Regina Homes & Condos For Sale|Regina Real Estate 

 

Really quick, one minute market update for Regina, Saskatchewan and surrounding areas.

 

Quick February 2018 market update for Regina and area  | End of February we had 1255 Active Listings in Regina ⬆️ +14% | 1786 Active Listings Regina & surrounding areas ⬆️ +5.8% | 153 Sales in February in Regina ⬆️ 9.4% | HPI Benchmark Price is $278,700...
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According to the Association of Regina Realtors, the number of residential properties for sale in Regina has increased 20 per cent compared to the same time last year, yet prices remain stable. 


At the end of July, there were 1,512 residential properties for sale compared to 1,263 listings in July 2016. 


The composite residential price — which the association says is a more accurate measurement than an average or median price — is $306,800. This number is up 3.6 per cent compared to last years price of $296,200.


Rob Reynar, manager of operations and member services with the Association of Regina Realtors, said normally when there is an increase in listings, prices tend to drop, but Regina hasn’t seen that happen yet. 


He said the fact that 28 per cent of the active listings are condominium properties may have something to do with it.


“You could be looking at a little bit of a subset of a market that might be holding pricing where it is,” said Reynar. “Maybe there isn’t as much demand for condo(s) — there’s an oversupply of condo(s) — but maybe there’s a balanced supply of other types of residential properties.”


He said of the approximately 1,500 listings, 430 of those are condominiums and pricing for apartment style condos has gone down over the past three years.

That leaves approximately 1,100 other types of residential properties like single-dwelling homes, which he said is not an oversupply for a city that has grown like Regina has over the years.


“This pattern has been going on for several years now. Slightly fewer homes trading hands at slightly higher prices. And I think it’s probably a really positive trend under the circumstances,” said Doug Elliott of Sask Trends Monitor, a monthly statistical newsletter.


He said the alternative is a crash or a boom, of which we want neither. 

Elliott said the current trend shows a maturing — or a levelling out — of the housing market since the boom that occurred in the mid-2000’s.


“Our housing prices were so low and the population was growing and a whole bunch of people (were) moving into this province. So the price of housing effectively doubled, the volume of sales increased dramatically,” said Elliott.


As the market stands right now, Reynar said it may be leaning slightly in favour of

buyers, but not by much. 


“Right now we’re cautioning sellers to say ‘Hey. Be aware of your pricing. There are more listings than we have seen in the past,’ ” said Reynar. “But that’s where more analysis is needed because maybe a lot of those are condominium properties and those other residential types can still command what they want.”


Elliott said he has been expecting Regina’s economy to slow because of the latest provincial budget — the effects of which will be in the market by now. Between the high number of civil servants and public-sector employees in the city and agriculture not doing well in the area compared to the rest of the province, he said Regina can expect to have a bad year. 


“It doesn’t seem to have affected sales yet, but it may have prompted a number of people to put their houses on the market,” said Elliott. “(People) may be considering a move or considering buying something cheaper.”

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Just before the market turned, the house across the street from this Toronto property sold over asking in a week. But this one listed a few weeks later still waits for a buyer.

 

Quite fairly, the many Canadians — and foreign investors — who have been making a killing in the country's crazy property market don't want the party to be over.

As the Canadian Real Estate Association releases its latest figures on house prices today, showing the average Canadian home was worth just over $500,000 last month, it will be harder than ever for the rest of us to be certain if either the reassurances or the warnings from industry experts can be trusted.

The latest figures show average home prices have declined by about 10 per cent since April, and people in the real estate industry are fond of calling slowdowns like that a "soft landing."

More dire terms are used only if it's determined that government interference ends up killing the goose that laid the golden egg.

Brave face

But whether you are a prospective buyer, a prospective seller, or someone not planning to play in the property market at all it may be wise to take any such comments with a grain of salt.

There is nothing wrong with putting a brave face on things, but rational people realize it had to end.

It is unhealthy for the price of something as essential to daily life as housing to be rising 30 per cent a year, as it was in southern Ontario earlier this year, while Canadian wages remain flat. That graphic relationship was tweeted out last week by Hilliard MacBeth, author of When the Bubble Bursts.

 

MacBeth quotes research that shows following a property bubble, a soft landing just never happens. But there are also reasons why his worst case, a resulting financial crisis, is altogether too gloomy.

Purveyors of the soft landing argument will point to the fact that house prices have continued to rise in many markets despite the recent federal and provincial rules intended to cool overheated house prices.

Not counting new condos

In the midst of those reassurances some of the same people who have pronounced a soft landing asked the government last week to roll back planned banking regulations that they fear, with rising rates, will cool the property market.

The real estate industry's own statistics indicate the market has turned. But accentuating numbers from the entire year showing prices still rising seems misleading for those thinking of getting into the market.

Because that is who the reassurances are meant for. Evidently few young couples will want to buy a condo if they think prices are about to drop like a stone. That would mean fewer mortgages for banks, fewer real estate fees for agents.

 

Could the market fall further? Absolutely. Today's CREA numbers only count resale properties that are actually sold. New condos are under the radar. The same with low bids that are not accepted.

Even that growing inventory of unsold houses is likely an underestimate. About a month ago a neighbour put her house on the market but after 10 days without a nibble, the sign came down.

Time to get rich 

Whether listed or not, that weight of unsold properties is bound to accumulate until people who really need to sell will accept an offer, even if it is below the price they expected.

But that does not mean property prices will plunge. Nice houses and condos in prime locations are still selling. It is just that the froth is coming off the market.

And it's about time.

When CBC business reporter Jeannie Lee saw and photographed the subway poster below it reminded her of a previous mania for day trading that ended badly.

 

"'Everybody can get rich buying real estate,' it seemed to say," she says of the poster that advises you to "Get pumped!"

As interest rates rise and the increase in the value of investment properties slows or stops or the value even falls, buying up condos to rent using borrowed cash may no longer be worth getting pumped about.

Canada's population continues to grow and people will continue to need someplace to live.

While property speculators may be disappointed, building houses for people who need them will remain a money-making proposition. There were lots of condos being built when they sold for $100,000 less.

More than speculation

The inflation figures tell us that the costs of lumber and steel beams and stucco and the labour to stick them all together have stayed nearly the same. It is the price of the land and the finished product that has gone crazy.

A healthy economy is about more than houses and it is about more than speculation.

In some ways real estate has been a bit like the energy sector in the oil-producing areas of the country. It has swallowed up too big a share of the economy, in 2016 reaching 50 per cent of GDP growth.

If speculating in real estate earns you a sure 30 per cent, the risk of investing in building an export business, for example, just isn't so attractive.

The real estate sector needs an adjustment period. Like oil and gas, the industry will likely have to learn how to operate more efficiently.

If property prices fall, those forced to sell will suffer. Recent buyers who have overextended themselves will feel the squeeze of higher rates.

But almost everyone knew this day had to come sometime.

With luck it comes at a time when Canada's industrial economy is showing signs of vigour as it joins Europe and the United States in a return to slow if sustained growth.

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The cost of homes in Regina may be about to fall.

Housing sales in Regina were down in the month of June. Meanwhile, listings were at a 10-year high.

"That means there's excess supply hanging around — not enough demand," said University of British Columbia business professor Thomas Davidoff.

"Usually, that is a precursor to a decline in prices."

A set of conflicting numbers have been reported on just how much sales have slowed in Regina.

In a July 5 press release, the Association of Regina Realtors reported a 14 per cent decrease in Regina city proper for June 2017 compared with June of last year.

On July 17, the Canadian Real Estate Association reported Regina sales to be down 32 per cent.

The difference in these numbers matters because the more sales are down — when coupled with a glut of listings — the more likely a price drop is on the way, Davidoff said.

Geography and reporting

The reason for the discrepancy between the two figures, and how to avoid a similar issue in the future, is something the organizations will be discussing come month end, said Rob Reynar, who works for the Regina association.

The figures are not normally so different, but June looks to have been the "perfect storm" regarding variations in reporting methods, he said.

"It's likely a question about what's been included," said Pierre Leduc, spokesperson for the national association.

The national association receives its data from from the Regina association, he said. But it reports figures that properly reflect what's known as the census metropolitan area. Regina has never used those corrected figures in its own reporting, Reynar said.

Sold versus 'sold'

As well, the size of the discrepancy could be one of timing, said Reynar.

Regina uses a "system sold date," Reynar said, which is a timestamp that indicates when a listing moves from an active status to a sold status.

The national association uses what's called a "sell date": a manually entered date that can fluctuate "reasonably a couple of weeks," he said.

This means some sales that happen in a given month may not be reported until the following month, depending on the date used, he said.

"We're both talking about fruit: one of us is talking about oranges, one of

us is talking about apples, and sometimes that gets confusing."

Regina has been using the same reporting method for about three decades, Reynar said.

"It's just a legacy issue; it's the way we've always reported data."

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Aaron Habicht
Cell:1-306-536-2454
Sutton Group - Results Realty
3904 B Gordon Road
Regina, SK
S4S 6Y3 CA
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