Flatlanders

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Nine days ago, 431 Buckwold Cove came on the market in a city seriously bereft of coves. Replete with a garage grafted on the front, stick tree in the front yard and giant vibrating hot tub in the back, it’s the poster house for suburban kitch. But for years now, this is what the overclass of Saskatoon has wanted.

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Meanwhile this pathetic blog has been peppered with comments from horny ‘Tooners about how real estate will stagger and stutter everywhere but in the prairie city, where (as I write this) it’s minus six with two inches of snow on the ground. Everybody, apparently, wants to move there. Right.

Actually it appears reality has arrived. The local real estate cartel was forced to announce some days ago that for the first time since 2010 sales tumbled in back-to-back months. “There are concerns in the market place that recent changes to mortgage rules would have a significant impact on the market however while this may be true in some Canadian markets, I believe the economic position and population growth of Saskatchewan mitigate this,” says a brave spokesguy. “Markets like Toronto and Vancouver have experienced unrealistic gains due to foreign investment and are now experiencing significant corrections. Unfortunately most economists paint the entire country with the same brush, if the real estate bubble is bursting in major Canadian markets it shouldn’t be assumed that it holds true for us.”

But it sure looks that way. As I’ve said a few times, every market is unique, but none is different. There will be no escaping the deflation of residential real estate. So sales in Saskatoon are down and listings are up. Shortly there will be a seven-month supply, which officially makes it a buyer’s market. But I wouldn’t be writing offers anytime soon.

The Buckwold Cove property is a case in point. Realtor Vaughan Krywicki has done all he to fete the fabulous features of this place (“…underground sprinklers with automatic timers in the front & back, as well drip system for trees & garden area, plus the yard lights are all on timers, as well the storage shed is wired and has lights inside…”), and now has opted for a so-called Dutch auction, reducing the asking by $1,000 a day.

“I’ve been watching the listing since I came across it on the 17th of October when the house was listed at $426,000,” says blog dog Steven. “Checked in a few days later to see if the price would really change. The price was still the same so I fired off an email to the realtor stating his listing was somewhat fraudulent since no price change had occurred. Today I decided to keep this realtor on his toes by checking it again. Price has dropped to $420,000, but it is 9 days later! So the price should be more like $417,000.

“I can’t do it myself, but this realtor needs to kept on his toes with adjusting that price daily. I think it’s very entertaining to see a daily price drop at a rate of a thousand per day.”

Well, Steve, you little Saskatoon Disturber, now young Vaughn will have an army of eyes on him for this listing, as we all watch to see when a greater fool buyer is flushed from the frozen tundra.

Why do we care about a market with just 235,000 people where wind chills of -60 were once recorded and the river flows the wrong way? We don’t. Other than The Sheepdogs, of course.  Plus real estate delusion — since this isolated city provides a great example of how people can bid up the price of homes simply by selling them to each other after watching house porn on Global News. Net population growth in the past year was less than 7,000 people and the average household income is 30% lower than that of Calgary.

Yes, Saskatchewan has oil, gas, potash and uranium. The price of farmland swelled massively in recent years. Speculation’s rampant, and not a week goes by that someone doesn’t email me asking if they should buy a quarter section. (No.) Others think grabbing a piece of the bald prairie is a genius move, given what’s happening to food prices. I hope they’ve heard of climate change.

We spend a lot of time on this site talking about bubbles in the GTA and the Lower Mainland, where population and media attention is focused. But the slaughter of the innocents in tertiary markets like Saskatoon could eclipse any bloodletting in the Big Smoke. After all, there are only so many available buyers in a small city floating in a sea of flat emptiness.

By the way, what would you pay for this house?

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avatarGarth Turner - The Greater Fool posted Friday, October 26th, 2012.

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