Competitive Market for Some Home Sellers

At the halfway point in the year, housing sales reflect that of the year to date total in 2016 with 1,850 unit sales in Saskatoon. The average sale price of $350,000 is virtually unchanged as well from a year ago. Also, the median price year to date at $330,000 is comparable to that of last year. Helping to sustain these price indicators is a notable increase (25%) in home sales over $600,000 which is offsetting a decline (3%) in sales below $600,000, as of June 30th. The total number of sales over $600,000 in Saskatoon was 101 units of which 90 were single family homes. Comparatively there were 1,765 transactions at the end of June below $600,000. The number of condominium units sold so far this year was 533 units representing a 5% increase over last year. With the mortgage qualification changes implemented last October, some buyers had to shift their purchase decision from single family to condominium to fit a reduced purchase price. The total dollar volume for Saskatoon and area of $846M is the lowest year to date total since June of 2011. The highest dollar volume reached for the midpoint of the year was June of 2014 at $1.1B.

Much has been said about the number of homes available in Saskatoon. Currently there are still over 2,100 active listings in Saskatoon. This amount of available homes would take just over five months to liquidate at the current rate of sales. This amount of active property also means that we are still firmly in a buyers’ market with a sales to listing ratio of 41%, comparable to last June but below the five year average of 50%. In the overheated market of 2007 there were only 375 active listings and a sales to listing ratio of an incredible 79%. This was at a time when Saskatoon’s population was around 210,000 residents for a per capita of one active listing for every 560 residents. In 2012 this increased to 1,254 active listings and a population of 239,420 for a per capita of one listing for every 190 residents. Saskatoon’s current population of 268,158 equates to one active listing for every 125 people.

On average it takes 45 days to sell a home in Saskatoon. This is the lowest days on market average for any month in 2017. “Average days on market can be misleading as well.” cautions Jason Yochim, CEO with the Saskatoon Region Association of REALTORS®. “If homes are properly priced in any price range and in any market condition, they can easiiy see an offer in much less time.” The key is to get sound advice on the current market for each specific home. “Our REALTOR® members are market experts who are objective and can guide a seller in this critical decision.” he adds.

The market surrounding Saskatoon had a year to date decline in sales of 11% with a total of 456 transactions. Active listings in this market at the end of June were 1,112 which is a 4% decline over last year.

Competitive Market for Some Home Sellers

Home sellers need to put forward their best efforts when pricing and presenting their home for sale in any market but especially now with a total of 2,112 active listings in Saskatoon. This is the highest number of homes for sale eclipsing the peak of 2,081 in June of 2015. “Pricing is the most important decision a seller can make, especially in a buyers’ market.” advises Jason Yochim, CEO with the Saskatoon Region Association of REALTORS®. “This is something that requires the assistance of an objective and educated REALTOR® to reflect the market.” Of these, just under 1,300 are single family homes and about 850 are condominiums with close to 500 of these apartment style. Additionally, 350 of the apartment style condominiums are priced between $150-350,000, making this a very competitive segment of the market. With 848 single family homes priced between $250-500,000, there is a lot of choice for buyers who are being selective on what they want and what they want to pay. Homes priced over $500,000 total 278 available properties with 76 of these in excess of $750,000. The MLS® system saw 1,035 new listings for Saskatoon in May, a 7% increase over last May, and the highest number of new listings recorded in a single month.

In May there were 423 sales in Saskatoon representing a 7% increase compared to last May. So far year to date the total number of sales is down 2% at 1,459 units. Price ranges between $250-500,000 showed positive increases to the number of sales year over year. In 2016. In May of 2017 there were 358 sales in this price range compared to 329 last May. There was a 13% decrease in the number of sales priced between $500-750,000 in May of 2017. Year to date there were 12 sales in excess of $1,000,000 in Saskatoon. Six of these sales were single family homes, two were bare land condo units at the Willows and one sale was a downtown apartment unit. The home that sold for the most so far this year was $2,000,000.

The average number of days required to sell a home in Saskatoon is 48 days. The five year average for May is about 41 days. Based on the number of sales that occurred in May and the number of homes available on the market, it would take 5 months to liquidate the current inventory of properties for sale. The average selling price continues to remain stable at $$349,000. The median sale price also remains relatively unchanged year to date at $329,250. Although the total MLS® dollar volume was up 11.5% when comparing this May 2017 to last, the year to date dollar volume is down 1.3% at $670,000,000.

The market surrounding Saskatoon showed an increase in sales of 10.4% in May, however year to date sales in that market were down 8%. The average selling price for this area is up 7% year to date at $331,450. This market includes the cities of Warman and Martensville as well as other surrounding communities and acreage property.  .

Spring has arrived and summer is fast approaching with the hot sun beating down along with clear skies. Everyone enjoys a warm sun, but sometimes the sun can become too warm and people look forward to going inside a building with blasting AC. Whether you are a first-time home buyer or an experienced one, you should know by now that your bills always seem to rise rapidly when that AC is turned on. Here are a few ways to help cut down that price and keep your house cool.

Awnings

For most houses, awnings aren’t really at the top of a person’s list to check to see if they can help with cooling down the house, but you should definitely take a peek outside and see what you are working with. Installing awnings over a south facing window can decrease the solar heat gain by almost half, while installing awnings on the west facing windows can decrease the solar heat gain almost by 75%.

Curtains

Almost everyone knows that by closing the curtains, the house becomes cooler as the sun and heat are blocked out by them, as solar heat gain can be decreased to close to 33%. If you close your curtains, but still notice that it’s still hotter inside then it is outside, check the weave of your curtains. Heavy closed weaved fabric curtains, such as velvet or broadcloth, are the best bet for effectively blocking out the sun.

Interior Shutters

If you have a quirky sense of design for your home, try installing interior shutters to your windows. Wood shutters would work best in blocking off the sun’s rays and cooling the house. They also add a little extra something to the room design that makes the room pop.

Timing is everything for property investment, entering at the right time in the market will always give an important effect on the long term success of your investment. Here are 9 signs that will help you decide if now is the time to start searching.

1. Financially Sound.

Saving enough for a down payment, creating an emergency fund, knowing that there might be maintenance expenses, as well as having a good credit history are all needed before you start to search for your investment property.

2. Long Term Goals

You know the purpose of your investment and are willing to be adaptable to any changing circumstances, such as market needs and new development of technology.

3. Research

You have completed your own research on the neighborhood you wish your future property to be on. You now know what schools are in or around the neighborhood, where all the bus stops are located and you can easily predict the next homebuyer’s needs.

4. Economy is Stable

The area you have chosen is financially stable, with promising economic trends and surging equities.

5. Policies

You have read about the country’s policies for all real estate, and that they promote and encourage a positive place and drive to help further economic growth. Make sure that the tax policy is positive for the homeowners, and that global innovation index is rising.

6. Growth

The city is planning on growth in the city and are building in anticipation of it, such as building another bridge, increasing road size, and renovating or creating more buildings.

7. Sustainable Development

The increase in value for sustainable property is growing as more and more people head towards wanting to maintain a sustainable living with eco-friendly homes.

8. Location Interest

It’s always at the top of the search engine for places to go, plus many job seekers could be looking in that area for a house that can be rented. Also keep in mind of any international students that could be looking for a place to call home during the school year.

9. Real Estate Agent

If you are from overseas or looking for an investment in a different city, it is crucial that you find a fantastic realtor for that area that knows what they are talking about. This will help to make your decision easier and find a great choice at a reasonable price.

Home Sales Down So Far in 2017

Total home sales in Saskatoon year to date saw a 5% decrease with a total of 1,037 units changing hands. The month of April was also notably quiet with a total of 315 sales, a 16% decrease from 2016. Listing activity is also down by 4% compared to last year with a total of 3,038 new listings introduced to the market so far this year. Listing activity for April was also lower by 10% compared to April of 2016. Inventory levels remain quite high with a total of 1,975 active listings at the end of April. This is considerably higher than the five-year average of 1,700 units. For the last three years, there has been in excess of 1,900 homes available for sale at the end of April. It would be ideal to have around 1,500 units available for sale at this time of year. “Higher inventory levels are a great opportunity for buyers for selection and a reasonable purchase price,” says Jason Yochim, CEO of the Saskatoon Region Association of REALTORS® “The market will eventually shift and those who waited will end up with less selection and more competition for the home they offer on” he adds. 

Higher inventory levels typically mean lower prices, however, for homes priced over $600,000, there has been an increase in the number of sales which sustains the average price even with fewer sales. Even though the average price remains unchanged year over year, the median price has decreased by 1.9%. So far in 2017, there is a 65% increase in homes that sold over $600,000 with a total of 93 sales compared to 56 in 2016. In April alone there were 19 sales over $650,000 compared to just 9 last April, three of the sales were in excess of $1M. Comparatively, there is a notable decrease in homes selling below $500,000. By the end of April 2016 there was a total of 438 home sales, so far this year there are only 358. Year to date the sale of single-detached properties declined by 11% while the number of multi-family unit sales increased by 4%. 

The sales to listing ratio of 37% also confirm that we are firmly in a buyer’s market. This is the lowest it has been for the month of April in over 5 years. At the current rate of sales, it would take over six months to liquidate the existing number of homes that are for sale, the five-year average for months of inventory is 4.5 months. Currently, it takes about 50 days for a home to sell in Saskatoon, just slightly longer than the 46 days of a year ago. Homes that are selling continue to realize sale prices in excess of 97% of the asking price. This underscores the importance of proper pricing in a buyers market. “A buyers market is not one for speculative selling” cautions Yochim. “Today's consumers are very well informed and with many homes to choose from are not afraid to move on if the seller is unwilling to respond to an offer at market value” he adds. 

Activity in the markets surrounding Saskatoon continues to experience a decline in both sales and listing activity. A total of 249 sales at the end of April is a 14% decrease from 2016. The number of homes listed for sale for the first four months of 2017 is down by 13%. The sales to listing ratio for this market is 28% while the time it takes the average house to sell is two months. Homes are realizing sale prices of 94% of the asking price. The number of active listings for the area surrounding Saskatoon, which includes the cities of Warman and Martensville, was down 15% with 979 available properties.

Here are three suggestions to increase the value of your home. Before renovations start, be sure to calculate all the costs and map out a timeline for the renovations.

1. Add a bedroom

Known as one of the best ways to add revenue to any property, adding a bedroom to your house will most defiantly add value to your house. Owning a house with a flexible floor plan helps enable you to either move internal walls, or enclose a large outside area within a roofline of the house, like a balcony.

1. Add a kitchen

The main focal point of a house is the kitchen, because this room is used every day by everyone in the household. Adding clean new cupboards, upgrading your appliances, and adding new storage space is a sure way of adding value to your house. 

1. Add a bathroom

Another room that always creates an impression on a house is the bathroom. Changing a bathroom by simply repainting the walls a bright color, and refurnishing can change a dreary and dark bathroom, into a bright and colorful bathroom. To make a small bathroom seem larger, laying large rectangular tiles laid horizontally really makes a small bathroom seem bigger. To add another wow factor to a simple bathroom, put in a free standing bath tub or a frameless glass shower screen.

When deciding to renovate a home, always be sure to ask for professional and expert help to ensure that even the smallest space, can look amazing with just a few simple changes.

Also make sure, that before starting anything, that all your finances are in check and that you have a backup in case of a delay or over runs.  

Positive Indicators in Saskatoon Home Market

Year to date, the Saskatoon home market shows positive signs in a few of the key indicators. “There are a few key statistics that we watch ever month to get a sense of where our market is at and where it may be headed” according to Jason Yochim, CEO of the Saskatoon Region Association of REALTORS® .“We keep a close eye on the number of transactions, the inventory levels and the change in pricing.” He adds. 

Year to date home sales are up 4% over 2016 with 558 unit sales. This is comparable to the number of home sales in 2015. The total dollar volume for those sales was just over $186 million, representing a 2% increase over last year. At the end of February, the inventory level for available residential property on the MLS® system in Saskatoon was 1,659 units, 5.4% lower than last year. The lower inventory levels are largely due to a significant drop in the number of new listings added to the MLS® system. So far this year there have been 1,337 new listings in the system compared to 1,410 last year. When comparing new listings for the last month, there were 15.7% fewer properties added to the market this past February than last February. 

A decline in new listings coupled with an increase in sales resulted in a sales-to-listing ratio of 37.4%in February. This is a significant increase from last February where this ratio was 30.9%. A market with a sales-to-listing ratio below 40% is considered to be a solid buyers market. This indicates a positive move towards a more balanced market. “Although we are seeing these positive indicators quite early on, these statistics indicate a shift in the marketplace in a positive direction,” comments Yochim. 

Home prices remain relatively unchanged year to date with the average price down a mere 0.7% to just under $340,000. The median price of $320,000 represents a slight drop of 1.6% year over year. The Home Price Index (HPI) is considered to be the most accurate measure of home values and where the market prices are trending. The HPI composite price is an aggregate of various residential home types in a particular market and is a measurement of change in value over time. A composite value was established with a base year and has been indexed on a monthly basis. The composite value in February was $297,900 representing a 1.2% decrease from a year ago. This value had been on a downward trend since mid-2016 which is not surprising considering elevated inventory levels through the year and a buyers market. 

The average number of days for a home to sell in Saskatoon was 54 days. This is only slightly longer than in 2016 with an average of 52 days. Because today's real estate buyers are well educated on the market, homes are selling at 97% of their asking price which is consistent with last year. 

Slight Downward Pressure on Home Prices 

At the end of the first quarter the number of MLS home sales was 723 units or a 1% increase over last year. The number of properties listed for sale year to date was 2,193, just 2% lower than the first three months of 2016. “Although the first quarter unit sales are comparable to 2016, pricing seems to be slipping slightly” comments Jason Yochim, CEO of the Saskatoon Region Association of REALTORS® “The median price of $320,000 is down 4.3% from a year ago and the average price of $342,100 is down 1.5%.” he adds. The Home Price Index (HPI) published by the Canadian Real Estate Association indicates a downward trend in pricing as well. The composite price, an aggregate of all home types, for Saskatoon has been trending downaward since August of 2016 when the benchmark value was $309,500 compared to $297,900. This composite value reached its peak of $313,800 in July of 2015. The HPI is based on a benchmark value of $133,400 established in January of $2005. This value is indexed every month thereafter representing the changes to that base value. The downward pressure on pricing is likely to remain until there is a decrease in the current inventory of just over 1,850 active listings or an increase in demand.  

Multi-family sales of 220 units was up year to date by 18% compared to 187 unit sales last year. The number of single family sales of 510 units was a slight decline of just over 4% year over year. The federal changes to mortgage qualification introduced in October of 2017 no doubt have had an impact on some who found it harder to qualify for a single family home. These changes increased the number of multi family transactions due buyers qualifying at a substantially lower purchase price. This is reflected in a 5% increase in sales between $200,000 and $350,000 in the first quarter. During this same period, homes priced from $350,000 to $600,000 saw a 13% decline in unit sales.  

There is currently enough existing inventory to last almost six months based on current sales activity. This is slightly higher than the five year average of 4.84 months. For the homes that do sell, currently on average it takes 47 days. This is two days more than the five year average. These homes are selling at just under 98% of the asking price. This is a reflection of the “intelligent buyer” that we see in today’s market place. “Today’s consumer has access to detailed information at their fingertips and know very well what the true market price of a home should be. Sellers are equally informed and when they are able to think objectively, they price to market and the result is a quicker sale with the sale price tight to list.” according to Yochim. The problem lies in most of us unable to be objective even in the face of raw data. The mindset of many home sellers is that their home is worth more than the one down the street because they used ‘heavy duty’ nails in the construction or similar rationale. “This is one of the most critical reasons for enlisting the advice of a professional REALTOR® in pricing your home.”  

Activity in the area surrounding Saskatoon has experienced a decline of almost 17% in the number of sales for the first quarter of the year with 167 total sales. A positive here though is the average price is up 9.2% and the days on market is 64 days compared to 70 for last year. Martensville and Warman have not been affected the same way in the past three years. The city of Martensville experiences 38 sales and 153 listings so far in 2017. By comparison, in the first quarter of 2017 Warman recorded 57 sales and 144 new listings. In the first three months of 2015 Warman had 81 sales compared with 26 in Martensville.  The Saskatoon Region Association of REALTORS® has a membership of just over 600 licensed and knowledgeable REALTORS® who can provide sound market advice. REALTORS® also subscribe to a strict code of ethics and are dedicated to developing professional standards and continuing education in the real estate profession.  

It is always a scary prospect to decide on purchasing a home, either by yourself or with your family. A question that always pops into one’s mind, however, is if they are ready to take such a huge step in their life. Buying a home is definitely something that needs to be thought about and not something done on a whim. Here are a few steps to help you determine if you are ready to begin searching for your new home:
 

1. You are Debt Free

When you are debt free, you are definitely ready to purchase a home as you won’t have any other debts to worry about besides your monthly mortgage, which by itself can seem like a massive task. You need to do some major number crunching and determine how much of your income can go towards your mortgage. If it seems like most of your monthly income is going towards paying down your auto loans, student loans and/or credit card debt, now might not be the best time to purchase a home.

2. You can Afford a Down Payment

If you have never bought a house before, you may be wondering what a down payment actually is. A down payment is a percentage of the total cost of the house that you want to purchase, that is paid upfront. This is the biggest challenge most first time home buyers face when looking to purchase a home. You may now by wondering how much this down payment will cost. This amount is usually between $3,000 - $5,000, but the bigger down payment you make, the better it is for you. It can be recommended to you to make a 20% down payment, which may seem impossible. But keep in mind, however, that this is the most ideal down payment as it will help to keep your monthly mortgage check low and manageable. This can greatly benefit you as it shows your mortgage lenders that you have the great ability to save a nice amount of money and that you are serious.

3. The 5 Year Rule

Something to also keep in mind is the knowledge that you want to stay in the same place for at least the next five years. This long-term commitment is really good as it helps to build equity. Equity is the difference between what the appraised value of your home really is, and the balance that it left to be paid for your mortgage. Keep in mind mortgage amortization though, which is how mortgage payments are actually calculated: how much actually goes towards paying off the principle amount and how much goes into paying interest. It is quite depressing to get back the numbers and realize how much of your starting payments go into just paying off interest, but eventually your payments will pay off more of the principle then the interest. Owning a house for five years will help you develop enough equity to sell the house for a profit, which can be used for a bigger down deposit for your next house.

4. Emergency Funds

Life has its ups and downs, and you need to always be prepared for any kind of setbacks, especially when dealing with financing. A great way to know if you are ready to purchase a home is that you have an emergency fund that can be dipped into in case of an emergency, such as a layoff, car repairs, medical bills etc. It is always a good idea to build yourself a safety net before purchasing a home, such as having six months’ income in a savings account. Keep in mind that this emergency money is to be kept separate from your down payment.

5. You can Afford Associated Fees

When purchasing a home, make sure to always keep in the back of your mind that you won’t just be buying the sticker price of the home. There are always several costs that are associated when purchasing a home, and you may not even be aware of some. It would be a really good idea to sit down with your realtor and find out what some of these extra costs could be. Home inspections, closing costs, moving costs, property taxes, home insurance, monthly utility bills, homeowner’s association fees, as well as maintenance, furnishing and any renovation expenses, these are all costs that some new home buyers can overlook that they really shouldn’t. 

     JUST FOR FUN - ONE HUNDRED YEARS AGO ...

• The average life expectancy for men was 47 years
• Fuel for cars was only sold in drug stores
• Only 14 percent of the homes had a bathtub
• Only 8 percent of the homes had a telephone
• The maximum speed limit in most cities was 10 mph
• The five leading causes of death were Pneumonia, Influenza, Tuberculosis, Diarrhea, Heart Attack and Stroke
• 2 out of every 10 adults could not read or write
• Coffee was 15 cents a pound
• Most women only washed their hair once a month.  Borax or egg yolks were used for shampoo
• Sugar cost 4 cents a pound