While global demand for oil, gas, potash, and uranium provided a significant boost to Saskatoon’s residential real estate market in recent years, diminished demand and the threat of a worldwide recession has had an impact on sales activity in 2008. Th e number of homes sold in the city, as a result, is forecast to fall 19 percent to 3,600 units by year-end, while average price expected to climb 24 per cent to $289,000 in 2008.

Rising inventory levels played a serious role in Saskatoon’s softening housing market. New home construction contributed to a 40 per cent upswing in the number of homes listed for sale early in the year.

Speculation was also a factor in the marketplace, as those trying to make a quick buck unloaded their properties on an unsuspecting market. During the latter half of the year, market conditions clearly favored the buyer. Purchasers had greater choice, the luxury of time to make their housing decisions, and more power at the negotiation table. Some home buyers took advantage of the narrow spread and chose to trade-up to a larger home or a better neighbourhood , while others saw market conditions as an opportunity to downsize. Retirees, in particular, were driving demand for newly-built condominium units.

More balanced market conditions are forecast for 2009. Move-up buyers will likely lead the way, stimulating demand for product priced over $250,000. First-time buyers are expected to play less of a role in Saskatoon’s residential housing market in 2009, with creative financing options like the zero-down down payment no longer available. Concerns over the global economy may serve to slow sales of luxury homes to some degree, but overall demand will remain stable. The absolute top end of the market—homes priced over $1 million is expected to hold firm. More job opportunities at higher income levels are predicted to attract out of town purchasers to the city. Former residents are also expected to return to Saskatoon, thanks to vastly improved economic conditions.

Saskatoon continues to be one of the fastest growing cities in Canada. Real GDP growth, projected to climb 5.2 per cent in 2008, will stabilize in 2009. While commodity prices have fallen in recent months, the city’s diverse economy continues to fuel solid fundamentals. Entrepreneurial ventures and the biotechnology sector are on the rise. Th e Financial Post listed Saskatoon as the fifth best business-friendly city in Canada, boasting affordable business costs and a versatile economy. Job creation in traditional industries such as agriculture and mining are also drawing people to the area. Saskatoon aims to move forward with employment growth and create 8,000 new jobs each year. Volatility in the financial sector has also prompted some investors to move their money out of the stock market and into real estate.

Th e residential real estate market in Saskatoon is expected to be one of the bright spots in Canada in 2009. Given strong economic fundamentals and a positive employment outlook, healthy housing market conditions should prevail in 2009, with the number of homes sold in the city rising three per cent to 3,700 units by year-end. Average price will continue its ascent in 2009, rising just over two per cent to $296,000.
Re/max Western Canada press release.

 Well that is certainly good news for buyers and sellers in the Saskatoon market. I always welcome good positive news. Lately all there seems to be is gloomy, negative, pessimistic news.

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Scott Ziegler
Re/Max Saskatoon