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Buyer,

What "signs" are you referring too.

It is my opinion that there are many properties out there right now, that are as low as they are going to go. There are some good buy right now, and some people are taking big losses just to move there property. New home sales is where i think you will find your best bargains.

Scott

Hi Darshyn,

This is Ivan Toledo.  Thanks for posting your comments.  I appreciate the sraightforward, non-spam opinions.

Let me offer a few different variables for you to think about.

Sure, inventory levels are hovering around 1300, and the outright number of unit sales may be less, but we're at a totally different part of the market curve than Q1 2008.  Buyers were starved for product then, and actually, we had tons of lower-quality-for-the-same-price-now properties that were selling.  We have lots more quality product for sale now Darshyn so from a buyer's perspective, the quality of the home they're buying today is far better because sellers have to do-fix-renovate more to sell.

Furthermore, look at your interest rate market.  Any serious investor looks at a prospective purchase from all angles.  Last year, your basic 5 year fixed rate was hovering around 6%.  Today, it's hovering around 4% and probably still going lower in April.  What does that mean to you??  Easy.  A $150,000 purchase in March 2008 would cost you the same on a month to month basis as a $205,000 purchase today!!  Your affordability just skyrocketed by 37% but prices citywide only went up 24% You'll get better quality, and way more selection, plus your utility costs have actually fallen since last year!  Makes sense to me.  

Thirdly, investing in revenue property is all about that magical phrase "Return on Investment" or ROI.  That's a percentage calculation that indicates what you're getting back on a yearly basis as a return on your down payment, start up costs, lawyer fees, etc. that it took to buy the property after you've paid the mortage, taxes, etc.  Have you considered that Saskatoon's rental market continues to climb and climb, way beyond March 2008 levels.  That means huge numbers for your ROI.  Now, if people complain and  say things like "Well.... I really don't wanna be a landlord, my answer is simple.  Get out.  Don't invest, you're obviously a person who doesn't understand the risk v. reward dynamics of investment property.  However, if you have any shred of entrepreneurship in your bones, you'd be licking your lips.  We continue to have in-migration to Saskatchewan, which means increasing rent pressure on the rental market. Renters are paying higher, and you in turn, as a landlord, can actually provide them with a better property to rent than last year.  As a matter of fact, I'm looking to buy another couple of investment properties before the end of spring, so if you have one to sell, let me know.

I'll give you my own example.   My wife and I bought a 4 plex close to Kelsey last November.  It's a clean, 80's built unit with 4  3 bedroom suites.  My ROI this year will be 25%.  25%!!!  You tell me Darshyn, where are you going to get this kind of return in any equity market (not), money market fund (not), or any GIC??  It's risk v. reward my friend.  

Anyhow, why are prices 60-70% more than 2 1/2 years ago?? That's easy too.  Even the staunchest bears out there in cyberspace will have to confess ( if they have an IQ of 50+) that for decades, Saskatchewan had been undervalued, depreciated, discounted, whatever you want to call it.  Just like people are saying that there' s a "correction" going on now, a huge and pent up correction occured 2 1/2 years ago.  And keep in mind, we as a province are still largely untapped in oil and uranium markets.  Some may cry about commodity prices right now, but unless someone develops a fuel within say the next 12-18 months that you can drive up and pump directly into your car, yerrrr puttin' gas in there.  Electric cars, fine, but you know what happens to those high tech, lithium battery packs in your laptop, dontcha?? :)

So to wrap it up Darshyn, although you probably have as many opinions coming your way right now regarding real estate, my final advice is be objective.  Don't bandwagon with others that are "armchair" analysts.  If you're really serious about buying, call a professional.  A professional will give you the facts.  We may all have our own opnions and hopes (or lack thereof) about the market, but a true professional at the end of the day, is a committed person.  They won't run home to mama when the market does anything, up or down.

I hope I've helped you, and I also hope that you're successful in anything you choose to do.

Regards,

Ivan

Bryan.

Sorry to be the bearer of good news, i know how most people in the blogosphere thrive on the negative. I am looking at the Star, and according to the paper ( not my stats theirs) i see a nice INCREASE in prices from the Q4 of 2008. East central condos are the only segment of the market which doses not have an increase in the average sale price from the end of last year. A difference of only $1,000 so even that is minimal. So i "hear" all this talk of falling prices, but when i see it in print it actually tells a different story. All i see is increases ( again according to the Star) and who am i to argue with the might Star Phoenix.