Friday, March 30, 2007

Friday Low-End Market Watch

Going to do it a bit different this week. Instead of calculating the sold above/sold below, we'll just note sales over list if any. We're no longer counting sales at list price as over as we've discovered there are many ways to make a place 'look' like it sold for asking price.

[criteria is suited, or suite potential, under $425K in SW, SE, Vic, Langford, ESQ]
Total houses: 83 (76); 7 new listings

Number sold: 51 (46); 5 above previous week

Sales over list price: 0

Average days on the market: (38)

Listings to sales ratio: 83/51 = 1.62 months inventory (76/46 = 1.65); slight decline in inventory

[criteria is 2 beds, at least 1 bath, under $250K in SW, SE, Vic, Langford, ESQ]
Total condos: 131 (122); 9 new listings, 4 less than last week

Number sold: 56 (48); 8 above previous week

Sales over list price: 0

Average days on the market: 30 (30)

Listings to sales ratio: 131/56 = 2.34 months inventory (122/48 = 2.54); slight decline

Our thoughts: starting to get concerned that the declining inventory (which could well be a miscalculation on my part) is becoming a trend in our price range. If it is a trend, the other indicators like rising prices and quicker sales aren't following suit. In fact, prices don't seem do be going up, there were multiple price changes, and no homes sold for above asking price this week.

I'm really looking forward to the March numbers coming out from VREB this next week. Should be interesting to see what trends, if any, have formed in the first 3 months of 2007. I would have thought that March would have shown significant action in listings, but it hasn't really in our segment. I'm also beginning to think our segment is too small to 'fit' into the greater market trends.

On a happy note, we found a new place to rent beginning in May. We don't have to sign a lease, we'll be paying about $1 per SF, which is on par with what we're paying now. We're going from a tiny two-bed to a larger 1 bed, both suites in houses. We anticipate a slight increase in monthly rent related charges (we expect our utility bill to be higher), but we'll get much more sun. Only downfall is it's a bit farther away from the centres of our current lives (work/school). And we were able to negotiate on the rent too. Not much, but still something.

We have decided to not buy at this point, but we're very happy that we don't have to sign a lease as we plan to keep that option open and, depending on market conditions, can see potential action on that front in the fall or next winter.

10 comments:

Anonymous said...

Congrats on your sensible decision to NOT buy just yet! You will eventually get exactly what you love , at an affordable price. Smart cookie! At least you don't have the stress of worrying about losing money or making ends meet. Best of luck

Vicguy said...

HHV,
Do you have total new listings or just tracking those you want as they come up ?
I feel there are alot of listings the last couple weeks from looking at the hot sheet.

roger,
my call is inventory up,sales flat and prices flat with a downtrend leaning.

With inflation numbers out of the US today it is more evident interest rates are not going down anytime soon and a chance of an increase. What a dilema for the FED with consumer sentiment down and inflation signs up. From commentary I saw today there are some other inflation numbers in the US still in the closet.

Was running some numbers thru the mortgage calculator today to remind me how insane this market is and cannot fathom anyone that stupid to be entering the market as a first time buyer with less than 50% down with an average wage. If rates go up a mere 2% then many on the fringes will not be able to afford a $400 per month hike and watch their house price go down with it.

Anonymous said...

Curious what people think of the Royal LePage 1st quarter market analysis that came out this week. It saw a "surprisingly strong start in 2007 with average house prices rising in all major (Canadian) markets surveyed".

However, Victoria showed growth below the national average compared to price increases over the same quarter as last year. But 9.2% for detached bungalows and 11.2% for condominiums doesn't seem to indicate a downturn just yet.

Vancouver was closer to the national average and still showing double digit growth in prices.

I think that the market is still nearing its peak but like any market, "perception" is still a big factor and I think that there is still a general "perception" amongst buyers/speculators that prices are still going to go up. At some point the prevailing "perception" will be that prices are dropping and then it will be "sell, sell, sell".

But I think now that a downturn is still a couple of months off.

Anonymous said...

this is the address for the Royal LePage article

http://www.royallepage.ca/CMSTemplates/AboutUs/Company/CompanyTemplate.aspx?id=1506

Roger said...

vicguy said

my call is inventory up,sales flat and prices flat with a downtrend leaning.

We are on the same page on this one. I made a calculation that shows the 3 month rolling average (Jan-Mar) is only up 3% from the same period last year.

I have been watching the new listings and they are really piling up. You saw over 50 there in one day and I have seen a number of days with at least 40.

I am also on a realtor list for price reductions. Quite a few arrive every day for Central Victoria, James Bay and Oak Bay. In the past a price reduction would trigger a sale but this is not happening as much as it used to. Some just sit there and then a little later I get another reduction on the same listing.

Some of these reductions are happening within 2 weeks of listing. I think some of the veteran agents have caught on and are advising their clients to get realistic if they want to sell.

If you look at the new listings a lot you will experience deja vu. Some of the agents are using the old trick of withdrawing a listing and then getting a new listing with the price a liitle lower.

Really looking forward to crunching the March numbers in my spreadsheet!!

Roger said...

anonymous said

Curious what people think of the Royal LePage 1st quarter market analysis that came out this week.

I read it and my first thought was how could they do a 1st quarter analysis before the end of March??

Sounds like they had all the positive spin pre-recorded!!

The numbers from all the boards for March won't be out until next week.

P.S. Why not use your initials or something instead of anonymous. We can't tell one anonymous from another :>)

Vicguy said...

"Some of these reductions are happening within 2 weeks of listing. I think some of the veteran agents have caught on and are advising their clients to get realistic if they want to sell."

That would be a real sign we are turning the other side of the peak when that happens in the spring time. Good agents know the affordability level has been maxed,and there are not many buyers who are not squeezing the stick when they sign on the dotted line.

I noticed another 28 listings since I last looked late this morning,they are addding up for sure.

Roger said...

vicguy said
I noticed another 28 listings since I last looked late this morning,they are addding up for sure

I have 48 so far today and I usually get a few more in the evening.

hhv said...

VG,

I only get email updates on the criteria listed in my 'market watch's' but i do check in with roger's hot sheet daily. My end of the market is much less active than the market in general... and since my end of the market is most 'affordable', it seems strange to me... but then again even I wouldn't buy the junk we're seeing at these prices, so...

FarFromHome said...

Hey, great new blog! I am overseas and anticipating a move home. I really appreciate all the comments and info! Thanks for keeping us in the loop, makes this little bear very happy to know what's going on and see signs of the coming POP! or "Phllllppppp", either way it's goin down baby. Keep up the good work!