Paulson: few residential, commercial and industrial real estate listings in Saskatoon

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Saskatoon has the lowest number of active listings in at least five years, and by a significant margin.

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In the spring, says Alfred, Lord Tennyson, a young man’s fancy turns slightly to thoughts of love.

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It is like that, and pardon the poetic intrusion; but in the spring, a Saskatonian’s fantasy turns to the idea of ​​selling and buying property.

Historically, anyway.

In May, the city’s residential real estate market is generally booming. Most sales – and announcements, of course – take place in May and June. We emerge from our hovels after harsh winters and enter the housing fray.

Being a curious kind, I checked in this morning to see how hot things were. Here is a hint.

In my neighborhood (admittedly quite small and quite old), there is a house for sale.

A.

Now, this happened before, about a year ago, when the COVID housing craze was at its height. What is the market excuse now? What are people thinking? Where are the lists!?

It’s not just my neighborhood that’s falling apart, as it turned out after further investigation. Indeed, says Norm Fisher, owner-broker of Royal LePage Vidorra, the number of homes listed has fallen in almost a week this year since the end of April.

At that time, there were 1,033 homes for sale (single-family and condos), down 336 from the same period last year. Listings for single-family homes fell to 537 from 652, and condos somewhat fell to 423 from 642.

Looking at Fisher’s active listings chart, I saw that we had the lowest number of active listings in at least five years, and by a significant margin. In 2018, for example, there were around 1,800 homes on the market.

Unsurprisingly, sales are also down, having fallen year-over-year in 14 of the 17 sales weeks. In the last week of April, for example, 106 houses changed hands, down from 24 per year.

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I have a few theories about this. Let’s start with an abnormally long and cold winter, which just ended about 10 days ago. I was so shocked when the temperature soared above five degrees that it took me another week to schedule an appointment to have the snow tires removed. Call it brain freeze. Seriously, six months of harsh winter will cut even the wind out of a Saskatonian’s sails. Or should I say sales.

One could also argue that after about 18 months of a crazy COVID market, in which everyone was looking for bigger homes with office space, some demand has been met. Meanwhile, inflation is hitting many people hard. Maybe staying put seems more attractive than taking out a bigger mortgage – with a higher interest rate, and that’s another thing.

Yet interest rates haven’t skyrocketed yet, COVID hasn’t gone away yet, and the economy is really starting to take off. Is there anything else at stake? Do we have a large number of less desirable properties languishing since last year? If there were stronger listings, would we see higher sales? I actually think so.

The most important factor, however, in any housing market, ever, is the economy. And other real estate numbers point to a growing economy, though others aren’t.

Industrial land, for example, can hardly be acquired for love or money.

In mid-April, ICR International, the commercial real estate company, pegged the industrial vacancy rate at 2.4%, with the Marquis Industrial Zone at just 1%. Industry watchers say interest in such properties is very high for both rental and purchase, and the rate will likely drop further this year.

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That’s, in part, because of a manufacturing boom, I’m told. Manufacturing sales in 2021 are up 24% from pre-COVID levels, which is an encouraging sign. In fact, it’s quite spectacular.

In addition, and this is quite surprising, commercial space is renting rather well, with a slight drop in vacancy to 4.55% in the first quarter of 2022 against 4.93 last year. Considering we’ve all gotten used to ordering everything during COVID, you’d think it would go the other way, but no.

Meanwhile, the downtown office vacancy rate is incredibly high, between 21 and 25 percent depending on which survey you read. This is, admittedly, partly because of the new towers at River Landing which are adding a huge amount of space and attracting tenants from older buildings. But that’s still too high, and the reasons why that would fill at least two whole columns, so I’ll leave it at that for now.

It’s a cylinder that doesn’t shoot, but there are generally strong economic indicators. Given rising interest rates and a lack of residential selection, will the economy become a lagging force in the housing market?

I wonder if the usual spring love of property will become a fall passion this year.

Joanne Paulson is a freelance writer and journalist from Saskatoon who has covered real estate on and off for over 25 years. Do you have a fascinating real estate story to share? Contact us at [email protected]

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