October saw a 25% decrease in home sales month over month in the Saskatoon real estate market. This reduced activity sustained inventory levels of available property in Saskatoon to just below 2,000 units. Based on the rate of home sales in October it would take nearly 7 months to absorb the current available inventory. In spite of the decrease in sales activity and higher inventory levels, the average price in Saskatoon has only decreased by 1% year to date. Although averages give some sense of where the market is at they can be misleading. An increase in sales in one price range can skew the results. A better indicator of where the market is trending is the Home Price Index (HPI). The MLS® Home Price Index is the most accurate indicator of market trends. It measures change in market value similar to the Consumer Price Index. The composite benchmark value for the Saskatoon market in October was $310,200, virtually unchanged from the previous month. The composite index of 235.6 has been trending downward since July this year reversing a gradual upward trend which began in January. This index is at its lowest level in two years and looks to continue its downward direction. By comparison this index was at 124.6 in January of 2007 rising to its peak of 230.8 in May of 2008 before the market corrected.
Although there has been a decrease in home sales in most price ranges, there was a notable decline in the sale of homes above $700,000 month over month. In October of 2014, a total of 11 homes in excess of $750,000 sold eclipsing the 3 that sold this past month. Year to date, home sales in Saskatoon have declined by 14% from 4,002 units to 3,459. Comparatively, the number of homes listed for sale was up 8% by the end of October. This has resulted in sustained inventory levels of 1,955 units, a 26% increase over last year. Total dollar volume for the Saskatoon market at the end of last month was $1.6 Billion, that is down 15% from last year and by year end will likely equal the volume of 2013.
The current buyers' market is likely to remain for the foreseeable future until existing inventory is absorbed. If priced to
market, homes will sell within the average of a month and a half. New home construction has slowed, especially in the multi-family market. With higher inventory levels, buyers have more to choose from in the market. The tendency for buyers is to wait on a purchase hoping prices drop significantly. Although there will be a downward adjustment in pricing, I don't anticipate a significant change as some have predicted.
Source: SRAR November 2, 2015 Media Release