Fears of Housing Bubble-Overblown?
Housing bubble or no housing bubble? It seems the debates never end on these topics lately and it comes down to differing opinions and research techniques. In a recent article in the Star Phoenix it appears that rumblings are overblown. They use words like “seem” and “could” to protect their assets. There are some left-leaning groups who look at worst case scenarios and publish that we “could” see prices plummett by 20-38% in Canada’s major real estate markets with a best case scenario of 19-29%. Really? The catastrophic US meltdown saw a national drop of about 30%. One of our leading think tanks, the Conference Board of Canada, thinks no bubble, instead just a return to normal as salese were too high to be sustainable according to Mario Lefebvre.
Prices rose in July from June in 19 of the 28 Canadian cities studied and all had prices that were above last years levels. One has to keep in mind though that average house price in Saskatoon, and everywhere else, is simply determined by adding the cost of each home and dividing by the units sold. In Saskatoon in any given month we may see a greater number of high end houses for sale in Saskatoon that sell vs small basic condos for sale in Saskatoon. These change the average house price in Saskatoon drastically so I would imagine it is the same across the country.
Overall the actual experts find little cause for concern, but that doesn’t stop the negativity and part of my job as a Saskatoon real estate agent is to educate. There will always be negative people in the world and even in the Saskatoon real estate community who believe everything they read, but it must get exhausting as there are so many contractions in the media!
I cannot stress enough how unfair it is to look at the entire country of Canada and lump each community under one heading. There are so many factors even in Ontario and BC but unfortunately they are still seen as the beginning and the end of our great country. The prairies and especially Saskatchewan are starting to stand their ground as confidence grows. The 2 agreed upon places where prices may come down are Vancouver and Montreal as the prices have shot up out of control. Saskatoon real estate is still strong thanks to our many resources.
Interest rates also play a role as the 80’s and 90’s saw home prices staying between 3 and 4 times the median income yet now they are between 4.7 and 11.3. Interest rates should not be reaching 20% like they did back then as they are only increasing slightly. If you are in that 11.3 group though I would hope you have some extra money coming in! If you need information on getting a mortgage in Saskatoon let me know!
If you are thinking about buying a house for sale in Saskatoon and you have questions about the Saskatoon real estate market I would love to speak to you and help you in your Saskatoon home purchase (or Saskatoon condo!)
Saskatoon Real Estate Agent
Century 21 Fusion