This morning I had the opportunity to attend the Saskatoon and Region Real Estate Forecast and hear from a panel of 4 professionals prognosticating about our local real estate market. I have attached a copy of the statistical charts Gregory Klump (Chief Economist, Canadian Real Estate Association) share with the audience. What was conveyed to us is that the average sale price has moved down approximately 7% over the past 3 years, single family homes had a smaller price decrease than condominiums and townhouses. This year we have witnessed fewer sales year to date as well as fewer homes available for sale. Compared to last year our months of inventory at 6.1 is slightly lower than than the 6.5 last year; the average number of days to sell sits at 53.8, essentially the same as last year.
The other panel members included Ann-Marie Lurie – Chief Economist with the Calgary Real Estate Board, Paul Martin – Chair of Martin Charlton Communications and Lesley Anderson the Director of Planning and Development Division, City of Saskatoon. The message each of them chose to share came down to 3 points, first: job growth has to happen in order for our housing market to improve. Job creation will happen when our resource sector shows some signs of recovery, potash sales to China and India, uranium sales, and oil and gas pipelines moving that product to market; from both the infrastructure investment and product sales perspectives. Saskatchewan’s agriculture sector has adapted to providing higher protein products to the Chinese and Indian markets where their populations disposable income has advanced so much that they are now demanding better quality food, food that comes from Saskatchewan. Foreign investment in Saskatchewan’s food processing industry will help to diversify our economy and create new jobs.
The second point dealt with building community, Saskatoon has a plethora of assets and we need to communicate locally and globally all of the benefits that come with living, working and playing in Saskatoon. The immigrant demographic is the largest sector of new home buyers in the Saskatoon CMA, we must embrace these new Canadians and encourage their inclusion.
And the final point was simply that the real estate market is cyclical, we are currently in a buyers market and we have a large inventory of homes available for sale. As our population grows and fewer newly constructed homes come onto the market these conditions will shift. The statistical analysis shows that there are people buying and selling homes every day, that is not going to change. Real estate is a significant contributor to the Saskatoon economy. It is estimated by CREA that ancillary spending not including the home sale amounts to approximately $61,600 per household sale. With 2411 sales to the end of August this year at $61,600 in ancillary spending per sale that amounts to almost 150 million dollars pumped into the Saskatoon economy.
The forecast indicates there is opportunity on the horizon. Real estate is still moving in Saskatoon, perhaps at a slightly slower pace, which means now is the right time to be moving up in the market. The amount you sell your current home may be 7% lower than it was 3 years ago ( ie; $300,000 – 7% = $279,000), but the $500,000 home you want to move up to (ie; $500,000 – 7% = $465,000) will require a lower investment, now is a great time to be moving up in the real estate market.
If you have a question or comment about this information please call me, I would be delighted to hear from you.