Saskatoon Real Estate Report, What happened in July?

Posted by Andrew Slater on Monday, August 17th, 2020 at 4:04pm.


July Tops June!

June had 515 residential properties sell, that is an average of 17.17 per day. As of July 18th there were 284 residential sales, an average of 15.78 per day. July is on pace for 489 sales.

Update:

July's residential sales end up at 550! That is the highest monthly sales in the past 10 years!

The average sales price in July 2020 was $350,458, July 2019 was $331,757

Does that mean house prices are up? You have to look deeper into the stats. 

Good House are Selling!

64 of the 284 houses that sold in July sold in the first 14 days of being listed (22.5%)

112 sold in the first 21 days of being listed, 39%!

What type of property is selling the most? Single detached houses, 203 of the 284 were single detached, 71%

What price range is selling? 119 single detached homes under $400,000 sold in July, 42%

There are currently 466 single detached homes for sale in Saskatoon, 297 have been on the market for over 21 days, 64%!

Why aren't these houses selling? Click this link for more information; Top Ten Reasons Your House Isn't Selling

If you want to know where our housing market was before covid-19 click here.

What has happened the first 15 days of August?

There were 198 properties sold in the first 15 days, that's an average of 13.2 sold per day, that would be 409 sales for August at this pace. That would be the highest August sales since 2011!

July's average sold per day was 17.74

What is causing this rise in sales? 

Is it interest rates? There are mortgage rates below 2% right now! The average rate in January 2020 was 3.08%

Let's look at some numbers:

Based on a $350,000 property

Mortgage payment at 3.08% with 5% down - $1,650.71

Mortgage payment at 1.90% with 5% down - $1,447.66

The average rent for a 3 bedroom house in Saskatoon is $1,600.........why would you rent? Are we seeing a lot of first time buyers?

What about up size buyers?

Based on a $500,000 property

Mortgage payment at 3.08% with 5% down - $2.358.16

Mortgage payment at 1.90% with 5% down - $2,068.69

Now, let's say you had the $350,000 house above at 3.08% with a payment of $1,650.71 BUT...you have enough equity to put 20% down on the $500,000 home.

Mortgage payment at 1.90% with 20% down - $1,674.57 

For $23.86 you can upgrade your current home! 

Of course everyone's situation will be different, but the main point here is..........record low interest rates, take advantage of these rates and get your first house or upgrade to the house you want!

Could another reason be that Saskatchewan has become a more desirable to place to live? We have more affordable housing and we have been practicing "Physical Distancing" since we became a province.

Here are some interesting stats from Google Trends

When you search house for sale and pick Canada here are the top searches:

Saskatchewan was #2

 Check out which city was #1!

 

 

 

 

Have house prices been affected?

I like to use the Home Price Index. With this we can look at what prices are doing nationally, regionally, locally, even down to a neighbourhood! Check out these videos for an explanation.

 

The following charts show that the Benchmark Price is slightly higher for July compared to June and slightly higher than last July. We still aren't at prices that we saw 3 years ago or 5 years ago. 

Did Your House Go Up In Value?

I feel the HPI gives a clearer, more accurate picture on what home prices are doing, but to find out if your house price has increased you have to look more closely and compare "apples to apples". When you hear or see someone proclaiming "The average house price is up 15%!" (or any other number). Ask yourself, "Compared to what?" Last month? Last year? Overall? Detached houses? Etc. 

The average house price in June 2020 was $335,213 ...... July 2020 was $350,458 an increase of 4.5%,  did all house prices go up 4.5%? The HPI shows an increase of 1.8%. You have to look at the MIX of what sold.

 

June 2020, breakdown of number of houses sold in price ranges. Check out June's report here.

 

July 2020, as you can see, more higher priced homes sold in July, thereby affecting the average price! Check out July's report here.

 

MONTHS OF INVENTORY

You have probably heard the term, "It's a buyer's market" or "It's a sellers market"

The next stat we need to follow is Months of Inventory. This is a stat that tells us, based on the amount of sales, if there were no more new listings, how long would it take for the current amount of listings to sell. The formula is;

  1. Find the number of active listings on the market within a certain time period. 
  2. Identify how many homes were sold or conditionally sold during that same time period.
  3. Divide the active listings number by the sales and conditional sales to find months of supply.

This can be as general as all residential housing in Saskatoon for the past 12 months or 3 bedroom bungalows, 900-1,100 sq ft in River Heights for the past month! Note: If you use to short a time period you won't get an accurate result, in my opinion using the last 3 months would give you the best indication.

A Seller's Market is 4 months (120 days) or less of inventory.

A Balanced Market is 4 - 6 months (120-180 days) of inventory.

A Buyer's Market is 6 months (180 days) or more of inventory.

Here are our stats.

As you can see, June and July of this year have been a seller's market

 

 If you have a house listed (or know someone who does) and it isn't selling, click the link below for some information on what might be affecting the sale.

 

 

 Top Ten Reasons Your House Isn't Selling

 

I have covered other economic indicators in my previous blogs, but I would like to point out the unemployment rate.

You can check out my previous blogs here.

 

 

UNEMPLOYMENT RATE

"Unemployment hasn't been this bad since The Great Depression!"

The Great Depression lasted for years! We have had high unemployment for 1 month! 13% in Canada for April. I am curious to see what the number for May will be...higher? I doubt it! Provinces have started opening up the economy and the Federal Government has offered the C.E.W.S. Canada Emergency Wage Subsidy. 

I will be posting stats on the U.S. economy as our economy depends on the U.S. In 2018 Canada exported 584 Billion worth of goods, 3/4's of that went to the U.S.

Here are unemployment numbers and projections for the U.S.

“News stories often describe the coronavirus-induced global economic downturn as the worst since the Great Depression…the comparison does more to terrify than clarify.”

“From 1929 to 1933, the economy shrank for 43 consecutive months, according to contemporaneous estimates. Unemployment climbed to nearly 25% before slowly beginning its descent, but it remained above 10% for an entire decade…This time, many economists believe a rebound could begin this year or early next year.”

Clearly the 2 don't compare!

(Monthly)

Canada

As you can see the unemployment rate is falling.

#canada-unemployment# 

Saskatchewan,

Our unemployment rate was at 6.2% in February, pre Covid. We got to a high of 12.5% in May and now July's number is down to 8.8%, not exactly the Great Depression!

 

 

 

 

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