17 Replies to “Saskatoon Housing Bubble?”

  1. pop goes the weasel!
    seeing as an sda poster thinks it fitting that the farmer in ontari-ari-ario ‘deserves’ to get defrauded by the mcguilty gubbamint regarding who can attach their solar panels to the grid, let me suggest the SAME thing applies to the sask speculators driving THIS bubble.
    you know who you are and others also.
    heh heh heh.

  2. One thing that struck me as odd was when the Saskatoon Real Estate Association was talking about the high prices were justified they mentioned that the median income for Saskatoon individuals was now $77,000 a year. If you check the stats data, however, it says that individuals whose income fell below $25,000 were not included in the median income calculations. Would this not skew the results noticeably?

  3. When looking at average wage, the only wages that count are average wages of home owners, and debt to equity ratios. They drop the 25K class because that class of wage earner is irrelevant and has no bearing on homeownership unless the 25K is added to household income. Most homeowners have two wages in the home, so the average income of the home unit is the number to consider.
    Housing bubbles are normal and are part of capitalism. If borrowing is made too easy, they become too large,like in the US, but bubbles are simply a part of free enterprise. Trying to “regulate” them is socialism and leads to stagnation. Canadian mortgage rules are among the most restrictive in the world, so it’s a given fact that most homeowners can afford their homes. Barring an economic collapse in Saskatchewan, there is no problem.
    I get such a kick out of Saskatchewan citizens who moan about this as they’ve never experienced a boom … the laws of supply and demand scare them … especially after decades of NDP driven stagnation.
    Saskatoon isn’t anywhere near “big” bubble territory, it’s simply in a housing shortage brought on by good times. Saskatchewan is enjoying a full employment rate and will have 5% plus GDP growth this coming year. This is just part of the ebb and flow of a healthy economy.

  4. I have one word for those whiners who don’t want to enjoy all the benefits of a booming economy……MOVE!
    The problem is that these young kids who want to buy a home, do not want to sacrifice and save for a downpayment. They feel entitled to start at the top, instead of putting in the time and years to earn the lavish lifestyle they believe they deserve.
    5% down on a small home or condo should not be a problem with a combined household income of $150,000.
    Home ownership is not a right, it is something one earns!

  5. Cjunk
    My family is looking to enter the housing market in S’toon but we hear two different stories. One is to buy now else pay more, and the other is to wait and see if housing prices drop significantly as this link suggests.
    in my industry, I’m seeing companies flocking to S’toon in anticipation of a iSht load of work. Anecdotally speaking, I’d guess that demand will increase in the housing market over the next few years.
    in your opinion (others feel free to opine) do you see this bubble as legitimate? Do you think for example that perhaps the housing prices are just overly-corrected to some degree, but for the most part reasonably accurate; or, do you believe that the ‘bubble reasoning’ is correct but perhaps overstated, due to unique Sask conditions?
    Thanks in advance.

  6. An option for those that think the house prices in the cities are too high. You can still buy a nice house in small town Sask for a reasonable price if you venture 1 hour out of the city. A nice 2 story house with a car and a half garage is selling for 35k here…

  7. Indiana, as you have seen in the graph, housing prices have escalated considerably since 2006. In my opinion, we have lived close to Saskatoon for thirty-six years, the increased housing prices are due to increased economic activity in various types of mining, increased potash production and the oils sands. Many oil sands workers live in Saskatchewan and commute to Ft. McMurray. The ag sector has also seen increased dairy and poultry and egg production which also requires more workers.
    If the Sask Party wins re-election this fall, this activity will continue and most likely increase over the next decade as there could well be activity in the oil sands in Saskatchewan and in the good quality coal discoveries east of Prince Albert.
    custom10 is correct, you can purchase a nice older home, even a relatively new or new home for a few tens of thousands less in any number of towns within 1 hour of Saskatoon.
    The housing contractors can hardly keep up to the demand. Although at some point this will level off and depending on the North American economy, there could be short term decreases as you can see in the graph for 2008-2009.
    So my unprofessional opinion is that this is not a bubble. With a “open for business” government this boom will continue.
    My wife and I would actually like to see a small decrease in housing prices as we most likely because of age have to relocate to Saskatoon in the not too distant future.

  9. cjunk nailed it. Looking at the charts, most of the increase seems to have come at the time when builders were quoting up to 18 months before your new home would be available. Builders here couldn’t get enough subs to meet their demand. The rest of Canada was booming and mobile trades people were not chosing to come to Saskatchewan. That has changed.
    The rest of Canada has experienced a decline in their economy. Saskatchewan weathered the storm. Tradespeople moved in. Builders can now get their homes built. Market forces are balancing supply and demand. That is shown by the fact that the lead time for a new hous is now down to 6 +/- months and the builders can now meet the demand (which is higher than it was at the time the boom started).
    I think the market has slowed down and we will start to see some downward or sideways pressure.

  11. Indiana Homez – one thing to consider in evaluating whether this is a bubble, is what proportion of buyers are sub-prime in Saskatoon. Regardless of boom times in Saskatoon for some, if there are a significant number of these in the housing market, there is a risk that that component of housing demand could disappear. If that happens, a simultaneous surge in some other component of demand would be required to make up for the loss, or the current price levels would decline, maybe precipitously.
    There was nothing natural about the housing bubble in the US – is was primarily due to the easy availability of financing offered to people without due consideration of their ability to pay.

  12. Indiana Homez: Housing prices peaked in 2008, then took a nice dip. They came back last summer again but never managed to spike like 07-08. Bidding wars are a thing of the past (I think). This summer will be telling. By end of July you’ll know if there is a new run-up in prices or not. I think that supply has almost met demand, BUT that 5% GDP growth this year could mean another shortage.
    My educated guess is that we are seeing a top now that will persist for many years within a solid price range and more controlled inflation. My home is going up for sale this spring and I’ve moved 2 other properties in the last year. There is lots of new housing coming on, but lots of people moving in as well so we may finally have balance.
    Right now is a great time to buy as I’ve seen houses in our neighbourhood in the $400K range move down to $350. The choice of homes isn’t that great, but buyers are just starting to get interested. Those same houses will be right back up by mid summer.
    Saskatoon home prices are also incredibly zone sensitive. An old character home in the right area, even if it needs tons of work, is worth more than a new home of the same size. People pay up for the old larger yards, character, and trees.
    If you aren’t in a rush, follow prices throughout summer and see how much they spike. If they stay within last year’s range, I think we’ve formed a nice top and you should be able to buy without fear of prices taking off, or of collapsing.
    In short, my “guess” is that hyper inflation is over; but prices should remain stable until wages take another spike. My personal rule is, buy in January – March; sell May to July 🙂 And if you don’t know the city, be sure to contact someone who does so you don’t end up in a nice house, but blocks away from “the hood”.
    Glad you’re considering moving here … bring all your friends and family!

  13. It’s too bad Canada repealed Glass-Steagall or this might never have happened.
    Those greedy bankers on Wall Street got you too with that nasty subprime MBS and CDS.

  14. So what?
    If people can’t afford them or … they will not buy them …. and the prices will come down.
    Someone is paying for those mortgages.

  15. “If the Sask Party wins re-election this fall”
    A foregone conclusion. The NDP base wandering around the Co-op waiting for their subsidized prescriptions and muttering about “hidden agenda”, “selling the crowns” and “Grant Devine” is dwindling fast as age catches up.
    Hopefully the decades of NDP-induced despair, stagnation and “have-not” province status will soon be just a bad nightmare.
    Sure do miss those equalization payments though.

  17. The idea that house prices are going to remain near current levels due to a “boom” is very dangerous in my opinion. The only boom I see is one created by level upon level of borrowed money. Once interest rates and taxes start to sneak up, we are very likely to see a significant downward correction. If you are about to borrow to go into the market now, heads up and good luck.
    http://www.saskatoonhousingbubble.blogspot.com

Proudly powered by WordPress & Skyrocket Themes

MENU

Navigation