It's so important.
How's this for spin:
CBC
Edmonton soars 15.1% YOY
HHV
Edmonton average house prices plummet a whopping $100,or 20% in just 6 months. May 2007, $426K. November 2007, $325K. I guess a lot of Edmontonians dreams of selling and moving west must be over.
CBC
Calgary up 13.3% YOY
HHV
Calgary home prices falling faster than a shooting star. May 2007, $487K. November 2007, $409K. That's $78K folks. Or 16%. But I know, I know, it's just 6 months. The use of average price information can be useful in establishing trends when applied over a period of time, i.e. six months or longer. The Calgary Real Estate Board cautions that an average price does not indicate the actual value of any particular property.
Yes, I cherry picked these stats. Yes, these cities rose fast and furious. Yes, their rates of increases were higher than Victoria's. But they didn't rise anywhere near as far. Nor did they account for the fact that more people, with more money, live and move to these two towns, more frequently and at a higher rate than ever they did come to Victoria.
I can't help but wonder if we'll see the same panic selling here, like we do there, when we get 2-3 months of consecutive declines here?
24 comments:
Read this article from Slate (I posted it in the previous thread).
"The Cockeyed Optimists of the NAR"
http://www.slate.com/id/2179605/fr/flyout
HHV
I am getting concerned about you. A few weeks ago you were looking at taking the real estate course. Now you are successfully learning how to spin statistics. Be very careful - it is so easy to slip, fall and wake up on the dark side
:>) Roger
long time reader here.
I work with many people that are new arrivals here in Victoria and they all are totally loaded with cash and laugh at the prices here.
I see Victoria pushing out the people that cannot make more then 100K per year and becoming the heaven for the rich in Canada.
I honestly think the prices here are about 50% too high, but honestly, Ill pay that amount not to live in -35 weather in redneck hell in mid Canada.
I can tell you right now, in my area of Oak Bay, people do not talk about how much things cost, they are too busy making money.
"I can tell you right now, in my area of Oak Bay, people do not talk about how much things cost, they are too busy making money."
Doing what?
Long time reader?
Must be jmk.
I agree with HHV.
Doing What?
I know many people in Oak Bay (I live there). They are not rolling in money.
Quite a few are real estate agents.
I am certain Anon 8:14 is a new real estate agent or builder just trying to keep the family fed.
In order for Victoria prices to drop substantially, ALL other markets that could conceivably supply buyers for this market would have to drop like a stone. You may not see it anymore, but Victoria IS a desirable place to live and especially, retire. Prices will level off, prices may dip, but they are NOT going to drop substantially.
MM
Well, look at Spain, Florida, other places.
So Victoria will be the only place in the Western World that won't have problems?
You have to see the big picture. Read Shillers macroeconmic report.
Well, look at Spain, Florida, other places.
So Victoria will be the only place in the Western World that won't have problems?
Both those markets have tripled in the last 10 years. Victoria's market has only gone up by slightly more than a factor of 2. I consider that a pretty big difference. Doesn't mean we definitively won't have problems, but it does mean we are not at as scary a height.
In my opinion, the key to this marketplace is new condominiums. The sales on these projects are weak,as measured by there sales to listings ratio and absorption rate, especially in Langford and Colwood.
The next stage of the marketplace is for the proposed complexes that are two years out to be put on hold as developers have difficulty in getting financing. Those recently completed but not sold out, will be sued by the subcontractors for payments not received. The lenders will demand payments and the developers will begin to rent out these suites, with the rents assigned to the lender. Then comes receivership.
This, as in 1994, will shake the psychology of propspective purchasers in all types of properties. If our level of specu-investors is high, which I believe it is, then a dramatic drop in sales will occur along with a dramatic increase in listings.
New condominiums prices will drop and the other types of properties will follow, until it makes economic sense to purchase properties which provide a positive return on the purchaser's equity invested.
A glut of properties and a dearth of sales.
Sorry, crystal ball starting to get fuzzy, but I would watch these complexes.
Reflections, Juliet, The Aspen and Latoria Walk.
Also, how many people have actually moved here? I think we had earlier stats and it was not as large as imagined.
Can retirees actually keep the RE market going? Are new businesses developing in Victoria? (not talking about little shops).
There are over 43 places for sale in the Songhees. Many of the Americans are leaving and trying to get out of their purchases.
I don't think retirees can really keep a market going and tourism, government and service jobs don't really bring in much money.
HHV, Prairieboy, Greg, JMK
The recent postings indicate a need for more statistics so that we can all see what is selling in Victoria.
What is required is access to the detailed stats from VREB and you can find them here
Now you can watch those condo and SFD sales in each area with a detailed price breakdown.
If you want stats for all of BC then look here
Making money in Oak Bay with grow ops maybe?
Making money in Oak Bay with grow ops maybe?
"but it does mean we are not at as scary a height."
Sure dude, then why aren't you owning a house instead of your little condo ? You can get one in Florida for half price right now though, around $150,000.
Last time I checked that chart roger posted we were at the top of the Matterhorn about to hit the slippery slope.
Did you see CIBC is going to have to eat it big for the next 3 quarters cause of ABCP paper ?
why aren't you owning a house instead of your little condo ?
Lifestyle choice.
we were at the top of the Matterhorn about to hit the slippery slope.
Just three more months!
JMK alert - standing by for his rebuttal.
Sure, I'll bite.
You could just as easily make that same schematic fit the data from 1977 to 1994. Or the price of gold, or the price of a hamburger. All with the same predictive power.
jmk,
I really would like to buy you a beer. :) Actually, you guys, I'd like to buy you all a beer! This kind of back n forth is what makes this whole thing worth while.
JMK said
You could just as easily make that same schematic fit the data from 1977 to 1994. Or the price of gold, or the price of a hamburger.
Cheesebugers at McDonalds have only increased in price since 1977. The price increases were pretty close to inflation. Price was based on fundamentals - labour, materials, competition. To my knowledge I have never heard that hamburgers are a good investment. :>)
Now gold, on the other hand, is considered to be an investment commodity. It is often subject to speculation and there have been several bubbles in the past. I remember when it ran to 800 $US and then the bottom dropped out of the market.
It is nice to see you compare the housing graph that I posted to gold. It means that you are finally coming around to accepting the fact that we are in a housing bubble. Perhaps in 2008 after a few price drops you will become a full fledged bear.
hhv.
When was it again that we were all going to meet at the Bengal Tiger Room for a beer (ahem, Taylor Fladgate) bought by you.
If I remember correctly it was when there was a 10% correction.
Someone please correct me if I'm wrong.
S2
i think that was it s2
the price increases were pretty close to inflation.
Thats the point Roger. The red curve in that picture looks like something increasing with inflation. It looks like something increasing at 100 times inflation. It also looks like something increasing at 1/100th of inflation. The red curve is simply the shape of exponential growth.
If it is easier, imagine two straight lines, both with a positive slope. Import them into photoshop and you can make them have the same slope by squishing the axes of one of the two lines. Thats all that has been done in this "comparison", except the shape is an exponential curve, not a straight line. Quantitatively meaningless.
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