Believe it or not

You really should read this. I know it's American, and I know it's different here, except it's not. Because it never has been. And likely never will be. Click here for a better view of above image rather than the image itself. Blogger was acting up tonight.

Bravery?

More of a question than a statement: if you're bearish on the RE market (we are, surprise, surprise) are you also bearish on the equity market (I am, she is indifferent). I'm not rushing to sell anything right now, but as VG pointed out in an earlier comment, some of the insiders are.

I watch my stocks fairly closely. It's easy 'cuz I only hold a couple outside of funds. When the insiders in those stocks start selling, I get a bit antsy. But not antsy enough to sell yet.

So here's the real question for today: if you don't own a house, but could, and are exercising bravery at not getting into the market despite crazy gains, because you believe a correction is coming soon, and coming hard, are you looking at the stock market with the same glasses on? I am. I'm trying to decide which segments may be recession proof, or at least not get hammered so hard. Financials? Oil and Gas? Mining? Tech Stocks? Pharmaceuticals? I don't know if anything is really recession proof.

WORDS that sell

If you follow politics or any other marketing-based hogwash closely enough you'll invariably notice that words tend to lose their meanings in short order. CondoHype has a whole blog dedicated to picking apart the Vancouver condo marketing paradigm. I know very little about the person behind the machine, but I can only assume there is a disgruntled writer/wordsmith in there somewhere.

This post is dedicated to the misconstrued meanings that have really come to the forefront during this last few months of crazy real estate marketing times. I truly believe that a year or two ago, homes did sell themselves. I remember being at a party where a good friend of mine announced he and his wife had just bought their first home. They paid $5K more than list on the advice of their realtor because it was the house for them and there were multiple offers in on the first day. Another mutual friend, a RE appraiser at the time, laughed at them. A deep belly, open in-your-face type of laugh. It wasn't pleasant to witness this. It was funny though when those two had the talk about how the owner made 90% in two years when he sold that house.

But those times are over. Very few places have multiple offers on opening day. There's a lot more choice now. So RE marketers have to get creative to convince potential buyers to come check out their wares. Fair enough.

In that light, We present our list of favourite words and their new meanings as told to use by those said RE marketing pros:

1. Open-Concept: My dad has open concept kitchen, dining room and living rooms. They total over 1000 SF. Now we see open concept used to describe one room that happens to serve three purposes, usually kitchen, living and dining. We used to call that small.
   
2. Penthouse: once reserved for the uber-rich, now to be had by the first time buyer. If you're old enough to remember that classic 70s/80s show that made the catch phrase "what chew talkin' 'bout, Willis?" standard playground speak, you'll remember what a penthouse suite should be: one that comes with a cook and a butler downtown and is bigger than your house in suburbia. Apparently penthouse now means top floor 800 SF condo on Balmoral.
   
3. Charming: can a house charm you? I know I've been in some houses that are attractive. Heck, I've even been in some condos that are well-appointed and nicely decorated. But doesn't charming require an interaction? Maybe the RE agent meant to say: "let me show you this property and I'll charm you into buying it"?
4. Character: I could be wrong, but I always thought character meant a property that was built at a time long ago, say turn of the century or so, that uses techniques and products that are simply not available or duplicated anymore. Apparently a character home/suite now means it has wood in it somewhere.
   
5. Harbour/Mountain Glimpses: I guess anyone in this town can make that claim. I mean you can pretty much stand on any property, on a clear day, and if the wind is blowing hard enough, and your neighbour's property leans far enough in said wind, there's a good chance you'll catch a glimpse of a harbour, or a mountain or maybe a tree. Whatever the case, it's a view, in a glimpse.
   
6. Luxury: My favourite over-used de-legitimized word. You pay for luxury. Luxury makes you feel luxurious. I've stayed in some nice hotels. I've worked in "luxury hotels". Luxury hotels have cornered the market in making people feel luxurious. Even the guests that aren't staying in the big rooms with the harbour views. How do they do this? By treating them the same as the guest who is staying in the penthouse harbour view suite complete with butler. OK, well almost the same treatment anyway. It seems as though developers have caught this train too. Seems if you use stainless appliances (it doesn't matter that they're Kenmore brand and not Wolfe), install wood floors (apparently laminate now counts as wood), paint in "modern" colours and actually use anything other than melamine as a counter top, you can claim the "luxury" descriptor for your property. Square footage, location and actual luxury items are irrelevant in this day and age. Apparently my generation has an issue with saving and obtaining luxury status later in years; we want it all, we want it now, and we want it in Quadra Village.

What are some of the words you've seen used and abused?

How's the Planning?

Victoria has a long-held and aptly-earned reputation of a community catering to the newly-wed and nearly-dead. In a recent (how?) Q&A published by the city, officials tried to dispel that "myth" with this response:

"Newly wed and nearly dead" no longer accurately describes our city. Slightly more than 43% of residents are single; the average age of all residents is 42.6 years.

If that truly is the case, are city planners and politicians making good choices when it comes to building housing for residents already here? Or are we building housing meant to attract the kind of residents we want to come here for the long-term sustainability of the city?

This city has some long-standing chronic issues that will not go away. Namely its fixation with homelessness and harm-reduction drug strategies. Granted, in the big scheme of things, these are relatively minor statistical issues with a ridiculously loud footprint. I do not mean to downplay the significance of these issues, I'm simply suggesting that the true number of individuals that these strategies serve is relatively small compared to the number of people who go under-served by the city to which they pay taxes to. Or more accurately, the city to which their landlords pay taxes to.

Victoria is fixated on density right now. Geographically, it is a relatively small parcel of land. And accurately too, they just aren't making any more of it. So buildings must go up and not out. Fair enough. But we do have height restrictions, and we should. We also have a fixation on urban dwellings and revitalizing the north end of downtown. As we also should. But are we building the right dwellings for the type of people we have here?

I think its important to assume that the old adage, if you build it they will come is patently false. The reality is people are attracted to living in Victoria. It is the mildest climate in Canada without question. We also have one of the lowest unemployment rates. But what kind of jobs are we offering? Or more importantly, how much are they paying? And are we actually building places for people who come here to work, or just people who come here to retire?

The city itself continues to publish this number as the average family income in Victoria: $56,179. It's a 2003 number that is lower than the provincial average and the CRD average. Let's assume that number has grown with inflation by about 2.5% per year. Now its just a few pennies over $60,000. That's average, not median too. And it includes those rich retirees that developers seem so fixated on.

Housing. Given the current costs, few people can afford more than a condo in Victoria. That's what they're building though, so we should be good right? Except there isn't a new condo development in Victoria available for under $300K. $60K does not a new condo buy. So these "average" people will have to rent. Good thing that Victoria doesn't approve any developments with rental restrictions anymore.

Again the city uses dated numbers, in this case 2004, for its publication. We'll factor rents went up with inflation: now that $750 for a 2-bed apartment is $787. I question this. I doubt very many people have this rent anymore. Rents are limited to 4% increase per year. My guess is most landlords in town, in this market run up have increased their rents to that limit, but much more if their suites became vacant in that time too, because there are no limits to vacant suite rental increases.

This town is not building housing for people here. It is building houses for people there. Where "there" is, is anyone's guess, because I don't think the city has a clue when they approve a development. Developers hire marketers, marketers figure out where to advertise, but in the end, it's the buyer that decides where "there" was, and no one else.

If this town wants sustainable growth, then it needs to address housing affordability issues. This means we need to densify, but it also means we need to demand developers drop the "luxury condo" bullshit and return to building the types of buildings that went up in the 70s and early 90s, minus the leaks. But until the buyers stop demanding the granite counter tops and gold-plated fixtures in their 485 SF condos, this trend will continue with death and taxes, and may only get worse and not better.

An Intriguing Dilemna; and a bit creepy

Received this email from a regular reader this week:

This past weekend, on Saturday, the house I rent had a showing. There are two of us that live here, me in the top, and a single 30-something woman in the suite below, and both of us were out at the time. The person who looked at the place, a single male, was quite enamored by the woman in the pictures that are scattered about the suite downstairs. He inquired with the agent if she was the one who lived here, and he said yes.

The next day the man came back on his own, came into our back yard, and left her flowers with a note saying something like ‘you are beautiful, I’d love to take you to dinner’. Neither of us know the man, and she's pretty thankful she was not here when he came by. Maybe he’s a freak, maybe not. I personally believe he must at least partially get his ideas about women from porno movies to think a woman would react positively to this. What kind of idiot thinks something like that is OK? It blows my mind.

While I’m a little weirded out that a stranger trespassed into my yard while I was away, she [is]pretty upset. She called the agent, reamed him out and he apologized. Neither she or I think that is enough. It’s my personal opinion that the agent should be at the very least severely reprimanded for giving out personal information about the tenant to one of his clients. If I was his boss, I’d fire him, frankly. I realize he just didn’t think and he meant no harm at all, he just wants to sell the house. Should she cut the agent a break and just forget it?

All we know for sure is that the listing agent confirmed that it was her in the pictures. We don’t know if the flower guy was told or just guessed that the woman is single and lives alone, or if her relationship status didn't matter to him. I honestly can’t think of how he could confidently guess that she is single.

My question is this… should the agent’s boss be made aware of this in a formal letter of complaint? She is incensed, and I’m fully supporting her. It would be quite easy to let this go in some ways, and she gets enough strange men that make inappropriate advances that I suspect she will let it go as well. However I really do believe the agent acted in a very unprofessional and disrespectful manner.

Talked to Ms. HHV about this. She was a bit weirded out by the whole thing, although in her beautiful, rational mind pointed out several interesting things:

1. The agent obviously doesn't have much in the way of common sense nor "street smarts". Regardless of whether or not he is a listing or buying agent, he should have "seen" what was going on by these questions and protected the resident. That said, he can't be held responsible for the actions of the man.
2. The listing agent (not sure if it's the same) should have spoken to all tenants in the rental house and suggested that personal effects be put away during showings. Most agents want this done for selling purposes. But in a rental home like this, it should have been strongly suggested for this very reason. It's to protect the tenant first and foremost.
3. The Guy. There's no excusing his behaviour. Someone did not teach him what is an appropriate way to approach someone. This is definitely not an appropriate way of introducing one's self. We both agreed that if he was really that "smitten" a more appropriate way of "introducing" himself would have been to patiently wait outside the property... even that is stalking though and would be creepy regardless.

We think the real issue is not between the woman tenant and the guy. Hopefully she never is forced into a face-to-face confrontation. The real issue is between the landlord, tenant and listing agent. The listing agent did (we assume) not due his/her due diligence in protecting the tenant, and by extension of that relationship nor did the landlord.

The agent in question is an obvious dolt; let's hope that survival of the fittest in the RE marketing business will swallow this one up soon. Will a formal letter of complaint result in much? We highly doubt it will result in much other than a talking to, but more likely a gentle ribbing at the water cooler.

Over to you dear readers...

Comment Spotlight

Wise words from Roger:

Folks I want to prepare you for the VREB numbers to be released later this week. Last month the average price went up to 568K from 542K and the median price stayed flat at 489K. Lots of readers on this blog were discouraged with the average price jump and discounted the flat median price. You need to look at price trends to see what is going to happen.

When the May numbers are released I believe the average price will be slightly lower at 560K and the median will remain around 489K. This is significant for patient trend watchers.

If you have been following the stats on Needs Analysis you will have seen a sharp increase in the 3 month rolling average of Greater Vitoria average and median prices. The 6 month averages have been much more gradual. If my May predictions are correct you will see a drop in the 3 month rolling average and a flattening of the 6 month averages. We will be at the market peak and heading into the summer sales season with rising inventory and fewer sales (see extrapolated graphs for details).

I know many people want a crash now but it won't happen until the media wakes up and smells the coffee. Many agents are already awake, sipping coffee and recommending price reductions. By the fall our old friend Ken Lowball will be back in town.

Just in case you were wondering

Just doing some late-evening blog reading and happened upon this post over at Langley financial planning... anyway, it got me thinking, what exactly is the ratio of US numbers to Canadian numbers when we talk about housing-related market info between there and here?

We know that Canada exports 86% of its total to the US. So when a mill closes in Northern BC, should we in Victoria give a damn? The island has lost mills many times over and housing prices have continued to skyrocket and mill workers have gone on to find alternative work. If you live anywhere near Northeast BC, you should have no trouble finding work regardless of your skills what with the oil and gas boom going on up there.

But is this just the start of a much larger trend?

Canfor said the cutbacks are due to a market downturn spurred by falling housing starts in the United States.

The company's interim president and CEO, James Shepard, said Tuesday he had been directed by the company's board to cut costs "and position the company to weather this market downturn, which is the worst this industry has seen in decades." emphasis mine

Let's play with some numbers shall we? US housing starts as of January 1, 2007 were just over 1.4 Million. That number is the lowest it has been since 1995. In Canada, where it is different, we're at 248,100 in January. That number is Canada-wide and represents 17% (roughly) of the US total. Consider the two numbers: exports at 86% and our housing starts at 17%; eerily similar gap there, don't cha think?

How about population then? US = 301,919,275 Canada = 32,917,579 or in % = 11%. Seems to my rudimentary economics understandings, we're awfully dependant on the US markets for our economic well-being.

I'm not sure where I'm going with this analysis, but it seems to me that the inter-connectedness of our markets should not be overlooked. The next time someone says: "it's different here", do what Mohican suggests, and tell them a different story.

LIVE LINKS

Just making some links from comments live.

1. SF Chronicle: The Wealth Effect (VicGuy asks: is this us?)
2. Thank Goodness for Shiller and the S&P
3. Even Credit Unions sing the Bubble Jingles: from the TC. My Favourite line is Condos and the applainces that go in 'em. 3 years ago that would have read: Houses and the applainces that go in 'em.

Keep up the good hunting people. As always post your links in comments. I will add them here. If you cut and paste instead of linking to the source, don't forget to add the http:etc so I can create a "live link" to the original. Cheers.

Capital City Comparison

Thought I'd play with some other numbers today. I was curious to see how far our income would go towards housing in other cities. I thought it only fair to compare one government city to another, so stuck with the capitals.

Here we go:

Obviously if you've lived and owned in Edmonton this past year, you're feeling like you won the sweepstakes. Charlottetown might have you feeling a bit worried. If I'm in St. John's, I'm scratching my head about how old Danny is blustering away our new-found oil wealth and not translating that into economic prosperity and real estate demand.

Victoria's doing OK, but at $570K is $190K more expensive than it's nearest comparison for a difference of 46%. On average then, you're out of pocket nearly 50% more to live in BC's government wonder-town. It's also interesting to note we are now officially more expensive than Vancouver. They must have discovered a way to make land over there last year.

Why did I choose to compare government towns? Baseless assumptions on my part lead me to believe that if I could find (I looked and couldn't without paying money) average incomes in these cities, my guess is they'd be relatively close.

Unless something changes, I don't think I'm comfortable with paying a 50% premium to earn the same money here, to own here. Yes, the weather is nice and the mosquitoes are rare, but come on, do you really believe that the savings in OFF! and the 28 days of rain in December are worth the premium? Maybe when your 65, but I'll tell you, Whitehorse is looking pretty appealing to this 32 year old. I can earn more, and live in a castle for less than it costs me to own a condo here. And 22 hours of sunshine is pretty nice too right?

Bringing West Van to the Highlands

It seems the can-do attitude is catching on huge out in Victoria's Westshore. It would appear that despite the long-term efforts of The Land Conservancy, the greenbelt from Thetis/Goldstream through to Gowland Todd will only serve to sweeten the view of monster developments for wealthy boomers. This quote especially highlights the plan:

It would eventually have more than 1,000 single-family homes, 4,000-plus condominiums, and 285 townhouses. Golf, restaurants, a spa, hotel, and a village are part of the development.

So who's a gonna build this you ask? Quigg. Nope, no gesundheit necessary, but thanks anyway. Quigg is a Vancouver Corp that has done its fair share of "creating nothing short of living art" since 1986. I guess that's better than since 2003. Their claim of "Breaking new ground on an unprecedented community" is a bit vague: was it Bear Mountain that is unprecedented or is it Quigg's presence there?

Actually, putting my cynicism aside for a moment, and ignoring the environmental impact assessments, not to mention the ensuing NIMBY-fuelled protests to come, this may actually be good long-term for Victoria. It's what we need. I hope developers come here in droves and mass-produce luxury living in "remote" areas. The buyers of these places drive fast cars; this'll speed up the "crawl" on HWY 1. The luxury-owners in town will move out in droves, freeing up space and demand for us FTBs to live closer to where we work. T'is all good.

I think we should start a bookmaking service on projects suggested, approved and then uncompleted. I'm guessing this one is as likely to happen in its "approved" form as the Bay Tower development. I'll put money on if they happen, they happen nothing like their intentions are today. Economic cycles have a way of doing that to a development.

Condo Evaluation

I've made it no secret that I hold considerable reservations about purchasing a condo. I can think of a hundred reasons why it would be a bad decision for us and only a few good reasons: affordability being the paramount of those.

I thought it prudent to run a similar set of numbers to those I did here a few days ago. We'll work with similar assumptions:

1. Annual income of $72,000
2. Condo purchase price of $230K. Why that? It's well below average, but if we really bought a condo, we'd refuse to spend more.
   
3. We'll continue to use 10% down payment, because it isn't that big of a stretch, and I'm guessing there are more than their fair share of people (kids) out there who have gotten $25K "gifts" from parents to get into this market before they are priced out forever.
4. Again we've used 30 years for amortization; likely this is average these days.
   

Scenario One: buy today, pay later...

So we find something we can live with and go get the mortgage. Posted rate was 5.85% for five years, we get 5.25%. Here's what it looks like:

Again we'll pay bi-weekly. So we give the bank a total of $1048.46/month. I'm assuming an average annual property tax of $1200, this is an unscientific average based on "observation" rather than calculation, we'll do the same with strata fees or monthly assessment at $175/month.

MA's in this town vary incredibly. We've seen them as low as $113 and as high as $280/month. Most hover about $20 under $200. We'll use 0.05% as the maintenance charge: while the MA covers common maintenance, it won't replace appliances, floors, paint and fixtures, which in our experience walking through condos in this price range all need replacing. We'll call that $1150/year or $96/month.

Total monthly ownership related costs then are: $100 + $96 + $175 + $1048.46 = $1419.46. This represents roughly 24% of our pre-tax income. This falls well into our fundamentals (33% of gross income). We could even qualify for much more of a purchase price with the bank if we chose.

Scenario Two: Five years later

Again the interest rate has crept up to historical norms of 7.5%. We've managed to "build" $16,561 in equity out of the roughly $70K we've given the bank thus far. Here's what it looks like when we go to renew:

No surprises here: our monthly payments have increased with the hike in interest rate. Now we're giving the bank $1286/month or a hike of almost 20%/month all because of a 2.25% interest rate increase. We'll keep similar numbers for the other "ownership expenses" and increase our income with inflation to $6500/month.

Now we're out of pocket $1657/month for our housing costs which is 25% of our pre-tax income. Again this is all keeping within those sneaky fundamentals we keep using in our calculations, and despite a 20% increase in mortgage payments, we are only eating into an additional 2% of our gross income.

Now looking at these calculations, we can see where there are some "issues". For laziness's sake, we didn't "calculate" increases to taxes, MA and maintenance charges, simply because using inflation numbers here will likely prove incorrect: taxes, maintenance and MA charges increase or decrease arbitrarily not based on CPI. I don't think one can predict any changes in these areas. Instead we'd just have to hope they aren't drastic changes and adapt. We think that fairly easy and affordable to do when it comes to making this kind of a purchase in this market.

If you're new to this blog, you may be wondering why we haven't jumped at buying a condo given these financial circumstances. Truth be told, we're close to that $72K income (I used that because it is somewhere between the median and average household incomes in Victoria, not because it's ours). That said, we actually will make a fair bit more than that this year, so in fact, if we spent $230K on a condo right now, we'd be well under the financial fundamentals we like to use so much. So why haven't we done it yet?

Because there is no way that we would spend that much money on the junk we look at in the neighbourhoods available to us in that price range in this market. Since February 2007, we've watched the low-end condo market have a sales to list ratio of about 50%. That means for every 2 condos listed, only one sold. Sure some were pulled off market, but they didn't sell. Guess what we think that means? You bet, a correction will have to come if that sales to list ratio is to gain and not lose. Can we predict when that will be? Nope. But we can be patient because despite those numbers it still is cheaper to rent a 2 bed 1 bath condo in this town than it is to own.

I can say this with all certainty. The first property we looked at was a 2 bed one bath condo of just under 700SF. The landlord wanted $975/month in rent. It was a nice place in a central location. She had no trouble renting it. She's our Realtor now. She found us the same suite, 1 floor up in the same building for sale at $230K (we had the option of buying before it got listed). It has a MA of $170/month and just over $1250/year in taxes. Surprise, surprise, really close to the numbers we used in the calculations above: Own = $1420/month, Rent = $980/month. I recognize this is anecdotal. But we also originally thought she was asking way too much in rent for her place.

Is pride of ownership worth $440/month or a 30% premium. Maybe. But if you feel as certain as we do that the condo market especially will be hit with a correction (how big?) then you'd better be certain it's worth more than a 30% premium because it may end up costing you closer to 50%.

After several conversations with our agent, we learned she paid $160K for her place in the same building 2 years ago. Using those numbers, she's still subsidizing her tenant's rent. An investment property indeed.

Suite Mother of a Deal

I must be feeling some added confidence lately, or it's the lovely Spring rain that's got me in the mood to take the gloves off and go after individual advertisements in town.

Today I'm right pissed at some deceptive bs coming from none other than Sooke's fabulous development on a bog: SunRiver Estates.

Several weeks ago, they started a Suite Deal! advertising push that showed how you can get into a home "cheaper than rent" (they claim) if you have 25% down, amortize over 40 years and have tenants in your 2 bed basement suite. Fair enough. But over the weeks some things have changed, but others have not. Your out of pocket expenses haven't changed apparently, despite a 0.25% jump in interest rates. How'd they do that?

Simple. They just upped the rent you'd charge your tenants. If only it were that simple.

The first add I noticed claimed a monthly rental income of $848. I didn't balk at that too much. You can't get a similar brand new 2 bed suite in town for that price. I figured there may be some Langfordites that would be willing to pay that and have a 20-minute commute to work. But when interest went up, strangely enough, so did the rental market value in SunRiver. Now that $848 is $950. That's over 10%. And that isn't reflective at all of true market value for similar suites in Sooke.

I couldn't find any vacant SunRiver suites to see what they are actually asking. But if only it were that simple that you could just assume that kind of debt no questions asked. Too bad you won't qualify for that at the bank. If you show up at the bank counting on rental income to make your mortgage payments, as I understand it, they will only accept it with a one year signed lease guaranteeing the payments, and they only count half the rent as actual income.

The most brilliant thing about their pricing though, is with an unfinished suite roughed in, you save $20K in purchase price. Want them to complete it for you? Pay the extra, no problem. Except that the actual costs of finishing that space according to a contractor I know, closer to $10K without cheaping out on appliances and furnishing's. He figured he could do up that SF on the cheap for $8K. If you are at all handy with finishing, you could self contract the drywall and taping, paint and finish yourself, get your flooring installed professionally, and the cabinets, and you could get it done for closer to $6K.

Ah, the things they just don't explain to you in advertising.

OH HAPPY DAY!

Yes, I did mean to yell that.

Picture this, I'm going through my morning ritual of reading the paper while sipping my coffee, and what do I see? Yet another full-page add for a condo development that hasn't sold out yet. This one promises a taste of European charm on the corner of one of Victoria's busiest intersections.

For the last 6 weeks or so, Tuscany Village has had a discount for buying during their special grand opening sale. It's a bit funny that nothing is open up there, or even close to it, but that's irrelevant for marketing anyway.

But today. Oh, today! I am greeted by that same add except, with a twist.

Ready for it? Make sure you're sitting down:

Priced well below appraisal.

Sweet mother of gawd. A $440,000 luxury 2 bed 2 bath condo, in Victoria, where everyone wants to be, hasn't sold itself out yet with its grand opening discounts, so now, they have to advertise that it's well below appraisal. Whose appraisal is irrelevant. It certainly wouldn't be the same as assessment via BC Assessment. Seems their listings agents with whichever realty company they have marketing for them didn't get the prices right.

Maybe this will inspire a new realty game show... Come on down Suzy Hahn, you're the next contestant on the Listing Price is Right. Set the pricing right, you win a big fat 9% commission, get it wrong and we'll end that contract and head over to Darren Day and his Day Team jingle singers.

What happens when interest rates go up?

I thought I'd play with some potential scenarios today. I'm using some-what arbitrary numbers to run these scenarios. Here's a list of the assumptions:

1. Mortgage is amortized over 30 years. Why 30? Because I think its probably the median of what is being sold to many people these days.
   
2. SFH price will be $500K, simply because it is an easy number and just about the median price of SFHs here now.
3. Family income is $72K. This isn't the average, nor the median, but it is near both. It's an easy number to break down into monthly terms for this exercise.
4. Down payment will be 10%. I have no idea how to find out what the average down payment is these days, but I'm guessing this may be close.
   

Scenario One: Today

House purchased at $500K using interest rate posted by Big 5 bank, I've assumed a negotiated discount from 5.85% to 5.25%.


Those are big numbers. Our pre-tax income is $6000/month. If we pay bi-weekly, we are using 38% of our pre-tax income to service our mortgage debt. Let's factor in other housing-related costs of $2200 in property tax. I'm using this number because it is the actual, after-grant charge of a friend of mine who lives in Saanich and owns a home that fits these assumptions, anecdotal I know. We'll use the widely-accepted 1% maintenance theory, which equals $5000/year. So in addition to our $2280/month we have $420/month in maintenance and $185 in taxes for $2885 or 48% of our pre-tax income going to our monthly housing ownership costs.

Scenario Two: Five years down the road

We need to renew our mortgage. Interest rates are back closer to their historical norm of 7.5%. Let's see what's happened:

First off, we've built up some equity. About $35K of the approximately $150K we've given the bank so far has gone to principle. But, the interest rate has gone up and now we have to pay more to stay in the same place. Our incomes went up, with inflation, so our $6K/month is now $6500/month. Again we'll pay bi-weekly. $2800 to the bank. We'll assume that taxes stayed the same as did maintenance, so our costs are $3400/month. What's that in percentage: 52%. Surprisingly, that's only a 4% increase in costs, despite a 2.25% jump in interest rate.

What's the point of all this? Merely just messing with some numbers arbitrarily. Is it likely that these scenarios will take place? Who knows. But it makes me wonder if interest rate hikes really matter all that much? Over to you.

Mid-May Low-end Market Watch

Sorry this is a bit late.

Our area of interest is Oak Bay, Victoria, Saanich, View Royal, Esquimalt, and Langford.

Our criteria for houses is under $425K with a suite or suite potential. These are total numbers of listings and sales since late January.

114 total listings (15 new since April 30)
79 total sales (10 sales since April 30)
sales to listings = 69% (down 1% since April 30)
12 taken off market (1 twice); 1 re-listed at $20K less than original list price; 1 re-listed and sold at $22K less than original list price; 1 re-listed and sold at $12K less

Our criteria for condos is 2 bed 1 (or more) baths under $250K. Again, total numbers since late January.

208 total listings (20 new since April 30)
100 total sales (4 sales since April 30)
sales to listings = 48% (down 3% since April 30)
28 taken off market; 7 re-listed, 2 sold within 2.5% of original list.

Our thoughts: SFH market is still moving in a direction we're not comfortable with: prices are going up, sales continue and listings are slow'n'steady.

If we weren't aware of the real state of the market, on paper the condo market looks to be in favour of the buyers. The reality is though that we're not seeing the kind of price reductions we'd like to see to bring condo prices back in line with historical averages. We'd look seriously at buying when the one's listed now at $220K come back down to $199K or less. If the trend continues and most of the listings are must sells--as opposed to testing the market--then things are looking encouraging. Maybe we'll start shopping again seriously in the fall.

But then again, this is enough to make us think thrice before ever buying a condo.

What they don't tell you: part II

Yesterday we took a look at the CMHC forecast for housing starts over the next two years, Canada-wide. Today the TC has a local perspective titled: Construction boom shows signs of cooling. Remember that CMHC was calling for a 12% decrease equally spread over 2007-2008 from 2006 numbers.

In Victoria we see a 17% decline this year from last (2739 to 2285) and then a further 16% decline the following year from 2007 numbers (2285 to 1940). Wow. Did I say that? Wow.

Considering that everyone wants to be here--actually, from the real census data, everyone wants to be in Kelowna--that says that builders simply don't expect the boom to last.

Now this could be that they just don't make land anymore. Or it could be that the cities (Victoria and Langford) aren't willing to throw the height restriction bylaws out the window. Or most likely, it could really mean that this bumper crop of boomer buyers has a forecasted drought on the way, and fast.

Now you'd think, or you could be forgiven to think, that the RE market might be reflecting some of the same trends: apparently it's not, but according to CMHC it will.

Resales are forecast to go down: 4% this year and another 4% in 2008. Now if you're a shareholder in Re/Max, wouldn't you be a bit concerned about an 8% drop in sales? What's more, if you're a homeowner banking on double digit value gains to finance your renos or your move up to bigger and better property dreams, the drop in appreciation (forecast for 8% this year and 4% next year) should concern you be a bit too. I won't even mention forecasted interest rate rises.

I'm thinking if I just bought, I came late to the party. You know that part of the party where all there is are crumbs on the platters, no ice in the freezer and flat Coke to mix your swill with. If I'm not yet drunk (which I must have been to buy today) I'm likely the next to leave.

I wonder how good CMHC and VREB are at forecasting? Are they like governments who have a habit of underestimating things so they can "outperform" themselves on the upside and quash the fear on the down?

What they don't tell you

CMHC says housing starts to decline:

Canada Mortgage and Housing Corp., says the housing boom will slow this year, predicting starts will ease to 213,425 units after reaching 227,395 units in 2006.

A 6% decline

In its second-quarter Housing Market Outlook, the corporation predicts that residential construction will continue to decline in 2008 to 200,175 units. That still means seven consecutive years in which housing starts exceed 200,000 units.

A further 6% decline. Yes, that's right folks, 12% in two years

The corporation says higher mortgage carrying costs and the erosion of demand that built up in the 1990s will mean lower starts.

It says sales of existing homes will remain strong, forecasting sales of 487,500 this year.

Prices for existing homes are forecast to grow almost 10 per cent this year, mainly because of strong price pressures in the West. (emphasis mine).

Immigration numbers for 2005-2006 were 254,000. That's not 254,000 families, that's individuals. So we built 1 house for every 1.1 immigrant. Sounds pretty sustainable to me! Not.

Myth Debunking?

One of the reasons that bears use when we talk about how we expect a correction in the RE market in the near future is how it's happening south of the border. Now, we all are well aware that this time it's different, that people do want to be here, and that everyone will retire here, but how will a correction in the US markets, both RE and equities, impact people's ability to retire here?

The last stats I read stated:

Of Canada's 2000 imports, 74 percent came from the U.S., while 86 percent of Canada's total exports were shipped to the United States. The volume of Canada-U.S. trade last year was far greater than the total amount of Canada's trade with all of its other trading partners combined.

Those numbers are daunting; this is how they look:


So what exactly do we offer up to the US that they want in such abundance? Our dollar is high (actually, their dollar is low, our's isn't that high when you compare it to the Euro or the Pound over the same time lines as in comparison to the US greenback), so that should slow down the exports right?

Conversely, because of the relative parity of the two currencies, our imports from the US should climb during this period. As my rudimentary economics (I hesitate to use this word) skills comprehend it, much of our trade with the US is in energy and natural resources and it goes something like this: We ship the sh$t to them raw, then buy it back refined. As in the crude flows south, the gasoline flows north, and the logs go south, and the chairs go north. Of course there are always exceptions to this, but that is a sweeping generalization that is likely correct if I was to not be so lazy in my linkages in this blog.

We know the forestry industry is in its worst recession since 1982. So that leaves the energy sector to keep the economy a pumpin' (pun intended). The same stats suggested that BC's energy sector is plagued by a 14% decrease in drilling (that's where we get the gas and oil from) between late 2005 and 2007. We import electricity, partially because we export a lot of it, but that is a market mechanism I do not understand, but it makes sense that that isn't making everyone rich enough to buy RE in Victoria. I know the mining sector is hot, only because my stocks are doing well, but those are piddly numbers compared to Oil and Gas as we see below. And I can still buy mining stocks at far superior price/earnings ratios than O&G.

Those are national numbers too. BC's take of that is paltry compared to Alberta, Atlantic Canada and Saskatchewan. We're about the minerals and the forests primarily. Our O&G sector has definitely grown, but the producers are busy producing in the tar sands, so unless you own their stock, you're likely not getting rich off of it directly.

I found this article very interesting; it's all about how Canada's economy is de-coupling from globalization. That should protect us from economic downturns in the States then right? Except it won't and it has some serious negative consequences for our economy to boot:

On the whole, this de-globalization is a negative development. Canada is reallocating labour and other resources away from export industries (which are highly productive, and pay wages 25 percent above the rest of the economy) to purely domestic sectors, many of which (like fast food, retail, and personal services) feature dead-end jobs and lousy productivity. Indeed, this de-globalization is a key reason for Canada’s abysmal productivity performance this decade, despite all the business-friendly policies we’ve implemented in the name of “efficiency.”

Now, I'm not really agreeing with the author. Especially on issues like free-trade. I imagine most people in our nation have benefited greatly from NAFTA. But this curious de-coupling within a free-trade arrangement leads me to believe that growing pains are a comin'.

Open Thread

Some suggestions for discussion:

1. TSX hits all-time high while job numbers decline
2. BC's jobless rate grew by largest margin in Canada (0.5%) in one month
3. Financial planners suggest we young'uns avoid taking risks with our money

Over to you!

State of the Rental Market

I had a really interesting conversation with a manager at my workplace recently that inspired this post. There are about 5-6 full-time positions available right now in the association I work for. Employees only need high school and they make what I consider to be above average wages that work out to be about $34-$38K per year. Trouble is, the employer can't fill the jobs consistently. The association has about 60 FTE and 30 part-time positions and usually have a pool of employees of about 150, including casuals.

Lately that casual pool has dropped because people are leaving town. When I asked why she thought people were leaving, the manager stated that in exit interviews many people were telling her that they couldn't afford to live here anymore. Some were working two jobs and were single. Some were partnered and their households still had more than two jobs to finance their living costs. My assumption based on that conversation is this: if they wanted to get anywhere financially, these people felt they had to leave.

This industry isn't Victoria specific and jobs are available with similar pay across Canada. The "labour shortage" is by no stretch of the imagination isolated to Victoria. There are plenty of opportunities in cities larger and smaller than Victoria with cost of living being nowhere what it is here.

We figure we have a pretty good deal on rent. It is much more than I remember paying 10 years ago, but it isn't the most I've paid in this town or in other cities I've lived in.

A quick scan of Craig' s List and Used Victoria reveals a bewildering scenario: the rental pool is big and it's diverse. It is almost like the RE market in that its pricing makes very little sense. There are 1-bed suites ranging in prices from $600-$1000/month, there are 2-bed suites mixed in that range too and going up to $1300. You can't seem to find a house right now for less than $1500/month and many of those are just the major part of homes; many have additional suites that are already rented by the landlords.

The prices don't fit neighbourhood patterns either. I'd think Central Park or Sooke would be cheaper than say the University neighbourhoods. But not really when you do a quick scan of those sites I mentioned above. Sure there are suites that are "new", but everyone and their dog has gone to Home Depot and bought the laminate floor for $1.50/SF and "updated" their suites with modern paint colours. This can only mean there is competition for renters.

We looked at some dark, dingy places that were updated. We looked at some bright places that were above ground that still had their original 1975 shag carpeting and wood panelled walls. And guess what we found? The price had very little to do with the quality of the suite or the location. The price trends it seems, based only on my assumptions, are more to do with when the owner bought the house. If it was recent, expect a one-bed suite to be $800 plus.

I'll try to bring this back full circle now. If my employer is having trouble retaining people at good wages, how are other employers fairing? If you've been to the malls lately, you've likely seen the advertisements in the food courts. Low-pay low-skill jobs are always the first to suffer. But we don't hear the stories of $17/hour Tim's employees here like they do in Alberta. Coincidentally, that's about the average wage my employer pays. That works out to be around $800-$900 after deductions every two weeks.

I ask this in the hopes that people will contribute to a good discussion: is working for two weeks just to pay rent worth what Victoria has to offer? And if more and more people start deciding that it's not, what is going to happen to all these suites?

Do people really believe that the current stat of 0.5% is reflective of the true rental market pool; you know, the one that includes illegal suites? There are no methods of counting suites in homes, so that stat is basically meaningless.

UPDATE: Further to the discussion on inflation and CPI, check this out, I sure hope it's not true.

Mortgage Madness Redux

Back in April, we had a good discussion of the mortgage mania that has grasped both consumers and financial institutions alike. It seems as though the MSM has caught on too. Which can only be a good thing for the bears, if you ask me.

Some highlights of the article:

Anyway you look at it, the Canadian mortgage industry is starting to look a bit more like its U.S. counterpart.

Nonetheless, for many less-than-solvent folks, getting a mortgage is not the challenge it once was.

big international players like AIG United Guaranty have moved in, the first of many American insurers and lenders anxious to keep billions of dollars flowing into the residential housing market.

To fuel the engine, some lenders structured these loans in ways that would only work if housing prices kept increasing dramatically – which they haven't. Add to that... low or even no down payment deals, and bonuses to offset closing costs, and you've got too many borrowers moving into new houses they really can't afford.

The growth of sub-prime mortgages is only part of the changes though, many of which are being driven by non-traditional players. Mortgage brokers, once considered lenders of last resort, are writing more and more of the business, for instance.

Although trade organizations like CAAMP seem quite serious about upgrading industry skills, provincial regulation of mortgage brokers is still bit of a patchwork – so tread carefully if you're planning to enlist their help

When I read how unlike our mortgage market place is compared to the US, it is always the same people quoted: the mortgage industry. I am a big fan of the open marketplace. I am also a big fan of self-regulated markets. Generally I believe they work, especially during hard times. It is always on the upswing that we read about the abuses. Though I am not suggesting that any abuses are taking place right now, I still believe it is important to analyze the source of our information.

When CAAMP says that sub-prime lending is only 5% of the total mortgage business in Canada, we have no real reason to doubt them. But there were 1.86 Million self-employed people in Canada back in 2001. Arbitrarily categorizing self-employed individuals into the sub-prime category seems suspicious to me; because self-employed people made up 8.6% of the total workforce in 2001. This issue could be explained by suggesting that it's just a case of lazy reporting on either my part or that of the reporters in MSM.

Another related story: The reno bug is putting many in financial straits

Buyer Beware

Interesting story on Canada AM this morning. Developer of homes decides to break contracts (can they legally do this?) with purchasers because of so-called cost over-runs. Perhaps I should call them to remind about the price of lumber having dropped 25% since January.

Anyway, I digress. Remember Vancouver's hot housing market. Here's a notable quote from one of the 'victims' of this BS housing scheme:

Donna MacDonald, who is in the same predicament as Bulat, called the revelation "very financially convenient."

She plans on taking the company to court.

"I've lost market value here in the last two years. I lost market value on the home I sold in the last two years," MacDonald told CTV British Columbia.

"If this is just a greed issue, yeah I want blood." (emphasis mine)

Think that the realtor who is selling this developer's project should be held to account? Too bad she's his wife. Aren't there laws against this? Hopefully the Association of REALTORS steps in.

So I go looking for who CB developments are. They don't have a web presence. Maybe I spend too much time online, but I kind of figured that at minimum, a website would denote a bit more of a professional firm would it not? I mean, come on, web advertising is simply the most cost effective medium for contacting an endless number of prospective consumers, is it not?

As much as I feel for the people who have gotten caught by this, it certainly isn't the first time a developer has pulled something like this (think Bambu in Victoria) and it won't be the last. If you sign a contract, it's a fair assumption to believe it will be honoured for certain, but isn't part of your homework figuring out who you signed the contract with? I am in no way exonerating the developer. This is right down there with any other criminal activity.

There certainly is something about bull markets that brings out the crooks and makes people forget that they can't be stupid with their money. The tech stock bubble produced movies like Boiler Room and Wall Street before that. I wonder if the next development (pardon the pun) will be movies about shyster realtors and developers fleecing "helpless" buyers out of their homes?

A little of this; A little of that

Just a couple of little issues I thought I'd write about tonight that have come up in blog posts and comments lately here and over on Victoria's Truth.

The issue of government incentives to attract workers:

I don't believe that the Pacific Leaders Program has anything to do with the current state of housing affordability in BC. This is a program that is designed to attract and retain post-secondary graduates into the public service. For a myriad of reasons, that I won't get into here, and that are mainly political in nature, the public service suffers from an acute shortage of qualified, younger professionals.

Let's just say that Universities aren't bustling with people training to become research and policy analysts these days. Business is booming and the private sector offers more opportunities and better pay. With 30%-50% of managers eligible to retire with pensions that make it very feasible to jump out at 55-60 years, the BC public service needs to do this before their workforce disappears.

Victoria looks to legalize secondary suites:

This is an action by the City of Victoria; which only includes James Bay, Fairfield, Rock Bay, Vic West, Mayfair, Hillside, Sears, Central Park and Fernwood if you're looking on MLS. So it's not CRD-wide. Although many other municipalities already provide for secondary suites being legal.

If you think this is about extending the bubble--think again. I don't believe that the city, as a corporate entity, benefits at all from increases in property value. In fact, during bubbles, building booms take place which create headaches--both financial and logistic--for municipal entities. Infrastructure is costly. Municipal corporations are not models of management efficiency--their political nature prevent this.

Legalizing secondary suites provides two political benefits for politicians looking for re-election. Firstly, it appears like action on the issue of housing affordability and homelessness. Make more suites available and the rent should go down right? And that should free up more of the current co-op suites available too, right? I'm not sure if this is the case in truth or not, and I highly doubt that politicians care if statistics back up these assertions; 30 second sound bites are enough for media politicians and apparently the electorate too.

Secondly, there is growing pressure by homeowners to make secondary suites legal, just so we can afford the mortgages these days. There are a ton of by-law restrictions that prevent suites, parking being the major one. The city ignores the bylaws by convention, but all it takes for enforcement is a single complaint from a NIMBY neighbour. When you spend $500-$600K counting on the $1000/month mortgage helper, eliminating the chance of a nasty neighbour calling you out on your own nasty-neighbour behavior can be a highly motivated voting behavior can't it?

As always, feel free to correct me in the comments. And again, those that have commented here, thanks. The discussion is what we enjoy the most about this endeavour.

Priced Out Forever!

Picture this: we're sitting quietly enjoying our Saturday morning ritual of a strong home-made americano on the couch, reading Victoria's Truth's weekly MLS update, and listening to CBC's Absolutely Canadian on the telly. My groggy-morning ears perk up to the words "Vancouver real-estate" and the story goes something like this...

A boomer-dad is hanging out in Granville Island with his two children, both under 10 years old. They're doing all the things young families do: checking out sailboats, looking at condo construction, and contemplating the future. Says Dad: if I don't buy my children a place to live now, they will be priced out forever.

Picture cuts to a townhouse showing with his realtor in East Van. List price is $340K. It seems Dad thinks it's a good call to buy them a house now and give it to them when they're 25; in the mean time he'll rent it out. His financial advisor [CBC did interview him] said it makes sense for this family, get advice for your own before acting like this. Realtor says, we're selling people a second or third home all the time for this exact reason.

By this time, I've spat my coffee on the TV screen 10 feet away. I always thought the CBC to be the last bastion of unbiased information left in this land; after all it's funded by government and not by commercial revenue. Oh, the disappointment we felt... OK, I'll cut the sarcasm.

Man this boomer generation just never ceases to amaze me. Apparently the first decade of the 21st century was supposed to be the most spendy in history. The second decade will likely prove to be the biggest crash and burn the world has ever seen if they keep this up. But don't worry. This time it's different: everyone wants to be here.

Sign of the Times

If you buy through this realtor, they will pay the 1% land transfer tax and the legal fees.

And if you buy through this realtor, they will also pay the transfer tax and legal fees.

I seem to recall a discussion on Victoria's Truth a while back about skipping the buyer's agent and asking for their commission when you buy. Maybe this is as close as it gets?

Feel free to offer up your own commentary.

Open Door Policy

I don't have much for you today, so I'll link to some reader tips and this dandy:

SFH prices are down 5% in the Fraser Valley.

Van Sun Prices Up story

TC paraphrases that April VREB report.

Arizona deals with the problem of re-listing properties.

I should state that we see this fairly frequently in the segment of the market we receive updates for. I wouldn't say re-listing as a wide-spread problem, nor really deceptive because a buyer's agent, and us too with the system that we get to view MLS listings, displays the re-listed properties. They're not obvious at first glance, but if you check your lists once or twice, you'll be able to pick them out. If you're really concerned, just ask your agent. If you don't use a buyer's agent (and I'm not sure why anyone wouldn't, they don't cost anything to you) just ask the listing agent. They are obligated to disclose that information. They're also obligated to disclose the previous selling price of the home too, not just the re-list but what the current owner's paid and when.

Shiller on Bubble.

TC writes about the flipper contest. I'm surprised that it's not really a pump job. Story presents more of a 'cautionary' tone.

Victoria City to make secondary suites legal?

Canadians maxed out their RRSPs in April. Can anyone say HELOC-financed purchases?

Feel free to post your own in comments.

Truer words are rarely spoken...

When I look at the income required to purchase one of these median homes, I think back to my dreams and aspirations as a younger man and dreaming of what I would be able to afford if I made $100,000 per year, which by all accounts was and still is quite a bit of money - far above the average income.

I thought about the car I could drive and the home I could own if I earned that kind of income. The car certainly isn't a problem but I'll be honest, I didn't really expect the home I could afford to be a mediocre townhouse for the education and effort required for the position that the income came with.

H/T to Vicguy in comments @ Victoria's Truth for pointing out this piece of perfection.

Does a US recession trigger a decline in Canada?

My house-building dad is back from a winter away in the sun. We got into it over dinner regarding our current situation. His advice: you just have to get in the market. Don't wait. We have a regular father/son relationship where Daddy is always right and son is always arguing to be right, so I went at him good and hard. I pulled out all the stops. It was a good show.

In my search of facts to back up my points regarding the unsustainability of this market that has ignored the fundamentals for far too long (something Daddy taught me never to do), I found this dandy blog: Captain Capitalism.

I won't bore you with the familial details of the trials of the father/son interpersonal relationship, but I will say this: I had the stats, he had the emotion.

His argument: everyone wants to be here. No. Check that. The bubble-boomer generation wants to be here. They will keep coming and prices will keep going up. This time it is different. Victoria is different than Spain.

The statement that preceded the sweet sound of silence: you leave every winter because you can't stand the grey and the wet, and you're a boomer.

Then The National came on CBC after the hockey game. In their first few stories they had a segment on the troubles of the US market and the economists in Canada talking about rate hikes and whatnot to protect the Canadian economy. It was a balanced story, but definitely not a pump job on the RE, stock or consumer markets.

April Low-end Market Watch

As promised earlier, here's the brief version of the low-end market watch we've been doing for the past 3 months. If any data we've omitted is important to you, let us know in the comments and we'll get right on it.

Our area of interest is Oak Bay, Victoria, Saanich, View Royal, Esquimalt, and Langford.

Our criteria for houses is under $425K with a suite or suite potential. These are total numbers of listings and sales since late January.

99 total listings (9 new since April 16)
69 total sales (9 sales since April 16)
sales to listings = 70% (up 4% since April 16)
9 taken off market (1 twice?); 1 re-listed and removed again; another re-listed, then sold for over $20K less than original list

Our criteria for condos is 2 bed 1 (or more) baths under $250K. Again, total numbers since late January.

188 total listings (29 new since April 16)
96 total sales (20 sales since April 16)
sales to listings = 51% (up 3% since April 16)
21 taken off market; 5 re-listed

Lots of condos taken off-market in that place I had a tantrum about earlier: 3 of 7 units for sale in that 52-unit building. Also noticing that there are several buildings around town (3 in Quadra/Cloverdale/Hillside 1 in Langford, that have 5+ units for sale in them) could be the work of flippers or the sign of a bad building or just a bunch of people who want to cash out and move on or up. But the competition in those buildings is leading to multiple downward price changes which can only be a good thing for buyers.

I'd hoped that there would be more listings than we've seen in our segment. I'm not surprised in the SFH market because our $425K cut-off doesn't fit well into a $450K split like the condos do. But in the condo market, there are relatively low numbers of units for sale at or around $240K-$250K.

We'd expected that sellers would do their best to get their $260K price down to $249K to bring in a whole other segment of buyers; I'm guessing agents are telling clients they have to go up, not down to attract the buyers still; which seems to be working still. We'll see what happens when some of these units haven't sold in July/August.

It seems the sellers are still cleaning up. For now.

Train wreck a coming?

Purely speculative and anecdotal evidence on my part here: but in the low-end condo market that we get daily updates on, in the past 5 days, for every new listing there is a corresponding price change for another listing. Which basically means prices are a coming down (slightly) and competition is heating up. Bring it on.

Average price drops are $5K on $220K places. When we see $10K come off, we get itchy to make the phone call to the realtor. Then we think again... we're waiting to see those $220K places hit $199K again. That's only a 10% drop, but 10% in a "hot" market is a big drop. And 10% in a "balanced" market as the BCREA and CREA are wont to call it these days is an even bigger drop.

What's that I hear? Sounds like brakes on the rails. I hope the driver got them on in time to avoid the big crash...

Disclaimer: as much as we hope for a significant correction in the RE market, a big crash has long term economic consequences that could hurt a lot of people, including us, and we'd never wish that on anyone, including us.

I'll get mid-to-end of April market numbers in our segment up later this afternoon... just was happy to read my updates and see these changes, thought I'd share it with you to possibly brighten up your morning coffee breaks.