Over the past month the inventory of homes for sale decreased by 6.5% largely due to a slowing of the pace of properties being added to the market. Sales activity in Saskatoon was down 13% year over year representing a total of 3,737 units by the end of November. This volume of sales is comparable to 2012 which saw 3,772 sales by the end of November. Current dollar volume of $1.7 Billion is similar to 2012 as well, this represents a 14% decrease from last year. There was a total of 280 sales in Saskatoon in November which is consistent with the five year average. November saw a slight decrease in the months of inventory from 6.8 months to 6.5. This represents how long it would take to absorb the current inventory level based on the current volume of sales.
Although sales have slowed in 2015, the average price of $354,000 only represents a 1% reduction from January 2015. The average price can be misleading however and should not be applied across the market. True market value will depend on the type of home, age, condition, location and what is competing on the market at the time. Some markets are in a much higher over supply while others have a shortage of available property. The median sale price for a home in Saskatoon of $350,000 is almost identical to the year previous.
Overall the CREA HPI (Home Price Index) composite benchmark price for the Saskatoon market has been in a steady decline since September which was the high water mark at $317,000. The current benchmark value of $308,000 is the lowest point since May of 2013. This would indicate that overall prices are cooling and will likely continue to do so for the foreseeable future. We don't expect to see a change in this trend until second quarter of 2016 at the earliest. In January of 2002, when the benchmark value was established, it was set at $114,000. The greatest increase in the benchmark price was when it climbed from $139,000 in January of 2006 to $303,000 by June of 2008. It's strictly supply and demand, as inventory is absorbed, prices will begin to stabilize.
Around 500 properties or approximately 27% of the inventory in Saskatoon is made up of newer homes built in the past two years. This has resulted in a drastic decrease in permits for new single family homes which are down 39% in 2015. Multi-family permits on the other hand are only down 15% over the same period last year.
Source: SRAR December 2015 Media Release