Western Canada’s Real Estate Boom Hitting Saskatoon
We have covered the real estate boom in western Canada over the past 2 years as oil revenue and demand has blown out the housing inventory in Calgary and Edmonton. Now the high prices in these large cities have started to drive up housing costs in the second tier cities such as Saskatoon.
Pertrol revenue from the sand fields have been a major part of the boom in western Canadian real estate, but the prices in Calgary and Edmonton are creating a great deal of wealth for folks in those cities that want to return home to their birth cities. So the young family that moved to Calgary for work from Saskatoon can now return with a pocket load of money to invest in a home in Saskatoon.
Also, the changing nature of the Calgary’s and Edmonton’s will make folks who do not want to live in a boom town head back home. It is interesting to watch the demographic trends of what is essentially a rural region such as Western Canada as they will shed light onto what is happening down here in the United States.
Their return is fuelling a real estate boom in Saskatchewan the likes of which no one has seen, particularly in Saskatoon.
“The only way to describe it would be that we’re in uncharted waters,” says Harry Janzen, executive officer of the Saskatoon Region Association of Realtors. “We’ve never had a market as active as we’ve had now.”Association numbers show the average selling price for a Saskatoon home was $233,917 last month, up 44% from a year earlier. Janzen says multiple offers and bidding wars are now the norm. He recalls one house drawing 31 offers. Homes are selling at tens of thousands of dollars above the asking price and million-dollar homes are selling in days instead of months.
“There’s so many young couples and so many expatriates,” says Janzen. “We knew that they were going to be moving back to Saskatchewan — we just didn’t know it would be as quickly and to this degree.” Part of what’s luring them back home is the fact that they can sell their homes in Calgary and Edmonton and use the profits to buy a home in Saskatchewan. via edmontonsun.com
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Comment by sadiq ansari on 19 August 2007:
i want to invest in MB housing market
Comment by Jim on 25 April 2008:
I think this June 2007 post is amusing. Yes all that happened people did move here. But now Saskatoon is more expensive than Edmonton. And Saskatoon is an over priced boom town. Will people move back to Edmonton? With a new Alberta Advantage, adding cheaper housing to higher wages, will we see a new wave of university grads, especially engineers, science students and commerce students moving to Edmonton, Calgary, and even Red Deer and Medicine Hat? For affordable housing? Or will Sadiq be correct, will people just bypass Saskatoon and move on to Manitoba, as Winnipeg is a metropolitan big city, with a good university and now cheap housing.
Either way. If people moved to Saskatchewan for affordable housing, it is now more expensive than many other places in Canada. Many of those places have higher wages. I think Saskaboom will soon become Saskabust as people here cash out on the huge gains in their houses and move to cheaper housing elsewhere. A good time to retire to the States/Phoenix. A tough time to stay in Saskatoon as a new university grad. Especially since wages are still relatively low compared to many other big, and now cheaper, cities (Regina, Edmonton).
Comment by Conrad on 26 April 2008:
I agree with Jim. This is funny because the “boom” has hit Saskatoon and is likely over. According to Fisher’s blog postings, inventory has increased consecutively for the past 6 weeks. Booms done. What a year. I also find “prices in these large cities have started to drive up housing costs in the second tier cities such as Saskatoon.” above kind of funny. Second tier city. Wow, that’s a burn.
Comment by Conrad on 26 April 2008:
I would also like to point out “the young family that moved to Calgary for work from Saskatoon can[NOT] now return with a pocket load of money to invest in a home in Saskatoon” as housing in Saskatoon is nearly as expensive as Calgary and maybe just as expensive, when considering that housing in Saskatoon is typically older and smaller, since it did not have Calgary’s decade of strong growth.
Also, as Jim says above, and is on Fisher’s blog as well, Saskatoon is more expensive than Edmonton, so the family will lose money in the move from Edmonton to Saskatoon!
How things have changed in one short year!
Except for wages, people in Saskatoon still make way less per year than Calgary, and according to Norm himself, people in Saskatoon still make 8% less a year than in Regina, which is still actually affordable and actually the centre for oil and farming in Saskatchewan, the two supposed industries that are driving increases in housing prices. http://www.teamfisher.com/
Comment by Doug on 17 January 2009:
And now real estate bust is hitting Saskatoon!
With prices down 15% since June 2008 (front page Star Phoenix) or over $44,000 down!! Inventory is TRIPLE what it was last year, sales down over 20%. Massive potash and uranium lay offs etc.
Some realtors continue the scare tactics, from Team Toledo ” So you buyers out there don’t delay or you will be sorry.” Seriously!
Home prices are going down in Saskatoon.
Will they fall another 5 to 10%? or a bigger drop, maybe another 20%?
No one knows.
But with listings continuing to be above seasonal levels (triple) and sales down, and the commodity crash, both the local economy AND local real estate inventory are in a very WEAK position – so expect prices to fall more!