Over the last week or so listings in our segment of the market have been going through a bit of a change. I'm not sure if the total listings in SFHs with suites have gone up (I haven't counted sales yet), but I do know that there have been multiple, substantial price changes downward. I also have noticed that quality has gone up. I don't know if this is the work of flippers, but it appears in photos at least, that the places listed in our price range (max $425K) look better kept than they did four months ago.
Another piece of anecdotal evidence: where we used to see places come onto the market at $419K or $424,900, we're now seeing $399K and $405K. Could it be that the tides have turned for agents? Are the RE professionals recommending lower starting prices for quicker sales? I'm guessing so. That small difference isn't much, either to us, or to a Realtor's commission. The quicker they sell a place, the sooner they get paid. After a couple of years of hectic sales, I'm sure the gang used to quick selling are just itching to get that turnover going again.
We've had to literally put the phone down twice this week as a preventative measure against getting sucked into looking and potentially buying something. We've been doing math like crazy lately, but every time we do, we make sure we do the math when that price has come down by $40K not twenty--that's only a 10% drop. Hopefully in the next few months we'll be doing the math on places that have dropped 15%.
18 comments:
I've had my eye on one bedroom condos downtown for under $300,000 for the last 3 months, and there isn't any change in that market. There are a few places that have been on the market for a while now, but anything of descent quality that comes up seems to go pretty fast.
It is coming down on properties over $500,000 and not selling over $900,000.
The condo market isn't showing much sign of anything in our segment either (under $250K). I've noticed that Richmond Gate has been 65% sold now for 3 months.
changes in the top end must mean something. don't you think?
It could be the few educated Realtor's are pricing their clients more aggressively to sell before the end of summer. Also seems a few developments are starting to show up in MLS (or lowering the price into my search range) that I haven't noticed before.
HHV, what are you using to calculate expected rent from a suite? I'm assuming it's not the current distorted numbers out of Craigslist/Used Victoria. =)
Village,
We use $1/SF for suites.
Village,
This is what I am seeing. And many are just sitting after price changes.
Here is an example of what I am seeing on homes over $800,000.
MLS# 230046
Asking $929,000
Price Change $899,000
Price Change $879,000
Price Change $859,000
Sold: $830,000
Days On Market 96
A $99,000 drop. It was a really nice house, 5 bedrooms, Fairfield, good street.
Why do they keep saying this is a hot market.? I remember selling our house in Toronto 6 years ago when the market was very hot. You gave a date when you would collect offers and you sat in the RE agents office while agent after agent came in with their figures. We had about 7 offers over asking. That was a hot market. It does not happen too much in TO anymore.
Mohican had this to say about CMHC stats over at his Langley Financial Planning blog...
http://tinyurl.com/2cllmw
On another note, I have noticed a recent trend with the completions numbers that CMHC publishes. They publish two separate completion numbers: 1) Completed and Absorbed and 2) Completed and Not Absorbed. The "Completed and Not Absorbed" count has risen by 48.4% from last July. There are currently 1083 new housing units for sale (Up from 730 in July 2006) that nobody apparently wants to buy. I wonder why?
I had to share this rental Ad...
Can there be such a thing as an "Executive 1/2 Duplex"!!!
http://victoria.craigslist.org/apa/400202748.html
My husband had drinks with a friend who knows many people in the RE markets. They are all selling their flips at a loss.
You must read this. They say this could not happen to Vancouver or Victoria????? Maybe not on the same scale. We know people who are pulling out. Read about the 70 year old retiree landloards.
http://www.orlandosentinel.com/business/orl-condobust2707aug27,0,2001796.story
Don't be content with a 10% drop, that just puts us back at last fall's prices. I am pretty confident that we will see a 40% correction (at least) before the music stops. The trough will last for a while before people begin to forget the pain.
I am seeing "price reduced" a lot in Vancouver. Edoomton and Calgary are starting to slide, UK too. Spain is in the can, and the US turn has only just begun.
It will likely take a while for reality to set in, so don't capitulate too soon. I am waiting for 2003/2004 prices to return before pulling the trigger. If they don't, rent is still cheaper, and there is always Mexico, Brazil, etc.
HHV You are only imagining that prices are flattening or dropping!!
Here is the reasoning behind my statement:
1. Everyone in Canada and many Americans want to move here. The BC governmnent has endorsed this concept on our auto license plates with "The Best Place On Earth" slogan.
2. Ask any real estate agent. They all agree property can only go up in Victoria.
3. Ask anyone who has bought in the last few years. They all agree they are glad "to be in the market" and see their house value going up and up.
4. Our resident bull JMK has provided extensive proof that there is lots more gas left in the tank of the Victoria real estate machine. Read his posts - he is Victoria's answer to Ozzie Jurock.
5. New FTB's are more than willing to pay 3K a month to live in a property they could rent for half that much. They are thrilled to pay that 3K a month for the next 40 years. Are they wrong? No way - Ask JMK!!
6. The boomers are coming in unlimited numbers. Most can hardly wait to snap up a fixer-upper in Esquimalt, Fernwood or an 800 square foot downtown condo. Not quite what they left behind but that's the price you pay to live in paradise
7. Don't worry. Subprime worries, credit tightening, slowdowns in Edmonton real estate will never effect us on Vancouver Island. We live on a beautiful island and are isolated from economic issues on the mainland.
Fabulous post, roger, thanks.
If you can, check out CH news at 11 tonight - they'll probably replay the substantial story they had on the dinner hour news on the tanking us market -foreclosure signs over and over - and how that is filtering down to Canada through the GM layoffs, etc.
Roger, we've miised your insights and enlightened commentary around here... much appreciated.
solopist,
My mother-in-law lives in France and from what she says it is hitting France. Especially the South and the Normandy, Brittany region where there are many vacation properties.
hhv said
Roger, we've missed your insights and enlightened commentary around here...
Thanks for the welcome back. I have been tied up with a work project for the last few months..
Now that it's finished I will be posting more often. I also plan to update the Needs Analysis Web site when the VREB numbers come out next week.
BTW I got a call last night from Will and Ken Lowball in Florida. They are planning to move to Victoria in a few months when things get interesting around here in the real estate market. VicGuy I believe you knew these guys when they were giving haircuts around here a few years ago.
Roger
yes,it's good to see you back roger,missed your posts as well.
I look forward to the return of those barbers,could be a real brush cut coming soon.
The part I am going to enjoy is watching the refusal of people to not lower their price cause their house/neighborood is different,and cause they poured tens of thousands into renos that only bring it up to an average modern day decor that many others have.If you don't have a recent modern decor update (hardwood/granit/stainless) you will be behind the pack of houses in your price range and at more risk for low ballers to insult you,it gets right nasty in a downturn.
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