COVID-19 has had significant economic impact across all sectors of the economy. Despite those challenges, the Saskatchewan real estate market has been relatively resilient to date.
While Q1 new listings and average prices were down 4.4% and 0.2% respectively over last year, Q1 sales were up 7.0%. The true impact of the pandemic, however, was not going to begin to be felt until April, and although activity was down, it was not down as much as anticipated.
Across the province, new listings were down 48.1% from April of last year while sales were down 45.1%. This contrasts significantly from the SARS pandemic which saw transactions in some markets fall up to 72% and cease completely during COVID-19 in certain markets. Average home prices in April fell 3.2% year-over-year which is consistent with the modest price decline experienced in other markets affected by pandemics.
Evidence from prior pandemics suggest that transaction volumes return to normal quite quickly once physical distancing measures are relaxed. The province is just beginning to re-open the economy and we anticipate that “the real estate industry in Saskatchewan will likely emerge from this shutdown with only a few cuts and scrapes,” said Saskatchewan REALTORS® Association CEO Jason Yochim.
Home sales produce approximately $54,000 in additional spinoff spending across multiple sectors of the economy. Reduced restrictions on the home buying process have the potential to boost employment and help the provincial economy to recover and offset some losses in other areas of the economy.
“The number of employment opportunities and essential economic activities that are created when a home is bought or sold is significant,” said Yochim. “Sales that don’t occur during this pandemic will be recovered once the province has opened up again.”
Saskatchewan REALTORS® have taken every action possible to protect public safety concerning COVID-19 and recognized early on that business could not carry on as usual. The industry has worked hard to develop and provide a significant amount of virtual resources for REALTORS® as well as buyers and sellers which has proved to be invaluable while practicing social distancing.
Sales in Saskatoon were down 43.9%, going from 380 in April 2019 to 213 in April 2020, and down 44.9% in the overall region, going from 514 to 283. In Saskatoon, sales were 34.3% below the 5-year average (and 40.5% below the 10-year average), while in the larger region, sales were 35.1% below the 5-year average (and 42.9% below the 10-year average). Year-to-Date (YTD) sales in Saskatoon fell 10.8% over last year, dropping from 1,048 to 935, while YTD sales in the larger region also fell 10.9%, going from 1,422 to 1,267.
Sales volume was down 44.2% in the city, going from $129.6M to $72.4M in 2020 (35.6% below the 5-year average, and 42.9% below the 10-year average). YTD sales volume in the city was $312.2M, a decrease of 9.0% from last year. In the region, sales volume was down 44.2%, going from $166.0M to $92.7M (35.4% below the 5-year average and 42.7% below the 10-year average). YTD sales volume also fell 9.6% in the region, going from $443.7M in 2019 to $401.3M in 2020.
The number of new listings in April 2020 fell from the number last year as well. In Saskatoon, new listings fell 36.7%, going from 774 to 490 (36.1% below the 5-year average and 37.5% below the 10-year average), while in the region the situation was even worse, with new listings falling 43.6% from 1,201 last year to 677 this year. Active listings also fell 17.9% in Saskatoon (down from 1,781 to 1,463) and 16.4% in the region (down from 3,240 to 2,708).
The sales to listing ratio was 43.5% in Saskatoon and 41.8% in the region suggesting somewhat balanced market conditions in the area.
Homes in Saskatoon stayed on the market an average of 56 days in April—marking no change from 56 days last year (but still slightly above the 5-year average of 52 days and the 10-year average of 44). Homes in the region stayed on the market somewhat longer than homes in the city at 67 days on average in 2020, up modestly from an average of 65 days last year.
Median home prices in Saskatoon went from $332,000 to $320,000 (a decrease of 3.6%) and were approximately 1.8% below the 5-year and 2.4% below the 10-year average median price. The MLS® Home Price Index (HPI)—a more accurate measure of house price trends—was up 2.4% from $302,200 to $305,600. Median home prices in the region also fell 1.2%, going from $313,750 to $309,900 which is 2.1% below the 5-year and 2.1% below the 10-year average median price.
~ May 2020 SRA News Release
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