Saskatoon Real Estate Trends: A Closer Look at the Market
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Introduction
In recent years, the phrase “Real Estate in Saskatoon” has become synonymous with growth, dynamism, and opportunity. The real estate market in Saskatoon, Saskatchewan, has shown remarkable resilience and buoyancy, making it a topic of significant interest among homebuyers and investors alike. This article delves into the current trends, the driving factors behind them, and what the future might hold for Saskatoon’s real estate market. The city’s unique blend of urban development and cultural vibrancy is drawing more people towards it, creating a higher demand for housing. This demand is reflected in the increasing number of property transactions and rising home values. Additionally, the city’s strategic plans for expansion and infrastructural improvement are positioning it as a promising hub for real estate investment.
Current Market Analysis
The City of Saskatoon reported a notable surge in real estate activity in November, with 314 sales. This 18% increase over the previous year, significantly above the 10-year average, signals a robust market. Despite a slight increase in new listings, the strong sales volume prevented a substantial rise in inventory, which remains almost 50% below long-term trends. The market’s vitality is partly due to the influx of new residents and investors attracted by the city’s economic stability and quality of life. Moreover, the trend towards remote work has increased the desirability of Saskatoon’s residential properties. Low mortgage rates have also played a crucial role in enabling more buyers to enter the market.
Provincial Context
The province of Saskatchewan echoes Saskatoon’s trends, with 1,006 sales reported in November, a 10% year-over-year increase. This uptrend, particularly pronounced in the Regina and Saskatoon regions, marks the fifth consecutive month of year-over-year sales increases. These figures are well above the long-term, 10-year trends, suggesting a continuing strong sales performance in the province. Saskatchewan’s overall economic health, supported by its diverse industries, contributes to this positive trend. The province’s commitment to sustainable development is attracting environmentally conscious buyers and investors. Furthermore, the government’s housing policies are ensuring a steady supply of new homes, balancing market demand.
Market Drivers
According to Chris Guérette, CEO of the Association, several factors contribute to this robust market. Saskatchewan’s strong economy, record employment rates, and significant population growth create a favourable environment for real estate. Additionally, the relative affordability of homes in the region compared to other parts of Canada continues to attract buyers and support above-average monthly sales. The area’s appeal is bolstered by its thriving cultural scene and natural beauty, which enhances residents’ quality of life. Infrastructure developments, like improved transportation networks, are also making the region more accessible and attractive. Moreover, the local government’s investor-friendly policies are encouraging more people to invest in Saskatoon’s real estate.
Inventory and Supply Challenges
Despite the overall market growth, challenges persist, particularly in inventory levels. A slight year-over-year increase in new listings has not been sufficient to offset the high sales volume, leading to further reductions in inventory. Homes priced below $400,000 are particularly affected, with inventory levels decreasing by over 16% year-over-year and remaining 30% below the 10-year averages. This shortage is more pronounced in certain desirable neighbourhoods, leading to bidding wars and rapid sales. Developers are responding to this challenge by accelerating new construction projects. However, supply chain disruptions and rising material costs are posing significant challenges to these efforts.
SASKATCHEWAN CLOSES 2023 WITH SIXTH CONSECUTIVE MONTH OF ABOVE-AVERAGE SALES
January 2024
Saskatchewan is reporting above-average sales for the sixth consecutive month, with 757 sales across the province in December, a year-over-year gain of 19 per cent and 13 per cent above long-term, 10-year averages. Year-over-year sales gains in the second half of 2023 failed to offset earlier pullbacks, as the province is reporting a 3 per cent sales decline compared to 2022. While the year-to-date sales decrease was forecasted as the market returns to pre-pandemic sales levels, much of the decline was driven by slowing detached activity. Meanwhile, apartment and semi-detached sales levels improved and continue to contribute to strong monthly sales. Above-average sales were met with a decline in new listings, resulting in declining inventory levels throughout the year. Inventory levels across the province dipped by over 16 per cent year-over-year in December and remain nearly 35 per cent below the 10-year average.
“Higher lending rates continue to push prospective buyers to seek more affordable options within our market while inventory levels within that market segment remain extremely tight,” said Association CEO Chris Guèrette. “When paired with declining new listings in more affordable properties, there simply isn’t enough inventory in lower price ranges right now.”
The shift toward more affordable products has increased price pressures for apartment, row, and semi-detached property types. Meanwhile, detached homes, which account for the majority of sales activity across the province, reported similar prices compared to last year. Saskatchewan reported a benchmark price of $319,300 in December, down from $324,400 in November and nearly 2 per cent above December 2022.
“Saskatchewan’s housing market continues to benefit from the economic success in our province, including a strong labour market and record population growth,” said Guèrette. “Supply challenges, specifically in the more affordable segment of the market, remain our biggest concern when looking ahead to 2024 and are likely preventing even stronger monthly sales numbers.”
Regional Highlights
Despite a slight dip in year-to-date sales across many regions of the province, year-over-year sales activity increased across all regions except for the Northern Region and remain significantly higher than long-term averages.
The decline in new listings across the regions in 2023 continues to drive inventory levels well below long-term, 10-year trends. The Saskatoon-Biggar Region (4.42 months of supply) and the Regina-Moose Mountain Region (5.43) continue to experience the tightest conditions in the province – while the Swift Current-Moose Jaw Region (8.65), Yorkton-Melville (8.84), and Prince Albert Region (8.43) saw a shift to more balanced conditions.
Price Trends
Benchmark prices varied across the province in December, as the communities of Humboldt (+6.2 per cent), Meadow Lake (+4.2), Melfort (+0.7), Melville (+4.8), Moose Jaw (+1.4), Prince Albert (+2.3), Saskatoon (+5.5), and Yorkton (+1.8) all reported year-over-year price gains.
In contrast, Estevan (-7.5 per cent), Regina (-4.1), Swift Current (-4.9), and Weyburn (-5.3) reported year-over-year price declines.
City of Regina
The City of Regina reported 188 sales in December, a year-over-year gain of nearly 25 per cent and 24 per cent above long-term trends.
Despite significant new listing growth in December, the number of new listings decreased by 12 per cent in 2023. This resulted in further reductions in inventory levels, which remain over 33 per cent below long-term averages in the Queen City.
Strong sales and below-average inventory were not enough to prevent price adjustments in December, as the City of Regina reported a benchmark price of $299,800, down from $308,500 in November and 4 per cent below December 2022.
City of Saskatoon
The City of Saskatoon reported 230 sales in December, a year-over-year gain of 14 per cent and 10 per cent above long-term, 10-year averages.
Strong sales were again met with a pullback in new listings, resulting in further inventory declines, as inventory levels in the Bridge City are nearly 45 per cent below the 10-year average.
Tight market conditions supported modest price growth in December, as the City of Saskatoon reported a benchmark price of $374,100, up over 5 per cent from December 2022.
Timing and Speed
In the current Saskatoon real estate market, timing and speed are crucial factors, both for buyers and sellers. For sellers, the key to success lies in accurately pricing their homes, effective marketing, and ensuring their property is in desirable condition. Houses that meet these criteria are often sold swiftly and at excellent prices, benefiting from the market’s current dynamics. However, sellers should be wary of overpricing. In a market sensitive to value, listings with inflated prices are likely to linger longer on the market, as buyers are cautious about overpaying. This sensitivity underscores the importance of a well-considered pricing strategy.
On the flip side, buyers need to be equally agile and prepared. The fast pace of the market demands prompt action when a suitable property is found. Having a pre-approval for a mortgage in place is a critical step, as it positions buyers to move quickly and decisively when they find their desired home. Given the competitive nature of the market, delay or hesitation can mean missing out on an opportunity. Buyers should be ready to jump in as soon as a new listing that meets their criteria hits the market, ensuring they are well-positioned to make a compelling offer.
Price Trends and Predictions
The benchmark price in Saskatchewan experienced a slight seasonal decrease to $324,400 in November, down from October’s $327,300 but up nearly 2% from November of the previous year. This trend suggests that while there is some fluctuation, the market remains relatively stable. Experts predict that the market will continue to see gradual price increases as demand remains high. The introduction of new housing developments is expected to bring more balance to the market. Additionally, the government’s monitoring of the housing market and potential policy interventions could also impact future price trends.
Impact on Homebuyers and Investors
These trends have diverse implications for different market participants. Potential homebuyers, especially those looking for more affordable options, face a competitive market with limited inventory. Investors, on the other hand, might find opportunities in the sustained price growth and robust sales activity. First-time homebuyers are particularly affected by the high competition and may need to explore various financing options. For investors, the strong rental market presents a lucrative opportunity for rental property investments. The market’s dynamism also offers potential for long-term capital gains for patient investors.
Conclusion
In summary, real estate in Saskatoon continues to be a dynamic and growing market segment, outperforming many regions across the country. While the market is thriving with strong sales levels and stable prices, challenges like inventory shortages, especially in affordable housing, persist. Looking ahead, the market’s performance will likely continue to be influenced by economic factors, population growth, and broader national trends in the Canadian real estate market. The city’s ongoing development and diversification efforts suggest a bright future for its real estate sector. However, maintaining a balance between supply and demand will be crucial to ensure sustainable growth. As such, stakeholders in Saskatoon’s real estate market should remain attentive to both local and national economic indicators.