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.
15 comments:
April sales numbers have been released by VREB. They sure don't look like a train wreck - sales up, prices up. It's tough being a bear.
Where have you seen the VREB numbers? They are not showing up on their website yet.
S2
http://www.vreb.org/statistics_current.html
Maybe I'm not looking in the right place. All I'm seeing is numbers for March.
S2
anonymous -
if you looked earlier today, go to the site and refresh your browser, they use cookies to take you to last months site until you do that....
Got it. Thanks.
I expected sales up, prices up. What I'm interested in is the amount of listings.
S2
My observations are purely anecdotal in a small segment of the market (bottom 20% or so). Personally I'm thinking that the VREB numbers are skewed by the way they are presented.
Average prices are up, but so is the number of $1M houses sold. The average DOM is up, so is the total number of price reductions. To claim that the market continues to show steady growth is not a fabrication by any means. But they will present the info in a positive light and not show any signs of weakness.
When the buyers dry up, and they will, because listings are up, not necessarily because the numbers of buyers has gone down. The competition will increase.
I'm asking the question: train wreck a coming? Not claiming it's happening. I'd be surprised if it does to be honest... just holding out hope.
If we look at the real changes in that report (prices up YOY, listings up YOY, median up YOY, low-end (under $400K) sales segment decrease by 4%, all show bouyancy. But not heat. Average SFH prices still haven't recovered to their March 2006 high yet?
If we want heat, we have to look to Alberta and Saskatchewan. The real numbers in Victoria are looking like a return to blue-chip stocks from the tech-craziness that was 2005-2006. RE investors don't look at single-digit ROI's as a good deal. Rents haven't kept up with prices, so buying to rent out isn't a good ROI either.
The buyer pool of RE investors and speculators shouldn't be looking here anymore. It's just the amateur house hunters left now. They'll figure it out soon enough.
In the meantime, we just have to be patient.
A little off topic.
I was just looking at one of the free magazines that you can pick up from a box on the street and they have pages of real estate ads. Mostly million dollar properties advertised. Every picture is sunny. No rain, no fog, no snow. Always sunny. Now we know why everyone wants to retire here. They think it is sunny all of the time. Could this be considered truth in advertising?
S2
From recollection, it seemed that in the U.S. the number of listings rose substantially for about a year or so before prices started to really be affected. Wasn't it the fall of 2005 where the listings started to increase, and by a year later the prices started dropping, and now are finally picking up steam? Am I remembering this correctly?
Bingo.
Here is a quote that I put up on the bear site I am on that got them very upset.
"Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning."
Sir Winston Churchill, Speech in November 1942"
S2
S2, which site may that be? I'd be curious to read that commentary.
HHV,
See my comment on the VictoriaTruth blog on the DOW rally.
This market is so out of whack with reality that if I won a million bucks today I still wouldn't buy. Happened in 81 and 90 so why is this time any different other than the end is gonna be uglier when all is said and done.
HHV
It is the Kids in Victoria website.
Here is a link. I hope you can access it through this.
http://kidsinvictoria.com/forum2/viewtopic.php?t=4532&highlight=house+prices
S2
"This market is so out of whack with reality that if I won a million bucks today I still wouldn't buy."
Yeah, I've thought the exact same thing. It puts a somewhat rude end to wistful fantasies about winning the lottery and living the good life. I'm not sure how much money I would have to have to buy a house in this market. Maybe there is no such sum. If I were rich enough that wasting hundreds of thousands of dollars didn't matter to me, I'd probably buy my own island on the central coast instead of a house in Victoria.
I haven't been following the market very much, but I do check with my mom whenever a unit sells in her townhouse complex. Recently one that had been completely remodeled after a fire went for $350,000 and the one before that, which had less work done, went for $330,000. Less than half a year ago they were barely breaking $300,000. So I think there's still some upward pressure at the low end, but I think it's probably a sign of price compression rather than an overall strong market. I thought Mohican's analysis over on his site is quite compelling that supply will keep building through the summer, and you'll see significant price drops in Vancouver in the fall. I'm not sure whether our market is mirroring that or not, though. 70% sell:list seems pretty healthy to me.
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