August represented the eighth straight month with a year over year reduction in the number of home sales in Saskatoon. This, coupled with a continued elevation in inventory levels equates to a buyers' market. Currently there are just over 2,000 residential listings on the market in Saskatoon, an increase of 26% from just 12 months ago. Considering that there were 329 sales in August, it would take 6 months to liquidate the current inventory of homes. Year to date 2,812 homes changed hands, a 12% reduction from last year. The sales to active listing ratio for August was 39% significantly lower than the five year average of 54%. This suggests that only four out of every ten homes placed on the market will result in a sale. Meanwhile the average home required 50 days to sell compared to the five year average of 41 days. Roughly 690 of the active listings are condominiums with two thirds of these being apartment style. The reality is that our market is feeling the effects of slower economic times. If someone is serious about selling their home they need to sharpen their pencil regarding price to ensure a successful sale.
The number of sales are down in nearly every price range but most notably between $450,000 and $500,000 and $750,000 and $900,000. This reduction has also impacted the new home market where the number of housing starts are down significantly over 2014. Year to date single family housing starts for the Saskatoon area totaled 510 representing a 28% reduction from 2014 while multi-family starts increased by 10% to 798 units. The average home price continues to remain static at $357,000. According to the second quarter RBC Housing Trends and Affordability measure, it takes a household income of $72,300 to purchase a detached bungalow in Saskatchewan. The next closest province is Manitoba at $68,100, Quebec at $54,700 and the Atlantic provinces at $50,900.The Home Price Index benchmark price of $327,700 remains virtually unchanged from a year ago for a single family home. The Home Price Index has remained fairly flat for Saskatoon indicating that prices are remaining stable for the time being. Over time this is likely to decline slightly as new listings continue to outpace total sales.
Ultimately sale price is determined by what the current market will bear, specifically what a buyer will pay, not necessarily what the seller wants. Buyers are more educated today than at any other time with access to information on the web and are unlikely to pay more than market price with more to choose from. It's important to keep in mind that regardless of the market conditions homes still sell, provided they are properly priced to the market. The opinion of a professional who is not emotionally involved in the sale cannot be overstated.
Source: September 1st SRAR Media Release