Friday, June 1, 2007

May low-end market watch

VREB numbers are out; Do they want us to keep dancing around the pole? Roger's predictions are oh-so-close.

Victoria's Truth always does a much better job of "having at 'em" than I ever could, so for now, I'll wait patiently for him and leave you with this highlight:
"Buyers now have a lot more properties from which to choose and the increase in sales points to ongoing high demand for properties that are priced realistically." emphasis mine
Of course, Bev McIvor doesn't state unequivocally what "priced realistically" means but this suggests two things: first, VREB are finally admitting people are asking ridiculous amounts for properties; and second, prices are coming down, both average and median, not significantly, but a 1-2% drop in one month is a good start for me, especially in May. Prairie Boy always likes to use a football score in the Bulls vs the Bears game. I'd say the Bears kicked a field goal for 3 points at least.

Here's our market segment numbers as we've been doing up bi-weekly:

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.

129 total listings (15 new since May 17th, same as previous two-week watch)
89 total sales (10 sales since May 30,
same as previous two-week watch)
sales to listings = 69% (no change)
14 taken off market (1 twice); the two new OMs are expired 90-day listings.

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

227 total listings (19 new since May 17th)
144 total sales (44 sales since May 17th, WOW!)
sales to listings = 63% (up 15% since May 17th, did I say WOW)
32 taken off market

I wonder if my last condo sales count was incorrect? That seems like a ridiculous jump in sales in just two short weeks. I can go through them individually, we I probably should do as punishment, but it's a long and tedious process that isn't happening right now, so we'll let that stand as is.

The low-end still seems a bit detached from the other market segments. This could be that as prices have increased, there is just less at the low-end.

As an aside: are you familiar with Russ Whitney, RE investor get-rich-quick guy? Received an interesting mail out from him promoting new workshops in town with this headline:
If the "bubble bursts," you can still make a fortune in real estate...
Funny. As a buyer, I didn't realize you could make money on the way down. I mean you can't flip 'em for less and make money can you? Has Russ decided buy and hold is the new get rich quick scheme? I don't think rents cover mortgages and expenses anywhere in this town anymore, so that can't be it. Oh, I get it... if making money in RE was so easy, he'd be doing it and not making his money teaching it. But there is so much more money in teaching these days.

Here's a little stat Russ uses: "did you know that real estate has appreciated over 6,281% since 1940? I didn't. I would like to know if that number is true (I doubt it) and if it is, does it include everywhere where you can buy land in the entire globe, which it must to come up with something so obviously skewed. The mail out is BC specific in its content too... his marketers must really expect us to be like this guy. Too bad he's off the Internet... though I guess he no longer has a computer or a connection, or a car, house etc... you get the drift.


VG said...

As I stated on VictoriaTruth's blog they are hanging on to this 20% stat for under $400,000 range to keep the low end believing.
As I also suggested if this number is really 19% would that really be worth mentioning ? it would be a non-event to me,so you have to wonder if they happened to round up the number since this has been a monthly quote on this percentage which I am sure was 27% a few months back and is critical to showing declining low end buyers and to the teetering psychology of this over hyped market.

Roger said...

I just got home and saw the number for May. Even better than my predictions. I predicted 560 for the average and that is what VREB reported. However the median was lower than I predicted. I thought we would stay at 489 due to FTBs but it dropped to 485. This may not sound like much folks but it means we peaked last month and we are on the way down!! Sales start decreasing and trend downward for the balance of 2007. Active listings are still rising and will continue until September. Rising supply & falling demand - Ken Lowball, is in the US right now but he will be moving to Canada in a couple of months!!

I will be updating my site this weekend with full stats analysis.

House Frau said...

Roger, what is your site? Thanks.

Also, I put on pB blog we get all of the high-end $500,000 - $5 million (not that we are looking at $5 million) private real estate updates. ie) price changes, time on market, sold for etc. etc. I get about 5 e-mails a day. Homes are all selling for under asking. More and more are coming on the market. Most homes are just sitting and not selling at all. This has to mean something.

vg said...

Here's an intersting one,the only article I could find yesterday on the May numbers were buried at the end of an article on how great it is that they are building a condo in the already congested Vancouver /Burdett St area.
The part I found most disgusting is then when mentioning the price changes they could not bring themselves to say the word "dropped", "down" or even "slightly down". But they made sure they said "rose" when referring to the sales numbers.
Is the VREB clearly denying what the numbers say ? I guess by saying the word "prices down" it would psychologically play into a certain percentage of potential buyers and we wouldn't want that would we. VREB's credibility is now completely toast in my mind after consistently babbling on every month that prices were up even slightly they can't bring themselves to say the truth. Since this came out on a Friday then maybe they are hoping to bury these suckers and pray for a stronger June.

I also agree with anothers post that if a few less million dollar sales didn't happen we would be looking at something more than a 1-2% drop.

House Frau said...


That is so true. A few million dollar sales skews the property.

Were properties selling last summer or the summer before under asking? Were there multiple offers on homes??? Were they not on the marekt only a couple of weeks certainly not months?

I was not following last year but I think it was different. Anyone?

greg said...

Last year wasn't that different (but a bit cheaper), two years ago was quite different.

There is a lot more available for sale now - that's why the multiple offers are so much less likely now.

VG said...

"There is a lot more available for sale now - that's why the multiple offers are so much less likely now."

This is where I think that all the multiple offers/bidding wars above asking prices have been a major factor in this whole boom. It has never to my knowledge been such an easily accepted way of buying real estate either which just blows my mind.
Speaking of mind blowing,Vancouver numbers out and are now at total insanity levels and a bubble is here no two ways about,anyone of these real estate types that tell you it isn't is full of it. You need a $143,000 income with a 20% down and $3550 per month before taxes. There are some very very stupid people still out there but guess someone has to be the last bagholder.