There is no doubt about it that over the course of the last year, the COVID-19 pandemic has led to a booming Saskatchewan real estate market. A trend that has swept the nation has found a home in the province of Saskatchewan as well, leading to a seller’s market all around.
The global pandemic which hit Canadians hard in March 2020 and has continued to modify lifestyles for everyone, is still in full effect. Many workplaces have been forced to turn to remote working conditions, meaning a large portion of the population has been working at home for the last year.
Economic Analyst Chris Gbekorbu credits the pandemic with helping a boom in the real estate market across Canada. “With people being forced to work from home over the past year or so, we’ve really found that some of the homes we’ve had haven’t really been conducive to work from home,” said Gbekorbu. “A lot of people don’t have that dedicated office space, so they are looking for something that does provide that dedicated office space because they know they’re going to be working from home now, or possibly into the future.”
This new work-from-home reality has put buyers on the market looking for more space at an affordable price. However, in Saskatoon, Saskatchewan the demand certainly is overpowering the supply, a trend that is playing out in real estate markets across the country. Gbekorbu notes that supply is diminishing quickly, “We’re seeing inventories dry up as people keep buying. At the same time, the number of new listings continues to fall in several markets, suggesting that supply is shrinking.” This low supply is feeding the housing bubble and increasing prices at a quick rate as prospective buyers want to secure their property and not be outbid.
High Demand and Low Supply a Reality in Saskatoon Housing Market
Real estate activity has been on a steady upward trajectory in Saskatoon over the second half of 2020 and into the first few months of 2021. In February 2021, sales in Saskatoon increased from 230 in February 2020 to 352 – an increase of 53.0%. February 2021 sales not only outweighed sales from one year ago, but they also were 42.7% above the 5-year average and 35.1% above the 10-year average; indicating a strong seller’s market and high demand for Saskatoon.
A reality of having high demand and low supply is that housing prices will drastically increase due to bidding wars. In fact, housing prices inflated 10.1% from February 2020 to February 2021, meaning the MLS Home Price Index (HPI) saw an increase from $299,800 to $330,100 over that period.
Despite this increase in cost, houses are being sold quicker than can be recalled in recent memory. The city of Saskatoon saw the average time on the market for a house to be 43 days in February 2021. That same time 12 months ago, the average time on the market was 72 days; this is a decrease of 40.3%, a further indication that Saskatoon is sitting comfortably in a seller’s market. Upon closer look, it is evident that the entire region is experiencing the same real estate market boom as the Province’s largest city. The region as a whole saw a drastic decrease in time on the market of 28 days, from an average of 81 days last year to 53 days in 2021.
What to Expect in the Saskatoon Real Estate Market
As we head into the second quarter of 2021, and the spring and summer months, it is expected that the Saskatoon market will continue to soar and maintain a seller’s market. Low interest rates, more time being spent at home, and quick turnover from listing to being sold, are all impacting the market in drastic, unprecedented ways.
The upswing in the Saskatoon real estate market first began back in June 2020. Over the course of the past 8 months, the city has seen housing prices increase, time on the market drop, number of sales increase; setting recent records month after month. Saskatoon and Region Builders’ Association CEO Chris Guérette urges prospective buyers to take advantage of the low interest rates and the PST rebates for purchasing a home, “If you’ve never owned a home before, let’s remember, Saskatchewan has the highest population of millennials across the country.”
As the COVID-19 pandemic continues throughout Canada, it is expected that the Saskatoon Real Estate market will continue to move in the same direction throughout the summer months; meaning, now more than ever is the time to get in on the market.