HIGHER INVENTORY LEVELS IMPACT PRICING
The Saskatoon housing market reached a record level of 1,934 active listings as of the end of April, a 34% increase compared with the same time last year. Of the active listings, just over 700 are multifamily properties representing more than a third of the available inventory. In spite of record inventory levels, the average price remains unchanged from a year ago at $352,000. "When inventory levels were lower we were experiencing a 3 - 4% annual increase in the average price." comments Jason Yochim, CEO with the Saskatoon Region Association of REALTORS® "It is reasonable to expect a slight downward change in the average price if the rate of increase in inventory levels continue to outpace that of sales."
According to the Home Price Index (HPI), single family property values are trending slightly upward recovering from steady decreases since last July. Townhouse and apartment condo values on the other hand have been trending downward over the past number of months. This is largely due to an increase in multi-family housing starts late in 2014 which are now seeing completion and entering the market. The HPI measures residential price trends based on four benchmark home types, with the index set at a base of 100 for January 2005. The HPI is a more accurate way to measure housing price trends than the average or median price. A benchmark value of $328,100 for single family homes is the highest level recorded since July 2014. This contrasts the benchmark value for townhouses and apartment condos of $260,400 and $217,100 respectively, which is the lowest level since last January.
All in all, the province and the city of Saskatoon have weathered the recent economic storm quite well compared to many other major Canadian cities. "A very diverse economy has insulated the province from the fallout of recent economic challenges" adds Yochim "Furthermore, higher inventory levels provide several positives, there is more to choose from for buyers, pricing remains in check and supply keeps pace with the growth in population." The sales to listing ratio currently sits at 42% which is still considered to be balanced territory. When the active listings are divided by the number of sales in April, it would take just under six months to liquidate the current inventory of homes for sale, the five year average is 4 months.
On average a home in Saskatoon will take approximately 45 days to sell, slightly longer than the five year average of 38 days. "Sellers need to be properly advised as to how to price their property in order to achieve a sale within the average time to sell." cautions Yochim, "Buyers are more educated today than ever before and will not move on a home that is overvalued."