Report has mixed review for Saskatoon real estate market
Published Friday, February 22, 2013 11:12AM CST
Last Updated Friday, February 22, 2013 6:52PM CST
A new report on Saskatoon’s real estate market has good news and bad news.
The good news is that between 2002 and 2012 Saskatoon recorded an “exceptional” appreciation rate of 165 per cent, the second-best performance in Canada behind Regina. The Queen city’s 10-year appreciation was 199 per cent.
More good news for Saskatoon home owners was the city’s five-year rates of returns – they were among the highest in Canada, with the average home buyer getting a 36 per cent return.
While rising appreciation and return rates are good for home owners looking to sell – it’s meant a tougher market for those looking to buy. When it comes to buying a home, there’s a shortage of middle of the range homes.
“The new homes that people are trying to move-up to are at an all-time shortest,” Larry Stewart, broker and owner of Remax Saskatoon said. “Between $320,000 and $420,000 there’s nothing. Anything that comes up is just gone.”
Stewart explained that high land costs are driving housing prices up. With an expensive lot, new homes are worth up to $500,000 regardless of what caliber of home is built on them, he said.
“A lot of move-up buyers can’t afford it,” Stewart said.
With new homes out of reach, a lot of families are looking at the used market and settling in older homes in Nutana, Mount Royal, and Richmond Heights were houses are 10 to 15 years old. “People are looking at the new and they have to settle for less. And that’s the area they find the type of home they’re looking for,” Stewart said.
The report concluded that for the market to improve, sellers need to start lowering their expectations and adjust to the more moderate market.
According to Stewart, this is starting to happen. “I see people are asking more than their properties are worth. So we’re seeing a correction. They’re coming down to where they should be in the first place,” he said.