Housing Market Off to a Quick Start in 2014
Unit sales appear to be strong so far in 2014. January recorded 331 sales compared to 297 year to date in 2013, an increase of 11%. The number of units listed also increased by 13% with 958 new listings bringing the total inventory in the Saskatoon market to 1,324 properties currently for sale. In January of 2013, there were only 1,061 properties available on the market. Many homes priced between $500-750,000 reduced their asking price late last year. The buyers appear to have responded accordingly with sales in this range increasing by 84% with 35 units sold year to date.
Two other factors of interest are the sales-to-listing ratio and the months of inventory. These two indicators will vary greatly depending on price range. The sales-to-listing ratio compares the number of newly listed homes to the number of sales for a given period. In homes priced between $350,000 and $650,000, the sales to listing ratio averages 28%. However over $650,000 this formula drops to 14%. At the lower price range, one out of every two homes below $350,000 is selling.
The number of months of inventory is simply determined by dividing the number of sales for a period by the number of properties available on the market. When looking at Inventory below $350,000 there is three months availability of homes. Between $350,000 and $550,000 there is just over 6 months of inventory, between $650,000 and $750,000 the number jumps to 20 months. Overall the number of months of inventory in Saskatoon hovers just below six months. The more months of inventory, the longer a seller can expect to wait for a sale. This just means that there are a small number of sales relative to what is available for sellers to select from.
The Saskatoon MLS® Home Price Index (HPI) reflects market trends for five specific property types as well as a composite of the Saskatoon market. The HPI works similar to the Consumer Price Index using a benchmark price and start date of January 2005. The composite benchmark price for Saskatoon had reached its peak in May of 2008 at a value of $308,900. By January of 2009, with the market adjustment, it had dropped to a low of $258,700. The market then began a slow climb until October of last year reaching a new high of $312,600, however, by years end the composite benchmark price declined to $306,600. Since October of 2013 the Saskatoon MLS® Home Price Index had been trending slightly downward, indicating a shift to more of a buyers’ market especially in the higher price ranges.” The recent burst of activity in January should arrest that decline.
Summarized from SRAR February 4th, 2014 media release