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.
8 comments:
hhv
Don't remember if you have said this previously.
If you buy a condo how long are you planning on living in it for?
Are you going to have kid(s) in the future?
I'm just thinking that IF condos tank then you may need to stay in it for awhile and it MAY not work for a family.
Just looking out for your best interests my man.
S2
We can barely afford a condo let alone children... :)
No plans for them in the next 5 years at least, if ever.
We'd only get into a condo reluctantly, if ever. More just thinking out loud.
But thanks to you none-the-less.
HHV,
My Granny used to tell me that it is OK to go ahead and have babies even if you THINK you can't afford them yet. She said that God put milk in mothers' breasts for that reason, meaning that babies come with ready-made meals. You and I know that kids require more than milk, but there IS some truth to her attitude.
Inflation is everyone's biggest enemy, so the sooner you have babies, the cheaper they'll be. And somehow, things just manage to work themselves out financially, as those babies bring their own bits of good luck with them. Ask most parents....they wouldn't turn back the clock for anything.
I really pray that you get going on starting a family soon, IF THAT'S what you and the missus want!
On another note......you scared the bejesus out of me by implying that you could crack up and buy a condo! PLEASE don't fall off the wagon just yet. Do not betray us all. I hope you know that condos are among the first properties to lose value, and you'd be doing yourself a disservice by settling for LESS than you deserve.
Take $2's advice, she's a smart cookie. Why buy a shoebox condo now, when you can wait and get a MODEST , REAL house for a bit more $$$?
I don't like having tenants myself, but if you decide to get a house with suite later, there will be reasonably-priced homes in maybe Camosun area, where you'll be sure to find tenants, as it is so close to UVIC and Camosun College. Besta luck, and stop thinking out loud about negative thoughts!
Incase you missed this on the Victoriatruth blog on interest rate hikes :
The retail sales report, which “blew off the roof,” coupled with Thursday's CPI report, suggests there is “more excess demand” than the central bank had anticipated just a few weeks ago. “We now expect that the Bank of Canada will be raising interest rates sooner rather than later, with the first rate increase occurring in July,” Ms. Douglas said.
http://www.reportonbusiness.com/servlet/story/RTGAM.20070518.wretailsales0518/BNStory/Business/home
From Today's Times-Colonist:
"B.C. house sales rebound from sub-2005 numbers
Carla Wilson, Times Colonist
Published: Friday, May 18, 2007
Hold on -- B.C.'s housing market is throwing big numbers at us again.
Last month, 9,677 homes sold in B.C., a rebound after 10 months of sales running below 2005 numbers, and up 5.2 per cent from April 2006.
The total value of all B.C. sales last month moved to $4.2 billion, up 17 per cent from April 2006.
Jennifer Lynch, Vancouver Island Real Estate Board (VIREB) president, is upping her forecast for this year, predicting prices will rise 11 to 14 per cent, rather than the eight to nine per cent she'd figured on in January.
"While I don't think it is going to be a record-breaking year in unit sales, I think it is going to be very close," Lynch said yesterday.
And as far as Lynch is concerned, there's a trend happening on the Island. "We are going to have a really good market at least for the next four years." At some point, it could stabilize, "But I don't think we will see prices go down. I think we are in for a good, long haul."
The average sale price of all types of homes on in the VIREB region (north of Greater Victoria) was $321,060 last month. That's up 11 per cent from April 2006. A total of 573 residential properties sold last month, up 17 per cent from the previous April.
WestJet flights between Calgary and Edmonton and the Comox Valley are delivering Alberta shoppers.
"This allows for the purchase of secondary retirement homes," Lynch said. "While the traditional family 'cottage' or 'getaway' was a three-to-four drive outside the city, the ease of taking a 90-minute flight has become a very popular way to expose people to the West Coast landscape."
Baby boomers are looking for good-quality homes and a lifestyle change, she said. "We are really only seeing the tip of the iceberg in buying."
The story's similar in Greater Victoria, where a new record of $568,710 was set last month for the average price for a single-family home, although the median price came in lower at $489,000.
This region's total number of sales rose to 898 in April, higher by 15 per cent than April 2006.
Greater Victoria also saw a 12.9 per cent boost in the value of sales, totalling $1.2 billion to the end of April this year compared with the same four months in 2006.
So far this year for B.C., the total value of sales rose by 8.6 per cent to $13.4 billion compared with the same period last year. However, the total number of homes sold in the first four months of this year was down 2.7 per cent from the same months in 2006.
The market remains strong as the average price of all types of homes in this province moved up 11 per cent to $431,945 last month from April 2006.
"B.C. home sales rebounded in April after declining for 10 consecutive months," said Cameron Muir, chief economist for the B.C. Real Estate Association. "A 25 per cent increase in the number of homes for sale and favourable labour market conditions are contributing factors."
B.C.'s strong economy reinforces the demand for housing, he said, but affordability remains an issue for many.
"While April's performance is notable, it will take a few more months of increasing home sales to consider demand on an upswing."
S2
From today's Vancouver Sun:
"Helping the kids buy a home requires a bit of figuring
Cashing in RSPs is 'an ugly way to do it' because of the tax burden, planner says
Fiona Anderson, Vancouver Sun
Published: Friday, May 18, 2007
Kent Curley figures he's a typical retired dad. He's got a good pension, his house is mortgage-free and he's got some savings to boot. Now what he'd really like to do -- besides putter in the garden and on the golf course -- is help his son buy a home.
Curley's son has two young children of his own and while he has a steady job and is pre-approved for a mortgage, he doesn't have enough for a down payment to get into the Lower Mainland's sizzling real estate market. And with prices rising as they are, Curley figures a lot of retired parents are in the same situation he is, comfortably retired yet watching their children struggle.
"You want to be able to help them," Curley said.
Kent Curley is retired and enjoying the good life -- which includes plenty of gardening -- but would also like to help his son buy into the housing market.
Ian Smith, Vancouver Sun
But at the same time, Curley wants to make sure he helps in a way that doesn't hurt himself.
"I don't need that money," Curley said. "I would like to use it but I don't want to incur a lot of penalty. And I want to be able to leave something."
Adrian Mastracci, portfolio manager with KCM Wealth Management, says helping children financially is one of the top concerns of his retired clients, whether it's to help them buy a house, start a business or just get out of debt.
With people living longer "it's a question that's on the minds of many," Mastracci said. "How can I help them now as opposed to waiting 30 years?"
The Vancouver Sun set Curley up with certified financial planner Michael Thorne of North Vancouver. As a planner certified by the Financial Standards Planning Council, Thorne has training in all aspects of personal finance, including investing, estate planning, tax and insurance.
Thorne called it a no-brainer for flush parents to help out their kids.
"But when it gets down to the nuts and bolts on how to do it, it gets interesting," Thorne said
The best source of money is cash in the bank because it wouldn't trigger any tax consequences, Thorne said.
But that's not an option in Curley's case. His three choices are taking money out of his registered retirement savings plan, taking money out of his non-registered account or using the equity in his house, Thorne said.
Taking money out of an RSP is "an ugly way to do it" because the tax could be as much as 43.7 per cent, the top tax rate in B.C. So to provide a $100,000 gift to his son, Curley would have to withdraw about $175,000, which could seriously deplete his RSP.
The increase in income for the year the money is withdrawn could also lead to other consequences, like a clawback of Curley's old age pension, Thorne said. "So taking it out of an RSP is not the way to go," Thorne said.
If Curley has sufficient money in a non-registered account, he may want to consider using that instead, though it too would have tax consequences. While the money would not be considered income, it would trigger capital gains tax if the investments have increased in value. Only 50 per cent of gains are subject to tax, but that could still be a big chunk of change if the securities have gone up significantly, which is often the case when they have been held for a long time.
Mutual funds may also have deferred sales charges or other fees that have to be paid when they are redeemed.
So again, more than $100,000 would likely have to be withdrawn to yield an equivalent down payment, although how much more would depend on the particular holdings.
A third alternative is using the equity in Curley's house, either by remortgaging or taking out a line of credit secured by the house, Thorne said. Money could then be taken out of the RSP or the non-registered investments as needed to make the principal payments with the son paying the interest.
Mandy Wu, a portfolio manager with RBC Dominion Securities and a chartered accountant, says Curley should sit down with an accountant to actually crunch the numbers to determine which suits his needs best. He should also talk to his investment adviser about the upside of the investments he currently holds to ensure he sells the ones that are likely to underperform. And after he determines what to do, he has to make sure he rebalances his portfolio so that he's properly diversified, Wu said.
And all that is just to determine where the money should come from. Curley then may want to think about how to give the money, whether as a gift, a loan or perhaps through a co-ownership agreement on a house, Thorne said. And then see a lawyer to put the necessary paperwork in place.
So while it seems like a "no-brainer" to want to help your children, how to do it can get complicated."
S2
"Thorne called it a no-brainer for flush parents to help out their kids.
...to provide a $100,000 gift to his son, Curley would have to withdraw about $175,000"
Good lord, it's a "no brainer" to give your kids a $100,000 gift? What a bunch of sissies my generation is. My parents didn't buy me a car, and they sure as hell aren't buying me a house. I'm saving up for the down payment, just like my parents did when they were my age. How can you even consider yourself an adult if you're still depending on mommy and daddy for money?
Okay, head on over the bear site I'm on.
I posted the Curly article over there.
We are having a conversation on this.
I seem to have said something wrong as some of them are mad at me...again. :)
Lots of them, if not all, think it is a great thing to be able to help your kids buy a house but the kicker is...this is how their parents helped them.
S2
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