Real Estate Information

According to the Bank of Canada, Canada's recession is coming to an end as improved credit markets and higher levels of consumer confidence expected to generate growth this quarter. (Source: Financial Post)

It’s fair to say that when most people think of Canada’s most vibrant cultural centres that are leading the way in education, scientific research, manufacturing and commerce, Saskatoon would not be the city that first comes to mind.  But this year, Saskatoon—a.k.a. the “Paris of the Prairies”—landed in the top three of all large cities in Canada on the 2009 Composite Learning Index (CLI), the Canadian Council on Learning’s annual measure of lifelong learning.  Our economy is recession proof,” Atchison explained almost apologetically. “According to the Conference Board of Canada, Saskatoon has the most balanced economy in Canada.” (Source: CLI Website)

Add to that today's announcement that the population of Saskatoon has increased by its highest rate in more than two decades, jumping by 5,000 people this year to 218,000, according to the city's latest estimate.  "The city's population has been growing for the last three years at a rate not seen in at least two decades, driven primarily by interprovincial migration and international immigration," said Bill Holden, manager of the city's research and information resource centre.

Real Estate sales are also doing well.  We're not quite at the end of the month and already 387 homes have sold in July, compared to 292 homes in the same time period last year.

Saskatoon is a great place to live, and as always, real estate is still a great investment.

Give me a call if you have any questions or feel free to leave a comment (click on the title and scroll down the page)

So, you've just become a new homeowner, or you're thinking of becoming one..... now, what is it going to cost to maintain it?

First, there's the one per cent rule, which claims that normal maintenance on a home is about one per cent of the value of the home per year.  This means that a $250,000 home would cost about $2,500 per year to maintain.  This would cover normal replacement of worn out components such as a failed water tank one year, roof repair another year, and the furnace the next.

Then there's the three per cent rule; some experts say that home buyers should plan on spending three per cent of the value of the home in the first year.  This is because new homeowners will likely purchase blinds and/or drapes, change some or all of the decor and maybe buy some appliances.

A Home Inspection (before you buy) will give you an idea of what is wearing out and what will last for a while.  For example, because the high efficiency furnace was installed a just a year ago, you likely won't be buying a new furnace for at least 15 years, since they last, on average, 15-20 years.  Or you know the shingles have never been replaced, they're looking a little rough and the house is 18 years old; count on getting up on the roof (or hiring someone) in the next year or so.  Asphalt shingles last approximately 12 -20 years.  This is not a reason to not buy the house, not a defect, just a something to be aware of.

Here are the typical life cycles of the most common home components:

• Furnace >  15-20 years
• Air conditioning system > 12-15 years
• Water tank > 12 years
• Sink garbage disposal > 10 years
• Appliances > 12-20 years (varies substantially)
• Asphalt shingles > 12 - 20 years
• High-end asphalt shingles > 20-30 years
• Cedar shingles > 20-35 years
• Garage door opener > 10-15 years

Care and maintenance is the key.  Generally anything will last longer if it is not abused, kept clean and dry, and used only for the purpose it was intended.

The Real Estate Market correction continues in Saskatoon.  There were 669 homes placed on the market in June 2009, down from 721 homes in May.  The number of units sold by Saskatoon Realtors in June was 442, an increase of 18.8% from May's total of 372 units sold.  And at the end of June, the number of residential properties for sale was 1,439 down from 1,532 homes at the end of May.

Area 1 (east of Circle Dr.) continues to be the most active area of Saskatoon with 246 units listed and 173 units sold.  The average sell price per unit is also the highest in this area at $314,944. 

Looking at the different price ranges, sales in the $300,000 to $349,999 price range remain the highest at 73 units sold, up from 52 units last month.   

"Similar market activity is expected moving into the third quarter of 2009.  Market conditions are favorable with low interst rates, steady employment numbers and a generally strong consumer confidence in the local economy."  (Henry Janzen, SRAR Media Release)

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The Bank of Montreal Capital Markets expects Saskatchewan to be the only Canadian market to post economic growth in 2009.

"Real GDP will likely expand 0.4 per cent this year, the only province in Canada to see growth," said Robert Kavcic, an economist with BMO Capital Markets. "This will be followed by a 1.9 per cent expansion in 2010."

Saskatchewan's diverse commodities mix has helped it weather the economic downturn, the bank said in its report. Potash demand, however, was down 55 per cent in the first quarter, but the energy sector continued to do well thanks to relative cost advantages over Alberta.

Kavcic said Saskatchewan's most important commodity during the past two years has been people, with the province netting more than 13,000 interprovincial migrants since the start of 2007.

He said Saskatchewan is the only province yet to see job losses this recession.

Saskatoon Star Phoenix

After three years of looking at what makes a city great, Corporate Knights (an independent Canadian-based media company that publishes the world's largest circulation magazine with an explicit focus on coporate responsibility), has found that the lives of Canadians are deeply affected by how well their cities address their needs.  According to their research, Saskatoon has retained 2nd place in the annual Canadian sustainable cities ranking in 2009 (in the smaller cities category).  Saskatoon also outperformed larger cities such as Hamilton, Montreal and Winnipeg, overall. 

(Business View Magazine - Greater Saskatoon Chamber of Commerce)

Saskatoon's strong affordable housing programs support low-income home-owners and projects through tax exemptions.  The city also prioritizes city reviews for approved affordable houseing projects.  These projects translate into a reality where Saskatoon residents spend about 18 percent of their annual income on shelter, whereas in Charlottetown it is as much as 25 percent.

According to the Conference Board of Canada, Saskatoon and Regina are once again expected to lead the way in economic growth among 13 major cities in 2009. After growing by a nation-leading seven percent last year, Saskatoon's economy will increase by 1.7 percent in 2009.  Regina's economy, which grew by 5.3 percent in 2008, will be right behind Saskatoon with a projected 1.6 percent growth in 2009.  Strong in-migration into both Saskatchewan cities will continue to support housing construction activity and demand for services, the report said.  Unlike many provinces, which are running deficits and cutting government jobs, the Saskatchewan Government is running a balanced budget and preserving jobs. (excerpt from Saskatoon Home Magazine)

The average price of a Saskatchewan home rose four per cent in May to $242,829, driven up by increases in four cities, the Canadian Real Estate Association (CREA) reported Monday.

While Saskatoon resale homes were down seven per cent from last May to an average $279,477, the average price in Regina jumped 12 per cent to $263,424.

Record average prices for existing homes were also posted in Yorkton, Swift Current and Prince Albert, said Gregory Klump, CREA's chief economist.

Some downward pressure on the Saskatoon price has come from an oversupply of homes on the market in recent months. However, the number of Saskatoon listings fell (from May 2008) nearly 30 per cent  in May to 721, while sales crept up 1.4 per cent to 372, CREA reported.

Klump noted sales in Saskatoon are consistent with several years before the run-up in activity that started in late 2006.

"It's returned to stable activity," said Klump in an interview.

"You're only down when you compare it to that record run-up in activity, which I don't anticipate in the near future," said Klump. "I do anticipate sales will remain steady at your current levels."

The total value of existing homes sold in Saskatoon was $104 million, down six per cent from last May. Regina's dollar volume was $102 million, up 21.6 per cent from last year.

CREA said Canada's resale housing market activity returned to pre-recession levels in May, led by an increase in some of the nation's more expensive markets. Seasonally adjusted sales rose in approximately 70 per cent of local markets.

The national average sale price of multiple listing service (MLS) homes reached a record $319,757, up four-tenths of a per cent from last May.

Klump said CREA does not anticipate a crash to follow the improvement. CREA believes Canada will not see the kind of price correction experienced in the United States because this country did not have the run-up in prices or the kind of speculative activity seen in the U.S.

Regina broker Dale Ripplinger, president of CREA, said sales activity is closer to the pre-recession peak than the trough hit in January.

Improving consumer confidence, low interest rates and improved affordability are bringing buyers into the market across the country, he said.

As you can see by the chart below, sales surrounding Saskatoon are increasing, with the number of units sold in May at 97, up from 29 in January.  The average sell price at $241,080 in these areas (year-to-date), is not far behind the city's average year-to-date price of $276,091.  The time it takes to sell a property outside of Saskatoon is an average of 64 days, year-to-date.  This is somewhat higher than Saskatoon's year-to-date average of 46 days. 

If you're not sure what is meant by Areas 6 to 9, take a look at the map below which shows what towns and communities are included in this surrounding area.

Map showing areas 6 to 9 surrounding Saskatoon:

A good portion of these surrounding area sales are in the bedroom communities of Martensville and Warman, which are 15 & 20 minute drives from Saskatoon. This graph shows the number of units sold in the month of May in the years from 2005 to 2009.  As you can see, sales have increased substantially in these towns this year.

As always, I'm available to answer any questions you might have.  Give me a call!

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The number of residential listings in Saskatoon continues to rise.  There were 721 homes placed on the market in May 2009, compared to 694 in April.  At the end of May, buyers had 1,532 residential listings to choose from, up from 1,499 homes at the end of April.

Sales continue to rise as well.  In May, 372 homes were sold, up 5.4% from April's total of 353 homes.  This number is also up from May 2008, when 363 homes were sold.  The average sell price this May was $279,477 with an average of 41 days to sell. 

Out of May's 372 sales, 111 were condos, varying in price from $445,000 down to $79,000.

Area 1 (east of Circle Dr.) continues to be the most active area of Saskatoon with 242 units listed and 147 units sold.  The average sell price per unit is also the highest in this area at $306,936. 

Sales numbers in the $300,000 to $349,999 price range were the highest at 52 units sold.  The $275,000 - 299,999 range was a close second at 44 sales.

"Summer sales and listing activity is expected to remaining similar as the market continues to correct with excess inventory moving through the system. Saskatoon has been somewhat effected by the global recession but all indicators point to the local market remaining steady in the next few months"  (From SRAR June Media Release)

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If you are a "First Time Home Buyer," there's a Tax Credit in store for you!

The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes, can be a particular burden for first-time homebuyers who must pay these costs, as well as save money for a down payment. To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009.

Here are a few Q & A's from the Canada Revenue Agency website: 

1. What is the Home Buyers' Tax Credit (HBTC)?
For 2009 and subsequent years, the budget proposes to introduce a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., closing after this date).

2. How is the new HBTC calculated?
The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.

3. Who is eligible for the HBTC?
An individual will qualify for the HBTC if:

• they acquire a qualifying home; and
• neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the year of purchase or any of the four preceding years.

4. What is a qualifying home?
A qualifying home is a housing unit located in Canada. This includes existing homes and those being constructed. Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings, all qualify. A share in a co-operative housing corporation that entitles you to possess and gives you an equity interest in a housing unit located in Canada also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

For more details & information go to:  http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html

There's never been a better time to buy a house!  Just take a look at these interest rates:

The latest rate cut means consumers buying a house can borrow for as little as 3% interest on their loan if they are willing to buy into the Bank of Canada's statement that it won't be changing rates until June, 2010.  If you don't believe the bank will hold steady on its promise, you can lock into five-year, fixed-rate mortgages for under 4% on a discounted basis -- the lowest rate in Canadian history. (Financial Post, April 22, 2009)

The regular rates at Banks seem to be approximately 1% higher than Mortgage Brokerage Companies, as this graph clearly shows: