If you’re at all interested in economics, supply and demand, or market behaviours, the past 9 months will likely have intrigued you. It was almost like the boomer effect, only this time it would be more aptly named the “pandemic effect”—a storm of supply shortages, making it hard to find a wide variety of things, ranging from toilet paper to RV’s.
Many who were lucky enough to make the transition to working from home in March were buying up all the computers and laptops, while others were hoping to find a new gaming system to use while they were stuck at home with nothing to do. There were so many home renovation projects happening this spring that the price of lumber was the highest it’s been, ever. And the warmer weather created a wave of people wanting things to do outside, safely, meaning things like bicycles, canoes, ATV’s, Campers and Boats were in short supply, as well; a trend we are again seeing with the newest change of the weather, with a shortage of winter sports equipment now at hand.
How the “Pandemic Effect” Has Affected the Saskatoon Real Estate Market
While the reason for a shortage in snowmobiles is very interesting, I am most intrigued by how the Saskatoon real estate market has been affected. As with many facets of our lives, there was a lot of uncertainty early on. However, much to our surprise, after approximately 6 weeks, the market rebounded!
Month after month, the reports have been mistifying, as sales are outperforming not only last year's numbers but those of the last 3 years as a whole! As of December 1st, the year-to-date sales were 22% higher when compared to 2018 and 2019, while new listings were down 9.9% in that same time period, signalling a seller’s market.
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How Have Home Values Been Affected?
While it’s all well and good to discuss the landmark numbers we are seeing in the Saskatchewan real estate market, the biggest question on people's minds is how their home’s value has been affected. Of course, there are so many variables that go into determining your home’s value and, by far, the best option is always to request a customized market evaluation. However, there are a few statistics I can share with you that can help you better understand how the market changes have affected home prices overall.
One way to compare home values in the market is to look at the median home price. If you were to take all the sales from a specific region or area and put them in a list from lowest to highest, the median price would be the value that is found right in the middle of the list. Here in Saskatoon, that value is up close to 1%, going from $265,000 to $267,574 for the first time in years due to supply issues. With more buyers looking to purchase and fewer listings on the market, many sellers are able to ask slightly more for their homes, with some even generating bidding wars and over-asking selling prices!
Another way to analyze home values in a market is to look at the benchmark price. Benchmark price is defined as the price of a “typical” home, a home that has the same attributes, i.e. lot size, square footage, number of bedrooms and bathrooms in a given area. The Benchmark price for single family homes in Saskatoon in November 2020 was $323,400. Compare that to $306,600 from 12 months ago. Townhouses were $233,600 this year and $226,800 a year ago. Apartments, $177,200 an increase from $166,000 in 2019. Another indication that now is a great time to sell your home in Saskatoon, with the possibility of getting more!
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Why Caused the "Pandemic Effect" in Saskatchewan Real Estate?
We know that Saskatoon is in a seller’s market, with supply remarkably low and prices on the rise. The question is, though, can we explain why this is happening? The answer is threefold.
Take the low home prices (now on the rise) and the low interest rates, combined with the fascinating “Pandemic Effect,” and you’ll end up with the unique storm known as 2020. Interest rates will likely remain low for the foreseeable future, which will continue to be a driver for home buyers, but the biggest driver is people spending more time at home. The deficiencies are a glaring reminder of their want to get into a better home—whether it’s a lack of space, the need for a separate office space, or the need for more bathrooms!
No matter the motivation, though, it’s created stability in our local real estate market, that has not only gone to keep our economy bolstered during an economically troubling time, but it has also allowed both buyers and sellers more freedom to explore their wants and needs for properties in Saskatoon! Want to learn more about how our market is looking, and how your home may be affected? Contact me today to discuss!
Posted by Kent Braaten on
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