Open Post

I'm off to the top of the world.

Remember to stay the course Bears, we're so close.

Here's your open thread for posting. I'll be back to continue this where I've left off in early June.

...in most markets, renting wins.

“When the average family can no longer afford the average home, how can so many people be deluded into believing a boom will last forever?” he asks. “How could we put so much money into something we might never be able to sell, except to a greater fool?”

H/T to Roger for the link.

Discuss away.

What do developers do...

when they (collectively) can't sell enough condos to keep themselves out of receivership? (6 in six weeks I believe it is now)

Why, build more of course:

A big boom in condominium and apartment construction boosted February housing starts to levels that far surpassed market expectations, CMHC said Monday.

The seasonally adjusted annual rate of housing starts was 256,900 units last month, up from 222,700 units in January, CMHC said.

That was much stronger than the consensus estimate of 210,000 units that the market had been expecting.

"February's housing starts figures highlight more than ever the stark contrast between the Canadian and American new home markets," said Pascale Gauthier, an economist at TD Bank Financial Group.

But Gauthier and many other analysts expect the building surge won't last.

"The deterioration in affordability and growing economic uncertainty should gradually slow home building activity in the months ahead," said a commentary from BMO Capital Markets.

The CMHC also said it's unlikely the torrid pace will continue.

"Despite this sizeable growth in February, we continue to expect that the trend in housing starts will decrease gradually between now and the end of 2008," said Bob Dugan, chief economist at CMHC's market analysis centre.

Construction of urban multiple-family units jumped 30.3 per cent to 140,700 units in February, while singles rose 1.8 per cent to 83,000 units. The overall seasonally adjusted annual rate of urban starts increased 18.0 per cent to 223,700 units compared to January.

Urban starts rose by 45.2 per cent in British Columbia, 26.2 per cent in Quebec, 16.9 per cent in the Atlantic region and 16.4 per cent in Ontario. The Prairies witnessed a decline of 9.6 per cent last month, CMHC said.

Rural starts were estimated at an annual rate of 33,200 units in February.

Of course, this isn't a carbon copy of what went on in the states right before their RE market avalanche.... up here in lotusland it's different.

Every night I go to bed saying a little mantra... "when I get home from my trip people will be rational." One can only hope; it may be the only thing that keeps those who bought in the last six months out of the loonie bin.

Real estate T-Ball

When I was a kid I was lousy at baseball. So I played T-ball, because that meant the ball was set up for you and all you had to do was step up to the plate and smack it as hard as you could.

Today, VREB set the ball up for all us bears to step up and smack it out of the park. And all you have to do is NOTHING. DON'T BUY. WAIT. IT'S HAPPENING!

These are busy months in RE. Prices should be creeping up along with sales. But the only thing creeping up is listings. Prices and sales are headed down. You can grease the slide by doing NOTHING. Except if you own a property, especially a second or third property that you currently spend an extra $1000 or so a month on subsidizing someone else's living, you can grease the slide by LISTING that money-losing property. And get out while the getting may almost be categorized as good.

Property Sales Moderate in February

The number of sales of homes and other properties in the Greater Victoria area moderated in February. There were 619 sales through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) in February, down from the 707 sales in the same month a year ago. There were 464 sales in January.

Victoria Real Estate Board President, Tony Joe, says the market continues to be well-balanced with strong demand for homes that are realistically priced coupled with a growing selection of available properties for sale. "The total number of properties available for sale rose to 3,311 in February - a 13 per cent increase over February of last year," noted Joe. Last month over 27 per cent of single family homes sold for under $450,000 while nearly 37 per cent of condominiums sold for under $275,000. At the higher end of the market, Joe noted that there were nine sales in Greater Victoria and one sale on the Gulf Islands of over $1 million.

The average price of single family homes sold in February in Greater Victoria was $587,295; the median price was lower at $543,500. The six-month average for single family homes was $588,826. The average price of all condominiums sold in February was $333,408; the average for the last six months was $334,577. The median was again lower at $299,450. The average price of all townhomes sold last month was $422,607; the six month average was $426,685. The median price was $395,000.

MLS® sales last month included 316 single family homes, 177 condominiums, 73 townhomes and 13 manufactured homes.

My favourite line here is "strong demand for homes that are realistically priced." What this actually points to is two things. First of all, no one can afford anything but the lowest end of our market. Realistically priced means that only homes under $475K are realistically priced. Given that a full 3/4 of homes in Victoria are above that mark, then 3/4 of home owners are out to lunch on what is realistic for their properties. And secondly, why is anyone buying right now when clearly the two-month-does-not-a-trend-make is telling you that the longer you wait the cheaper these houses are going to be. Feels good to be a bear today. Even if I am getting a bit ahead of myself.

Personal anecdote related to a previous post about how we almost bought two months ago: the condo sold for $13K below asking, which means had we taken the support we were offered we would not have really received the full value of the support. This point is not meant to belittle the significant value of the help that was offered to us. But seeing as how in a sudden, unplanned turn of events, we would have had to list this place as soon as it closed, we would have either lost out financially or sentenced Ms.HHV to having to turn down a great career moving opportunity. That place would have cost us $25K (sold less plus the Realtor commission) in two months. Crazy when you put it into perspective eh?

Some quick observations and Guest Post #1

I was in D.C. on Friday. I was impressed with how clean it was. Granted I was in the business district but wow, brick sidewalks, not a cigarette butt nor needle to be seen, and the architecture... certainly doesn't make Victoria appear "world class." I came home from Van yesterday on the seaplane. Flew right over downtown. Anyone who thinks we don't have more land for development should fly over town. There is much more land here than I realized.

Care_bear sent in the content below for a guest post. It's a different take than we've seen here for a while. I'm inclined to think a good discussion may arise.

Selling in a bear market

It drives me nuts to see the number of home sale listings increase daily in yet people still think that they can sell their house/condo/whatever with minimal effort and for ridiculously inflated prices. The market is different today than 2 years ago people.

I drove by a newly advertised 'for sale by owner' duplex the other day and the sign looked like it was made by the owners 10 year old kid. It was complete with flashing bike light on top. How a flashing bike light is supposed to convince someone to drop $400k on a duplex is beyond me.

If you want to sell your property in today's market then you will have to do more than your neighbours who are selling the exact same place. Here are some hints:

1) Get a real estate agent. Get a good agent. Reality is that you need to be playing with a full deck of cards in order to complete such a huge transaction. Even selling a bachelor condo is a huge transaction these days. Believe me that I'd love to say that you can save the huge amount of real estate commission by doing it yourself...you can't. Maybe you could 2 or 4 years ago.

2) Watch your agent like a hawk. Make sure the ad is perfect. Make sure you bug them for updates regularly. Make sure you get feedback from everyone that was through your property. Most real estate agents do a good job but they have many clients besides you and any sale will be the result of the partnership and not soley your agent.

3) Price accordingly. Your price must be exactly right for the market. You will not sell if you're overpriced. Likewise, make sure you don't get bamboozled into selling for less than market value. It's up to you to determine the value of your property and not your agent (they will have an important opinion). It's your money.

4) Make sure your property is the best one available in the area for the price. Paint some walls, cut the grass, reno a bathroom, etc. Your property must be better than your neighbours as the amount of buyers looking for your place is not as high as in years past. If there's a serious buyer in your area then you want them to buy yours as you can't afford to wait for the next buyer (if there is one).

5) You need maximum exposure. List on MLS, usedvictoria, craiglist, wherever you can think about. Tell people at work, post signs, use the newspapers. Have open houses every weekend. You need to find your buyer as it's much less likely that a buyer will find you.

If you really need to sell your place now then you must take the initiative. Fortunately, things are still selling but the amount of listings is increasing rapidly and the window for you to sell (and not lose a lot of money) is only narrowly open.

DISCLAIMER: I am not a real estate agent nor am I involved in the real estate industry in any fashion.