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. 

Positive Start to 2017 Home Sales

Home sales in January were cause for optimism for the year ahead with a 6% increase year over year. Home sales of 185 units last month represented the highest January total since 2014, the five-year average for January is 195. Another positive indicator is the number of homes available for sale. At the end of January, there was a combined total of 1,592 homes for sale in the Saskatoon market, representing the second lowest monthly total in almost two years. The lowest inventory level was December of 2016 with a total of 1,443 properties on the market. “An increase in sales in a typically quiet month is very encouraging” comments Jason Yochim, CEO of the Saskatoon Region Association of REALTORS® “especially in the wake of the tougher mortgage qualifications introduced last October.”

At current inventory levels, anticipating no increase in demand and no new properties listed for sale, it would take over eight months to liquidate the current inventory of properties. The five-year average for available inventory in the Saskatoon market is just under five months. The “sales to listing ratio” is an indicator of whether we are in a buyers or sellers’ market. It is determined by dividing the number of sales by the number of new listings for a period of time. When this ratio is at 50%, the market is considered balance. The last couple of years has favored buyers in the marketplace with an average sales to listing ratio of 40%. January typically has an uptake of listing activity and quieter sales activity which is reflected in a sales to listing ratio at 26%; the five-year average is 30%.

Homes priced below $400,000 saw a much-needed increase in activity compared to last January with 143 sales between $200,000 and $400,000, a 20% increase year over year. The average sale price for January of $341,800 represented a 4% decrease compared to last year. In 2016 a steady number of sales over $750,000 helped stabilize the average price in spite of a 5% decline in sales. This emphasizes that using an average to determine the true market picture is easily misleading. The median price for last month was $318,500 which was the lowest median price in almost five years. A more reliable indicator of the market is the MLS® Home Price Index® (HPI). It is considered to be the most accurate determinant of where a real estate market is trending. The HPI composite benchmark price has also been trending downward, although very slightly for several months. 

In January, on average it takes 54 days to sell a home in Saskatoon which is consistent with the five-year average of 51 days. This compares to 45 days which is the average of the past 5 years. “In any market, a home that is priced to current market conditions should sell in even less time, often within a week or two.” comments Yochim. “Buyers are well educated on the market and are not fooled by optimistic sellers. However, they are willing to pay market price for the right home in any market. For homes that are selling, the sale prices are being realized within 97% of the asking price.”

Accurate Pricing Key in Successful 2017 Market

Year over year unit sales for the city of Saskatoon saw a 7% decline in 2016. As at December 31, there was a total of 3,679 transactions recorded versus 3,933 in 2015. The total dollar volume for Saskatoon also indicated a 7% decline by years end. There was also a decline in the number of new listings in 2016 of 5% with 9,290 properties placed on the MLS system in Saskatoon last year. In other words, 38% of the homes that were listed ended up selling which is considered a firm buyers’ market. This ratio is what is referred to as a sales-to-listing ratio. A ‘balanced market’ is when one home sells for every two listed and is considered a balanced market at a 50% sales-to–listing ratio. The market for the month of December was in balanced territory with 191 sales and 392 new listings.

The market surrounding Saskatoon which includes the cities of Martensville and Warman saw a year end decline in unit sales by 11% with a total of 1,010 sales by December 31. The total number of new listings for 2016 in the markets outside of Saskatoon was 3,192, a sales-to-listing ration of just under 32%. The city of Martensville saw a 10% increase in unit sales in 2016 while Warman saw a whopping 35% decrease in units sold from 2015 to 2016. Other bedroom communities surrounding Saskatoon saw very little change in units sold year over year.

A home in Saskatoon took an average of 51 days to sell realizing 96.7% of the asking price on average. “There are buyers out there who are ready to act and are willing to pay market value.” Comments Jason Yochim, CEO, Saskatoon Region Association of REALTORS®, “What this tells me is that if a seller is serious about selling their home the best thing they can do is get sound advice on pricing to the current market we are in. The result is a quicker sale for the maximum sale price. Buyers are well educated and not often fooled into overpaying.” He adds.

The average selling price for a home in Saskatoon in 2016 was just over $350,000 which was only a decline of 1% compared to the average selling price of $354,000 in 2015. This average price was maintained by a year over year increase in the number of homes that sold over $750,000.

The MLS® Home Price Index® is considered to be the most accurate determinant of where a real estate market is trending. The composite benchmark value is an aggregate value of various property types and is used to compare changes in market values and trends. The composite benchmark value has been trending downward slightly since August of 2016. The composite value of $299,700 is down 1.6% from the same period in 2015 and looks to continue downward for the near future.

“2017 is not likely to see a significant change in market conditions, however being properly informed on what those market conditions are and how to properly price is where one of our REALTOR® members is invaluable” adds Yochim. “One of the best ways to stimulate an economy is through a home sale. The average home sale in Saskatchewan generates nearly $50,000 in spin off economic activity. Multiply that by 3,700 transactions.” He adds. REALTORS® also subscribe to a strict code of ethics and are dedicated to developing professional standards and continuing education in the real estate profession.

The month of November saw a decline in sales activity as well as new listings coming on the market in Saskatoon and region. Total dollar volume year to date was $1.65 B, a 4% reduction from 2015 and 18% lower than the same period in 2014.The number of homes that sold in Saskatoon for November was 243 units representing a 14% reduction compared to November 2015. As of the end of last month there was a cumulative total of 3,489 home sales, this is 7% lower than a year ago. The number of homes listed for sale to the end of November 2016 was 8,897. Currently there are1,687 residential properties available for sale in Saskatoon, only the month of January had less product available with 1,612 units. At the current level of sales it would take nearly seven months to liquidate this inventory.

 The average selling price continues to remain virtually unchanged at just over $350,000. Two years ago the average selling price two years ago by comparison was $357,000, at a time when the market was more active. “An increase in sales in the higher end homes has helped to support the average price in the Saskatoon market” states Jason Yochim, CEO with the Saskatoon Region Association of REALTORS®. Sales in every price range below $750,000 saw decreases in unit sales however homes priced above that increased year over year. For sales over $1M there were 25 units sold year to date compared to 13 units a year ago. Homes in the price range between $750-800,000 were up 50% year to date over 2015.

 The current sales to listing ratio for November was 37% which is firmly a buyers’ market as it has been all year. Homes are currently taking 50 days on average to sell in Saskatoon with sellers realizing 97% of the asking price. “These statistics tell me that sellers who price to the market will realize a sale in much less time than the average of 50 days and close to their asking price. Those who do not price to market are typically responsible for the low sales to listing ratio.” Comments Yochim. “Buyers are more educated than at any other time and typically know where the market is at.

 There are positives in this quieter real estate market. The recent selling out of the much awaited River Landing condominium project in less than four days proves that location, location, location is key in any market conditions. This occurred in spite of an oversupplied condominium market with somewhere in the neighborhood of 1,000 multi-family units available for sale.

 “The best advice I can give to those who are needing to sell is to get sound pricing, marketing and timing advice from a professionally licensed and trained REALTOR® member of The Saskatoon Region Association of REALTORS®. Real estate is local to specific markets in Saskatoon and every seller’s situation is unique. Impartial and objective advice is critical in a successful sale of residential real estate.” cautions Yochim. REALTORS® also subscribe to a strict code of ethics and are dedicated to developing professional standards and continuing education in the real estate profession.

The month of November saw a decline in sales activity as well as new listings coming on the market in Saskatoon and region. Total dollar volume year to date was $1.65 B, a 4% reduction from 2015 and 18% lower than the same period in 2014.The number of homes that sold in Saskatoon for November was 243 units representing a 14% reduction compared to November 2015. As of the end of last month there was a cumulative total of 3,489 home sales, this is 7% lower than a year ago. The number of homes listed for sale to the end of November 2016 was 8,897. Currently there are1,687 residential properties available for sale in Saskatoon, only the month of January had less product available with 1,612 units. At the current level of sales it would take nearly seven months to liquidate this inventory.

The average selling price continues to remain virtually unchanged at just over $350,000. Two years ago the average selling price two years ago by comparison was $357,000, at a time when the market was more active. “An increase in sales in the higher end homes has helped to support the average price in the Saskatoon market” states Jason Yochim, CEO with the Saskatoon Region Association of REALTORS®. Sales in every price range below $750,000 saw decreases in unit sales however homes priced above that increased year over year. For sales over $1M there were 25 units sold year to date compared to 13 units a year ago. Homes in the price range between $750-800,000 were up 50% year to date over 2015.

The current sales to listing ratio for November was 37% which is firmly a buyers’ market as it has been all year. Homes are currently taking 50 days on average to sell in Saskatoon with sellers realizing 97% of the asking price. “These statistics tell me that sellers who price to the market will realize a sale in much less time than the average of 50 days and close to their asking price. Those who do not price to market are typically responsible for the low sales to listing ratio.” Comments Yochim. “Buyers are more educated than at any other time and typically know where the market is at.

There are positives in this quieter real estate market. The recent selling out of the much awaited River Landing condominium project in less than four days proves that location, location, location is key in any market conditions. This occurred in spite of an oversupplied condominium market with somewhere in the neighborhood of 1,000 multi-family units available for sale.

“The best advice I can give to those who are needing to sell is to get sound pricing, marketing and timing advice from a professionally licensed and trained REALTOR® member of The Saskatoon Region Association of REALTORS®. Real estate is local to specific markets in Saskatoon and every seller’s situation is unique. Impartial and objective advice is critical in a successful sale of residential real estate.” cautions Yochim. 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's that time again where the Forestry Farm opens its doors to the long line of cars so that they can drive through and look at all the gorgeous displays of lights that are placed throughout the farm!

From November 19th, 2016 to January 7th, 2017, the Saskatoon Forestry Farm will be lit up with amazing displays of lights that everyone will find a simple delight.

They are open from 5:30 pm - 10:00 pm every night until closing so make sure that you grab your spot in line so that you don't miss out on this year's extravagant sight. 

Bigger and brighter this year, featuring a new Nutcracker display, the Enchanted Forest is now open for its 18th season for this Christmas year, so be sure to fill up the car with your family and friends because you don't want to miss out.

Prices for entry are: $10.00 per person, or $33.00 per car that holds up to 7 people. 

If you feel like driving a car will make you miss out on some of these displays, be sure to come on down on January 8th, 2017 from 5:30 pm - 9:00 pm where you can walk through the displays for only $5.00 per person!

For more information on the Enchanted Forest, click here to go straight to the website.

Home sales in the Saskatoon market last month were up 8% over October of 2015. “This is a very positive change and speaks to consumer confidence in our market,” states Jason Yochim CEO with the Saskatoon Region Association of REALTORS®. Recent changes to lending rules by the federal finance minister were also a contributing factor in activity as buyers scrambled to beat the October 17^th deadline when these changes came into effect. “Regardless of the factors leading to a sale, it is always good to see stronger sales activity.” he adds “every home sale contributes almost $50,000 of additional economic activity in the local economy.”

Strong sales in August and October of this year coupled with an overall decline in new listings has resulted in an 11% reduction in the inventory of active listings in Saskatoon. Active listings peaked at 2,047 units in June of this year and have declined steadily to 1,745 at the end of last month. This will have a positive impact in several areas. It will help maintain the average price as well as start to move the market in the direction of a seller’s market, although we’re not there yet. Total number of sales for Saskatoon year to date were 3,249 compared with 3,457 for the same period last year. The sales-to-listing ratio indicates whether we are in a buyer’s or seller’s market. It is determined by dividing the number of sales by the number of new listings for a period. A 50% ratio is considered balanced. Currently the market is at 42% which is a buyer’s market.

Another positive sign is the days of inventory which determines how long it would take to liquidate the current active listings at the current level of sales. Based on October’s numbers there is currently just over five and a half months of inventory. This is just slightly above the five-year average of five months. The overall dollar volume for the Saskatoon and surrounding market is only down 3% from last year and currently sits at just over $1.5 Billion dollars. Overall dollar volume has remained strong despite a 6% year to date reduction in sales. This is largely due to an increase in sales over $750,000. Year to date there were 51 units sold between $750-800,000 compared to 40 last year. Comparatively, sales were down 10% year to date for homes priced between $250-450,000. “There is no doubt that the recent federal change for homebuyers qualifying for a mortgage will further impact our market with an average price of $350,000” comments Yochim. “It has yet to be seen how much the impact will be.”

The good news for those selling is that sellers are realizing 97% of their asking price. Sellers who choose to list too high over the market are finding it difficult to obtain that sale. The closer the asking price is to market the tighter the offer will be to the list price.

Sound pricing and timing advice can be provided by one of the 640 professionally licensed and trained REALTOR® members of The Saskatoon Region Association of REALTORS®. REALTORS® also subscribe to a strict code of ethics and are dedicated to developing professional standards and continuing education in the real estate profession.

For many the average sale price is used to benchmark where the market is at. Year to date statistics reinforce why that is not a sound practice. As of the end of September, a total of 2,936 unit sales were recorded, a 7% drop from the same period in 2015. By comparison, the average sale price of $351,835 remains virtually unchanged from one year ago. Furthermore, the average sale price for September 2016 was 6% higher than last September. The reason, an increase in the number of properties selling at the higher end of the price range coupled with a decline in more affordable home sales. More specifically, year to date the number of units selling between $300,000 and $500,000 declined by 12% while the number of units selling above $750,000 increased by 20%.

The Home Price Index (HPI) tool was created by the Canadian Real Estate Association (CREA) as a way to more accurately reflect changes in home pricing and predict pricing trends. The HPI uses a starting point of January of 2002 and establishes a “benchmark” value for a typical property type. This value is then indexed over time to reflect changes in the market. The composite benchmark value for a home in Saskatoon in January of 2002 was $115,000. Currently the composite benchmark price is $308,600. This index has changed very little since January when it was at $305,400. This would indicate little change in value over the first nine months of the year and has remained virtually unchanged since June.  New listings for September were down 20% compared to September of 2015. 

“A reduction in new listings has a positive impact on the overall inventory levels in Saskatoon which have been elevated since the spring of 2015”. comments Jason Yochim, CEO with the Saskatoon Region Association of REALTORS®. “Ideally we would like to see the number of active listings around 1,500 units” he adds. At the end of September, the number of active listings was 1,841, the five-year average is 1,625 units. The high water mark for active listings was 2,081 in June of 2015.

The number of sales for September was 324 units which is a 9% reduction from last year. Year to date the total unit sales was down 7% compared to 3,167 units a year ago. The average time to sell a home in Saskatoon is currently 51 days, the five-year average is 41 days. These homes have been selling for 97.4% of the asking price. “The key element in the sale of a property is proper pricing, buyers are more educated today than ever before,” adds Yochim.