On the heels of CMHC announcing it was changing some of its underwriting policies, Genworth, a private insurer has confirmed that it will not follow suit. Genworth feels that measures that are already in place will keep them withing their risk tolerance.
Yesterday, CMHC announced changes to its mortgage insurance underwriting criteria.
Effective July 1st:
- The maximum housing cost to income ratio drops from 39 to 35%
- The maximum total debt and housing cost to income ratio drops from 44 to 42%
- The minimum credit score rises from 600 to 680 for at least one borrower
- Borrowed down payments will no longer be accepted
Note, these are CMHC decisions and not from the Ministry of Finance, so the private insurers Genworth and Canada Guaranty will not be mandated to change their underwriting. Early indication is that these private insurers will not follow with these changes, but we are waiting for a response from them directly.
I will keep you posted when we know more.
Interest rates are fantastic right now, with good mortgages from good lenders in the range of 2.29% on a 5 year fixed. Variables are starting to creep below the 2% threshold.
Saskatoon Sales in Saskatoon were down 22.7%, going from 422 in May 2019 to 326 in May 2020, and down 14.0% in the overall region, going from 515 to 443. In Saskatoon, sales were 15.5% below the 5-year average (and 21.6% below the 10-year average), while in the larger region, sales were 14.3% below the 5-year average (and 22.3% below the 10-year average). Year-to-Date (YTD) sales in Saskatoon fell 14.2% over last year, decreasing from 1,470 to 1,261, while YTD sales in the larger region fell 10.8%, going from 1,843 to 1,644.
Sales volume was down 16.7% in the city, going from $140.6M to $117.1M in 2020 (12.4% below the 5-year average, and 18.7% below the 10-year average). YTD sales volume in the city was $429.3M, a decrease of 11.2% from last year. In the region, sales volume was down 9.1%, going from $578.0M to $525.6M (13.8% below the 5year average and 21.7% below the 10-year average). YTD sales volume decreased 9.1% in the region, falling from $578.0M in 2019 to $525.6M in 2020.
In Saskatoon, the number of new listings in May 2020 fell 17.0%, going from 911 to 756 (18.1% below the 5-year average and 16.2% below the 10-year average), while in the region, new listings fell 14.2% from 1,253 last year to 1,075 this year (19.7% below the 5-year average and 19.1% below the 10-year average). YTD new listings in the city fell 15.6%, going from 3,420 to 2,885, while in the larger region, the number of new listings to date fell 17.4%, going from 4,735 to 3,913. Active listings fell 20.1% in Saskatoon (down from 1,944 to 1,553) and fell 21.2% in the region (down from 3,254 to 2,564).
Inventory in Saskatoon stood at 5 (which is 3.4% above the level last year and 7.8% below the 5-year average), while the sales to listing ratio was 43.1%, suggesting balanced market conditions. Inventory in the larger region stood at 6 (which is 8.4% below the level last year and 11.4% below the 5-year average), while the sales to listing ratio was 41.2%, suggesting balanced market conditions.
Homes in Saskatoon stayed on the market an average of 48 days in May—up 2.1% from 47 days last year (and above the 5-year average of 46 days and above the 10-year average of 40 days). Homes in the region stayed on the market longer than homes in the city at 60 days on average in 2020, but also up from an average of 54 days last year (and 11.1% above the 5-year average).
Median home prices in Saskatoon went from $326,000 to $338,000 (an increase of 3.7%) and were approximately 1.7% above the 5-year and 1.9% above the 10-year average median price. The MLS® Home Price Index (HPI)—a more accurate measure of house price trends—is up 2.2% from $303,400 to $306,500. Year-to-date, the median home price in Saskatoon was $326,250 which is 1.0% above the $323,120 price from the same time last year. Median home prices in the region went from $312,500 to $307,000 (a decrease of 1.8%) and were approximately 1.8% below the 5-year and 1.9% below the 10-year average median price. Year-to-date, the median home price in the region was $305,700 which is 2.1% above the $299,280 price from the same time last year.
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.
Sales in Saskatoon were up 6.2%, going from 258 in March 2019 to 274 in March 2020, and up 7.2% in the overall region, going from 346 to 371. In both Saskatoon and the region, sales were less than 2.0% under the 5-year average while they were more than 10% below the 10-year average. Year-to-Date (YTD) sales in Saskatoon rose 8.2% over last year, increasing from 668 to 723, while YTD sales in the larger region also increased 8.8%, going from 891 to 969.
Sales volume was up 16.9% in the city, going from $81.4M to $95.1M in 2020 (1.3% above the 5-year average). YTD sales volume in the city was $240.2M, an increase of 12.6% from last year. In the region, sales volume was up 16.2%, going from $105.9M to $123.1M (1.2% above the 5-year average). YTD sales volume also increased 11.3% in the region, rising from $274.6M in 2019 to $305.7M in 2020.
Although total sales and sales volume were up, the number of new listings in March 2020 fell significantly from the number last year. In Saskatoon, new listings fell 14.2%, going from 702 to 602 (over 17.0% below the 5- and 10-year averages), while in the region the situation was even worse, with new listings falling 19.5% from 1,037 last year to 835 this year. Active listings also fell 9.9% in Saskatoon (down from 1,611 to 1,452) and 7.8% in the region (down from 2,864 to 2,641).
The sales to listing ratio was 45.5% in Saskatoon and 44.4% in the region suggesting somewhat balanced market conditions in the area.
Homes in Saskatoon stayed on the market an average of 55 days in March—down a modest 3.5% from 57 days last year (but still slightly above the 5-year average of 54 days). Homes in the region stayed on the market somewhat longer than homes in the city at 66 days on average in 2020, but also down from an average of 68 days last year.
Average home prices in Saskatoon went from $316,737 to $347,189 (an increase of 9.6%) and were approximately 3.0% above the 5- and 10-year average price. The MLS® Home Price Index (HPI)—a more accurate measure of house price trends—is down 0.3% from $303,200 to $302,200. Average home prices in the region also increased 8.4%, going from $306,161 to $331,793, which is also approximately 3.0% above historical averages.
Saskatoon and region continued to show growth in the residential real estate market. Sales of 230 in the city were up 9% from 211 in February 2019, and the region saw sales grow 11% from 283 last February to 314. Sales were above the 5-year average of 295, but still below the 10-year average of 338. Year to date (YTD), sales were up over last year; 9% in the city, from 412 to 449, and 8.6% in the full region from 556 to 604.
Sales dollar volume was also up. In the city there was a 3.2% increase of $73.7M over last February, and in the region, last month’s $93.5M sales were up 7.4% over 2019’s $87.1M. YTD sales dollar volume was up 10% in the city to $145.1M and up 7.6% in the region to $183.7M.
The number of new listings decreased in both the city, down 2.7% from 481 to 468, and in the region, down 3.2% from 709 to 686. The 2,588 active listings in the region were down from 2,699 in 2019 and the 5-year average of 2,781, however still above the 10-year average of 2,494.
The sales to listing ratio in Saskatoon is 49%, and 46% in the region. Balanced market conditions exist in the 40-60% range, while below 40% is considered to favour buyer’s, and over 60% suggests a seller’s market.
Homes were on the market an average of 82.9 days in the region, up from 69.4 days at the same time last year, and 73.7 days in the city, up from 58.5.
The average home price in the city was $320,249, down 5.3% from $338,268 at this time in 2019. The MLS® Home Price Index (HPI), a more accurate measure of housing price trends, however, is up 1.1% from $282,500 last year to $285,600. In the region, the average home price was down 3.2% to $297,724.
“We see the trend of increased sales and decreased listings continue in Saskatoon and region,” says Jason Yochim, CEO of the Saskatchewan REALTORS® Association (SRA). “If this continues, we anticipate seeing prices increase. Upcoming changes to the mortgage stress test rules this April will likely start to positively affect our residential markets, as well, and we should see more potential home buyers qualifying for mortgages and subsequently entering the market.”
The Saskatoon market started the year off on a positive note. Sales in the city were up 9% to 219 from 201 in 2019, and up 6.2% in the region with 290 sales over last year’s 273. This is well above the 5-year average of 265 and 10-year average of 278.
Sales dollar volume is also up – 18% in the city to $71.5M and 7.9% in the region to $90.2M.
At the same time, listings increased only slightly over last year with 811 new January listings in the region up 3% from 787 in 2019, bringing the total number of active listings to 2520. 571 listings in the city are up 2.7% from 556 for a total of 1372 active listings.
The ratio of sales to new listings for the month was 36% in the region and 38% in Saskatoon, suggesting a slight lean towards a buyer’s market. Balanced market conditions are generally in the 40-60% range – below 40% is considered to be more of a buyer’s market, and above 60% is considered to be a market favouring sellers.
Homes are spending an average of 76.6 days on the market in the region, down 4.5% from 80.2 last year and 67.5 days in the city up 6.6% from 2019’s 63.3.
The average home price in the city is $326,278, up 8.3% from 2019, while the region average price is $311,127 – up 1.5%. The MLS® Home Price Index (HPI), a more accurate measure of housing price trends, reported a composite benchmark price of $286,500 – down only $300 or 0.1% from 2019.
“The increased sales combined with lower inventories and lower than average home prices are starting to cause a price shift. We’ve seen prices steadily decreasing for some time now – with average prices up last month and MLS® HPI prices virtually on par with last year we’ll be watching closely to see if this trend continues,” says Jason Yochim, CEO of the Saskatchewan REALTORS® Association (SRA).
What’s Your Home Actually Worth?
Discover What Buyers Will Pay in Today’s Market
It’s easy to look up how much money you have in your savings account or the real-time value of your stock investments. But determining the dollar value of a home is trickier.
As a seller, knowing your home’s worth helps you price it correctly when you put it up for sale. If you price it too high, it may sit on the market. But price it too low and you may be losing out on a good chunk of money (nobody wants that!). For buyers, it’s important to know a home’s worth before you make an offer. You want your offer to be competitive, but you don’t want to overpay for the property.
Even if you’re not a buyer or seller right now, as a current homeowner you might just be curious about the value of your home. Keeping track of your home’s worth year over year helps you understand the trends in your market. So when you are ready to sell, you can take advantage of a good window of opportunity.
The good news is, a trained real estate agent—who understands the nuances of your particular neighbourhood—can determine the true market value of your property … and at no cost to you!
THE THREE TYPES OF HOME VALUES
When you start the process of buying or selling a home, you’ll frequently hear the words appraised value, assessed value, and true market value. It’s important to know the difference between each one so you can make better, informed decisions.
A professional appraiser is in charge of determining the appraised value of a home. These appraisals are typically required by a lender when a buyer is financing the property. And while the lender is the one requiring this information, the appraiser does not work for the lender. Your appraiser should be an objective, licensed professional who doesn’t have allegiance to the buyer, seller, or lender—no matter who is paying their fee.
The number the appraiser comes up with (the appraised value) assures the lender that the buyer is not overpaying for the property. For example, imagine a seller lists a home for $400,000. They reach a deal with the buyer to sell the home for $375,000. However, if an appraiser evaluates the property and determines that the appraised value is actually $325,000, then the lender will not lend for an amount higher than that appraised value of $325,000.
When figuring out this number, an appraiser will compare the property to similar homes in your neighbourhood, and they’ll evaluate factors such as location, square footage, appliances, upgrades, improvements, and the interior and exterior of the home.
The assessed value of a home is determined by your local municipal property assessor. This value matters when your city calculates property taxes each year. The lower your assessed value, the less property tax you’ll pay.
To come up with this value, your assessor will evaluate what comparable homes in the neighbourhood have sold for, the size of your home, age, overall condition, and any improvements or upgrades that have been made. However, most assessors don’t have full access to your home, so their information is limited.
True Market Value
True market value is established by your real estate agent. It basically refers to the value that a buyer is willing to pay for the property. A good real estate agent is an expert in determining true market value because they have hands-on experience buying and selling properties. They understand the mindsets of buyers in your market and know what they’ll pay for a desirable house, townhouse, or condo.
As a seller, knowing your true market value is important because it helps you choose how much to list your property for. It can also help you decide if you want to make any improvements to your home before putting it on the market. Your agent can help you figure out which updates and upgrades will have the biggest impact on your true market value.
HOW AN AGENT FINDS YOUR HOME’S TRUE MARKET VALUE
So, how does an actual real estate agent determine true market value? They’ll start by doing a comparative market analysis (CMA). This means they’ll compare your home’s features to similar properties in your area. For the CMA, the agent looks at the below factors to influence their assessment of your home’s worth:
- Neighbourhood sales - Your agent will look at similar, recently sold homes in your neighbourhood to see what they sold for and what they have in common with your house.
- The exterior - What does your home look like from the outside? Your agent will factor in curb appeal, the style of the house, the front and backyard, and anything else that impacts how the house looks to everyone walking and driving by.
- The interior - This is everything inside the walls of the house. Square footage, number of bedrooms and bathrooms, appliances, and more all influence the overall market value.
- Age of the home - Whether you have a newer or older home affects the number your agent comes up with as part of their assessment.
- Style of the home - The style of your home is important because buyers in different markets have different tastes. If buyers prefer ranch-style homes and you have one, then your home may sell for a premium (aka more money!).
- Market trends - Because a local agent has so much experience in your market, they have their finger on the pulse of your area’s trends and know what buyers are willing to pay for a property like yours.
- Location, location, location - This one’s probably the most obvious. Your agent will think about how popular the area is, how safe it is, and what schools are like.
A computer algorithm simply can’t take all of these factors into account when calculating the value of your home. The reality is, nothing beats the accuracy of a real estate agent or professional appraiser when it comes to determining a home’s true market value.
YOUR AGENT IS THERE EVERY STEP OF THE WAY
Determining a home’s true market value is a real estate agent’s forte. If you’re a seller, your agent will help you find your home’s market value so you can list it at the right price.
For buyers, your agent will help you determine the value so you can come up with a fair offer. Your agent can also set up a personalized home search on the Multiple Listing Service (MLS) for you so you’ll receive emails of listings that meet your criteria. This will help you see what’s out there in your city and how properties are being priced.
Get a Complimentary Report With Your Home’s True Market Value
Curious about your home’s true market value? Call me to request a free, no-obligation Comparative Market Analysis to find out exactly how much your home is worth!