Saskatoon real estate: Week in review (February 23-27 2009)
Sales of Saskatoon houses and condos continued at a rather lackluster pace this week as local real estate agents reported just forty-seven sales, up two units from last week, but nearly half the number reported during the same week last year when ninety-two such properties sported a sold sign.
Residential listing activity remained brisk as seventy-four single-family homes and forty-four condominiums were offered for sale on the Saskatoon multiple listing service, down two units from last week, and up nine from the same week in 2008. Total active residential listings gained ground again for the fourth week in a row suggesting confirming that we are now into our spring listing market. At the close of business Friday 1,298 residential listings were showing an active status, up 56 properties from the previous week, and well ahead of the 370 properties available at this time last year when inventories pushed towards record lows and just 204 houses and 127 condos were for sale. Today, take your pick from 785 houses and 429 condominiums.
Click the image for a larger version of the graph.
Thirteen of twenty-six canceled or withdrawn listings made another appearance as a new listing, most offered at a lower price. An additional seventy-four sellers adjusted their asking price in hopes of getting a jump of the competition. Condo sales had a strong week accounting for nearly one in three sales, and pushed the average selling price for the week down sharply from $295,014 last week to $269,628, just fourteen dollars higher than it was for the same week in 2008. The median sale price for the week sank even further and settled at $253,500, down just over $30,000 from $285,000 last week. The six-week average came in at $281,573, down just $2,000 from last week and about $23,000 higher than it was the same week in 2008. The median also fell slightly week-over-week to $263,750 but maintained a gain of $15,500 over the same week last year.
Click the image for a larger version of the graph.
While home buyers definitely weren’t out in droves, those that did buy clearly took it easy on their seller of choice as the average underbid reached its lowest level since the week of August 25-29, and came in below $10,000 for the first time since that same week. The underbid graph presents a picture that we haven’t seen before as a full forty percent of the week’s sales recorded a price within $5,000 of list and an additional thirty-four percent came in between $5,001 and $10,000. The $10,001-$15,000 accounted for 11% of sales compared to 16% last week while the $15,001-$20,000 category picked up a single percentage point and finished at six. The $20,001-$25,000 category more than doubled to nine percent while the underbids which exceeded $25,000 completely fell off of the chart for the first time since I started publishing these stats.
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.
Norm Fisher
Royal LePage Saskatoon Real Estate
65 comments so far. We'd love to hear your thoughts.
April 15th, 2009 at 2:15 PM
Norm,
This is a follow up to my post last week. Assuming average prices stay flat the average price will now go negative year-over-year (YOY)in less than a month.
I suggest that one reason that the underbid might be so low this month is that the first time buyers are out in force due to low interest rates. This group tends to focus on monthly payments and seem less concerned with purchase price. They also are less skilled at negotiating and want the deal made now (i.e. instant gratification).
April 15th, 2009 at 2:16 PM
Roger,
I expect you’re probably right about the coming year-over-year downs. We hit nearly $290,000 last March and just pushed higher from there. Realistically, prices should easily be down over the next eight months even if they don’t go down much more.
As for the underbids, hard to say on just 47 sales but clearly with the lower median it would appear that there were more first-timers.
April 15th, 2009 at 2:16 PM
Roger, apparently this is happening in a few other cities as well, ie: first-time homebuyers are making a surge in other markets (Calgary, etc.) I hope sellers take full advantage of this brief respite and realize it for what it is: a very limited window of opportunity to sell their home before competing with a flood of new listings.
I’m going to throw this out there for Spring-Summer projections… End of March: 1,500 MLS listings, end of April 1,800 MLS listings and by the end of June 2,500+ MLS listings. I also think we have a good shot at breaking 3,000 MLS listings before year-end.
April 15th, 2009 at 2:16 PM
How about reporting the underbid numbers as a percentage of the list price? Can that be done?
The underbids may appear low this week because of all the condos and first time buyers as noted above, but an apparently low underbid could actually be a higher percentage than normal if the listing price is lower. Does that make sense. Know what I mean?
Like a year from now when the average price is $175,000, underbids will likely be lower than now, but also represent a higher percentage of the listing price.
April 15th, 2009 at 2:18 PM
Jason,
You are right on the mark. Here in Victoria we have seen an increase in activity in February at the lower end. The underbid here is lower at this price level. Around the median there are fewer sales than last year. At the high end there are some big haircuts on older listings and few sales. There are reports of offers not being accepted due to “subject to sale of current home” conditions being rejected by sellers.
April 15th, 2009 at 2:19 PM
Hangover,
It’s a good idea really but it would be nightmare for me to break them into categories. Using all of the sales where an underbid occurred it’s fairly simple to get to an average. Here’s how February looked.
Week of 2-6 – 5.4%
Week of 9-13 – 4.6%
Week of 16-20 – 3.9%
Week of 23-26 – 3.4%
April 15th, 2009 at 2:19 PM
I think it will be interesting to see what happens to sellers’ attitudes once all those lines (4 week median, 6 week average, average etc) collide with last year’s (ie prices/median/mean/4/6 week median/mean) will all be Down Year over Year in about a month. Will be tough to sugar coat that and I would think that many sellers would be less resistant to cut prices after what I would think would have to be a big media story (ies).
I will admit I am amazed prices have stayed up as long as they have. With still slow sales and consistently big, and now again growing inventory, I would have thought prices would have been on a constant slide since the fall. When prices start falling, I would think inventory will baloon, as all those investment and rental owners try to sell now rather than risk a drop in value that may take years to recoup.
Will be tough to convince buyers to buy in greater numbers, as even when prices do come down a bit more, there will always be the fear they will drop another 10% (20%?) within a year or two after the purchase. Sales might increase a bit when prices come down in a month or so, as “deals” seem to present themselves to buyers afraid of the “buy now or forever be priced out” attitude we still hear now and then.
Or of course buyers could just move to Regina and enjoy and instant $50,000 savings, and 2 Earls locations…
April 15th, 2009 at 2:22 PM
Roger, I’d heard that “subject to sale of current home” is kind of like the kiss of death right now in Victoria… And I believe up until recently (like in the last year or so) this wasn’t a very common condition in Victoria, but is becoming more and more prevalent in offers.
I also wonder if we’re going to see a repeat of the early 90′s, where a lot of people attempted to downsize and kept prices artificially higher (although still down) on the lower price ranges, while the mid and high-range took a significant hit.
April 15th, 2009 at 2:23 PM
What we are observing in Victoria is what some call “price compression”. Prices are dropping slightly at the low end, with significant price drops above the median. There is also much more inventory above the median and fewer sales. What happens is that price drops start trickling down the price ladder to the bottom. The 600K becomes 550K; the 550K drops to 510K; 510K drops to 480K and so on. The low end buyer will be suffering from regret in a year because their friends will be getting much more house for the same money and their home will be worth considerably less.
In the fast paced world of the Internet, cellphones, and rapid stock market the real estate market corrections are a slow process. Here we are seeing price of drops 1-1.5% per month. There is still a lot of denial by homeowners hoping for a spring bounce. Standing by watching a slowly falling real estate market before eventually buying requires patience.
April 15th, 2009 at 2:23 PM
What is the consensus on why there’s such a discrepancy in pricing between Saskatoon and Regina?
April 15th, 2009 at 2:23 PM
Nick,
“Or of course buyers could just move to Regina and enjoy and instant $50,000 savings, and 2 Earls locations…”
Okay, I’m suspicious. Have you purchased a property in Regina ’cause you’re sure pumping it up pretty good lately.
April 15th, 2009 at 2:24 PM
Uh Oh… Another Saskatoon vs. Regina thread
April 15th, 2009 at 2:25 PM
Norm, as much as Regina is a better deal than Saskatoon, I’m not buying in either until the whole market sorts itself out. Since I’m pretty even on either, I’d go with what ends up being the more affordable. Since Regina’s now home and has a significant cost savings, I’m assuming I’ll buy a home in Regina in a few years – worst case scenario (for me), will cost the same it does today.
Just think all those new prospective grads/home buyers are missing out if they don’t consider Regina -as the cost difference basically lets them upgrade a class of housing (single family home for Saskatoon town house pricing)
April 15th, 2009 at 2:26 PM
The Milroy has been renamed “The View on 5th”. Sign on front of building says “condos for sale” but couldn’t find any on mls.
April 15th, 2009 at 2:27 PM
Saskatoon vz Regina. *sigh*.
This is one of those arguments that only makes sense to people from the province: those of us come-from-aways find it, well, kinda dumb.
Saskatoon is where the speculators started: the U of S is bigger than the U of R, ergo more students, ergo more tenants, ergo better place to buy revenue property.
Of course, how they squared that with a 7% vacancy rate has never made sense to me, but still, I think that’s where the difference comes from.
April 15th, 2009 at 2:39 PM
Milroy — that’s wonderful! What does it have a view of?
I can’t believe they’re going through with this…unless the company that bought the building is big enough to have the ‘stopping a supertanker’ problem.
Hangover: man, your bear suit’s even shaggier than mine! I think we will get to an average of 175K (assuming you fold condos & houses together) but not this year! I’m assuming around 2011 or late 2010 for that.
Not sure that we’ll get to 3000 listings: I’m sure we’ll get to 2500, though, given that we’re starting at 1300.
I’d be happy to go into a ‘bet on the week prices go down YOY”, but that’s a real crapshoot.
April 15th, 2009 at 2:40 PM
Now jrochest,
The Milroy (I’m going to keep calling it that forever) does offer some of Saskatoon prettiest views from either side of the building.
“I can’t believe they’re going through with this”
I’m thinking they were in too far to really stop. Once you’ve bought the place, whataya gonna do? Can’t recall the details on this sale but if they bought it right, these ones might have potential. If I could get a larger two-bedroom unit, up high on the east side of the building with new windows and two underground parking stalls for $250K I’d seriously think about buying one.
Milroy,
There were four units listed MLS in the fall. They all appear as “expired” at this time, and you’re right, no active listings.
Over the next sixty days we’ll probably start hearing of condo developments that won’t go ahead. I think most that are under construction will probably finish, even of they take forever to sell but anything depending on pre-sales to get started is pretty questionable.
April 15th, 2009 at 2:40 PM
In today’s SP Business Section – Page D3 (I couldn’t find it online), it says The Milroy sold for $19 Million. At this time I’ve heard they are only selling units on the first few floors so “The View” isn’t too hot. Have no idea on prices.
April 15th, 2009 at 2:50 PM
Norm,
“If I could get a larger two-bedroom unit, up high on the east side of the building with new windows and two underground parking stalls for $250K I’d seriously think about buying one.”
Really? I think that in a year or two those units are going to be worth around $150-$175k. Let me know how you make out with the concept of ‘downsizing to a condo’ (hoping I can pick up some future tips!)
The scary aspect is that we almost have enough condo developments to have a pretty successful dead pool this year… I’ll put the River Landing at the top of my list.
April 15th, 2009 at 2:51 PM
“Really? I think that in a year or two those units are going to be worth around $150-$175k”
I’m probably not quite as bearish as you are. A spacious downtown condo with a river view from on-high was fetching more than 150-175 pre-”boom.” I gotta have the two parking stalls though.
Obviously I would only make such a move at $250K if I could get an equally ridiculous amount of money for my grossly overvalued house.
Let me know how you make out with the concept of ‘downsizing to a condo’
Seriously though, I’m absolutely certain I’m not moving anywhere anytime soon, unless I want to move without Trish but I lived in that building years ago and was quite happy there. A south-east corner unit would suit me fine.
“The scary aspect is that we almost have enough condo developments to have a pretty successful dead pool this year..”
Is there that much where they’ve done much more than some drawings and pushed some dirt around? I agree that there will be many planned projects that won’t go. If the “River Landing” doesn’t go ahead, you still have a pretty limited amount of stuff with a river view.
Milroy,
Thanks for that. If I recall, they have 22 floors with about 8 units per floor so they were bought around $108-110K per door. I imagine they’d make a filthy fortune at $200,000 per unit on average.
“At this time I’ve heard they are only selling units on the first few floors so “The View” isn’t too hot.”
The could call it, “The View of Carleton Towers.”
I don’t think this is true. First, that would be an incredibly stupid business plan for a condo project with a river view
, but secondly, the four expired listings were all between the fifth floor and the fifteenth floor. They ranged from $205,000 to $350K.
April 15th, 2009 at 2:52 PM
Norm — I can see the East side having a lovely river view (once you clear the other buildings), but what do you see from the West side? The railyards? The Sugar mill?
Yep, River Landing will be pushing up the daisies. Lousy, really, because it would benefit that whole end of the city, especially the new elements like Persephone and the Farmer’s market.
I grumble madly about bad real estate (condo conversions, flipping, etc) but good developments can make a massive difference to the life of a city.
April 15th, 2009 at 2:52 PM
Norm, that was exactly my point: a lot of those condos are going to return to pre-boom prices in the not so distant future. Maybe +$25k or so more for any renovations and upgrades. Yeah, I agree, the two stalls are a must: even if only to ensure you limit the amount of door dings to one side of your vehicles! Just make sure it has first-rate appliances and that will improve your odds some. That and getting the aforementioned ridiculous amount of money for your house.
In answer to your second question, well, for a lot of these projects I suspect they paid a premium for either the buildings to tear down or lots to piece together, so if they don’t go ahead I guess they can always turn it into another Impark lot (one example is the old houses they ripped down on College for a 30+ residential/commercial project there; forget the name offhand but it’s going to do wonders for the parking in the area!)
jrochest, yeah, I agree; I think even the old Legion building was preferable to an open pit. In terms of good developments, I think Meridian has done a lot of great projects in the city. The King George was a fire trap waiting to happen and there was essentially nothing of worth on Broadway where the Luxe was. The only thing I’m not convinced as that there’s enough interest to sustain all these high-end ($400k+) condominiums being built. I’m fairly certain a lot only have deposits so it will be interesting to see the portion that were speculated.
April 15th, 2009 at 2:55 PM
Jason — I agree with you about the King George, although the Luxe is probably overpriced for its location. But not all their projects have been as useful: they’ve done a few ‘pig with lipstick’ ones, too.
I completely agree about the high-end condos; the reason I liked the River Landing projects wasn’t the price per square foot, but the fact that they were going to put a lot of people into an area that would really benefit from it.
April 15th, 2009 at 2:56 PM
I’m not surprised they are going through with the Milroy either – part of sales prices more than doubling in 2 years means that builders were making a killing. I think any one of the condo projects could sell out if they reduced their prices to undercut the competition. There doesn’t seem to be much desire for any real competition yet. Same way any of those stagnating town houses in the east end (new for $110,000) could be sold instantly 4 years later for $200,000, but owners all insist on getting their $210,000 to $260,000 (occasionally over $300?!).
If the Milroy was started later, maybe they lose a bit, but like Norm said, if they already spent the money up front, going through with it would recoup some costs. I wouldn’t be surprised if they can make money (or at least break even) and all it will require is to be a bit less greedy and sell for a smaller profit margin.
April 15th, 2009 at 2:56 PM
So is the River Landing a no-go for sure then?
Anyone know how long they have until it becomes official?
Just curious how the market would react to such a high profile development being cancelled. That is if if the SP and Rawlco actually report about it.
April 15th, 2009 at 2:57 PM
Nick, “less greedy and sell for a smaller profit margin”: do you think developers in Saskatoon are ready for this concept?
Unrelated, in the past 2 months I’ve received at least a half dozen unsolicited flyers, mailings, etc. from local trades looking to do *any* kind of renovation work. This is the only time I can recall this happening in recent memory…
Hippo, they missed the deadline to complete the land sale (this was apparently attributed to problems bringing various titles together). I believe they have to break ground before the end of the Summer. If it’s cancelled you can guarantee a lot of press with the city and developer both promoting it heavily. In terms of fallout, I see anyone who was speculating looking for their deposit back (I guess we’ll find out how many of these units were really “sold” then…).
April 15th, 2009 at 2:59 PM
Yep, the assumption that River Landing is just that — an assumption. But it’s based on some pretty sound facts: they missed the deadline to buy the land, they’ve canceled other projects in Calgary, the financing for the project is unclear and there’s a real problem getting financing for almost anything.
And many, many projects that have been delayed for other reasons wind up getting cancelled.
April 15th, 2009 at 3:00 PM
I enjoy where News Talk Radio says they look for the “positive” stories – funny they don’t even pretend to be objective or well rounded!
April 15th, 2009 at 3:01 PM
Yes Norm I’m sure you say I look for only the “negative” stories – sure would be nice to have a news agency that reported on both though…
I couldn’t believe Saskatoon’s drive by shooting last weekend was all but ignored by local media, while nationally we heard about one in Toronto and Surrey (also non fatal) – no wonder we think Toronto is dangerous here, there crime gets more local coverage than the stuff in our own back yard. (note Regina actually does a better job of covering local stories, crime, economy or otherwise, aside from the constant Saskatoon boosterism)
April 15th, 2009 at 3:02 PM
Nick, what drive-by shooting? (seriously, I don’t remember hearing anything about that) I tend to view of a lot of this stuff more as “realistic” (or neutral); ultimately it’s really what you choose to do with this information and how you apply it that determines whether it’s positive or negative.
For example, there’s a better than average chance that housing prices are going to see a serious correction. And while that may be unfortunate for some who bought at the peak (and who might view that as negative), one has to weigh this against the benefit of more affordability and a cheaper cost of living (which has to be an overall positive gain for society as a whole).
After all, from an economic standpoint, the only sector that really benefits from unrealistically high housing prices (aside from developers) is the banking industry; everything else really suffers as a result of less disposable income.
April 15th, 2009 at 3:02 PM
“And while that may be unfortunate for some who bought at the peak (and who might view that as negative), one has to weigh this against the benefit of more affordability and a cheaper cost of living (which has to be an overall positive gain for society as a whole).”
That’s a good example Jason. Here’s another one that I thought of. The fact that someone got shot in a drive-by shooting could be viewed a quite negative. The fact that it wasn’t me who got shot is pretty positive, at least as far as I’m concerned.
I hadn’t heard of this story either.
Nick,
Yes, I love that promo, “We hear stories of doom and gloom from everywhere else, but here at home things are just fine.”
April 15th, 2009 at 3:02 PM
Norm, I think this was the article on the drive-by shooting:
http://www2.canada.com/saskatoonstarphoenix/news/story.html?id=61e2d696-b67b-489d-9441-ae5b5c1ccc6c
April 15th, 2009 at 3:03 PM
saw the TO drive by thing on the national last week
did not see the local story
kind of feels like the news finds it cheaper to report on pre planned local press conferences than actual news
a drive by in saskatoon is big news
a story we all need to know about
April 15th, 2009 at 3:03 PM
In “News Talk”s defense, I actually heard about this crime exclusively on the radio. No one else seemed to think Saskatoon’s first drive by of the year was news worthy!
April 15th, 2009 at 3:03 PM
Nick,
“There doesn’t seem to be much desire for any real competition yet. Same way any of those stagnating town houses in the east end (new for $110,000) could be sold instantly 4 years later for $200,000, but owners all insist on getting their $210,000 to $260,000 (occasionally over $300?!).”
No doubt there are tonnes of people that bought pre-boom who could still make a killing! My brother is looking to buy one of these Eastside townhouses… but will have to wait until sellers get these silly “spring bounce” ideas crushed by reality. No sense in him spending more than $200K when these units will probably be worth $150K by next year.
April 15th, 2009 at 3:04 PM
Hi Team Fisher,
Product is moving at a good pace considering the persistent media is trying to hold Saskatchewan down. The government is still predicting a surplus this year. Lets not forget how much money the Sask Party is still making on potash and the Bakken formation. On a per capita basis, we are very well off.
April 15th, 2009 at 3:04 PM
L.oki, I wouldn’t call sales being off 50% a “good pace”. And while the government may still be anticipating a surplus this year, all bets are off next year (and I wouldn’t depend on potash and oil revenues to make up any shortfall).
Norm, any surge of new MLS listings in anticipation of the Bank of Canada rate drop that’s expected tomorrow?
April 15th, 2009 at 3:04 PM
Welcome to 1991: Canadian Economy Shrinks 3.4%
http://www.financialpost.com/news-sectors/story.html?id=1344445
(Positive Spin: Bank of Canada almost certain to cut rates to 0.5% tomorrow)
April 15th, 2009 at 3:05 PM
I would love it if the statistics could be presented with some integrity (yes that is a little harsh but true), or not at all.
It’s truly too the point where I would not refer anyone to Norm as a Realtor, which in the past I have.
April 15th, 2009 at 3:05 PM
Brian, that’s a pretty wide brush to use there without telling us what your handle is.
I’m a numbers guy. It’s who I am, it’s what I do. I analyze data, look for trends, and have posted many of my insights on Norm’s numbers on this blog. If you’ve got specific issues with the integrity Norm’s stats, then I would very much like to hear them, because it will all factor in to a personal RE decision I’ll likely have to make within the next 6-12 months.
But I want specifics, not drive-by smears. Which of Norm’s statistics do you have issues with, and why?
(In other words, put up or shut up.)
If I sound like a booster, then so be it. Raw, factual data is invaluable to me when making decisions, and in my investigation Norm’s weekly stats are the best source for these in Saskatoon. Stating that they are corrupt and casting aspersions on Norm’s character without so much as a single reference is, to me, a cowardly act.
April 15th, 2009 at 3:05 PM
Brian,
“I would love it if the statistics could be presented with some integrity”
Get bent! Norm has one of the best real estate blogs in the country. No spin, no fluff, he lays out the numbers and stats and everybody on this board has an opportunity blog about them.
Not sending someone to Norm as a realtor is your choice and their loss. As all can see Norm is doing quite well with many sold signs on the side bar. And the reason for that? Honesty and integrity!
April 15th, 2009 at 3:06 PM
I am not sure if I understand the psychological side of the estate market right.
When the price is rising, every seller sees it, and they raise their prices quickly, because they all want to make more money.
When the price is dropping, every seller resists it, because they do not want to lose ‘money’. Even if a seller sold a property for a low price, and it would go very fast, and the whole market would not see its effect.
So the process of correction will take a longer time than ‘booming’, but it will be accelerated.
April 15th, 2009 at 3:06 PM
Brian,
I echo Bookrat and George’s assertions- this *is* one of the best real estate blogs around. What is your specific issue with the statistics? You can’t expect someone to defend themselves against broad public accusations- especially ones that are presented anonymously and include no specifics about what your issues are. Man up, please.
April 15th, 2009 at 3:07 PM
L.oki,
It could certainly be a lot worse given the conditions on the ground elsewhere. I agree that we are fairly lucky to be where we are.
Brian,
Thanks for the feedback. I’m sorry that you feel that way. If you have any specifics that you could put forward I’d certainly appreciate it. I’m doing my best to present the market in an unbiased manner, but I’m not a statistician so it’s certainly possible that there are better ways to present them.
April 15th, 2009 at 3:07 PM
Norm,
Once again you responded to unworthy criticism with tact and class. That is why you have such a good reputation in Saskatoon. I suspect Brian is a homeowner, investor or flipper that doesn’t like the story the statistics are telling.
You are experiencing exactly what has happened in Calgary, Victoria and Vancouver. Once the markets turned down unhappy real estate bulls and owners starting dropping by the blogs trying to dispute the downturn. Gotta blame somebody – right?
People need to accept that all markets, stock, bond, real estate or commodities, go through up and down cycles. If you bought your home recently and can make your payments over the long term you will see your property increase in value. Unfortunately in the short term you will lose your bragging rights at parties, family gatherings and around the office water cooler.
April 15th, 2009 at 3:07 PM
Don, I think what we saw was a gradual increase in prices (as buyers resisted a shortening supply). Then as prices continue to climb, demand (quite a bit in the form of speculation) increased and further exacerbated the situation. At this point sellers finally caved to fear and innuendo (ie: if I don’t buy-in now I’ll never be able to afford a house) which led to the housing run.
Now we’re following the same path — only in reverse. Sellers are attempting to resist a gradual fall in prices by holding firm (as buyers continue to dwindle in numbers and underbids increase). This will soon be followed by a glut of inventory, at which point it will be apparent to anyone that a huge correction is looming on the horizon, and you’ll see prices go into free fall as buyers remain firmly on the sidelines.
How much prices will ultimately drop really depends on the will of the average buyer. Those that are prepared to rent and remain on the sidelines stand a very good chance of picking up the deal of a lifetime.
April 15th, 2009 at 3:08 PM
George, thanks for the laugh this morning! (nice response!)
Norm, keep up the good work: it’s a fine line and slippery slope that you have to contend with and you’re doing an excellent job with balancing both sides of the equation! (it’s easier to be a “bear” or “bull” without having to present the other side of the coin)
Roger, you hit the nail on the head (gotta blame somebody). Sure there’s hype, peer pressure and all sorts of media exposure/bias, but at the end of the day who’s responsibility is it to read between the lines before putting pen to paper? And let’s be perfectly honest: if people were more fiscally responsible in the first place, they’d realize that sometimes the hard choice is not taking the path of least resistance and to buck the trend. What’s ironic is that for such a life-changing and financially-altering decision as buying a house people spend less time researching and “kicking the tires” than they do the automobile in their garage. If people left the emotion out of buying a house and spent more time focusing on “what they can afford” vs. “what they’d like” it would be an entirely different housing market altogether.
April 15th, 2009 at 3:08 PM
Jason,
“Norm, any surge of new MLS listings in anticipation of the Bank of Canada rate drop that’s expected tomorrow?”
Lol. C’mon, I just reported on this on the weekend and you want an update at 10:09 am Monday?
Listings fell back a fair bit when the 28th came and went. Month end expired listings moved us back to 1,255 by the 1st.
Thanks all.
April 15th, 2009 at 3:08 PM
Norm, it was either that or watch the markets this morning! Some of us are stats “junkies”… what can I say.
I suspect the RRSP cutoff had a lot of people running around today but it’ll be interesting to see where we wind up at week’s end for new listings.
April 15th, 2009 at 3:09 PM
To Brian and Norm,
Brian, I’d definitely be curious what your complaint about Norm’s data presentation is. Speaking as someone who both produces and evaluates stats-based claims every day, I can see that Norm has an excellent grasp of how to generate and present numerical data. I’ve never seen him create anything that was untrue or misleading.
I used Norm as my Realtor, and will use him again. He gets top marks in my books, and I’m a die-hard cynic when it comes to real estate agents. Unlike the shortcomings someone can demonstrate in almost any other job, with real estate agents there’s also a lot of potential out there for abuse (even if it’s not entirely done consciously), and it happens, in my experience, with alarming frequency. In the 20 or so transactions I or my family have been involved with, I’ve seen the following to varying degrees:
- making quick and easy commissions by pricing way too low (probably much less common/extreme now that the Internet is around)
- manipulating a buyer (especially an inexperienced one) into a poor deal
- not advertising a listing immediately/adequately so as to try to secure a double-ended transaction with one’s own buyer
- using open-houses only for self-promotion
- spilling the beans to the opposing agent about how far the client will go financially or about how motivated they are in the interests of making the deal
-wearing the home inspector/financial advisor/lawyer hat when not really qualified… and confidently delivering poor advice.
Norm is ethical, reliable, and knowledgeable, produces great ads, and is easy to work with. I’m constantly recommending him… look, just did it again.
April 15th, 2009 at 3:09 PM
Heather,
Good comments about Norm. And the rest of you defending him also – dido.
Norm,
Are you prepping yourself for the influx of buyers (of which I am one) when the market turns in our favour? How free is your schedule, say, in six months to a year?
April 15th, 2009 at 3:10 PM
Haven’t you all heard the saying…
“99% of statistics are made up?”
Haha, take what you want from that, but even Norm’s statistics must be taken with a grain of salt. And I’m sure Norm will admit that as well, you can’t take his website for the truth, you always need to cross reference. (On a further note, statistics should always be followed by their perameters and errors. For instance, does Norm consider private sales or just realtors? Does the # of listings consider those that were taken off the market in January and put back in May. Or does the same house get counted as 2 listings but only sold once, etc, etc. I would imagine most of the statistics on this website are +/- 10 to 15%.
As for Jason, 50% off sales? Are you kidding? What kind of statistic is that? Perhaps your comparing to the spikes we had in 2008? But even then…I don’t think that is fair, look at where we are compared to 2006. Still very healthy.
April 15th, 2009 at 3:10 PM
L.oki, yes, I’m drawing a comparison with 2008; I’m generalizing at 50% and probably within ±5%. With respect to the validity of his stats, I’ll let Norm take that one (I for one do feel they’re accurate). I don’t have the 2006 numbers handy, but I know for a fact we didn’t have close to 1,100+ MLS listings at the start of 2006, so the market is anything but “healthy”. Denial is alive and well!
April 15th, 2009 at 3:11 PM
humored,
While I really appreciate the support, I’ve removed your comment. I don’t have any desire to antagonize Brian or anyone else. Thanks for understanding.
Jason,
50 new listings, 17 sales, 1,256 actives. Based on today’s stock market activity I have a feeling that most of the RSP purchases where directed elsewhere.
Heather,
Thanks so much. I appreciate your kind words, and the opportunity to work with you. Hope you are well.
cyn_d,
Bring it on, when the time is right for you. Looking forward to it.
As for the accuracy of the data, I’d just point out that each statistical post that I create has a link at the bottom which provides details on where the data comes from, how it’s calculated, and its limitations.
I’ll also mention that this data does not come from “independent research” which I could just make up but from an MLS system. It’s my understanding that somewhere in the neighbourhood of 1,100 people, most of them competitors, have access to the same data. Every statistic that I report is potentially subject to an audit by my peers. The idea that I could get away with fudging numbers for any significant period of time is simply not credible. It cannot happen. That is not to say that an error couldn’t occur, and I am quite certain that some errors have occurred. As always, if anyone sees something that strikes them as strange they are welcome to bring it up. I will review any bit of data that is questionable and if I’ve made an error I’ll acknowledge it publicly, thank the person who brought it to my attention and correct the mistake. That’s really the best I can do.
I would love to have an opportunity to openly address Brian’s concerns. I have no problem being accountable for anything that I’ve said.
April 15th, 2009 at 3:11 PM
Hey Brian…Norm sold my home in three days, first visit, just before Christmas. Pretty tough to do in this market.
I think Norm is a good realtor.
Phil
April 15th, 2009 at 3:12 PM
“Norm, any surge of new MLS listings in anticipation of the Bank of Canada rate drop that’s expected tomorrow?” – Jason
That would be interesting to see another rate drop. Wonder if this happens whether or not the evil banks will lower their rates accordingly?
Have the banks/mortgage brokers lowered accordingly over the past few reductions?
April 15th, 2009 at 3:12 PM
Bull, indeed it would. Expectations are this will be announced tomorrow. It remains to be seen if the banks will match the rate reduction this time; in the past they haven’t always passed along the full cut… One thing you can count on is GICs, etc. being cut by the full 50 points.
April 15th, 2009 at 3:12 PM
Phil,
Thanks so much. I appreciate the good words and the business. Take care.
April 15th, 2009 at 3:12 PM
Jason,
Regarding your exchange with L.oki; Residential units sales were off 42% in February compared to February 2008. Year to date, 2009 is down 36% compared to last year. I think L.oki’s point is that today’s sale numbers are more in the “normal” range than the previous two years. Here are the year to date figures over the past number of years.
2009 – 423
2008 – 667
2007 – 540
2006 – 395
2005 – 349
2004 – 366
I would maintain that sale numbers are remarkably good given all that’s going on around us. Demand is not our biggest problem right now, though it certainly could become one further down the road. Supply, on the other hand is completely off of the charts and there’s simply no credible way that those numbers can be viewed as “normal.” While it would be fair to say that inventory levels were unusually low during the previous two years they are easily double what could be considered “normal” and likely to get worse before they get better.
April 15th, 2009 at 3:13 PM
Norm, while sales may be in the “normal” range, the amount of inventory (massive) and (unusually) low interest rates are anything but. And prices are still running close to twice the value they were just a few years ago. The level of affordability is still out the window for the majority of prospective homebuyers and that is my underlying concern.
Within the next 6 months we’re probably going to see the lowest mortgage rates in history. I would be remiss however if I didn’t also point out that rates really have nowhere to go but up from here, and at the rate governments are currently running deficits, interest rates could see an early return to high single-digits faster than anyone imagines.
Whenever someone uses phrases like “normalizing” or “stabilizing” I can’t help but think of the story of the Titanic and where the real danger lay unseen… beneath the surface.
April 15th, 2009 at 3:13 PM
Let’s be clear Norm is an ethical, skilled and hardworking real estate professional – and a nice guy to boot. My issue is solely the facilitation of all the negative Saskatoon bashing, and whining about prices that is poster on this blog.
Group think is incredibly strong, it played a major role last year, and will play a major role in bringing us down as well if we’re not careful. I know you numbers guys might have issue with that statement but not everything has an easy metric to point at.
However With numbers like that and your latest blog entry Saskatoon’s home sale market continued to stabilize in February: SRAR you may just have redeemed yourself.
April 15th, 2009 at 3:14 PM
Is there any way to eliminate the excessive stock of new builds by builders, empty lots in surrounding subdivisions including the rural lots that are counted, and some of the brutal flips sitting on the market that have little chance of selling when there is not a housing shortage (without massive discount)?
I honestly don’t believe a single representation of inventory levels can be used in any accurate analysis.
I’d love to see what you can put together statistically on $200,000-$400,000 detached single family dwellings within the city limits.
April 15th, 2009 at 3:15 PM
Jason’s comment on affordability I have issue with, the truth is there was a market correction required and people need to adjust to an new concept of what affordable is – and the sales are showing that they are in fact doing so. Yes some people may have been left behind and they may need to re-evaluate life and career choices if home ownership is a top priority.
Phil – it doesn’t surprise me that Norm sold your home in 3 days in this market, last fall friends of mine sold their home privately for $23,000 above the listing price suggested by the Realtors they interviewed (including Norm) within a few weeks, the truth is that a well staged appealing home will still sell easily and possibly quickly – the fact that you think its so special reflects that this blog may have misled you on the state of our market! And yes Norm is very good, and this level of misleading from the contributor to this blog and the statistics provided is my issue.
April 15th, 2009 at 3:16 PM
Brian,
Thanks. I appreciate hearing your further thoughts.
I have my moments when I’m frustrated with the negativity, and I’m sure I have my days when I slip into it myself (like the week that half of my life savings slipped away, even though I saw it coming, but because I allowed myself to be convinced by some eternal optimist that everything would be okay). The real issue for me is transparency. I could delete the comments that I don’t like but I would do so at the risk of being perceived as someone who is trying to control the discussion and perceptions of the market. Alternatively, I can leave the forum open for all to make their arguments. I wish there were more people who would be willing to make the counter-point. Unfortunately, the bears seem far more talkative lately.
I do want to assure you though that this blog is probably significantly under trafficked to actually influence the direction of the market. You are correct though that it can certainly influence people, but people are pretty sharp for the most part. Believe it or not, some of our more regular readers are buying properties in spite of the generally negative tone about the future of prices.
There are no rural numbers in the stats that I post. Everything is area 1 to 5. I did do something awhile back that focused on fairly mainstream property types but if time allows I’ll see if I can’t put something together along the lines of single family homes $200-400K.
Your friends could very well have sold their house for an additional $50K under the right circumstances. When pricing a property one can think in terms of possibilities, or probabilities, and there is a degree of risk associated with each approach. Pricing for what’s possible is the easy choice when a market is appreciating because you can always correct by coming down to the right price if you’re wrong. When the right price is trending downwards, coming down to today’s right price a month from now won’t work. Many a Saskatoon seller has learned the lessons of “chasing the market down.” There are dozens of homes listed right now that have been on the market for a long time, which are offered far below their initial list price, which could have easily sold well above their current asking price several months ago. Much like it was when prices were increasing at insane rates, it is admittedly a bit of a best guess at this time as well.
Thanks again Brian. I really do appreciate hearing from you again.
April 15th, 2009 at 3:16 PM
“like the week that half of my life savings slipped away, even though I saw it coming, but because I allowed myself to be convinced by some eternal optimist that everything would be okay”
I hear you Norm! I let a good chunk of my savings get pissed away in the market downturn as well. People keep telling me that I’m so young yet and that I have a very long time horizon; well, it’s not very reassuring to hear that people who invested in 1996 for the long haul are probably breaking even right now if they’re lucky. Oh well, I should just be happy that I do have many years ahead of me; I feel for the folks that are retirement age and were dependant on the income generated from their savings.
Brian, it’s good to hear from someone with a not so negative outlook. I like to hear what people are saying on both sides of the real estate issue and to be honest, the optimists were being relatively quiet.