SUPPLY LEVELS REMAIN LOW CAUSING CONTINUED PRICE INCREASES
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 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.
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.