Joanne Paulson: Saskatoon housing situation may become a crisis

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All the numbers are shocking.

The extremely tight availability of Saskatoon homes in 2023 has not abated in the first quarter of 2024. In fact, it’s worse.

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“Just to give you an idea, this morning, we have 576 listings and 220 conditionally sold,” real estate agent Warren Ens said on April 9. “It’s true as a heart attack.”

I take his point. The situation is a bit heart-stopping.

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To the end of March, there were 732 total homes in inventory; the 10-year average is 1,416. That’s with almost 15,000 more souls coming into Saskatoon in one year, so when you do the math …

The prices, of course, were also up. The benchmark price was $308,700 in 2019, that year noted because it was pre-COVID, and now sits at $394,300.

Meanwhile, to the end of March, 917 homes have sold (up eight per cent) out of 1,338 listings (down six per cent), but those numbers don’t really tell the story. Had there been more homes to buy, and if March had not been cold, snowy and weird, there would certainly have been many more sales.

Chris Guérette, CEO of the Saskatchewan Realtors Association, gave me this indication of how pressured the market is.

Comparing the first week of April to the same week in 2023, and even though listings increased 130 per cent, “55 per cent of the listings sold at listing price or higher. It was 28 per cent last year,” she said.

“I am very worried for the spring and summer. That’s the indication that things are speeding up.”

Indeed, Guérette said, we may be “entering crisis mode,” and if the Bank of Canada reduces its policy interest rate, potentially in June, it could add gasoline to the fire.

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“The stats corroborate it. It will increase demand,” Guérette said. “It’s not going to alleviate the situation; it’s going to make it worse.”

It doesn’t matter which market range you’re looking at, either, in terms of houses flying off the market.

Re/Max Canada just released its luxury property report (please note that its high-end housing price benchmark is $700,000) which noted that 22 houses in that range sold in the first two months of 2024, up 57 per cent from 14 in the same period of 2023. While it’s a small category, Saskatoon still led the country with that percentage increase.

“The market in the $700,000 to $800,000 (range) is very surprising right now. Definitely, (people) new to Canada (are) making a massive difference, those who have been renting the last six months to a year,” said Ens, who is with Re/Max Bridge City Realty.

There are also people coming in from less-affordable provinces, such as B.C. and Ontario, he added.

“In the new areas, people are coming in and it’s more of an ‘I want’ than an ‘I need’ thing. The money coming in is on a different level than what I have seen.”

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And what about new builds, which everyone has been hoping for because there just aren’t enough homes?

Last year, builders were pouring it on in the multi-family market. At this point in 2023, 714 permits had been issued. This year so far? Sixty-six. A 91 per cent drop from 2023 and a 78 per cent drop from 2022.

Single-family dwellings are up … by two, to 128.

Analysis on this is coming soon from the Saskatoon and Region Home Builders’ Association, but last year, builders were still struggling with various issues ranging from labour availability to on-time product supply.

Meanwhile, the rental market vacancy is somewhere around two per cent. So the next thing Ens said, while also shocking, was not surprising considering these numbers.

“Almost every sale has been a multi-offer situation and it doesn’t matter whether it’s a two-bedroom condo on Tait (Crescent), a two-bedroom house in Hampton or an $800,000 house in Stonebridge.

“As a buyer’s agent, I say when something comes up, you put your sneakers on and we run. Just expect to get into a bidding war and if you don’t, consider yourself fortunate.”

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The only category that has seen an easing is the super-high end, above $1 million, he said. But otherwise, if this continues, “I don’t know how long we’re going to stay as the most affordable place in Canada to live,” he said.

“We may be more affordable than most places, but you have immigration, you have definitely a supply problem, and we have never built fast enough.”

Answers are trickling in, I suppose, ranging from federal government supports for various levels of housing (largely “affordable”) to GST and PST rebates on new builds.

Maybe it’s time to also start looking at other things, such as the regulations and processes around real estate transactions. For example, giving sellers just a few hours to decide among many offers adds more heat — and potential for error — to this already steaming market.

But until and if these various measures take effect, this will remain a strange, stressful time for residents of Saskatoon.

Joanne Paulson is a Saskatoon author and freelance journalist who has been covering real estate, off and on, for more than 25 years. Do you have a fascinating real estate story to share? Get in touch at jcpwriter@sasktel.net.

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