of having my spirit crushed I’ll feel differently. :’)
May 26th, 2009 at 10:10 AM
Garth Turner, a Liberal MP for Halton, ONT, made a good post on his blog that I think is worth reading:
http://www.garth.ca/weblog/2007/12/18/war-on-the-house
Turner isn’t always the smartest person, but I think he’s got some good points here. Maybe it’ll make those that are worrying about the current prices feel a bit better — you may just get that house you want. I’ll admit I’ll be unhappy if the market suddenly tumbles, having bought a (probaby) somewhat overpriced house this summer, but I only have 22 years left on my mortgage and put over 50% down. I’ll be fine.
May 26th, 2009 at 10:10 AM
Johny said: “Any landlord that feels ok about forcing someone from their home into a state of danger just to make a buck should certainly feel ashamed but those that we pay to protect all of us from dangerous situations and desperate conditions should be tared and feathered… oh and fired.”
Get the laws changed then. Tell your city councillor that you are against condo conversions. Start a petition, do something, anything. It’s easy to yack about it on the internet. It’s much tougher, as we real estate investors know, to get out there and act.
May 26th, 2009 at 10:11 AM
Callum,
Obviously if I’m this passionate about the issue, I’ve contacted city councilors and have done more than just “yack” about it… It’s actually a lot easier than you’re suggesting for real estate investors to get what you want, given the fact that I’m having so much difficulty convincing city council that what you want isn’t what’s best for saskatoon as a whole.
J.
May 26th, 2009 at 10:12 AM
Wow! Quite a discussion going on here. Sorry I’ve missed it.
My email notifiers have gone on the fritz and I thought everyone was busy with Christmas.
On the topic of condos, and the elderly; on Monday, city council tabled their decision on the Milroy until late January when they’ll have a private session. From what I’ve heard, I expect that this application will be shelved indefinitely. There is no reasonable alternative for these people and with the vacancy rate pushing the zero mark it would be terribly hard to justify giving them the green light.
Alex,
Scared renter is correct. Condo owners do not receive a monthly fee after they sell. Condo fees are paid to the “condo corporation” which is co-owned by all existing owners. They are non-profit organizations run by a board of directors which is appointed or elected by unit owners who all have some voting power on the major decisions which face the board. When you sell your unit, you also sell your proportionate share of the condo corporation.
May 26th, 2009 at 10:12 AM
Todd, thanks for posting that link!
The article has MANY good points, and I’m glad somebody out there (the voice of reason) is standing up and saying we are OVER consuming EVERYTHING, and this is NOT sustainable. We are definitely creating a big rut, and we only have ourselves to blame.
May 26th, 2009 at 10:14 AM
Johny,
Would you share with us what you’re trying to get council to do? There are lots of people reading these posts that could add a measure of pressure.
May 26th, 2009 at 10:15 AM
Off the cuff,
Revise the saskatchewan’s residential tenancies act to not allow, in any fashion, the removal of tenants upon purchase of an apartment building for 1 year following purchase.
- If it is required that the tenant must be moved prior to the 1 year term, the new owner has to subsidize the tenant’s new rent for the remainder of the term.
Increase capital gains tax on sales of any non-primary residential unit.
Obviously invest a significant amount of money in affordable housing projects. It didn’t seem to make the budget this year.
Reduce property taxes on primary residences and increase property taxes on non-primary residences
Candidly, take a good hard look at what seniors can afford in today’s saskatoon given a pension structure that could never have predicted the severe level of deterioration in affordability due to hyper-inflation in this city.
And in short, make it very VERY difficult for anyone to make a quick buck by buying a house/appartment, painting the walls, laying down laminate, cutting the grass, and selling it as “renovated top to bottom” for 50K profit.
Ofcourse it is very difficult to get this city council to do anything without a get rich quick scheme behind it…
J.
May 26th, 2009 at 10:16 AM
Oh, I’d also love for the federal government to stop promoting access to credit but it’s too late for that… and an indebted society is exactly what they’re after when it comes time to implement indenturing strategies like the SPP and TILMA.
J.
May 26th, 2009 at 10:16 AM
There has to be some incentives for building new rental apartments too. All the apartments go condo and none stay as apartments. There has to be some way to encourage investment in rental properties in Saskatoon. Like it or not, there is a segment of the population that just never will own their own place and they need a place to live too.
May 26th, 2009 at 10:17 AM
Yeah seems like cheap paint and laminate flooring with stainless appliances are the thing these days.Ive seen quite a few listings in Saskatoon and i just laugh at these shacks going for 229k and 299k that are wartime dumps waiting for a bulldozer.Pull the drywall off the inside walls and I bet you find walls that have old insulation,faulty wiring,Old windows etc.When you buy an old dump make sure it is well insulated with new windows.Get an electrician to inspect the wiring and panel also.Have a look in the attic and you should see 12 to 15 inches of insulation,bet you only see 5″ to 8″!If it smells like mildew in the basement walk away from that place as those old home never had weeping tile around the house for proper drainage.A 30 year mortage at 1500/mth?People who do that need their damn head examined!Half of the houses that are up for sale are not even worth a third of the asking price.Its a realtors media hype that has brought this stir of over inflated flip this house nonsense to the fine people of Saskatchewan.For the serious home buyer I strongly suggest,DO NOT BUY,WAIT in 1 year with a market freeze up the prices will come as fast as they went up.I state this comment with all due respect to future home buyers only.For the rest who are stuck in the high priced mortage I’m sorry to hear your loss.
May 26th, 2009 at 10:19 AM
Todd, the answer is to build more new condos as well as rental units. Conversions rarely have in suite laundry and a buyer will usually prefer a new condo to a conversion, if it is available. If doing a conversion is not as profitable and take longer to sell, there will be less of them.
May 26th, 2009 at 10:20 AM
Johny,
I can tell it’s a subject you have lots of passion for. Believe it or not, I share your thoughts. When I started my investment company my main goal wasn’t to screw the poor and elderly. I don’t want to see people on the streets without money either. Yes I do own rental properties and invest in houses. I’ve also never increased rent as much as $1 on any of my rental properties I own or have ever owned. My tenants enjoy renting from me because I am fair.
Yes I do agree that the ebb and flow of markets are cyclical and that Saskatoon will correct itself. Much like how you are frustrated by un-educated buyers and frenzied pumpers, I’m frustrated by constant acusations of only being here to create buzz. A long time ago you asked me to offer facts to base my opinions on which I did. What was the point in doing that if you just continue to call me a pumper. I’ve always stated my predictions were my opinions only and always wanted the future to determin wether or not I was right or wrong. I believe back in August I predicted sideways until December and then up through May. So far I have been proven right and we will see what happens through May. Once again I will let time tell.
As far as your opinions on how to “fix” things, I can’t disagree with any of that. They all sound like fair points and I have no problem supporting all of it. Let’s not forget one thing though. For every thing there is an extreme opposite. Up / down, balck / white, left / right. I propose in addition to your ideas, these points.
- Welfare / Social assistance to be a 1 year maximum. Once that 1 year is up, it’s time to 1) get a job and contribute to society. 2) go to school and get an education, then get a job. (excluding disabilities)
- A food stamp type program so that welfare checks don’t go towards alcohol, cigarettes and drugs.
- A government program that doesn’t reward welfare recipiants by giving them more money for every kid they produce.
etc, etc.
Heather,
“If you were following the trends, you wouldn’t be predicting 15% increase MINIMUM by May ’08.”
I’m not sure what you are seeing happening as far as trends but that’s exactly what I am doing. The overall trend is up and setting up for another run. It’s all technical analysis of charts, mainstream psychology and the examination of the fundamentals of this city and province. My predictions are not self serving, they are what I see happening whether or not I own any property here. I only plan on selling 1/2 of what I own here in April and May and holding the other 1/2. After May (so long as what I have predicted comes to fruition) I will be calling for a correction with houses still in my investment portfolio. How is that self serving? I can’t short the housing market.
If you are the exception to the rule of complaining then so be it. I’m glad to hear it. What I find with most people who complain about stuff is that they complain about lots in their lives. I know this because I used to be like that.
May 26th, 2009 at 10:21 AM
Northstar,
I agree with all of your points but two.
1)Going to school and getting an education is easier said than done for many… and becoming many more.
2)Offering social assistance based on child headcount is kind of chicken/egg, do you think that those on welfare plan to have those children? I’d venture to say not most. So it’s a safe assumption that they wouldn’t be weighing the prospect of having another child against whether or not they get more welfare. If their welfare is not increased to support the additional child, that’s an entire family left with less support… or maybe more revealing, more children at risk of not going to school to get that education.
One without an education, and on welfare most of his/her life is a pretty likely candidate for welfare as an adult… especially when you can’t afford the rent that just doubled.
Norm,
Maybe you could offer some suggestions for avenues of creating pressure?
J.
May 26th, 2009 at 10:23 AM
You people are all a bunch of weirdos in Saskatchewan.
May 26th, 2009 at 10:23 AM
I agree with Brian – Saskatoon has all of the ingredients to become a leading Canadian city. You’ve got the natural resources and the human resources. You have the infrastructure and a very nice physical setting. All of the macroeconomic trends are favourable. You’ve got the basis for high tech industry including a first rate university and can serve as the servicing and administrative centre for Saskatchewan’s rich resource economy. The fact that agriculture is booming doesn’t hurt either. Jim Rogers, a leading commodity and financial “guru” is relatively pessimistic on the US economy for the next two years but is very bullish on agricultural commodities and to a lesser extend energy. I just hope you learn from the mistakes that others have made in places like Alberta where growth was not managed very well – don’t become a victim of your success.
May 26th, 2009 at 10:24 AM
I guess my main point is yes, some of the high end rich people can do without another million in the bank… But some of the poor could be a little less lazy and not mooch off of society. It’s not a nice feeling seeing people on the streets as some of them have definately fallen on hard times and need help. Some of them have just brought it on themselves and I have no sympathy for that.
May 26th, 2009 at 10:26 AM
Johny,
Thanks for sharing your thoughts.
I agree that it’s difficult to get the government to do anything effectively. In fact, if they’re involved, they can almost always be counted on to take too long and waste way too much in the process. The only effective way to pressure governments to action is through media, or massive demonstrations supporting some action. We need to see more stories in the newspaper and on television which draw attention to the plight of those who are trying to figure out how to live in a world which is suddenly much more expensive, without additional resources. A one on one talk with a politician generally results in little action, other than a nodding head.
The way I see it, we have two big issues here that need to be attacked independently.
The first one is the issue of poverty and homelessness which has only been made worse by changes to our real estate market. I believe that this is a community issue and it needs to be embraced by the community. There is a serious need which has to be addressed quickly. If a homeless family needs a warm meal and a place to sleep, you can count on the government to keep them waiting while they do a study to find out if these people are really that hungry. Fortunately, you and I are sharp enough to recognize a desperate situation when we see one. Those who are fortunate enough to be on the more comfortable side of the income gap need to give more, we need to do it now, and we need to do it locally. There are many excellent local charities who are working hard to help. I would hope that those who have benefited from this “housing boom” would be amongst the most generous givers. A small slice of the “profits” which have been taken out of this community could go a long way in restoring some hope.
Of course, the other issue is affordability. I still have some faith in the market to ultimately reach sustainable levels. Perhaps some government intervention is required in certain circumstances. For instance, I don’t see how we can support a condo conversion at the Milroy when the vacancy rate is .6% and the place is full of senior citizens. Generally speaking, condo conversions will likely be the biggest factor in taking some of the steam out of that segment of the market. The principle of supply and demand, and competition seem to be at work.
The low vacancy rates which we’re faced with should speak to the need which we’ll continue to have for investors who wish to retain long term real estate investments in Saskatoon. If we jump the gun here and make holding real estate less attractive, then we defeat the purpose. For instance, “reducing taxes on primary residences and increasing taxes on non-primary residences” ultimately hurts the people you and I seek to help. Those increased costs get passed down to the renter. Even the socially conscious landlord has a responsibility to make wise investments. If there isn’t an adequate return, the property is sold to someone who has a plan for profit. Part of our problem right now is that long term investment isn’t attractive enough, particularly for new comers. You can’t make any money. I would be more likely to support some type of a tax break for those that hold on to, or construct new rental properties.
I am far more concerned about the “pump and dump” investor. These are the ones which blow in and out of town, inflate prices, and then carry the money they make back home. I would support initiatives which make it tougher and riskier for them to make big profits. They don’t contribute much to the community and in most cases, we’re better off without them. I’m not sure what can be done about this problem. Higher capital gains taxes might encourage some to hold their investments. Again, it’s unfortunate that if government can collect it they’ll just piss it away, but perhaps that’s a better than nothing. One suggestion that I would make to people who find themselves needing to sell this year; do a little work yourself before you put the home on the market. You take the profit which comes from some fix ups. Don’t send it off to Alberta. If you’ve owned the property for a couple of years, you easily have enough equity to borrow some cash, make some improvements and increase your net. Let’s make it tougher for the flipper to find properties which will work.
May 26th, 2009 at 10:26 AM
Northstar, from all the articles I’ve read the majority of market “experts” are saying there is going to be a cooling trend happening all over Canada in 2008. Granted they say in SK’s case this trend will begin later on in the last half of the year.
If the market does get hot again in the spring that means people haven’t learned from this year’s past mistakes of panic buying, and bidding wars. I can only hope people have a bit more common sense this time around.
Psychologically, people can be very suseptible to gossip. People will base their actions on whose arguement is most convincing and majority – I’m just trying to do my part to calm down the hype. Fundamentally, this province and our cities do not have the wages to support this kind of growth.
Believe me, I’m no complainer. I’m thankful for everything I have in life, I’m very lucky. However, this housing situation isn’t just a minor nuisance, it’s a BIG deal that affects many future decisions: careers, children, and finances. I’ve paid a LOT of dues by doing everything the “right” way. Getting an education, saving money, getting married. NOW that we’re trying to get our first starter home it seems that dream has temporarily slipped out of reach. We could have MORE than afforded a decent home 1 year ago, but we wanted to do things the “right” way. Should have, could have, would have… isn’t that always the way it goes?
Jon, it is SICK many of those wartime houses are out there for around $290,000 which are NOT renovated and falling apart! It’s almost criminal. Something’s got to give.
May 26th, 2009 at 10:28 AM
Great discussions on this blog – I’m a long time reader. As for the Milroy apartments, the application is scheduled to be discussed at the January 14, 2008 City council meeting.
May 26th, 2009 at 10:28 AM
Heather, it might not be the wartime house that is SICK its the land. Land is increasing, not the house.
And I had no idea that taking a neglected house and cleaning it up, which I feel will attract people that would further take care of a place is a bad thing. There are many different types of people that are flipping, not just the “pump and dump”.
I personally purchased a war time house last year. I wanted to ensure that if the housing market increased further, then I would not be left behind. I also had time during the summer to work and having a project like a house would be valuable experience for me and further contribute to me purchasing another house.
The house I purchased was honestly on the verge of junk. Thinking back, I dont think I will EVER live in something so terrible. We have refinished the floors, replaced the entire kitchen, replaced the windows and painted and repaired every surface. I have finished the deck and replaced the rotting stairs.
There are going to be many things in the future that still needs to be accomplished. Electrical is not great and the addition in the back has seen better days. But I cannot do everything, hopefully the next person that owns this property does take care of it and further works on the house.
Now, does this make me a bad person? Should I have left the property in its current neglected state? Or have I benefited my neighbourhood and the city by making a more homely property? Or does the idea of me profiting from hours and hours of work really disgust some of you?
Its amazing how people see flippers. If you want to shake your head, look at the house on lorne just north of ruth. That makes me cringe! But I do not consider myself the same.
May 26th, 2009 at 10:29 AM
tb,
I have a couple of valued clients who take a lot of pride in restoring decrepit properties and there is certainly a place for that. My point is that I’d rather see the profits from such efforts remain in this community. Sometimes, it’s just too much for a seller to take on, but in those instances where a fresh coat of paint and some new flooring adds 30K to the potential sale price, they’re almost foolish not to do it.
May 26th, 2009 at 10:32 AM
tb, you have COMPLETELY missed the point! Did you pay $290,000 for your wartime home? I don’t think so. I’m not saying it’s a bad thing to buy homes that need major repair, but prices should REFLECT that. I’m not going to spend close to 300K just so I can spend ANOTHER 80K on repairs. Seriously.
May 26th, 2009 at 10:33 AM
Heather, Am I going to GET $290,000? I don’t think so. The price will be fair and will REFLECT the quality versus the comparible’s. I have been following this house and area and will not see that price. And I hope that the next owners will not have to spend ANOTHER 80K on this house. It is perfectly livable.
Im sorry that you are having a rough time finding a place. I understand that you want the housing trend to cool. I am not going to feel bad that I am gaining equity and hopefully making money on the performed repairs.
….seriously
May 26th, 2009 at 10:34 AM
tb, what I’m trying to say is that sellers are selling these homes for $290,000 without ANY repairs/renos. I’m not talking about your project. You’ve put work into the house you’re selling, and of course you should expect an increase in equity. I wasn’t even addressing the whole “flipping” situation. I was simply stating how stupidly overinflated the market is, that even fixer-uppers are practically out of my price range!
I would be interested to hear how much you paid for your wartime house, what area it’s in, and how much you would be asking for it now. You don’t have to tell me, but this is anonymous.
May 26th, 2009 at 10:35 AM
well I dont want to be specific but its on the south east. I put in 20K and expecting/hoping to profit 50k, now after lawyer and realtor, that will most likely be approximately 35k profit for a years worth of part time work and investment.
now if the market shrinks a little, we will have been no worse that when we started. If there is a massive increase in price, then we can still afford to live in the city. And I have had a great experience knowing what it costs to do things to a house, and recognize things to look for in my next property.
May 26th, 2009 at 10:36 AM
That’s pretty exciting, definitely a rewarding experience. :’)
May 26th, 2009 at 10:37 AM
I think there are two different streams of thought on this thread. One, the predictions of how the market will fare in the next year. The second, how it is impacting the overall community, especially with regard to first time buyers or people who are working yet have been priced out of the market. Would people please be careful not to confuse the two.
For example, it is my belief that the price is going to rise somewhat substantially in the next year. A month ago I would havve been more inclined to cite sources. Now, a day doesn’t go by where there is an article in the Star Phoenix, Saskhouses.com, cbc.ca, or other sources that talk about the population growth, job growth, hottest economy in Canada, booming agriculture, technology, and commodity production, and most recently optimism in the business community. A month ago I could see the market going one way or another. Now it is going up. it may come down but it is going up. To defy this is to defy logic at this point. No I am not a pumper and I don’t care about what economists who can’t spell Saskatchewan have to say. The weather professionals are wrong on a daily basis and as Norm has mentioned last year’s predictions by real estate agents were just a little off (By 42% or so;-)
Because I see property values going up does that mean I see it is a good thing? No, I don’t. I am not sure what to think. I do think it is ridiculous that people who contribute to society in a very meaningful way are running out of options and can probably not afford to own in this new market and I would be scared to rent without a no increase clause. I do feel for young people coming out of post secondary institutions with debt because of ever increasing tuition and book costs who will be strapped to have a home as a starter home is way out of whack. I also think it is a shame at what lenghts people go to to make a buck. I have no problem with people making money off of real estate. All I have ever been told is that your home is one of the best investments you can make. After all, everyone has to live somewhere. But to force people out of a home or make it unafordable? Someone didn’t raise their kids right.
A couple of howevers: This problem isn’t going away, at least not for a couple of years. By then, stability may have prices that are too much for most. Saskatoon should embrace this opportunity to show people this climate can work, or at least that it cares about its citizens more than most other cities do. How? That is the critical question.
What isn’t a good start: the ungreatful lady whose sense of untitlement was reflected in the paper today. Expired food is wrong. But to get a ham, enough money to buy a turkey, a variety of other food (Maybe its not much to her but might have been to the people who have donated it) and take it as an insult! Or I recently heard of another program that didn’t let people deliver hampers tonight because the recipients wanted them at a specific time tomorrow so a lot of people have to go in to work tomorrow to accomodate this.
Let this be a warning: Don’t underestimate the generosity of people. Cleaerly there a lot of people on this blog that care for the people that are affected by the recent housing market. But a few more people like Mrs. Whiny and that will to find solutions may go away. I will continue to support charities and other causes, but no more hampers for me.
May 26th, 2009 at 10:39 AM
Hampered by Christmas,
I have delivered hampers the last two years with my church and also with work. Some of the people have been extremely grateful, some even crying. It really makes you feel for these people. I wish them the best. There have also been people less grateful. It is almost expected for them to get stuff. One guy did not even say thanks. On Gormley today there was a report of a lady who was upset because she did not get the same amount her friend got. I guess this shows that greed can be found at the poverty level as well.
All in all, most people receiving hampers are very grateful and I am happy for that. Just like everything else, a couple bad apples can sour things. Even though I am not rich, never will be, I believe it is my duty to help my fellow person through charity and will continue to do so. One day the tables may be turned. And if that day does come, I will know then that when I had the chance to help others I did not give enough.
(sorry this was a bit off topic, but a valid post)
May 26th, 2009 at 10:40 AM
I totally agree with Johny in talking about how being concerned and open to the notion that we are tied to those we share a community with.
What I don’t understand is why anyone here would think to denigrate me because they see my concern as extreme. Out of all people here I have done more to ensure that the point is pressed. Norm can back that up if it so pleases you to call my bluff.
You might not like my suggestions to solve anything, but let me give you a hint: So far, inaction, balanced and mediocre solutions are what have gotten us into this mess.
The problem is, are you moderate with a lean towards greed, or are you moderate with a lean towards equitable opportunities and fair expectations? To this day, our wishy-washy moderate leaders have shown mild preference to profit and this is starting to add up.
Let’s not be so benign and ambiguous anymore. The clear message has to come out eventually or we will all end up losing our status. It’s no secret the businesses have been keeping more for themselves over the past ten to fifteen years.
The rising tide has not floated all boats.
( http://growinggap.ca )