Brenda & Bob Ganne Sutton Group - Results Realty
Both sales and new listings trended up this month compared to levels seen over the past few months. However, the level of new listings coming onto the market was far lower than levels seen last year and for the 10-year average. This caused the sales to new listings ratio to rise and prevented any notable change to the supply situation. With 5,648 units in inventory, levels are nearly 30 per cent lower than what we traditionally see in the market in March.
“March is typically the month that we start to see more people listings their homes adding supply to the market. While we did see more new listings compared to the winter months, it hasn’t been enough compared to the sales to make any significant change in supply, resulting in further price gains in the market,” said Saskatchewan REALTORS® Association (SRA) CEO Chris Guérette.
The unadjusted benchmark price in March reached $289,500, nearly two per cent higher than last month, over three per cent higher than last year’s levels and 13 per cent higher than pre-pandemic levels.
Economic conditions have been improving across most sectors and with that we have seen gains in employment and reductions in the unemployment rate. This along with relatively low lending rates is likely supporting further confidence in the housing market and continued strength in demand. While sales did ease in March over last year’s record levels, they remained 40 per cent higher than long-term trends.
“As we move more into the spring market supply will be a crucial factor,” said Guérette. “Should supply levels start to improve we could see more balanced conditions slowing the upward pressure on prices. However, this transition could take longer than expected, especially in our largest cities, which is why we’ve begun outreach to our industry partners to discuss how to address these supply shortages.”
Sales growth in Southeast Saskatchewan and Swift Current were not enough to offset pullbacks in the remaining regions of the province. However, it is important to note that sales in every region continued to remain stronger than long term trends after the first quarter. At the same time, every region has generally seen the amount of new listings ease compared to the previous year and all areas except Swift Current have seen levels fall below long-term trends. This is creating tighter conditions across most regions of the province and is likely impacting sales in those regions.
After the first quarter, both North Battleford, Prince Albert and the Melfort region have seen their months of supply trend up. However, it is important to note that despite those gains, conditions still mostly favour the seller based on historical norms for those centres.
Generally tighter market conditions across each city continued to place upward pressure on home prices. In March, all main reporting centres recorded price growth. Year-over-year gains ranged from a low of less than one per cent in both Estevan and North Battleford to a high over nine per cent in Warman. While the price gains did narrow the spread from earlier highs, the only areas to see prices fully recover and post further growth was Saskatoon, Martensville, Warman, Humboldt and Melfort.
City of Regina
Sales in the city slowed compared to last year’s record pace, but with 351 sales in the month, levels are still amongst the strongest March activity recorded in the city. Like other areas, new listings did rise compared to levels seen over the past seven months. This helped support modest gains in inventory compared to the last four months. However, with 982 units in inventory, this was nine per cent lower than levels recorded last year. . Regina did not have the same inventory struggles last year, but this recent shift does put inventory levels over 12 per cent below long-term trends.
The strong sales compared to inventory levels did cause the months of supply to fall below three months, the first time it has done that since October 2012. While the tighter conditions have had some impact on prices in the market, if the market still is this tight, we could see added pressure on home prices in the coming months.
In March, the benchmark price rose to $264,000, nearly two per cent higher than last year and one per cent higher than last month. The growth in prices helped narrow the spread from the earlier high, but prices continue to remain nearly 13 per cent below the monthly high recorded back in June 2012.
City of Saskatoon
Sales in Saskatoon eased over last year’s record elevated level, yet with 491 sales this month, activity is the second highest on record and over 40 per cent higher than the 10-year average for March. While new listings did trend up compared to the levels seen over the previous six months, thanks to continued strong demand, it was not enough to cause a substantial change in the inventory situation in the city. With 1,054 units in inventory in March, levels were 19 per cent below what was in the market last year and 31 per cent below what we typically see in the market in March.
Low inventory and strong sales resulted in further tightening of the market. With just over two months of supply in March, this is the tightest March Saskatoon has seen since 2008. Persistently tight conditions have continued to affect prices which trended up again this month and currently sit over three per cent higher than last years’ levels. While the pace of growth has eased compared to last year, prices have risen by around $40,000 since the start of the pandemic.
February sales in the province reached 1,059, an 8% decline relative to last year. While the year is starting out with sales that have slowed compared to last year, it is important to note that housing demand continues to remain strong as levels are over 22 per cent higher than what we typically see at the start of the year and nearly 40 per cent higher than average levels recorded throughout the 2015–2020-time frame.
While there have been some signs of improving new listings relative to sales, inventory levels remained lower than levels we traditionally see in the market and the months of supply averaged just over five months. The five months of supply in February is slightly lower than levels expected at this time of year.
“There is a significant amount of uncertainty weighing on the economy. While this could have some impact on demand, supply levels are still low providing some cushion should demand taper further. Conditions also vary significantly based on location, property type and price range because real estate is very local,” said Saskatchewan REALTORS® Association CEO Chris Guérette.
Most of the decline in sales was driven by pullback in the detached sector. However, some of this could be related to the lower inventory levels. Detached inventories in February were 3,643 across the province 30 per cent below 10-year averages and the lowest the market has seen since 2010.
“Last month we started to raise an alarm bell about inventory levels in Saskatchewan,” said Guérette. “Now that we’re two months into the market, that dip in inventory levels being the lowest we’ve seen since 2010 is concerning. That’s why we’re working harder than ever to build a fuller picture of Saskatchewan’s housing continuum so we can identify where the gaps are and build smartly and collaboratively for growth.”
Benchmark prices in the province have remained stable over the past several months, but on a year-to-date basis remain over five per cent higher than last year’s levels. If the inventory can better meet demand as we move through the spring, it should support more stability in prices this year.
While provincial sales did ease over last years levels, this was not the case in every region. After the first two months of the year, sales activity rose higher in both Swift Current and Southeast Saskatchewan Region. When considering the two larger regions in the province, the pullback in sales in Saskatoon was far higher than what Regina saw. However, this could be related to the steeper decline in Saskatoon inventory levels. While it is early in the year, we have seen a significant rise in the months of supply in North Battleford and Prince Albert regions. Should this trend continue into the spring, it could have effects on home prices.
While some cities saw prices pullback slightly in February compared to January levels, prices were still higher than levels recorded at the end of 2021. While pullbacks generally did not offset earlier gains on a year-to-date basis, we did see year-over-year price declines occur in Moose Jaw and Estevan. The shift in price trends is something to monitor but it is important to note that these shifts are not accompanied by dramatic changes in other housing market indicators, making it too early in the year to speculate if this will be the trend for those centers moving forward
City of Regina
With 261 sales in February, city levels rose to a new record high. The February gain offset some of the pullback that occurred last month as year-to-date sales remained at levels consistent with what we saw last year, which is over 30 per cent higher than long term trends for the city. In addition to the low lending rates and improvements in the job market, Regina has not faced the same level of supply constraint that has prevented stronger sales growth in some markets. However, should the sales to new listings remain above 70 per cent as we move into spring, we could start to see supply challenges occur in this market as well.
By the end of February there were 908 units in inventory, like last month and last year. Inventory levels are slightly lower than long term trends. Strong sales relative to the inventory levels caused the months of supply to ease to just over three months.
The detached segment of the market demonstrated tighter market conditions relative to the broader market. While prices remained stable this month, after the first two months of the year, the benchmark price for detached homes rose by over six per cent moving the city closer to price recovery.
City of Saskatoon
For the second month in a row, sales activity eased over last year’s record levels. Despite the decline, levels continue to remain well above longer term trends. Some of the pullback in sales can be in part due to some of the supply challenges in the market. Year-to-date there have been 942 new listings, far lower than the over 1,100 new listings that we typically see at the start of the year. Inventory levels also remain low with 985 units available at the end of February, over 30 per cent below the 10-year average.
The pullback in sales combined with a pullback in inventory has done little to provide more balance in the market. In fact, with just over three months of supply in February, conditions are like last year and at levels not seen since 2012.
Persistently tight market conditions have contributed to further price gains. The residential benchmark price reached $330,600 in February, higher than levels recorded over the past several months. However, there are some signs that the pace of benchmark price growth is easing. After the first two months of the year, the benchmark price increased by over five per cent; far lower than the annual gain of over eight per cent recorded in 2021.
New listings in January remained well below traditional levels seen in the market in January. While levels are better than what was recorded in December, it did little to change the inventory situation as inventories remain at the lowest January levels since 2012.
January sales in the province reached 748 units, a decline over last year’s elevated levels, but still higher than longer term averages. Lower inventory levels likely contributed to some of the slower sales activity this month.
“Inventories still remain relatively low, but if new listings continue to improve relative to the sales, this should eventually translate into improved supply and better market balance,” said SRA CEO, Chris Guérette.
The months of supply in January rose to just over seven months. While this is a gain compared to last January, overall conditions are still relatively tight for January. Persistently tight market conditions supported further price gains. In January, the unadjusted benchmark price rose to $285,700, nearly seven per cent higher than last January.
The SRA has been working to gain a better understanding of the factors affecting housing supply in Saskatchewan. Everything from labour and supply shortages to land costs, lending rate increases, the pandemic and remote work, along with increased immigration and economic growth. All are contributing to gaps in the housing continuum and the Association is seeking partnerships that foster collaboration in the industry to work and address those gaps.
“With changes expected in lending rates, the 2022 housing market is not expected to see the demand levels as 2021. However, it is still early in the year, and like I have said before, my biggest concern for 2022 is inventory,” said Guérette.
Every region in the province recorded slower sales this month compared to the strong levels recorded last year. While sales in the province remained in line with historical norms, Moose Jaw stood out as the decline in January sales pushed levels well below long term trends and caused a significant rise in the months of supply. While it is too early in the year to put much weight on these figures, Moose Jaw is a place to watch. The months of supply generally trended up toward more balanced conditions across most regions. However, conditions still tightened compared to last year in the regions of Melfort and Saskatoon.
Benchmark home prices across all the larger centers did record gains compared to last January with year-over-year increases ranging from a low of just under one per cent in Estevan to a high of nearly 16 per cent in Melville. While the year-over-year gains are significant, it is important to remember that prices started to see more significant gains last year in the spring. Nonetheless, most of the centers recorded further price gains in January over December levels. The largest unadjusted monthly gain occurred in Meadow Lake at over five per cent.
City of Regina
Like other centers, sales in January eased over the strong levels recorded last year but remained above the 10-year average. At the same time, new listings did ease slightly over last year’s levels, but with 316 new listings for the month, the sales to new listing ratio eased to 53 per cent, slightly lower than the 57 per cent recorded last year. Inventory levels also remained relatively stable this month. However, slightly slower sales combined with stable inventory levels helped push up the months of supply to just over five months.
Despite the gain, the months of supply is still relatively tight, supporting further price growth in the market. Benchmark prices in January trended up over last month and reflect a year-over-year gain of over seven per cent.
City of Saskatoon
January sales eased over last years levels, but with 230 sales for the month, activity remained consistent with long term trends. At the same time, new listings in the market continued to ease compared to levels we traditionally see this time of year and could be one factor preventing stronger sales in the month. Inventory levels remained exceptionally low for January with 881 units. That is over thirty per cent below longer-term averages and the lowest January levels since 2010.
The limited supply and relatively strong sales kept the months of supply relatively tight at under four months. While prices remained relatively stable compared to where they were at the end of 2021 with a total residential benchmark price of $328,600 in January, levels are nearly six per cent higher than last January.
Information provided by: SRA (Saskatchewan Realtors Assoc.)
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