Monday, March 10, 2008

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.

197 comments:

Anonymous said...

Hey why not?

Even doomed to recievership the lawyers, accountants, brokers, realtors and developers will all still get paid.

It is only the poor sap holding the mortgage or the worthless title that gets to foot the bill.

hhv said...

developers and construction companies go under... just ask Kinetic, they took a hit on Tuscany and now they're getting worked over by the Radius.

hhv said...

anecdotally I'm seeing lots of price reductions in the cheap end of the condo market the last week or so

Anonymous said...

hhv,

That is why I didn't add construction company to the list! As an aside, word is that Radius paid all of its bills until the end of December. Kinetic should be ok on that one.

S2 said...

Good Grief!

From today's Times Colonist. I know they HAVE to print good RE stories but really...good grief.

"Housing market expected to stay strong"

http://www.canada.com/victoriatimescolonist/news/business/story.html?id=6b3a30ac-c3dd-46f3-8a22-24d8cce5006d

roger said...

S2 said

The title of the article in the TC Housing market expected to stay strong is misleading but it contains good news for bears!!

Provincially, homebuilding starts in urban B.C. surged last month to 48,800 seasonally adjusted at an annual rate, up from 33,600 in January.

"The forecast is for lower level housing starts this year than last," said Frketich. "We're looking for a 15 per cent lower level of starts this year. February looks very much like a spike."


But on Vancouver Island

Vancouver Island housing starts slid to 277 last month from 317 in January. February's numbers are also below the same month a year ago when 354 homes were started, CMHC said.

Then the pathetic excuses for the poor numbers:

"They are probably down a little bit because it is a seasonal thing. There is usually a rush to finish before Christmas," Rebneris said.

Even with the decrease, housing starts remained above the 20-year average for the first two months of this year.


Now we are using the Christmas season and 20 year averages to justify the sliding market on Vancouver Island.

By the way Herman Rebneris, president of Cottage Grove Developments Ltd. has not had any major developments since 1998 according to his website A Goggle search indicates that he a is a local affordable housing activist.

Is he also a forecaster of the future of housing in Victoria? I don't think so!!

S2 said...

Whew! Thanks for that Roger.

I wonder if the bulls will read it the way you explained it?

roger said...

S2 said

I wonder if the bulls will read it the way you explained it?

I don't think so. Bulls will go through five phases: Smugness, denial, anger, fear and for some panic. Most are currently in phase 2 - denial.

hhv said...

I highly recommend people read Mish today. Link on the blogroll.

Anonymous said...

I don't care what Carla of the TC says today (surprised she did not report on the number of hits Bare Mountain is getting from salivating Phoenix investors). The facts are simple. Albertans are all buying in the US (they used to buy here and kept the prices inflated as they had the means and salary to pay for them).

http://www.thestar.com/Business/
article/306338

Now, they are gone. The local folks who can't even afford to buy a new car (hence all the old cars that are 25 years +)certainly couldn't even qualify for a $200K mortgage. They can't even afford flights South (not a single flight from this "world-class" city except to Seattle as there is no demand given the extreme levels of poverty here, or is it cheapness/). This year will see the biggest price drop in history in Victoria. Probably 40-50%.

Anonymous said...

Bears will go through four phases: predicting market crashes years early, turning to bitter posting on the internet until the inevitable prediction comes true, glee at watching the market drop, and gloating and waving it in people's faces for the next ten years. Where were YOU in 1982?

olives said...

Yes, Mish is great today (and every day)- always enlightening, in a slightly disturbing kinda way.

greg said...

Like average joe doesn't gloat with smugness when by accident he bought in 1985, or cry with despair when he bought in 2007?

vg said...

Some educational reading for the bulls who think the credit crisis is a blip in world history, I think it's wake up time for them.




Derivatives the new 'ticking bomb'
Buffett and Gross warn: $516 trillion bubble is a disaster waiting to happen


Derivatives bubble explodes five times bigger in five years
Wall Street didn't listen to Buffett.

Derivatives grew into a massive bubble, from about $100 trillion to $516 trillion by 2007.


http://tinyurl.com/25f7qw

vg said...

One more piece for the bulls on how fast the so called employment number story the media machine can turn on a dime. This is just the beginning.


Hundreds to lose jobs at call centre

West Corporation is closing Central Saanich site, citing high costs


Close to 450 workers were stunned today to learn that they'll be out of work by the end of July when their employer West Corp.. shuts down its Central Saanich call centre.

Workers, some teary, are worried about their future now that they will be flooding the job market at the same time. They fear that even though Victoria has the third lowest unemployment rate in the country, it won't be able to absorb that many people.



http://www.canada.com/victoriatimescolonist/news/story.html?id=1734337c-fadc-4391-a56c-929b6df7fc60&k=90973

Anonymous said...

We're sure a world class city with high paying world class jobs. No wonder locals are so flush with dough and bid up the price of homes to affordable $600K levels.

Muriel said...

hhv said:
"anecdotally I'm seeing lots of price reductions in the cheap end of the condo market the last week or so"

On a similar note, I just signed up for the PCS, on the recommendation of one of the posters here - Roger, I think - anyway, thanks whoever it was - and I have been pleasantly surprised to see the number of listings jump from 171 mid-last week to 201 as of today. My criteria is houses, townhouses or duplexes in Vic, OB, Esquimalt or Saanich East/West. It's spring of course, and my criteria is broad - a wider area and (much)higher price range than I would consider if I was really serious about buying, but it's good for looking. I love being able to see how many days on the market houses have sat, and how many price reductions there have been. Fun!
It's also interesting to compare the list price to the assessment prices, which you can still find for free at bc assessment site until March 31.

snaptee said...

If you go through a real estate agent so that your account doesn't expire, you'll get to see all the listings that have been relisted over and over again. I've had my account since late last year and already there are some properties that have been relisted 3 or 4 times since then. Some legitimately expired most of them are the exact same listing, sometimes with a lower price.

Anonymous said...

Don't pick on Carla.

The TC needs "reporters" like her; someone who prints what they are told and doesn't bother to ask a lot of questions or worry about facts or research.

Anonymous said...

Hundreds to lose jobs at call centre

Good golly, do you think all these $12/hour ex-workers will be able to continue to pay the mortgage on their $400K condos? Look out below!

JAS2 said...

That's the problem with high house prices - you might think you can afford them with your salary, but with the massive length of time it takes to pay off the house (e.g. 40 years), lots of things can happen.

Metaldwarf said...

might have been posted before



US Mortgages "Map of Misery"

vg said...

"That's the problem with high house prices - you might think you can afford them with your salary, but with the massive length of time it takes to pay off the house (e.g. 40 years), lots of things can happen."


Good point,even with 25 year mortgages too. It seems the bulls posting have had the idylicc life with no financial/personal setbacks that most people have to endure. With so many young couples under the stresses of todays lifestyles I can only see a higher divorce rate coming down the pipe once the novelty wears off and reality sinks in that 40 years is a prison sentence.

boomer said...

ironic

"mortgage" literally = "death pledge"

VicREBear said...

"..40 years is a prison sentence."

Imagine how these stressed young people will be reacting if they run into tough times, try to sell, but can't because the market is glutted with condos. Oh, and what if their "investment" is worth less than their mortgage? There goes the "if we can't afford the place we'll sell and make some money" escape plan. (Several young couples with whom I am acquainted are have just such a plan with no other backup. Hope it works for them.)

roger said...

VG - Here is an update on Ladysmith

Ladysmith goes big time

“I would imagine that you’re going to get some of the rich and famous buying in there and using it as summer retreats,” Ladysmith resident Jill Dashwood told the Georgia Straight. “Those people will see how beautiful Ladysmith is and how comparatively inexpensive things can be here.

A realtor and director of the Ladysmith Chamber of Commerce, Dashwood has seen a number of newcomers from Vancouver and Calgary

Dashwood noted, Ladysmith residents have always been proud that the town has produced a successful actor who also has a knack for business. “She’s got a really good head over her shoulders,” Dashwood said of the former Baywatch star.

Billy TwoBaulz said...

I honestly feel sorry for people who are so naive and have clearly never traveled widely outside of BC or even Ladysmith. I don't even think she's being cynical - I think she honestly believes that Ladysmith's day in the sun is coming and that the rich and famous will start to flock there.

Anyone who thinks people in BC are more sophisticated or worldly than your average American needs to really look around with their eyes open. I have had difficulty in getting bank tellers here to cash pounds sterling cheques, as they're unfamiliar with what currency it is (unbelievable I know considering the ex-pat community). I also had a bank teller, in response to a conversation about UK regional accents, say wistfully "I wish I had an accent". No joke.

roger said...

I just dropped by Canadian Mortgage Trends and saw this article on subprime in Canada.

It's now becoming extremely challenging for those with weak credit profiles and small down payments to get decent financing.

Lenders who are still entertaining these deals are charging significant risk premiums (i.e. high interest rates and/or fees). They're doing that because very few investors are left in the secondary subprime mortgage market.


A Victoria solution??

Many cash-strapped credit-challenged borrowers might be stuck with two options in the meantime:

a) Rent

b) Use smaller lenders with less favourable terms.

Just don't be alarmed if you see more rate sheets with 12%+ interest rates and 3%+ lender fees.

roger said...

Today, the Globe and Mail published this article:

U.S. mortgage mess creeps north

Lenders catering to riskier borrowers, most of whom took advantage of new financing techniques and a wave of liquidity to enter the market in the past few years, are struggling to fund their operations.

The result is a slow retrenchment in a sector that held about 5 per cent of the Canadian mortgage market before the credit crunch spread from the United States in August.

Anonymous said...

12% interest is not bad in Saskatoon where homes appreciate 50% (year to year and forever). In Victoria, nope, houses appreciated only 1% yty, OUCH, that's big loss.

Anonymous said...

Ladysmith and the riffraffs who live there with their rustbuckets are the new Bervely Hills of trailer parks.

vg said...

There's always a reason why places like Ladysmith are cheap,cause there's nothing there,lol.



“She’s got a really good head over her shoulders,” Dashwood said of the former Baywatch star. "


I'm not going there, I'm not going there, I'm not... etc :)

roger said...

vg said

I'm not going there, I'm not going there, I'm not... etc :)

Geee. I thought you might bite on that one!!

Anonymous said...

Remember when Canada was so isolated from the credit problems in the U.S?
Remember how "It's different here"?

Globe and Mail:
http://www.reportonbusiness.com
servlet/story/RTGAM.20080313.
wrsubprime13/BNStory/Business/home

U.S. mortgage mess creeps north
Non-prime home lenders hit by trouble securing financing; new opportunities for big banks.

Of course, this is only 5% of the mortgage market here. But still.
Another thing to consider.

(oh, and as an irrelevant consideration:

Shortly before the subprime crisis hit, MoneyConnect had been hoping to ride the "non-conforming" mortgage market, catering to customers who found it difficult to get bank financing. The company expected an annual industry growth rate of 50 per cent.

So, they were expecting to grow at a rate of 50% in Canada. Even if we miss the worst of the crunch (we likely won't).... it would have been a lot worse in the near future.

roger said...

Latest Financial News

No end in sight for market woes, Bank of Canada chief says

More than seven months on, the end is not yet in sight," the Bank of Canada governor said, "although it is safe to say that we have reached the end of the beginning of this turmoil."

Resource boom can't last, Carney says

March 13, 2008 at 7:50 PM EDT

TORONTO — The high commodity prices that have shielded Canada from recessionary conditions in the United States are poised to weaken and drag down the Canadian economy, the Bank of Canada's new Governor warned yesterday.

Already, Canada has felt the effects of plunging exports to the United States, and is gradually feeling the impact of tighter credit conditions spilling over the border, Mr. Carney said.

Now it appears the U.S. slump will be deeper and will stick around longer than the central bank had expected, and the pain is being felt around the world, Mr. Carney said.

Despite Mr. Carney's faith in the strength of the Canadian economy, he warned that market turmoil will continue to shatter nerves and wreak havoc on investments, even though policy makers and market players alike now have a much better understanding of the causes of the global credit crisis that started last August.

Happy Owner said...

This has no bearing on Victoria real estate but is a story about the potential of renting-versus-owning. Not trying to make a statement or anything, but just a distraction from the Bulls vs Bears debate.

Story from BBC news

http://news.bbc.co.uk/2/hi/programmes/crossing_continents/7290139.stm

vg said...

Oh the luck of the Irish,can't happen here cause we live on an island.


Irish banks may need life-support as property prices crash

11/03/2008

The Dublin government appears to be almost powerless to prevent a severe downturn. Ambrose Evans-Pritchard reports

The Irish banking system faces acute strains and may require a phase of temporary nationalization as the property slump leads to a wave of defaults, according to a leading Irish economist.

Morgan Kelly, of University College Dublin, said the government is almost powerless to stop the downturn becoming a severe slump. "We're in a classic post-bubble recession, yet we can't do anything that a country would normally do in this situation because we're inside the eurozone," Prof Kelly said. "We can't cut interest rates, we can't devalue, and there is a lot less room for fiscal stimulus than people think. We're stuck.

"We have a domestic recession now colliding with a global recession. It is the state of the banking system that will determine how terrible this will be, and frankly that is looking very shaky."

roger said...

VG - The Irish have company

U.K. Housing Market Slump Becomes Worst Since 1990

March 11 (Bloomberg) -- The U.K. housing slump deepened in February and is now the worst since the eve of the nation's last recession in 1990, a survey of real-estate professionals showed.

Every region apart from Scotland showed price declines in February, with the worst result in Northern Ireland, where a net 95 percent of respondents reported a drop in home values. Across the U.K., stocks of unsold property rose more than 8.5 percent to the highest since October 1998, RICS said


Across the Pond

The European house price boom 'is over'

The great European house price boom ended in 2007 according to a new report predicting storm clouds on the horizon for the Continent's property markets.

Only Cyprus and Iceland saw house prices outstrip the previous year's performance, according to the Royal Institution of Chartered Surveyors report, which called the end of the property goldrush.


Things here in lotusland are still OK and we will be unscathed by the credit crunch, US recession and rocky financial markets because we are unique. We have the 2010 Olympics!!

Anonymous said...

Hmmmm....

Why are we still comparing average income to SFH and why not to condos? Considering that multi-family housing starts over the past few years has outpaced that of SFH it seems that is what the average is purchasing?

Also, if you go outside of North America our condos are the size of the average home in London (93.3 sq. meter, approximately 1000 sq.ft)

So - IMO, we are want more for less all the time. Time to pay up

Anonymous said...

^^^sorry for adding the "are" in the sentence. Meant to say "always"

hhv said...

Anon at 8:45.

give yourself a nickname. read the VREB stats. SFH outsell condos almost 2 to 1. SFH is still the "average" purchase in Victoria.

Nick said...

HHV,

Those are SFH sales based on MLS and not based on pre-sale of condos that are not placed on MLS.

Also I mention start and not sales. I based it on what "is" being created as that is the future. I know that currently SFH are still out pacing homes in sales but not in new starts.

In Vancouver it is 8-1 don't remember the stats for Victoria.

Considering there is a future opinion of a crash I believe that the future should have average associated with condos.

hhv said...

Nick,

thanks for giving yourself a nickname... i still don't believe that condos are even close to matching SFH sales let alone outpacing them. There are not that many developments in town not on MLS.

greg said...

I agree with hhv, once construction slows down, all presales eventually find their way into the resale market. Any skewing of the totals in the future based on present construction hasn't occurred yet.

Anonymous said...

I noticed sales of homes are still very close to asking prices despite the rise in all listings to 3708, one place on Inez sold for over the asking price of about 560k, i guess we'll see how things are in a month or two.

vg said...

Bear Sterns going under, RBC report out saying BC more expensive than 1990. Makes you want to go to the bank and max out cause you only live once right ? tick tick tick....

Anonymous said...

It's official. The TC this morning reports we are safe to buy a house. All those crime stats "should be taken with a grain of salt". No worries, we are still paradise, everyone wants to live here, you can leave your doors unlocked, you will not be robbed. Everything is fine. No crime here. Let's buy a house. Prices will be going up again, forever.

beagle said...

Housing affordability drops to 18-year low, study finds

"But the relentless increase in prices have squeezed an increasing number of Canadians out of the housing market, and real estate experts agree that a pullback in the cards."

wow, the MSM is getting pretty bearish

roger said...

anon 11:46 said

I noticed sales of homes are still very close to asking prices despite the rise in all listings to 3708, one place on Inez sold for over the asking price of about 560k

Were you watching this on PCS? Was their a price reduction before it sold? I have seen lots of listings on PCS but fewer sales this month than last month. There have been a few sold over asking if they were realistically priced. However, I have also seen some nice haircuts.

boomer said...

Hard to find I suppose (because they are buried in with the regular mls condo listings) but Im curious how many of the ludicrously priced "fractional ownership " condos have actually sold.
anybody have any stats?

roger said...

The CREA now has now an explanation for last months drop in sales across the country. This latest spin should be repeated for many months to come. June, July and August spin will use the hot and humid weather in Ontario.

Snow blamed as housing resales drop

Mountains of snow in Toronto are bearing the brunt of the blame for a slowdown in home sales across the country last month.

In February, sales of resale housing units in Canada's major markets fell 6.4 per cent from the month before to 26,588 units, according to the Canadian Real Estate Association (CREA). The drop reflects fewer transactions in Toronto, which accounts for about one-quarter of the major market sales total, CREA said.

While more buyers sat it out, sellers stayed in the game, causing new listings to hit their third-highest level on record, at 50,405 units.

“CREA's forecast calls for sales activity to fall short of last year's record, new listings to increase, a more balanced market, and smaller price gains,” said CREA chief economist Gregory Klump in a statement. “Figures for the first two months this year are in step with the forecast.”

roger said...

The CREA now has now an explanation for last months drop in sales across the country. This latest spin should be repeated for many months to come. June, July and August spin will use the hot and humid weather in Ontario.

Snow blamed as housing resales drop

Mountains of snow in Toronto are bearing the brunt of the blame for a slowdown in home sales across the country last month.

In February, sales of resale housing units in Canada's major markets fell 6.4 per cent from the month before to 26,588 units, according to the Canadian Real Estate Association (CREA). The drop reflects fewer transactions in Toronto, which accounts for about one-quarter of the major market sales total, CREA said.

While more buyers sat it out, sellers stayed in the game, causing new listings to hit their third-highest level on record, at 50,405 units.

“CREA's forecast calls for sales activity to fall short of last year's record, new listings to increase, a more balanced market, and smaller price gains,” said CREA chief economist Gregory Klump in a statement. “Figures for the first two months this year are in step with the forecast.”

boomer said...

BTW re crime stats --Canadas most dangerous cities


notice that Victoria the smug is on the top 5 list and Nanaimo (the nice town that Victorians are always smirking at) is not???

hhv said...

funny how snow prevents sales but doesn't prevent listings... at least we know who's motivated.

roger said...

CREA news and BMO comments

Canadian Home Sales Declined in February

Existing home sales in Canada's major markets slowed slightly in February from the previous month, but average prices continued to climb, according to a report released Friday by the Canadian Real Estate Association (CREA).

The year-over-year increase in average sales price was 5.3%, the smallest rate of increase since November, 2004, said the CREA release.

BMO deputy chief economist Doug Porter said the slowdown is another sign that Canada's housing boom is "grinding to a finish."

Dismal weather may have exaggerated the weakness in the opening two months of the year, Porter conceded, "but there are more durable factors to suggest that the bloom is off the boom. The average price increase of 5.3% year-over-year was less than half the 2007 average, he said, "and one of the smallest gains since the boom got rolling in 2002."

The previously steaming hot Alberta markets "are fully back down to room temperature," he said.

Aleks said...

"notice that Victoria the smug is on the top 5 list and Nanaimo (the nice town that Victorians are always smirking at) is not???"

The Hell's Angels keep everyone in line.

greg said...

Aleks,

I was thinking that, but I think its more to the point that the Nanaimo municipal area is very large while Victoria is concentrated on an area filled with urban misery and problems.

As someone else pointed out, Saanich and Sidney or Sooke for that matter do not have the same crimewave problems as downtown Victoria.

vg said...

The most retarded part of this RBC report is where it states Vancouver affordability index is at 74 %, Calgary at 42 % but prices are going to correct only in Alberta but the rate of price gains in Vancouver are going to slow down. Where is the logic in that ? I think he has it ass backwards,he must own a few west coast condos.



"It found that having a detached bungalow in Vancouver takes up 74 per cent of a household's income, well ahead of Toronto at 47 per cent, Calgary at 42 per cent and Ottawa at 32 per cent."

“The national figures are skewed by the Alberta figures and that is a market where we are expecting price drops to occur,” Mr. Holt said.

In hyper-expensive Vancouver, meanwhile, buyers can expect to see “a dramatically cooler pace of price gains this year.”


The best part of the article (which pertains to Victoria in my humble opinion) :


"You'd have to be an idiot to buy right now in Vancouver,” is the conclusion Mitchell Purdy, 25, has come to after nine fruitless months of condo searching with his girlfriend."


Good to see a young person with a good head on his shoulders,eh roger ?

Roger said...

VG said

Good to see a young person with a good head on his shoulders,eh roger ?

VG - absolutely!! This is the point of HHV's post. Potential buyers need to just be patient and walk away. Things are going to slow down - just wait and observe the inventory and sales numbers for March.

BTW here is an interesting article on Bear Sterns.

After Bear bailout, who's next?

The U.S. Federal Reserve's unprecedented intervention on behalf of Bear Stearns Cos. Inc. was intended to ease fallout from the credit crunch, but experts fear it augurs more U.S. government bailouts as the crisis worsens.

Indeed, fears have grown that other financial firms could be at risk. “It's the cockroach theory: There's never [just] one,” said Joan McCullough, an analyst with East Shore Partners Inc. in New York.


This subprime thing is only beginning to get rolling. The FED won't be able to solve this with a 1% cut next Tuesday. It's like trying to hold back a tidal wave. The derivative market may be next and that is real scary.

Retail spending is down in the US, consumers are in debt to their eyeballs, record foreclosures etc. etc. Most US economists already say they are in a recession. We will soon join them with 70% of our exports going to the USA.

This is not the time to be locked into a closed 5 year fixed or variable mortgage with 40 year amortization unless you have a secure job and solid financial resources to weather the downturn.

boomer said...

RE::"notice that Victoria the smug is on the top 5 list and Nanaimo (the nice town that Victorians are always smirking at) is not???"

The Hell's Angels keep everyone in line."

LOL-thats certainly true in their neighborhood-their clubhouse has a discreet "Hells Angels Parking Only "sign.
That sign is not often ignored.

Regardless, Nanaimo has developed into a real nice town in the last 10 years or so and way less expensive(still)than Victoria.

Happy Owner said...

This is not the time to be heavy into anything. But if you must, and you feel secure enough to handle the payments, then this market in the long term with sustain it's value. Maybe Gordon Campbell and the ongoing tourist campain are right....This is TURELY the "Best Place on Earth". Average house prices are about 25% under Vancouver, higher-end is about 50% under. Room for correction, but typical Island correction ( prices drop a tad, stay flat for some years, and then start moving again) SO... you see a lot of development because there is current(not as much as before) and future (oh ya it's coming) demand. I think 2010 will produce a greater after-games effect on the island then the mainland.

hhv said...

Happy,

we have two periods of "correction" in Victoria in the last 30 years. The lightest of the two was roughly 20%, the heavier of the two somewhere around 40%. So you don't have an average there. You have two choices. Heavy, light. 20% or 40%. Average = 30% then. I'll take a 30% correction in this market.

At no time in the history of Victoria has the hype and can't help but win in this RE boom been higher. The old saying, the higher you climb the harder you fall is unarguably true.

I have no way of predicting what will happen, nor do you. But your "hunch" based on "averages" don't account for "fact" and I challenge you to find me ANY Olympic market that hasn't had a housing correction immediately after-- here's a hint: some even started prior.

Why anyone thinks Victoria is an Olympic market is beyond me. That's like saying that when people came to Calgary for the 88 games they bought in Red Deer cause, well, it's close enough.

I can see Whistler, or Squamish, because you'll be driving through there... we've always had high tourism and we haven't always had high RE sales. The Olympic factor is simply marketing rhetoric with about as much "truth" as Obama's comments on NAFTA.

Happy Owner said...

hhv,

That's actually my whole point. Vicroria isn't an olympic city. Victoria lives on the outside. So if there's no real olympic effect, why are prices so high. This town is about 20-30 years behind Vancouver and because of the MOAT affect(city seperated by lots of water) the locals can't see it.

Anonymous said...

"This is TURELY the "Best Place on Earth"."

If you like rain, cold and overpriced housing you're right!

Happy Owner said...

Apparently lots of us like rain, cold and high house prices( I don't see a mass exodus for the door), even people that don't live here...yet. Why can I but water front in P.E.I. for a 100k? Why would you want to?

Happy Owner said...

I love it. Hit the link and watch the video.

http://www.ctvbc.ca/servlet/an/local/CTVNews/20080314/BC_housing_market_080314/20080314/?hub=BritishColumbiaHome

I especially love..."as long as I have enough play money I will buy here".

hhv said...

Happy,

Prices are high because LOCALS got caught up in the belief that escalating prices would continue until the sun ran out of sun-fuel and that 10% gains YOY were lower than historic norm and that 20%-30% less than the "bubbliest city in North America" (Schiller) indicates a good deal.

There is no one in the game professionally today that is denying we have reached a top. Sales people are saying we'll now just return to normal 4-6% YOY gains (which are arguably losses but that's a whole other issue). Economists are calling for a slight correction. And rational people who read back farther than 7 years see the writing on the wall and expect history to repeat itself. To what extent we won't now until it happens. But anyone who doesn't think we're due, and inevitably so, for a correction is kidding themselves.

Happy Owner said...

"There is no one in the game professionally today that is denying we have reached a top. Sales people are saying we'll now just return to normal 4-6% YOY gains (which are arguably losses but that's a whole other issue). Economists are calling for a slight correction. And rational people who read back farther than 7 years see the writing on the wall and expect history to repeat itself. To what extent we won't now until it happens. But anyone who doesn't think we're due, and inevitably so, for a correction is kidding themselves".

As a guy thats been pegged as a bull, you might be surprised, but I agree with above statement. It's inevitable that the market must return to historic averages with a slight correction to bring it in line. I would be happy to see the market return the boring, drab doubling every 14 years for a while.

olives said...

There's too much optimism here tonite! Now for a dose of reality - here's this week's Doug Noland's Credit Bubble Bulletin - (scroll down to the heading "Wishing for another Z1" near the bottom of the page)

http://www.prudentbear.com/index.php/CreditBubbleBulletinHome

vg said...

Housing woes may move into Canada
Turner warns that prices may begin to fall



Published: Friday, March 14, 2008

OTTAWA -- With the subprime contagion spreading around the world, Canadians who hoped their homes would be immune from the carnage are wrong.

The disease is here and coming soon to your neighbourhood, says financial author and member of parliament Garth Turner.

The effects of the U.S.-induced mortgage crisis were everywhere yesterday -- in the crumbling U.S. dollar, in Carlyle Capital's $16-billion mortgage writedown in Amsterdam, in mounting housing foreclosures in the U.S. and in crashing stock markets in Europe and Asia.

Absolutely, without a doubt, that contagion is spreading to the Canadian real-estate market," said Turner, the author of a new book on the subject titled Greater Fool, the Troubled Future of Real Estate.

vg said...

happy owner,

what happens when no one can borrow anymore and if they can they have to have 25% down and impecable job/credit history ? the food chain stops and anyone wanting out gets low balled by those with the cash and have bartering room cause all the panic buyers with zero down or 5% are gone bye bye. That eliminates 30% of the past few years of buyers.

phil said...

"what happens when no one can borrow anymore"

You get this... and by the way it was sunny and 26'C in Tampa today:

http://tampa.craigslist.org/rfs/606529989.html

Nick said...

VG,

Stop promoting Turner. He is quite useless. In 1998 he also said there will be no significant price appreciation in Real Estate for the next decade or possibly to decades. Well, as you can tell, that was only off by about 100%.

As well, if you read his latest article or book it talks about the best RE to purchase is 750-1500 sq.ft condos.

Over the past few years we may have seen a lot of MLS SFH sales but actual new housing starts favor that of Condos.

Also, with a correction I am sure that square footage and land is still going to retain some value. So, if there is a correction what do you think will have a better time weathering the storm.

Nick said...

Sorry, my last post is a bit off as it is quite late at night but I think you get the gist.

hhv said...

Nick,

I agree with you, maybe not to the full extent of useless, about Turner. IMHO he only gets in the game and calls it like it is once the cart has got out in front of his horse. He's a political blowhard and an attention seeker to the nth degree.

But he is right. He's just late to the right party. Or maybe he's left. I'm confused. He just can't make up his mind where he is.

Regardless, I know you think that condos will get pounded and houses less so. And you may be right. But here's what I understand, Nothing is immune in RE corrections. Some SFH will lose less than others. But those crack shacks on Burnside and Tillicum that have been fetching $400K for the last year or so will get hammered as bad or worse than condos.

SFH homes in Gordon Head are due for a big correction too. They are run down, old homes that typically had working class families living in them that didn't maintain them. Some have gone through updates during the boom, but most have not. You think they'll still fetch $600K in a declining market.

Right now, it's hard to sell any property that has any problems. Banks won't lend 100% on a place that requires $80K worth of electrical and heating work to get it up to current insurance standards. And for the last few years they have been doing that.

Times are different. Right now. You go to a bank for a mortgage on a building that leaks. They show you the door. So you go to a broker. They show you 12-14% interest rates because the credit market for asset backed (as in your leaky condo) securities is basically frozen so investors are demanding ridiculous returns. That's why mortgage rates have not fallen despite interest rate cuts by the BoC.

To qualify for a variable rate that is pegged to prime, you have to have a down payment and good credit or you pay a premium. That's why sales are going down. The average potential buyer doesn't do a lick of research, trusts their Realtor for market information, and makes the biggest purchase of their lives blindly believing they can't help but win.

In 2002 everyone was crying foul about corporate and accounting fraud. In 2009, I predict the American public will work diligently to hang high profile RE marketers and agent organizations. We won't be far behind. We never are.

greg said...

I would have to agree with HHV. Banks have cut my GICs by around 1.0% in the last two months, while mortgage rates haven't budged. If anything, they are going up with the difficulty some borrowers are having negotiating the previously standard 1% cut from the posted rates.

Anyone who thinks this is a market with easier financing options then say spring 2006 doesn't understand anything about what is happening.

BTW, I do agree with Nick about condos getting pounded. It will start in Vancouver and quickly ripple here to Victoria.

Last time that happened it took ten years for the condo market to recover - they languished here for longer than sfhs in the early 2000s - they weren't going up much until 2003.

Anonymous said...

I agree with the last several posts that certain single family homes will actually hold up better than condos during an inenvitable downturn. Buildings depreciate over time and a brand, spanking new unit may look dated and used after a few years. At least with a well located property with a decent sized property, you will have some appreciation from the land value. I can vouch for this during the last downturn in the 1990's. A newer rental condo which I owned lost value during the downturn while my older home on a huge lot in a nice part of town gained a little bit most years.

snaptee said...

Garth Turner is selling a book and that's it. He's selling himself to an emerging market - the RE bear market which has been non-existent these past 7 years. How many of you have already said you've ordered his book? He's often wrong, both in politics and investment advice. Anyone remember in 2000 when Nortel was at $40 and he was telling people to buy? Truth is, him and other 'experts' don't have a clue.

hhv said...

Turner: those that can't do teach, hence the book.

Come to think of it, why do I write this blog?

My brain is going numb... oh the hypocrisy :)

Anonymous said...

The US economy appears to be entering a 'Melt-down'. Now we shall see if this affect Canada or not.

beagle said...

happy owner said:

I would be happy to see the market return the boring, drab doubling every 14 years for a while.

I would like to see that too.
So 1978 = 63,733 from VREB SFH stats
1992= 127,546
2006=255,092
2020=510,184

That would be great with me. I'd love to see that trend .

vg said...

I am not pumping Garth, I am posting articles written about him and since there is not one single person in a high position of government who has the balls to say that then I am not sure why you so called bears are chastising the first one to publicly take on the MSM after all this time of listening to the Muirs,Pastricks and Bill Good Jr's RE pumpers who slough off anyone who says the slightest negative to this orchestrated pump machine.

So what if he is pumping his book ? I am not a Liberal nor a Garth politics fan, I see someone who has some guts to speak some truth and you bears start slagging what we have all waited a long time to see.

And who cares about Nortel,any one with a brain could see that was going in the can,this time Garth has done some homework.

Please tell me of another Canadian out there calling for the inevitable correction ? I see none,just the constant whining about the TC pumping. Geezuz,not sure what you guys want anymore.

vg said...

Listened to Michael Campbell show replay and he thinks Vancouver is immune to a RE correction due to the "massive" offshore migration. Are offshore entities buying into Vancouver still ? maybe,but are they moving here in "massive" numbers like he says ? I thought this myth was blown out of the water ages ago.

roger said...

VG - People have short memories

From the Vancouver Sun - June 22, 1996

They were the Vancouver condo flips that flopped.

Take the couple who lost more than $140,000 earlier this year when they resold a condominium purchased three years ago during a pre-sale frenzy.

For a luxurious three-bedroom penthouse suite at The Electra -- the converted B.C. Hydro building at 989 Nelson -- the two business professionals paid $475,000 plus seven-per-cent GST of $33,000 when they took possession in April 1995.

Ten months later, they sold the 1,900-square-foot unit on the 21st floor for $370,000, minus real estate commission and legal costs.

``There were block-long lineups of people wanting to buy 212 years ago,'' Vancouver realtor David Andrews said Friday. ``Now they are lining up to sell.''

While other investors' took less of a financial beating than the penthouse vendors, a Sun investigation shows those who bought condos primarily for short-term investment or flipping purposes in four high-profile downtown developments mainly lost money.

Andrews, broker-owner of Re/Max Real Estate Services, said pre-sale condos are only good investments for the long term, especially if they are purchased at a discount from the asking price.

``Owner-occupiers should only buy if there are significant discounts, of at least 10 per cent below current prices, because most people can't read well off floor plans or predict the exact views from a property until they actually set foot in {the finished unit}.''

Andrews also advised prospective buyers to check into the background and reputation of the developer before committing to a condo pre-sale.

``I've come across an agent handling a pre-sale who wouldn't reveal the developer's name. He didn't say why. My advice was run, don't walk away.''

Both Rennie and Partington agreed that people who invest in real estate should be in it for the long term -- at least three to five years -- if they expect to realize a decent return.

roger said...

And here is one more!!

Vancouver Sun - Dec. 6, 1990

House prices stabilized in Greater Vancouver

A Century 21 Real Estate Canada Ltd. survey released Wednesday ignored the pessimistic outlook of many analysts by stating that Greater Vancouver house prices have bottomed out.

"Average house prices in the greater Victoria and Vancouver areas are not expected to move any lower than they are right now," said Century 21 chief operating officer Don Lawby.

"Our survey shows that although house prices declined in some areas during late August and early September, the market has again stabilized and a six-month downward correction that began last spring appears to be over."

But Canada Mortgage and Housing Corp. analyst Lucia Su said Wednesday prices could drop another 10 per cent and feels the market might not bottom out until the middle of next year.

"All indications show that the market will still continue to soften for the balance of this year and into the first part of next year," Su said.

The Century 21 survey said a standard detached home in North Vancouver worth $245,000 in August fell by nearly 12 per cent to $216,000 in November. A comparable home in Vancouver's west side fell from $278,000 to $253,000 - a nine-per-cent loss.

Lawby said that, while house prices are affordable all across Canada and more first-time buyers are purchasing homes, many potential buyers have adopted a wait-and-see attitude.


If you hung on for 8 years you started to make some serious money.

My point is houses can drop and it can happen quickly.

hhv said...

VG,

I don't think you were pumping anything... My opinions on Garth are simply opinions and highly likely tainted by politics. I also pointed out I think he's right, right now. Or he's left. I can't keep track (sorry couldn't resist). I think anyone who dismisses his research or methodology simply because he's trying to sell a book is delusional if they think the "advice" and "facts" they get from the MSM, RE marketers/salespeople etc is more soundly grounded in fact.

Roger,

Great finds!

S2 said...

Thanks for posting those Roger. We will see articles like that again.

"Both Rennie and Partington agreed that people who invest in real estate should be in it for the long term -- at least three to five years -- if they expect to realize a decent return."

Glad to see long term explained. It isn't ONE year. It is at least three to five years. Geeesh!

vg said...

"Glad to see long term explained. It isn't ONE year. It is at least three to five years. Geeesh!"


Funny how the goal lines move, now Rennie and the other con artists mean you should be in for 40 years cause thats whats fashionable these days. It's so cool to be in debt over your head,something to brag about at your next party.

S2 said...

One day us bears will get to brag about how brilliant we are.

In my parent's time long term meant you bought a house with a 25 year mortgage and you stayed in the house until you paid it off and then you still stayed in the house until you were carried out of it to the old folks home or the funeral home.

Long term is 3 to 5 years. Again, geeesh!

vg said...

hhv, I believe nick accused me of promoting Garth. But the underlying sentiment from your posts as well seemed he isn't worth listening to because of his political aspirations and because he is selling a book.

All I am saying is be thankful someone has some nuts to say it that actually makes national news wires cause there is NO ONE ELSE besides a bunch of bloggers saying it. It will be a cold day in hell before anyone in his same public position makes the same statements.

Besides, did Shiller not charge for all his appearances and promote his books before the US market stock market and RE market crashed ? hmmm



The New Financial Order: Risk in the 21st Century, Princeton University Press, April 2003, 400 pp.


In his best-selling Irrational Exuberance, Robert Shiller cautioned that society's obsession with the stock market was fueling the volatility that has since made a roller coaster of the financial system.


http://www.econ.yale.edu/~shiller/books.htm

S2 said...

Buy an apartment at the Private Residences at the Hotel Georgia and they'll throw in a chef.

http://www.canada.com/vancouversun/news/westcoasthomes/story.html?id=731f1c33-ff8b-4881-8fa1-8757613abfee

olives said...

I apologize if this has already been posted.

Those Sophia owners will have to come up with another $85,000 on average:

http://www.cbc.ca/canada/british-columbia/story/2008/03/12/bc-sophiaupdate.html

Anonymous said...

What is off shore migration? Is it illegal immigration? There is a legal process to immigrate to Canada (and it takes years). My dad waited 5 years in the 60's. He couldn't just come here as a tourist and buy a property. That would have been illegal. Is it legal now for tourists (or whatever, illegals) to buy here?

hhv said...

off shore migration is technical speak for I'm out of here.

Vg,

Garth isn't getting ANY MSM play for his book. Hence the blog.

greg said...

hhv, I disagree, if you google Garth you will find a bunch of recent links.

For example, this one from Canada.com.

Or this one from National Post dealing with concerns of wealthy boomers. Crikey, as if there were any other kinds.

There are quite a few more recent links, got to back up vg on this one....

Happy Owner said...

Gee,
and real estate is over priced in little ole Victoria.
Better hang on to your wallets bears, you havn't seen nothing yet.

Click the link.

Video from CBC British Columbia.

http://www.cbc.ca/mrl3/8752/bc/ondemand/video/bc-080314-housing-1800-WILLIAMS.wmv

Happy Owner said...

Regardless of price fluctuations, I'm sure glad I'm in.

Money talks and bul**hit walks. At least I don't need a pair of walkin' shoes.

I hear Windsor, ont. is priced according to Garth. I wounder why?

vg said...

as per gregs posts there are several articles on it. What did you expect,front page news for a week ?

happy owner is sounding more like a troll rather than someone "interested" in real estate,no one sits here and pumps the "demand" crap over and over without more than just a simple home owner interest. Happy owner probably owns a slew of rental dumps on Burnside.

BTW happy owner,the buying pool has to run out after 7 years,it's the law of averages and result os overhype with 40 year mortgages. It's all over.

hhv said...

I stand corrected, cheers Greg and VG

Anonymous said...

I watched the CBC clip that Happy Owner pointed to. I am puzzled. The RE agent with a foreign accent tells the reporter that at $700K+ the bungalow that he is selling is cheap (to foreign buyers)and that he has Chinese or Hong Kong buyers interested. I don't quite understand how this works? How can foreigners simply show up and buy our real estate? What happened to having to get visas to travel to certain foreign countries, restrictions on the time tourists can stay in the country (I read recently about individuals who overstayed on their students visa in the US and subsquently were expelled by US Customs). Do we not have immigration and custom laws that have to be followed in order to gain residency into Canada? I mean, I don't think I could just show up in Bejing, just like that, and pluck money on a condo there, and then set up residency there? The Chinese would arrest me? What gives?

We need some regulations here. Housing is a basic need and its affordability should not be a function of foreign speculators. I deplore and find it immoral and unpatriotic any Canadians who welcome "international" foreign buyers to "invest" into our RE. Their glee and salivation in welcoming foreigners is purely driven by selfishness, greed and a lack of self-confidence and pride in Canada and their fellow Canadians. I don't even consider these people as Canadians. These selfish beings maybe even believe in a convulated way they have will be put at the front of the queue in our overcrowded hospitals or somehow will be spared from dying, or getting cancer, or hit by a car?

olives said...

I have two questions about that video as well:

If the real estate is cheap, then why are they buying dumps in East Van?

Secondly, are these Hong Kong investors also buying in Victoria?

Anonymous said...

Also, if these are not primary residences, as obviously they live in China and legally do not have the right to live here, do they report their rental income (as they should by law) from their Vancouver investments to the government. Do they report their profits (as legally they have to) as capital gains to be taxed on after they sell? I wonder how much criminality there is in this business (not reporting their international income and profits from sale to our governments)? I wonder how much our governments are doing to ensure these profits by foreigners are taxed?

jimmy said...

Why would anyone buy a shithole in the rainy ghetto of East Van, when for $750K you can buy two mansions: one in Florida and one in Phoenix. What a tall story. Listings are up and sales are significantly down in Vancouver according to Feb. stats. And the argument about the scarcity of land, that's pure fantasy. BC is half the size of China, and China has what 2 billion people, we have 4 million?

Anonymous said...

"Why would anyone buy a shithole in the rainy ghetto of East Van, when for $750K you can buy two mansions: one in Florida and one in Phoenix."


Shhhh! Keep it down. Wealthy asian buyers are here right now looking for our bargain real estate. Soggy, cold, wet 700k bargains!

sitting pretty said...

"Why would anyone buy a shithole in the rainy ghetto of East Van, when for $750K you can buy two mansions: one in Florida and one in Phoenix."

You've obviously never been to Florida or Phoenix between May and October. It's their "winter." Everyone stays inside because it's so hot. My hubby says real estate in Victoria will always be more attractive than Florida or Arizona because of the climate. Oh, and property tax in Florida is 2.25%. That's a lot of money for even the cheap places.

Anonymous said...

I call BS on that agents comment about how cheap we are compared to places like Hong Kong.

This condo works out to $340k. Not cheap but I would rather live there than the east side of van for twice the money.

hongkong.craigslist.org/rfs/605686401.html

Anonymous said...

Sitting Pretty - You must be blind, deaf and have no limbs (do you have bed sores from the lack of movement too?) if your "hubby", no doubt imaginary one, has to tell you about the climate? Your braille monitor must be obviously skewing your view of reality. Why don't do yourself a favor and go feed the homeless and pick up those needles in front of your dump on burnside?

Anonymous said...

How can foreigners simply show up and buy our real estate? Do we not have immigration and custom laws that have to be followed in order to gain residency into Canada?

Happy owner is an example of an immoral and unpatriotic individual who welcomes foreigners (illegally) to rob Canadians from getting what all previous generations of Canadian were able to attain, a roof over their heads.

Anonymous said...

Happy onwer - Do you declare your rental income and profits from your "investment" properties to the government? Are you a foreigner illegally living in Canada?

sitting pretty said...

anon 3:02

You seem so bitter! I feel sorry for you. I state facts, you blubber away like an emotional wreck!

sitting pretty said...

anon 3:06

"How can foreigners simply show up and buy our real estate?"

Simple. Write the cheque.

hhv said...

Sitting pretty,

"I state facts, you blubber away like an emotional wreck"

I don't recall seeing anything of "fact" that didn't start with "my hubby said..." News flash, just cuz yer hubby says, doesn't make it fact.

Just to let u know as well, when a foriegner wants to buy here, it's not as simple as showing up and writing a check.

sitting pretty said...

hhv - I am stating facts when I talk of the climate in Florida and Arizona. If you cannot believe them then you have never been there. As for foreigners buying here, my hubby and I know lots of them and it really is as easy as writing the cheque. They can't live here 365 days of the year, but they can buy here. You people saying they can't are just ignorant.

hhv said...

"my hubby and I know" and with that your honour, I rest my case...

sitting pretty said...

"my hubby and I know" and with that your honour, I rest my case...

and with that we see that the emporer hhv has no clothes...

beagle said...

Some of you bulls should check out the macroeconomic events taking place. Bear Stearns got bought out for 2$ a share today. A lot of investors just lost a shit load of money. But your arguing climate and foreign buyers. geeshh! read some papers other than the TC

roger said...

HHV,

I have been reading the exchanges with happy owner and sitting pretty and find that they are not in the spirit of your blog.

Your blog subjects and the posters who have been contributing for months have made for great reading. Lots of information has been exchanged in a civil and constructive fashion.

In a previous post I mentioned that as the RE market starts to correct we will have unhappy owners dropping by to start flame wars. Sadly this is now the case.

I know that your blog will wind down as you start your next adventure in April. I hope that in the interim most of us will just ignore these trolls and not bother to respond to their posts. Maybe then they will just go away.

sitting pretty said...

Roger - you are such a pompous pratt. You want this blog to be a forum of people agreeing with each other and pretending to be sage observers of the stupidity of the market. Problem is, some people see you guys as being the fools. When people present information that doesn't coincide with your world view, you hurl insults. Sorry, it doesn't impress me. BTW, "my hubby" is a rhetorical flourish, but you and your basement-dwelling friends have been too dumb to realize that!

greg said...

Pride goeth before a fall....

sitting pretty said...

Pride goeth before a fall....

That witticism doesn't make you any more interesting.

Anonymous said...

Sitting Pretty - You therefore agree that future generations of Canadians (our children and our grand-children) should be robbed of their basic right of owning a dwelling on account that they cannot afford to buy because of inflated prices bought on by foreign speculators. You had the chance to buy when it was affordable, but not our children or their children?

sitting pretty said...

anon 5:48

I believe in the market, under which there are winners and losers. Too bad if you are a loser, good for you if you are a winner. You would prefer communism, under which the aristocracy (i.e. ruling party) gets to rob everyone else? Give me the meritocracy we have today anytime (and yes, "my hubby" approved this message).

roger said...

Alberta has a booming economy but the Alberta housing market may cool further

Mario Toneguzzi, Calgary Herald
Published: Saturday, March 15, 2008

It's premature to get too concerned, but Alberta's housing market is on watch for possible further negative developments, says a national real estate report released Friday by RBC Economics.

Bungalow prices fell by 7.3 per cent, townhomes were off by four per cent and condos fell by 5.3 per cent in their second consecutive quarterly dip.

The report said the price of the benchmark two-storey home is still 63 per cent higher than two years ago, "and one quarter does not make a trend," but the year-over-year pace of price gains has gone from about 50 per cent a year ago to 11 per cent today.

"Furthermore, the sales-to-listing ratios in Calgary and Edmonton remain at about 0.4, or about half the peak recorded over the past two years, which points to the risk of further price cooling in a market with more slack," added the report.

Also, a report released Friday by the Canadian Real Estate Association said February MLS residential sales in Calgary dropped by 35.4 per cent compared with a year ago to 2,162 units while the average sale price increased by 5.5 per cent to $415,017. New listings for the month were 5,182, an increase of 38.9 per cent from February 2007.

Hirsch said demand has also softened for housing because fewer people are moving here. "Also, I think there's a lot of people who aren't in the market just because they're so priced out of the market so they're not even looking or they're not even out there checking out prices."


Victoria listings will climb to March 2001 levels next month; sales are falling and average SFH sales prices have been dropping since December. Looks like we are following Alberta.

sitting pretty said...

"Looks like we are following Alberta."

Sure, like we're following Las Vegas, Phoenix and Miami. The problem with your prognostications, Roger, is you have no analysis to back them up. It's nothing but mental maturbation.

roger said...

Beagle said

Some of you bulls should check out the macroeconomic events taking place. Bear Stearns got bought out for 2$ a share today.

That buyout was unbelievable. Last week Bear was $100 per share and today $2. When they looked behind the curtain there must not have been anything there!!

Even today's Fed cut of .25% in Fed lending rate has not calmed markets.

As of 6:30 PM Sunday the markets aren't happy. Gold is up $25 to $1027; Australia down 2.6% and Nikkei currently down 380 points to 11,862. Dow Futures are now down 185 points. Yen at a 13 year high against US dollar.

This week is going to be volatile!!

sitting pretty said...

"Even today's Fed cut of .25% in Fed lending rate has not calmed markets."

Yes it has. You are making this stuff up because you are envious of people who have (a) a house and (b) a position in the stock market. All you have is a crappy basement apartment and a $10/hr McJob.

Anonymous said...

Sitting pretty

I bought a couple of condos a couple of weeks back and already I have an offer $40,000 more then I bought at. I'm thinking not to sell. I'll probably get $100,000 by the end of the year. Real estate is booming. Best to hold on to what you've got. It will be worth a mint in a couple of years. Also, I heard that the Government of BC will be hiring visible minorities that they will move here from Vancouver. That should keep the market going.

beagle said...

sitting pretty:

I think at this moment I'd be envious of someone who had a position in gold or commodities.
Real estate or stocks?...no, not so much.

beagle said...

anon March 16, 2008 6:46 PM

Sell those condos and buy in again, but leverage your gains and buy more condos. Your on the road to riches!!
Victoria is booming, no worries!

roger said...

Beagle

You might find this site interesting:

www.prudentbear.com

Lots of articles, graphs and up-to-date business press feeds.

HHV - check out the logo

sitting pretty said...

beagle

all very well, but you obviously have nothing at all, and no one would envy that

beagle said...

Thanks for the link Roger. Looks like a good site.
Sitting Pretty, I have a few bones buried here and there but no I'm not big time like yourself.

Anonymous said...

Sittig pretty is right. Even my maid bought a condo last week. 0% down. She already has a $20,000 paper profit. She is thinking of buying another one for 0% down. CMCH is a blassing.

Anonymous said...

Beagle is correct in drawing our attention to the bigger picture. World markets are far bigger than Victoria, and at this point in time there is a real sense of panic taking hold. Us in Victoria should be thankful that events have been generally unfolding behind those in both the States and the rest of the developed world - but we sure seem to be rapidly catching up. This is very much a time to be in a strong cash position and sit on the sidelines. I do not think many of us housing bears are in 'basements' - in fact we are very comfortable with our investment decisions.

olives said...

Another great site - Calculated Risk:

http://calculatedrisk.blogspot.com/

It's really hopping tonite!

S2 said...

Does Sitting Pretty ever have an independent thought of her own?

Sitting pretty said "I believe in the market". And I believe in economics.

No basement suite here. We rent a whole house. We could buy it off of the landlord and pay more in mortgage payments then we do in rent but really why do that to then watch it get clobbered.

We'll keep sitting pretty here thank you very much.

btw I love your posts sitting pretty. It is good to have a panicked home owner show up and give us all a run for our money sometimes. Keeps us on our toes. :)

hhv said...

great link Roger...

Cheers.

Me thinks that certain trolls and anonymous posters of late are, in fact, the work of some now known to be false "hubby." Your advice of ignoring is well given. Rather than simply block certain IPs I'd rather let them bleat themselves into obscurity so that future fence sitters with rational thought can read and decide for themselves...

Some crazy political events on the other side of the globe may be the undoing of my travel plans... I may be around for a while longer than I'd planned.

S2 said...

and btw Olives as PH I'm not evil. I'm just getting completely fed up.

Really, if RE is such a great investment then giving advice to buy 2 really can't hurt them...can it?

olives said...

s2 - From her reaction, I don't think she realized you were being sarcastic!!! (or maybe you weren't!)

olives said...

and by the way, I may just go out tomorrow and buy a couple of condos myself - I hear you can make $40,000 in just a couple days!

S2 said...

No Olives, it appeared she didn't know which was part of why it was so funny (to me anyway). Another KIVer who I know IRL mentioned how funny it was too so I guess I'm not the only one with a skewed sense of humour. :)

And yes do buy 2. You may want to wait for a bit though and pick them up at a bargain price (a bit of an inside info tip from DT)

sitting pretty said...

Me thinks that certain trolls and anonymous posters of late are, in fact, the work of some now known to be false "hubby." Your advice of ignoring is well given.

Yes, go ahead and alternate between fervently wishing for economic doom and burying your head in the sand. Sorry if I've been upsetting you!

olives said...

Hey sitting pretty - check out some of the "doom" today:

http://www.reportonbusiness.com/

maybe you could share some of your more optimistic news publications with us?

S2 said...

I wish that I was just "wishing" for economic doom but no need to as it looks like it is here.

http://news.sympatico.msn.ctv.ca/TopStories/ContentPosting.aspx?feedname=CTV-TOPSTORIES_V2&showbyline=True&newsitemid=CTVNews%2f20080317%2ffed_reserve_080317

I would love to see some positive economic news. I could really use it right now.

roger said...

s2 said

I would love to see some positive economic news. I could really use it right now.

Some people are happy!!

Torontonians clear out jewelry boxes as gold prices rise

With gold selling at more than $1,000 per ounce, Toronto jewelry buyers say they're doing a brisk business with people looking to sell.

Harold Girstal, one of the city's jewelry buyers, says that as the price of gold rises, so does the traffic in his store.

"It generates a lot of interest in gold and many people are bringing in their gold, and they're getting better prices and generally people are happy," he said.

S2 said...

Oh sure, and I only wear silver.

At least some people are doing well. :)

roger said...

The Globe and Mail will be hosting a question and answer session with Garth Turner on Tuesday March 18 at 1 PM EST. You can watch and submit questions at How long will the housing boom last?

Mr. Turner's new book, Greater Fool, The Troubled Future of Real Estate, argues that Canadians have been buying homes at inflated prices by taking advantage of expensive mortgages that last 40 years and signing up for incentive plans that allow them to forego the traditional down payment. As a sub-prime-mortgage crisis unfolds in the United States, with more than 400,000 families losing their homes in the past year and a million more said to be on the brink, should they smugly assume they are insulated because of high commodity prices and a strengthening dollar?

“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?”


S2 and Olives - Maybe you want to post this at KIV :>)

S2 said...

He, he, he, he, he.

Anonymous said...

sitting pretty:
I bought a condo this morning at bloor/avenue rd. I sold it 20 minutes later to a foreigner who spoke broken English at the end of sales office queue and who was still waiting. He offered me $50,000 more. He just wrote a cheque. The cheque has some funny characters on it, it's not English, and I can't read cause it's a foreign language, but hey, it works. Thanks for your advice.

sitting pretty said...

s2

He, he, he, he, he.

You think 400,000 people losing their homes is funny? That makes you a rather ugly person.

vg said...

"The problem with your prognostications, Roger, is you have no analysis to back them up. It's nothing but mental maturbation."


no analysis ?...wasn't this yappy woman just accusing all of hurling insults ? no class at all,shut it up already...and she can't even spell the naughty words.


Did you see the TSX at one point hit the lowest one day drop in over 5 years ? this is going to be brutal for real estate,they are all scared crapless. Lehman Brothers next,then CITI, Canadian banks getting smoked,lending rules tightening like a vice,this is just the beginning of a long long road down hill.

S2 said...

Remember what ASSUME is sitting pretty.

I am not giggling about 400,000 people losing their homes.

If you are not happy here sitting pretty you could go elsewhere you know. :)

olives said...

vg said:

"...this is going to be brutal for real estate,they are all scared crapless."

It's all about confidence, isnt' it.


As for S2 - you are too late sitting pretty, I already "outed" her as evil! :)

olives said...

Hey HHV - did you read in the past couple days Mike Shedlock mentioned he will be doing a post specifically about Vancouver real estate (and area?) - he was looking for info, maybe you or roger or greg can provide him with some good info.

greg said...

Olives - we should just send him some links to the archives, there are lots of good sites in Vancouver, check the blogrolls on hhv and Victoria's Truth and my site- go there and check archives on Vancouver Condo Info, Vancouver (Un)Real Estate, Condohype, Financial Planning and Common Sense, Even Chipman and VHB.

Think that would be a good start. I scrolled through the recent post list and couldn't find the info, so if anyone has a link to Mish's recent interest in the Vancouver market, please share it.

sitting pretty said...

this is just the beginning of a long long road down hill

I sincerely hope you are the first to get a pink slip in the coming downturn. That would be poetic justice in view of the joy you take from other people's misery.

S2 said...

sitting pretty said:

"I sincerely hope you are the first to get a pink slip in the coming downturn."

Wishing job loss on someone. That makes you a rather ugly person. :)

olives said...

Greg, here's a link. He's posting so much lately it was already in his "older posts". Scroll down the page a bit until you get to "20 Canadian ABCP Trusts file Bankruptcy". His comment (highlighted) about wanting info is at 12:49 a.m.

http://globaleconomicanalysis.blogspot.com/search?updated-max=2008-03-16T18%3A11%3A00-05%3A00&max-results=5

hhv said...

"I sincerely hope you are the first to get a pink slip in the coming downturn. That would be poetic justice in view of the joy you take from other people's misery."

this is just the beginning of a long long road down hill

Calling it like it is is not taking pleasure in someone else's misery. In fact, if you weren't such a johnny-come-lately, or you even bothered to use some of your well-earned gov't internet time, reading back through the posts on this blog, you'd realize that no one here is taking pleasure in other's pain. Quite the opposite is true. Blog's like this exist to keep people aware of the financial realities of their MSM-marketing fed financial ignorance. We try to help people avoid the pain. And in so doing help ourselves avoid lasting and longterm economic consequences. Unfortunately, ignorance prevails in our society on these issues.

Sitting pretty, I sure hope your ignorance is bliss.

roger said...

HHV,

I have a suspicion that our old friend johnvlizr is back under a new name. I wonder if his "team of psycholgists" were successful. Hopefuly his real estate agent was able to help him sell that Gabriola property.

S2 & Olives,

KIV is broken. Database is down. Did you cause such a fuss over there that they went into meltdown??

vg said...

"I sincerely hope you are the first to get a pink slip in the coming downturn. That would be poetic justice in view of the joy you take from other people's misery."


Yes, a very vile woman who is obviously a waste of taxpayers money. I am sure they will be able to fish out the useless ones like you in a hurry to turf first.

I never wished anyone ill will. I along with many others have posted nothing but indepth analysis for the last several years explaining all that has been coming down the pipe,right up to the massive derivatives problem brewing for years that you can't wrap your bitter owner mind around. I think they have meds for situtations like yours.


And don't worry about my job,you will be long gone before myself,without me there would be no need for you. ;)

Anonymous said...

Surely this forecast cannot be good news for Bears?

vg said...

just an article for those with blinders on and think we all live in sugarland, wake up time :



Central banks scramble to stem the bleeding


Globe and Mail Update

March 17, 2008 at 10:38 AM EDT

OTTAWA — The global credit crunch has now become a full-blown and rapidly deepening financial crisis that central banks are scrambling to contain, analysts say.

With the U.S. Federal Reserve taking more extraordinary measures over the weekend to mitigate the crisis and set financial institutions on a more stable footing, markets are on edge, with a wary eye on the U.S. dollar, financial stocks, and credit conditions around the world.

“It is very important for everyone to understand that we are making the transition from crisis prevention to crisis management,” said David Rosenberg, chief North American economist for Merrill Lynch.

The Bank of England also moved quickly Monday morning, offering £5-billion in three-day securities to grease the wheels of the British banking system.

roger said...

anon 5:04 PM

Thanks for the link. Beats reading spam.

Your post B.C. house prices forecast to keep rising made for interesting reading. I tried to find the Credit Union report to see if there was any data to support their claims. No luck but maybe it will surface soon.

I imagine it was written before the financial turmoil we have seen in the last week. Bulls and bears on this blog can argue forever about their predictions. The future will unfold soon enough. I am going to keep watching this VREB graph. to see if it drops for the third month in a row.

vg said...

roger,

only someone with a biased interest would write that garbage. Sounds exactly what they were pumping out in the months preceeding the US collapse. Even Flip this House ran positive stories along with CNN while Rome began to burn.

So we will be up another 19% percent by 2009 ? LOL....who, prey tell will be able to qualify for for these massive mortgages with 25% down and tightened lending rules not seen in almost a decade and higher interest rates ?

johnvlizr said...

roger-glad you missed me. For your benefit, Ill try to be a little less subtle with my witticisms in future.
Im not "Sitting Pretty" if thats what you're implying, however I do think that she and the obviously brilliant "hubby" are pretty well correct in their incisive analysis of the Victoria RE market. (Buy now, and buy often or you'll be soorry-there wont be many buying opportunities after this one)
This is confirmed by my psychologists, and she (sitting pretty) is after all a government employee--nuff said?

>>onwards and upwards--
especially condos--thats what all the boomers and immigrants want<<

silly boy

roger said...

johnvlizr

Glad you are back posting!! We wondered how things worked out for you. Did you sell the house? Where are you moving to now?

roger said...

VG

I agree with you about the article but I have not seen the actual Credit Union report or news release.

Frankly, what concerns me now is world-wide financial events. The financial world is so interconnected, leveraged and poorly regulated that anything could happen over the next few weeks.

When the fifth largest investment bank in the US drops from over $100 per share to a $2 firesale bailout price it makes you wonder about the whole system. Basically they looked behind the curtain and only found boxes of junk. The recent FED announcements have basically turned them into an out-of-control printing press with a pawnshop window for junk securities.

Tomorrows rate cut will be interesting to watch. If the market doesn't get 1% it will tank and if they get more they will smell even more FED panic.

vg said...

well said roger, you have to look behind at what Bear Stearns was involved in and their importance to being bailed out. The funniest part is JP Morgan is a derivatives abuser many times that of Stearns. Stearns were all about the bonds game and if they went under with no bail out there would be instant world wide chaos beyond our imaginations.

fhh said...

A friend of mine is a mortgage broker. She was talking about how easy it (still) is to obtain a lot of money.

I'm in ok shape in terms of being able to get financing. But there is no way I should be able to borrow that much money.

Either way, I'm self-sidelined for the time being.

johnvlizr said...

hi roger-thanks for asking--
yes, we sold our house and my wife and i and dog are now living in our vega station wagon in the walmart parking lot waiting for victoria real estate to fall a bit so that we can buy that big stone house on rockland that we have our eye on. its even got a mortgage helper rental suite (actually theres room for several others) so
shouldnt be long.

roger said...

johnvlizr,

Sounds like you have been having a real adventure. You are even smarter than those of us that are renting. I imagine you are probably investing the house proceeds in CDIC insured GICs and pocketing the interest every month. No rent or mortgage for you!!

Have you bought a Coleman stove yet? It does a great job frying backbacon. Next time I drive by the Walmart I'll drop by and say hello. I have some discount MacDonalds coupons for you and we can discuss old times over a coffee.

olives said...

I read somewhere the JPMorgan is leveraged 74:1.

They're all worth $2 now!!!!

Yes Roger, KIV has been down for a few days. I didn't realize it was one of your regular sites.

roger said...

olives said

Yes Roger, KIV has been down for a few days. I didn't realize it was one of your regular sites.


It isn't a site I visit very often. I only go there when I hear that you and S2 are stirring the pot.

S2 said...

Thank goodness it isn't just me. I thought that I had been cut off of KIV. It was up for awhile but is down again. Making more changes I guess.

Hey Roger. When you come over to KIV do you post or just lurk and let me and Olives do all the dirty work?

Happy Owner said...

Hey guys,

Don't associate me with sitting pretty ( no offence sitting pretty ), I prefer to offer reasonable, non-confrontational opinion on real estate as opposed to the usual "I own, you suck" commentary.

By the way, I'm not some Burnside slum lord, or an immigrant owner. I'm just an average working guy (really) who had some luck, watched his money and feel I'm in a reasonable finacial position. I don't own anything other than my principal residence.

Don't thrash the immigrants, they are the only reason there is any respectability and ongoing prosperity (and no, I'm not asian or anything else; I'm as white as they come) that we've come to enjoy, unless your out of the market. Then YOU ARE SCREWED. That's what I love about island people, almost completely removed from the REAL world. That can be viewed as a blessing because the island could be considered an oasis from the real world, that's why this place is considered a paradise by most people THAT DON'T live here and has a predicted 50% real estate drop buy some of those that do live here.

By all means don't let your dreams die, but if any of you bears ACTUALLY have any money to buy something, better get your ducks in a row because you'll get your drop within 12 months and the next price rise starts in 18 months. Just my white ass opinion.

hhv said...

Here's a more likely prediction:

We get a drop over the next 12-18 months (to what extent only the great housing market bear in the sky knows), then it takes 7-10 YEARS before the next run up occurs. That would be more in line with historical trends in RE in this town (adjusted for bursted bubble psychology and 40 year amortizations).

Anyone who thinks the trouble in the GLOBAL financial markets will be short lived understands nothing about economics.

roger said...

VG said

Stearns were all about the bonds game and if they went under with no bail out there would be instant world wide chaos beyond our imaginations.

I have been watching the market and concerned about the worlds financial situation all day. Then I read this Globe & Mail article: U.S. has taken decisive action: Bush

United States President George Bush, trying to ease turmoil in financial markets, said Monday that his administration is “on top of the situation” in dealing with the slumping economy.

“When need be, we'll act decisively,” Mr. Bush said, without indicating any other steps his government might take.

Repeating his reassurances to the country, the president said that in the long run, the economy is going to be fine.

Mr. Bush spoke on a day of turmoil and plunging prices on global financial markets. Oil prices hit a record in Asian trading, U.S. stock index futures fell sharply and the dollar hit record lows.


I feel better now and can get a good nights sleep.

Happy Owner said...

Admittedly, the currect state of finacial markets are a concern. I can't dismiss that. I just don't think it makes all that much difference here. Sure, if Canada - US economic entrenchment are the only economic factors to consider, them we could be in a mess of trouble. But I think we (the west) are past the ol' 80's model. There is far to much global integration here - we were forced to look to a global market even way-back-then because central Canada abandoned us out here. Now we are far better positioned to take advantage of the "asian century" then our counterparts "back" east. Christ, they still talk about protectionist solutions. Lets all go back to living in a cocoon. The fact we, "out here", were forced to look beyond our border to achieve prosperity has positioned us to continue our prosperity with a focus to Asia. 12 months you"ll see the bottom. After that, it's full steam ahead.

roger said...

Hmmm......

Today the DOW and TSX were deep into red territory. The TSX ended down 300 points while the DOW rallied and ended up 21 on the day.

Maybe George does have something up his sleeve.

Plunge Protection Team

The Stock Market's Da Vinci Code

Must be bunk. American government wouldn't rig the game.

Happy Owner said...

I know I'm branded as a "bull" here, and honestly I try to keep my perspective on the conservative side, but I keep looking around and I don't see any bad stuff on the horizon.

CBC text story.

http://www.cbc.ca/canada/british-columbia/story/2008/03/17/bc-cucbc-realestate-forecast.html

What this story means for the future, I don't know. But.....

Anonymous said...

Happy owner
Price apprecation was only 1% year to year here. Even Halifax appreciated 10%. Saskatoon 50%. So returns here when you factor in mortgage payments, tax, inflation, etc are pitiful, actually they are negative. So what are you talking about? Saskatoon must be paradise as viewed by people from outside the island. Time to travel a bit, and get off the island and a get a dose of reality.

greg said...

Olives, thanks for identifying the link to the comments on Mish's site where he expressed interest in Canadian real estate. I sent an email, so you never know, maybe we'll get a story about our neck of the woods done on global economic analysis soon.

olives said...

Greg, I can't imagine the story is a high priority right now with everything else going on, but it would be great to see it.

vg said...

happy owner thinks we are immune because we live on an island ? LOL
wake up bud,we are a "world class city" remember ? the buck stops here like everywhere else.

Incase you are missing out on the important points of this financial disaster we are in,they are doing financial dealings not done since the Great Depression to save all our asses,ever heard of that era ?

roger said...

If you are interested in a free Private Client Services Account or just want to see what they look like see the last post at Victoria Housing Blog comments

beagle said...

Happy Owner, I'm not convinced we can have prosperity without a prosperous US. The problems down there really scare me. I think the Asians think so too or why every time there is a sniff of problems in the States their markets tanks 4-5%? I remember when Japan 20 years ago was to be the dominate world power. Didn't quite pan out. We have a world built on debt and the chickens have to come home to roast awhile. I feel there are some lean years ahead while it all shakes out.

roger said...

If you are a bear with bonds as one component of your portfolio you might find the site Canadian Fixed Income interesting. Daily quotes on fed, provincial and corporate bonds.

roger said...

The US is just entering recession and the stock market is entering bear territory. At least someone is waking up.

Bit of a breather likely in consumer spending

Business Council of B.C. executive vice-president Jock Finlayson said turbulent financial markets and a slowing U.S. economy are bound to affect the attitudes of B.C. consumers.

Finlayson said the current economic crisis doesn't represent "the end of the world" and still expects the B.C. economy will grow by about two per cent this year -- down from an earlier forecast of 2.8 per cent.

"But we're in a very turbulent time and it's naive to think that B.C. will be insulated from it," he said. "Consumer spending represents close to 70 per cent of all spending in the B.C. economy.


You get a much different perspective if you don't rely on the Times Colonist and the Oak Bay News as your source of information.

roger said...

For those of you that are interested in the Garth Turner Conference it is online now.

beagle said...

haha, There were some very entertaining comments in there.
It's good to see these views in the mainstream now, not just the bearish blogs.

boomer said...

roger: thanks for the fixed income link-current bond quotes are pretty tough to find on line.

In spite of the recent and current efforts of the us fed (and the boc) to get general interest rates down to "spur" the economy , most of that effort has been buried in the much wider spread that the banks now have between their retail cost of funds and their lending rates (which really havent changed much or have even gone up at the consumer / mortgage level). The feds continual dropping of administered rates is trying to apply a band aid solution to a broken financial system and is not even remotely helping the real economy.
I see the dow is currently up about 300 points on another fed rate cut expectation. Whether or not they get it, its just a continuing excercise in futility and that gain will be gone tomorrow.. This mess will be with us for a long time yet (on both sides of the border)

IMHO, of course-live from walmart

vg said...

Garth sums it up as we have all done so, blind bulls take note,the after party is over,lasted much longer than it should have,by about 2 years :


"Average prices have exceeded the ability of the average family to buy homes and to overcome that, we have developed mortgage products that encourage a debt orgy and over-buying.

In the US they were called subprimes. Here they're called 40-year mortgages.

And both countries have been willing to destroy real estate with zero (or close to it) down payments. The combination yielded a predictable result - people have bought houses they would not otherwise be able to afford. That is an unsustainable foundation for any boom. So, it can't last here, as it could not in the States."

vg said...

there's some classic lines in the Garth chat :

"If you think real estate is different from every other asset, and that this boom is never-ending, you must be from Vancouver."



" Money flows where it can garner a return, either immediate in terms of cash flow, or as a longer-term capital gain. Currently, real estate is falling out of favour in much of the world, supplanted by commodities like oil and gold. Many invetsors now look at Canada and see a mirror of real estate conditions that existed in the US in the autumn of 2005. They're just not interested."



"Definitely more than taking their housing advice from industry professionals. I am appalled at the shilling by the major real estate marketers which passes for informed comment. Far too many American investors were lulled into buying at precisely the wrong moment by words of assurance given by self-dealers. My view is that Canada is at that same moment now, with ample evidence the market is turning quickly beneath our feet."

hhv said...

But my hubby insists this time things are different!

sorry sitting pretty, I couldn't resist.

roger said...

Cameron Muir of BCREA seems to be toning down the bullish rhetoric.

BC Home Sales Drop for Second Month

VANCOUVER (NEWS1130) - Continued erosion in housing affordability is taking a toll on the ability to pay for some buyers. The British Columbia Real Estate Association is reporting home sales have fallen for the second month in a row, and we've seen the slowest start to a year since 2003.

Cameron Muir with the B.C. Real Estate Association says it's a trend that's showing up all over the province. The average residential price in B.C. climbed to $478,000 in January, up 15% from last February. Muir says prices are still rising, but not as fast as we've seen in the last couple of years, and that could balance things out in the months to come. "We anticipate at least over the next 24 months much more of a moderating trend so more listings and more inventory there for homebuyers to have time to do their due diligence. Prices are still rising but rising more in single digits in most of the urban markets."

A weak U.S. economy and lower demand for B.C. lumber are just a couple factors for the drop. But Muir says fewer home sales and the increase in active listings may actually be balancing the B.C. housing market.


What will he say when sales, prices and YOY drop next month?

What about Victoria? I have seen lots of listings and not too many sales. Oh, did I mention the price reductions and some nice haircuts. Try PCS and you will see it for yourself.

roger said...

I dropped by Garth's site and found this REALTORS® Confession

I think things are already slowing down. Other Realtors think it’s because of the weather this year. I do not.

I see and hear bizarre things in my line of work, and the level of (lack of) financial savvy amongst the average person is shocking. You plan on spending half a million on a house and you don’t get an Inspection BEFORE buying?

I used to work in a high profile office with over 100 Agents. There are 2 in that office that I’d even consider working to sell my house.