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EASING SALES HELPING SHIFT MARKET TOWARD MORE BALANCED CONDITIONS
August 04, 2022
For immediate release:
July sales eased to 1,439 units reflecting a year-over-year decline of nine per cent contributing to the year-to-date decline of nearly 10 per cent. While sales have eased, last year was a record year, and with year-to-date sales just shy of 10,000 units, levels are still well above long term averages for the province.
New listings trended down from levels seen over the past few months and last year’s levels. Nonetheless, the pullback in sales has outpaced the decline in new listings supporting a shift toward more balanced conditions. This also caused inventory levels to continue to trend up for the lows recorded earlier in the year. While inventories pushed up to 7,142 units, levels are still nearly 11 per cent lower than what was available in the market last year.
“As expected, gains in lending rates are having some cooling impacts on the housing market causing consumers to seek out more affordable options. The challenge will be product availability in the lower price ranges of the market. Supply levels are improving compared to earlier in the year, however, the year-over-year decline in inventory has been driven by homes priced below $400,000,” comments Chris Guérette, CEO of Saskatchewan REALTORS® Association.
The recent shifts help push the months of supply up to nearly five months, reflecting far more balanced conditions compared to what was experienced over the past four months. While conditions are not as tight as they have been, with less than five months of supply, the market is still experiencing the tightest July conditions since 2009.
Relatively tight conditions are supporting further price gains in the province at a time when many cities in Canada are seeing some retraction of prices. In July, the benchmark price reached $335,100, slightly higher than the previous month and over five per cent higher than levels recorded in July 2021.
“Moving forward, further rate increases are expected as concerns over inflation persist in the market. This will continue to weigh on housing markets across the country,” said Guérette. “However, markets like Saskatchewan are expected to fare better than some of the larger centers in the country as they never experienced the same level of price growth throughout the pandemic.”
Sales activity in July eased across most regions in the province contributing to the year-over-year decline in sales reported. However, on a year-to-date basis, every region continues to see sales activity that is either consistent or far stronger than long term trends.
Inventory levels trended up in July over previous months, but every region still faced inventory levels that were lower than the previous year and long-term averages. Overall, most regional markets are starting to shift away from the exceptionally tight market conditions seen earlier in the year. However, most regional markets still face conditions that are tighter this July then they were last year. The most notable exceptions in July were Prince Albert and Yorkton, which recorded year-over-year gains in the months of supply as the decline in sales outpaced the decline in inventories.
Despite slower sales across most of the main centers in Saskatchewan, prices still trended up relative to last month in many of the larger centers in the province. The monthly gains in Saskatoon, Regina, Moose Jaw, Prince Alberta, Swift Current and Estevan were enough to offset pullbacks in other areas supporting the provincial monthly gain. Despite some monthly shifts, prices in all centers except Yorkton remain higher than last year’s levels, with the largest year-over-year gains occurring in Melville.
City of Saskatoon
Sales in Saskatoon trended down again this month contributing to the year-to-date decline of nearly 11 per cent. While sales have eased, that was relative to record high levels and with over 3,000 sales so far this year, levels are still over 20 per cent higher than long term trends for the city. Easing sales were also met with a pullback in new listings preventing any significant shift in inventory levels and keeping the months of supply relatively tight with less than three months of supply.
The persistently tight market conditions continue to weigh on home prices. In July, the benchmark price reached $383,800 nearly one per cent higher than last month and over six per cent higher than price levels reported last year. Moving forward, higher lending rates are expected to continue to weigh on housing demand. However, given the low level of inventories in this market, it will take time for conditions to return to more balanced levels.
City of Regina
July sales remained relatively strong in the city, supporting year-to-date sales of 2,379, a one per cent gain over last year’s record pace. At the same time, new listings did ease compared to the previous year, but it was not enough to cause any significant shift in inventory levels which remained similar to last month and over 13 per cent lower than last years levels.
When considering the sales and inventory in the market, the months of supply remained above three months in July, still low relative to historical standards and last years levels, but an improvement over the levels seen earlier this year. The relatively low months of supply continued to support some modest upward pressure on homes prices, but at rates slower than what was experienced in the early spring. As of July, the benchmark price reached $330,600, slightly higher than last month and nearly four per cent higher than levels reported in July 2021.
For more information:
Chief Executive Officer
Saskatchewan REALTORS® Association