Stock markets around the globe are taking a big-time hit again today.
The 40 year mortgage is the most popular mortgage product in Canada says the CBC, despite the extra $70K one would pay in interest versus the 25-year option on a $250K mortgage. Canadians are, in fact, stupid: like this article suggests.
VREB have their July numbers out today; rather quick I might add:
We should notice several things about this month-end report that aren't the same as previous ones. I've highlighted them above.
Sales of homes and other properties in the Greater Victoria area continued to show exceptional strength last month reaching the highest level for the month of July in over 15 years. There were 922 sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in July, up over 36 per cent from the 677 sales in the same month a year ago. There were 949 sales in June of this year. Meantime, 27 sales of over $1 million helped push the average price of single family homes sold in July to another record high of $574,753; the median price was considerably lower at $515,000; the six-month average was $560,393.
Victoria Real Estate Board President, Bev McIvor, says the continued strength of the market is remarkable, "Despite the significant increases in prices that we have seen in recent years, the total number of sales shows that demand remains very strong. The number of sales so far this year is running over 11 per cent higher than in the first seven months of last year while the six month average price for single family homes has risen over seven per cent since the beginning of the year."
The average price for all condominiums sold in July was $306,668; the average for the last six months was $311,568. The median was again lower at $268,000. The average price for townhomes last month was $402,558; the average for the last six months was $397,434. The median was $379,900.
MLS® sales last month included 499 single family homes, 241 condominiums, 106 townhomes and 22 manufactured homes.
There were 3,402, properties listed for sale on the MLS® system at the end of last month, up from the 3,318 properties in the same month a year ago.
Despite record numbers of sales, 7% return on your investment if you've bought in the last 12 months should have you worried, non? Had you bought with the intention of trading up/flipping, you haven't broke even yet when you consider that 6% of your sale price will go to your Realtor and that other 1% goes to property transfer tax. Sounds like not too many of these get-rich-quick believers are getting rich.
Condos are, in fact, according to VREB, coming down in price. Anyone who tells you different doesn't read this monthly update obviously. If you're thinking of buying a condo: WAIT.
I can't remember any other monthly summary that included the numbers necessary to do a listings-to-sales ratio calculation (in case you're interested it's about 26%). The changes that MLS made to their website have made it very difficult to track (just ask Prairie Boy at Victoria's Truth), nice of them to do it for us, eh? Can we say that too much self-regulation is not necessarily a good thing in this market? But a listings-to-sales ratio of 26% is a great thing for this market.
I also need to point out that whoever writes the MLS sales stats update has worse math skills than I do (is that possible?). I tallied their total sales (868) and then looked at the total they gave us (922) for a difference of 54. The only logical explanation is that 54 sales went through the board that weren't on MLS, which is highly likely, and that I can adjust my sales/listings ratio from 26% up to--wait for it--a staggering 27%. Today is a good day to be a RE bear.
UPDATE: OK, after some careful reasoned analysis, I realize I got a bit ahead of myself with this post. After having done our segment analysis yesterday and counting barely one-month's inventory supply in SFH and just slightly more in condos, I was overly excited about 4-months general market supply. A more realistic "Oh, Happy Day!" for bears will be when inventory approaches double what we have today.
The likelihood of 6000-plus properties for sale in Victoria seems far-fetched. I'm guessing that we're more likely to see a considerable drop in sales before we see a doubling of listings. Maybe it will be a combination of declining sales and ever more listings that is the undoing of this market. I don't see any signs of that happening right now. I'll leave this post untouched as a reminder to not think out loud on screen anymore... :)