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Saskatoon housing market to lead country: forecast

Paulson J 2008, “Saskatoon housing market to lead country: forecast” the Star Phoenix, December 3

Saskatoon’s housing market is expected to be one of few bright spots in Canada next year, with the average price rising by two per cent and sales going up by three per cent, Re/Max forecasted Wednesday.

In fact, Re/Max predicts that Saskatoon will see the highest increase in unit sales for 2009, out of 22 major markets. Regina is expected to hold the line, matching this year’s sales.

Re/Max says 11 of the markets surveyed will match or exceed 2008 sales levels, while the remainder will slide back.

Canada’s housing market performance will be contingent on economic performance, says Michael Polzler, executive vice-president with Re/Max in Ontario and Atlantic Canada.

“Issues affecting the overall economy are impacting housing markets across the country and the situation is not expected to be remedied until consumer confidence is restored,” said Polzler in a release.

“That said, we could see a bounce back as early as spring — if inventory levels remain stable, pent-up demand kicks into gear, and lower interest rates stimulate home-buying activity.”
 

The average price of a Saskatoon home is expected to end 2008 at $289,000, up 24 per cent from 2007. Re/Max expects it to creep up to $296,000 next year.

Unit sales should end the year in the 3,600 range, down 19 per cent from 2007, but rise slightly to 3,700 in 2009.

In Regina, home sales will number 3,450 in both 2008 and 2009, while the average price of a home will jump to $250,000 next year from $230,000 this year, an increase of nine per cent.

Re/Max says global demand for Saskatchewan’s resources led the boost to the Saskatoon residential real estate market in recent years, but diminishing demand has dampened sales activity in the second part of 2008.

High inventory levels played a role in the local housing market. New home construction contributed to a 40 per cent increase in the number of homes listed for sale, and speculation was also a factor in the market.

Re/Max sees a more balanced market for 2009. First-time home buyers will play less of a role in the market, in part because financing options have become tighter, including the elimination of the zero-down payment option.

However, “more job opportunities at higher income levels are predicted to attract out of town purchasers to the city,” says the Re/Max report. “Former residents are also expected to return to Saskatoon, thanks to vastly improved economic conditions.”

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