Wednesday, January 2, 2008

What does BC Assessment say your house is worth: YOY?

These are the CRD numbers. What do they tell us? Look closely. If you live in a municipality where "they just aren't making any more land" you'd think your house would have gone up in value more than say, Langford, or the Highlands, or View Royal, where they seem to be making a bit more land available. But that isn't the case.

Let's adjust these numbers for inflation @ 3%, maintenance at 1% and taxes at 2.5% (total 6.5%) I rounded:
Colwood: 4% gain
Victoria: 5% gain
C. Saan: 4.5% gain
Esquimalt: 4.5% gain
E.Saanich (61): 3% gain
W. Saanich (63): 2% gain
Oak Bay: 1% gain
Langford: 2.5% gain
N. Saanich: 2.5% gain
Metchosin: 9.5% gain
Sooke: 7% gain
Highlands (61): 7.5% gain
Highlands (62): 7% gain
Highlands (63): 11% gain
V.R. (61): 2.5% gain
V.R. (62): 1.5% loss
Sidney: 2% gain

Hardly the great market it once was eh?

13 comments:

Nick said...

I can understand deducting 3% for inflation to show real growth, but I don't get the 1% maintenance and 2.5% taxes. The rise in assessed value is a lot less than the previous few years of 15-20%+, so the spike up in prices is probably starting to level off, as it must. However, if you're hoping for SFH in Oak Bay to drop 30% I think you're going to be disappointed. There will be a slight condo glut in the next couple of years and I wouldn't be buying pre-construction right now, but people who own the land under their dwelling in Greater Victoria will probably not see their values tank.

Greg said...

@Nick

Why not? The way it works is, house prices tank when people can't sell condos to move up. What's so different here?

hhv said...

Nick,

I did not say that values would tank. I asked the question: "
Hardly the great market it once was eh?"

I adjusted the BC Assessment non-market based appreciation for inflation, 1% maintenance (which is what is estimated people should budget to spend on their dwelling and land) and then added the very roughly estimated property tax just to demonstrate that this market is hardly as hot as some would like us to believe. I also like to remind myself that owning a home is not the investment that many people believe it to be.

Anonymous said...

What! What!

What happened to the 12%, 15% gains of old?

2%? 3%? 4%? 5%?

If this doesn't shoot a cannon across the bow of a specuvestor I don't know what will.

Better bring down the lifeboats I suspect that we are going to see a lot of folks fleeing a sinking ship.

S2

Nick said...

hhv

OK, I see you are thinking of a property as a liquid asset (it's not, but we can assume that for the sake of argument). I'm not spending any of my home's value when I pay property taxes or do maintenance, but if I was the numbers would be more like 0.6% for tax and 0.3% for maintenance. Specifically, my house is assessed at $1M and my taxes are $6200 and my maintenance is $3000. Your mileage may vary with maintenance, but tax rates are linear to assessed value.

You're right the market isn't as hot as it used to be; how could it be? Supply and demand have to balance each other and rapidly rising prices push down demand. My point is that doesn't necessarily mean there will be a crash. We don't have the massive oversupply that AZ, FL and CA have.

greg said...

@Nick

When the sale of 94 homes valued over $536 thousand is trumpeted as supporting a new high median and a new high average price for the local area, it wouldn't take a lot to reverse the trend, would it?

hhv said...

wow. were my predictions ever off.

roger said...

HHV,

My predictions were off but I did make this comment:

However, anything can happen with statistics when the sales numbers are low. The sale of even a few multimillion dollar homes can skew the average price to the high side.

Another reason for the upward Average and Median numbers pressure is that there is not much inventory left at the low end. However there is lots of high end inventory that has been on the market for months with many having significant price reductions. I guess high-end buyers couldn't resist what they think is a "bargain".

VREB met my expectations for the Spin Alert

Anonymous said...

Hey, want a good laugh?

http://leveraged-in-vic.notlong.com

As I read the article, I first thought "hang on, they're depicting this guy as a brilliant investor just because he knows Nortel was a bad investment, and then bought a house - thus making him a genius along with 99% of the North American population".

But then when he said he wasn't going to change his spending habits due to increased paper equity, I thought "well, that sounds prudent and intelligent". The next sentence reveals that he's not going to change his spending because he's "already taken out as much equity as he can stand to make leveraged investments in more real estate on Vancouver Island and across Canada"!!!!!!!!!!!!!! He also says that if his house goes up more in paper value, he will leverage it even more to buy more property.

You guys should all kneel down and hail Mr. Leverage. If there are enough like him, they will bring about a crash identical to the US.


- Billy TwoBaulz

Anonymous said...

Sorry, it's not Mr. Leverage - it's Mr. Kim Linkert, and I reiterate that all housing bears should canonize him as the patron saint of bringing about housing corrections.

All hail specuvestors leveraging their houses since it's a way better investment than Nortel!

Anonymous said...

Here's another place with the "best climate in the world" and they probably also benefited from the ripple effects of the Vancouver Olympics

http://www.sun-sentinel.com/business/sfl-flzhousingpb0101pnjan01,0,3665711.story

Anonymous said...

We don't have the massive oversupply that AZ, FL and CA have.

No, probably not. But still, I seem to recall nobody (other than those crazy bubble bloggers) was saying AZ, FL and CA had a massive oversupply until after their markets tanked. Just as you can't be sure you're in a bubble market until it pops, you can't be sure how much (over-) supply you've got until the specuvestors bow out ...

Anonymous said...

I agree with the previous poster that you can't call the market a bubble or that there is an over supply unless the market bursts.

What is difficult to estimate is the level of speculation in the market. If we are in a bubble and the market bursts, then I would point the finger at heavy market speculation. If the market slowly deflates, then it was not heavy speculation at all.

Is there anyway to determine the level of speculation?

I've looked at the number of new condominiums not owner occupied in Humbolt Valley. I've looked at the decrease in our household size (Stats Can). I've looked at our population growth (Stats Can). I've looked at the percentage of homes currently for sale that were purchased less than three years ago (me). And to me - all of these factors suggest that the level of speculation in Victoria is high.

So, If it looks like a duck, it walks like a duck and it quacks like a duck. Then it most likely is a duck - or an ugly cat with a limp and a bad cough?