It's clear the US market is toast. It's clear the Alberta bubble has EXPLODED (Updated 05/11/08; H/T to Island Boy at VT). It's clear the Ontario market is turning.
Ours? Not so clear. Yes, inventory is piling up. Yes, sales are declining. Yes, new condos aren't selling anymore. But prices remain slightly up. I know, I know, things take time to develop.
Nation-wide, the US market took about 6-8 months to unravel. But it didn't take that long in Alberta. It's not taking that long in Ontario. And these are facts that the bulls will use to justify their argument that Victoria is different.
75 comments:
Victoria is different, at least in comparison to the rest of Canada. It's industry is government, technology (apparently?) and tourism. Fair chunk of construction as well. And lets not forget 2010 psychology.
None of those have really taken a hit yet. But it doesn't matter. Canada is an export nation, our largest export market is in or on the brink of a recession and our dollar is on equal footing.
It's when, not if.
Of course, I still intend to buy a place. When it makes financial sense for me to do so. Market can do as it wants since I'm intending to live there.
Victoria is different in that once the s#@t hits the fan, the property value decline will be worse than in other areas of Canada.
Why?
1)Because the young 'uns who already live here cannot afford to buy.Those who've bought in the last 2 years WILL lose money if they HAVE to sell.
It only takes a 33.33% decline for house prices to be slashed by 50%, right? NOT impossible, we've seen it before. And the higher they went up , the more they'll flop down.
2) The old timers who are migrating here to retire will get LESS for their homes in Alberta or Ontario, as the fallout is beginning there, and those markets are forecast to suffer more in the coming Canadian recession, so who's buying those retirees' homes there? The young UNemployed?
These retirees'll think thrice before risking $500-700k on a mouldy dump which will be declining in value between offer date and closing date.
3) The final group of buyers, 'rich' Americans, are getting less or NO premium on their Yankee dollar. So, why buy here when they can own a clean castle in an American sunbelt like Florida or Arizona for a percentage of the prices here?
What did the US and Alberta look like right before they burst?
Were they similar to here with rising inventory? Or is it like apples/oranges, so just wait and see?
If Vancouver, like Seattle, comes late to the crash, then maybe that will buoy up Victoria too. For a while.
I am working as a Toronto realtor and I am also starting to have a serious problem in here. It will be interesting to see what will happen now. Bank of Canada lowered key rates and this should affect also strong (in my opinion overvaluated) dollar and then the increasing export should be a good cure for a recession.
Last year we were shielded from inflation by the huge run up in the Canadian dollar. This year the dollar has stopped it's appreciation and we should start or if you go gas up are already feeling the bogieman that is inflation. Costs for almost everything are going to creep up. The BOC won't have much choice but to raise rates. Developement will stall, good paying construction jobs go away, the people that stretched to own will be in trouble and the slide will start. But this all takes time. Folks are resourceful and will hang on thinking it's gonna change. I've been in business here in Victoria for over 20 years and this year is feeling very different. A lot more lulls than usual.
We are not the same as…by some realtors and “house economist”:
Monday: The price will keep going up before 2010, because many buyers will come from outside of BC.
Tuesday: The price will not clap after 2010, because except for coal harbor and Whistler, 99% buyers are local.
Wednesday: Alberta house is booming, because they have oil and rich. BC will boom afterwards, because Albertan will come to buy house here, so are the Americans.
Thursday: They crashed, we won’t, because it is a balance market now, the price will up 9.9% instead of two digits.
Friday: somebody say the house boom is officially over. No, new survey shows buyers are willing sacrifice to live in remote area, they are will to buy a condo at $400k to $600k.
Saturday: Let’s have a party and figure out who should we hire to write another booming article on the SUN to fool these stupid buyers and sellers.
Sunday at church: oh god, help me to let them believe me for another 30 years
I love this comment from over on KIV:
"Umm, househunt, you must hate the fact that that the market has been nuts the past few weeks, with many multiple offer situations, and people jumping on houses the day they hit the market. I know you want to "warn" people of this huge crash, but remember, many people do not believe it will happen here, not just Realtors. I know that you, and a couple people on here have sat with your calculators and newspaper articles and internet blogs,and decided that for sure there will be a drop, but many people have total confidence in the market here and that alone makes it unlikely prices will drop. (although I know you are trying to change that)."
Ooo, househunt. The power.
S2 (laughing too hard to sign in).
Oh, ya how stupid are we for doing the math and researching and reading when we could just have total blissful confidence too. OMG!
No one wants to hear the emperor has no clothes.
What's up with completely avoiding the question?
As if we won't notice that she isn't answering it - all ten people or so that asked and bumped the post up for three days in order to get an explanation of the statement!!!!
Maybe Vancouver and Victoria are like the last car on the rollercoaster - once we go over the top we will get whipped downwards the fastest.
There is a grain of truth in what the poster on KIV said:
Umm, househunt, you must hate the fact that that the market has been nuts the past few weeks, with many multiple offer situations, and people jumping on houses the day they hit the market.
The market has ben quite active in the last month. To my surprise, I have seen a number of multiple offer deals on PCS on good condition/location properties going to eager punters. We need to remember that most of the public is only reading and seeing one side of the story in the MSM and is receiving biased RE agent advice. However, there have been lots of price reductions as well. Some houses do sell quickly if well priced, below the median or with suite mortgage helpers. However, we are in May which is the busiest month of the year!! As the summer rolls around the effect of rising inventory will begin to kick in.
I know you want to "warn" people of this huge crash, but remember, many people do not believe it will happen here, not just Realtors. I know that you, and a couple people on here have sat with your calculators and newspaper articles and internet blogs,and decided that for sure there will be a drop, but many people have total confidence in the market here and that alone makes it unlikely prices will drop. (although I know you are trying to change that)."
Spoken like a true real estate believer®. This is why we have bubbles in real estate; almost unshakeable belief that prices can go only one way - up. Naysayers are not appreciated because they present an unpleasant viewpoint.
Funny how when gas goes up it's the bad and those greedy speculators and corporations are evil, but when it's housing everyone cheers even if it ruins the community.
I know. I try to point this out to the bulls when they all complain about gas prices and how they should boycott buying gas for a day and such.
I figure it is because the gas money is not going into their pockets but the real estate money is (or at least they feel it is even though it is only on paper).
Of course, if they were first time buyers, and the money was going out of their pockets, they wouldn't be quite so smug and satisfied about real estate prices....
Roger said: "The market has been quite active in the last month..."
My answer to that uses 3 words:
DEAD CAT BOUNCE
I have to respectfully disagree with Roger about market activity - total sales in April were lower than March, and much lower in both months than a year ago. I don't see anything this month to make me think May will be any better - total sales were in the 900+ range last May, and I just don't see that happening this year.
but many people have total confidence in the market here and that alone makes it unlikely prices will drop. (although I know you are trying to change that)."
hmmm, wonder what happens when "many people" change their mind ? looks like there are a record level selling that think the opposite,like 4000 of them.
I have private client lisitng service and I more and ore houses are coming on the market every hour. I have never seen it like this. I am looking at the $500 +. The homes over $1 mil. are not moving at all.
Greg,
I did not mean to imply that there would be more sales this month than last May - just more activity than last month.
There are more listings this month all over the island. I have seen some over list price sales on PCS which gets the agents all excited (i.e. hot market to them). However, lots of price reductions and some good haircuts and trims on some sales.
Just posted some Metchosin numbers over on KIV.
HouseHunt goes in with a left hook and then Olives goes in with a right hook and then OnceHarmony goes in for the upper cut.
And she is out!!!!
S2 (too cyber swarmy to sign in)
ummmm, what is kiv?
I see what you mean Roger. If sales were actually lower again, that would be a shocking development at this time of the year....
S2 and Olives, why on earth do you care so much about some realtor over on KIV, and trying so very hard to disprove her or make her look foolish. What is in it for you?
Good Post on Greater Fool today
Well, the CREA people were hitting the Hill to make a few demands, including letting young buyers take $25,000 out of their RRSPs (up from the current $20,000 limit) for a real estate down payment. I gave my approval (even though I think RRSPs are for retirement – which is our next crisis), conditional upon the realtors taking back a message with them: The industry’s on the road to serious grief.
The reasons are clear. More and more couples are buying homes with little cash and mountains of debt. New homes can be purchased for 1.5% down, with a 98.5% mortgage. When prices flatline later this year, and decline next year, this could mean too many people owing more than their homes are worth.
Second, the use of 40-year amortizations is going wild. Almost half of all new loans have these lifetime repayment schemes, which can turn a $300,000 loan into a debt obligation of almost $900,000. Worse, they allow people to borrow more, pay more and gamble more in a Canadian equivalent of the subprime rot which infected American housing and is voraciously eating its way through the middle class.
Hey, Anon 10.44
Realtors can take it, don't you think they get much much worse grilling from their clients who are concerned about huge sums of money. The debate on KIV is nothing. People need to hear other opinions. I applaud S2 and Olives for trying to wake people up to the notion that it's not all sunshine and roses.
I think people should be able to hear different opinions and make informed decisions based on hearing both sides of an argument and if the information that I am getting is skewed or mistaken then I will call someone on it. :)
Really. People research more and ask more questions (and have more rights) when they buy a toaster.
When it come to the biggest purchase I am ever going to make in my life I will be asking a lot of questions.
I'm not just going to tow the line that real estate is the best thing since sliced bread and everyone should just listen to the real estate professionals and buy.
As for KIV - the realtor made a statement which I did not understand and many asked for clarification. I still don't think she has given an answer to the question, but perhaps she has none.
If she looks "foolish" at all, it is because she has made a statement and now is not able to explain it.
The only thing "in it for me" is an explanation from her, which would lead to greater knowledge. no hidden motive...
As for listings,
WOW, are there ever a lot of FOR SALE signs around town!
Almost half of new mortgages in Canada are 40-year amortizations - but in Victoria and Vancouver isn't it something like 80 percent?
The realtor has given an answer as she understands it. I don't think we will be hearing anymore on it and to be fair since we know that she really does not have an answer we should not keep asking for one.
Good news for bears in the TC this morning: Building trades are going flat out
Victoria's [homes] under-construction volumes have now reached their highest level since July 1976, which indicates the current generation of builders is now experiencing their busiest year on record," Peggy Prill, CMHC principal of surveys in B.C., said.
Great - more inventory to add to the growing list on MLS
"Home sales have begun a cooling trend and although sales levels remain above the average, new-home starts are expected to level off this year," Prill said.
Does Peggy smell the smoke?
Despite last month's strong showing on Vancouver Island, overall housing starts are only slightly higher than the same four months in 2007.
Not quite in line with Carla's lead paragraph "Today's Greater Victoria home builders are busier than they've been in decades, as this region's housing juggernaut continues to blast forward."
What those kind of numbers mean is that many would-be buyers have been priced out of the market and cannot afford to buy a house. Instead, many are turning to condominiums, which can be more affordable.
Not many condo buyers as shown in this graph
"Everybody wants to live here. We are the California of Canada."
The classic line. Funny - a guy from Kelowna said the same thing the other day... or was he in Courtenay?
S2
I saw your comments on Metchosin on KIV. The following might be of interest to your readers:
Sales of houses last month in Langford 48 and today there are 166 waiting for eager buyers. Not too bad for sellers.
But in Sooke we have 173 houses for sale and only 23 sold in April which is less than the 36 sold in March. With gas @ $1.34 some people might be reconsidering that one hour commute.
If Tim is still around he might be able to provide a RE agent perspective on buying in Sooke right now.
Data from VREB and MLS.CA
In Colwood, developer Cam Hayward's Windcrest Developments Ltd. is building a 31-unit, upper-end townhouse project called The Lookout. Just over one-third have sold, and buyers are local and from out-of-town, with some from Alberta, Hayward said.
Although Hayward thinks a plateau in the market is likely, he's optimistic about the future.
"Everybody wants to live here. We are the California of Canada." After a slow January, "It has picked up in the last month. More people are looking again," he said.
I really don't think this developer really wants to be the California of Canada, haha
California is cratering, can Colwood be far behind?
Victoria is like California:
Everyone wants to live here, house market is bubbled. Both place’s government and tourist agency can lay off people. So house price at both places can crash.
The different is we have a low unemployment rate. But that doesn’t mean we have a stronger house purchasing power. How may people earn $20/h or less? How can these people afford a $500k house? No food, no cloth, no travel, no movie, save every penny on house. Is that possible, “house economist”?
At least, the house price should in line with government assessment. I think the assessment value can be used as sort of a mark.
Beeeeeeeear
I visited The Lookout by accident once. $700,000 to over a million for a townhouse whose big selling point is a view of the water... on the other side of what is currently a gravel pit, and will eventually be a giant subdivision. Where do I sign?
I just received the remaining VREB/CMHC data that I needed to update all the Victoria slideshows and graphs. Drop by, browse around and see the all the numbers for Victoria and Vancouver Island.
Your comments and views will be interesting to read.
Wow the listings! I particularly like the graphs with the sales to active listing ratios.
olives said:
Wow the listings! I particularly like the graphs with the sales to active listing ratios.
The inverse of the sales/active listings is the months-of-inventory (MOI). For example 33% is 3 months and 20% is 5 months.
Olives you can download or link to the graphs as well by selecting "Browse Photos"; selecting a chart amd then clicking Larger Size or Download Photos.
Anyone is free to download or link to the graphs or sideshows; no credit or request to use is necessary.
Who is really at risk of the housing crash?
There are those that have leveraged heavily in the past couple years hoping to make a buck with 2nd properties or those over extending with 40yr amort with nearly nothing down.
Those that have positive cash flow rentals and those who own a home that is costing them less than 32% of their gross income over 25 yrs and you intend to own your properties for the next 10 years are not going to be affected in the long run.
If your home, or rental, can still see equity if it sold today for 30% less than you're OK.
The sales to new listings ratio is not the inverse of the months of inventory. They appear to be similar but are calculated differently.
I'll try to show the difference.
Sales to new listing ratio:
You take ALL of the properties that were listed within the last 90days. Of those listed within the last 90 days, X amount have sold.
The month of inventory is ALL of the current listings which include those properties that have been listed in excess of 90 days. X amount sold in the last month which includes properties that were listed more than a month ago.
Subtle difference between the two, and at this point in the market, one might argue "what the heck is the difference".
But when the marketplace shifts you will see a divergence in the median price of each. The median price of the Sales/New listings ratio will be lower than the MOI median, indicating that people who have listed their homes in the last 90 days are more likely to take a lower price than those who have had their homes listed in excess of 90 days.
The problem with both of these calculations is due to time lags.
A property might have an acepted offer today, but it is not recorded as a sale in the data base for 2 weeks but back dated for today. Hence, when you do the same calculation for the same time period two weeks from now - you get different answers.
Thats why I like to back date my analysis by the average days on market. So, if the average days on market were 30, I would run the Sales/New listings ratio and MOI for the time period ending 30 days ago.
Siobhan
"...indicating that people who have listed their homes in the last 90 days are more likely to take a lower price than those who have had their homes listed in excess of 90 days."
Why would this be? Is it just likely more people in this group that need to sell quicker?
S2 said:
I think people should be able to hear different opinions and make informed decisions based on hearing both sides of an argument and if the information that I am getting is skewed or mistaken then I will call someone on it. :)
Really. People research more and ask more questions (and have more rights) when they buy a toaster.
When it come to the biggest purchase I am ever going to make in my life I will be asking a lot of questions.
I'm not just going to tow the line that real estate is the best thing since sliced bread and everyone should just listen to the real estate professionals and buy.
Please don't misunderstand, I was not suggesting that you tow the line. Questions are always good, as long as you are really looking for the anwser rather than just pretending to want an answer. I just didn't understand your particular fascination with this realtor, and your self described 'one two punch'. I've read the discussion in question, and think she sounds sincere and genuine, even if she doesn't share your opinions and beliefs.
anon, what makes you think the realtor doesn't share (some or most of) s2's opinions? I don't think she has stated that, in fact s2 mentioned that the market in Metchosin has slowed down and the realtor agreed.
that particular realtor has not made any statements that I recall that state that she doesn't share a similar prediction of a market correction - she just doesn't mention it. that is one of the reasons I personally was interested in her analysis of how median and average prices indicate the direction of a market - to get her opinion. It seems to me she is very careful (and maybe for obvious reasons), not to provide her opinion in that forum. Maybe I have missed something she has said though.
okay, I just read the whole thread again to make sure, and the only thing the realtor says that doesn't make sense is that houses at the lower end won't go down - of course this doesn't make sense because if the higher-end goes down the lower end will follow. Prices however may begin to compress for a while and the lower end may therefore be the last to go down.
But I think anyone with half a brain could see through that statement. Maybe she meant something different.
"...indicating that people who have listed their homes in the last 90 days are more likely to take a lower price than those who have had their homes listed in excess of 90 days."
Why would this be? Is it just likely more people in this group that need to sell quicker?
It's an observation on my part, Olives.
I have been following this type of analysis for the last few years and only in the last few months have I seen the Sales/New Listings median being slightly less than the MOI median. There could be a dozen single or combined answers for this - or - it could be an anomaly.
My thinking is that the agents may be lowering the expectaions of sellers over the last few months by not being as high in the list price. Or perhaps, sellers in the last 90 days are willing to accept a slightly lower price than before. Now when I say slightly lower amount - I mean $2,000 to $4,000 on half a million which is less than half a percent. Which is an insignificant number, but I think it shows a trend. I am watching this price differential to see if it increases as the market gets worse for selling homes.
My thinking is along the same lines as I watch the average price in relation to the median price. As long as the average price is above the median then it suggests to me that prospective buyers are more positive in their outlook on future real estate prices. When the average, drops below the median, I think that may convey that a negative attitude exists among buyers and sellers of the future market place.
I'm looking specifially at four different market segments which are:
Single Family Homes
New and Re-sale
Condominiums
New and Re-sale
I'm only seeing the divergence between the two medians in the new condominium market. But, I have not seen the average go below the median in this market segment yet. But because I am suspicious of these "full price" offers on unbuilt condominiums, I might not see the average drop below the median.
Siobhan
I don't see the average price dropping below the median anytime soon. That's a tough one - check out Roger's chart here at slide 4, and you'll see what I mean.
Langford and Colwood NEW condominium sales for the last 90 days.
Average Sale Price $309,686
Median Sale Price $310,000
Siobhan
Siobhan said:
The sales to new listings ratio is not the inverse of the months of inventory.
Agreed. I think you may have misread my post. This is what I said:
The inverse of the sales/active listings is the months-of-inventory (MOI).
MOI is the ratio of active listings/sales and is usually done on over a one month period. Sometimes, but not often, the calculation may be done over a longer period of time like one quarter.
This is the typical way that MOI is used in the RE industry as described by the London Real Estate Board and by Rob Chipman and at Mohican's Financial Planning. Google gives lots more sites with the same defintion of MOI.
Example: 30 houses sold in March, there were 60 new listings and there are 300 houses available at the end of March (active listings). There are 10 months of inventory (MOI). The sales/active listings ratio is .1 or 10%. The sales/new listing ratio was .5 or 50%.
MOI is not the best of statistical measures but it is widely used as defined above. Your statistical technique looks like it is very useful for looking at trends but it is not the MOI as commonly defined.
One has to work within the database that is available.
Unfortunately, the data base I use does nasty things to data. So, I have to set 90 day parameters to both sales and listings. In this way I can compare the sales to new listings ratios from one period to another period.
I originally did the calculation as you show, but found that when you did the same calculation 3 weeks later you got a different answer. As the programme kept dumping more sales into this time period. So, in order to compare one time period to another and get reproducible data it was necessary to set limiters to sales that occurred in that set of listing data only. I also find it easier to understand if you restate the Sales to new listings ratio as being the odds of selling a property within the typical 90 day listing contract. So, if the ratio was 0.25 then the odds of selling in 90 days would be 1 in 4.
And say the ratio were 0.5 this would mean that for every home that sold - one would be listed making it a balanced market.
Using it this way, I have seen the sales to new listings ratio drop from almost 100 in 2005 to 0.75 a year ago and now to roughly 0.45 depending on what your looking at ie homes or condos, new or resale.
I still like using the MOI as it can show spikes in inventory. The MOI did kinda screw up in December, when a lot of property listings were cancelled and then relisted in January.
Siobhan
"Langford and Colwood NEW condominium sales for the last 90 days.
Average Sale Price $309,686
Median Sale Price $310,000"
So, using your theory, the general population doesn't have an optimistic view of the Langford condo market - This doesn't seem possible! LOL
Siobhan,
Thanks for the reply. Looks like no matter how we look at things - your stats, mine, sales, inventory - we come to the same conclusion. "Captain, the ship is listing"
BTW - On the Victoria Housing Blog they had a link to a Calgary Herald article Sellers flood home market Scary business and not suitable for posting on KIV.
Not suitable for KIV only because they would all say that that is Calgary and not Victoria.
my favourite quote: "Those are the people that went out and bought four, five, six, seven condos in a building that wasn't going to be built for two years. All of those buildings are now being completed. Those people did not want to be landlords. They were going to buy the condo, hold it until the building came due and put it on the market," said MacLean. "Well, the problem is of course we have the highest number of condos in history for sale."
But of course, this isn't happening here.
Population of Greater Calgary is Approx. 3 1/2 times the population of Greater Victoria.
Number of condos for sale thru MLS in Victoria as of may 8- approx.1100 (not including THs)
Number of condos for sale thru MLS in Calgary according to the article. 3214
We seem to have a few more condos for sale per capita than the Calgarians, but of course they are going to be snapped up by buyers and "investors" from other places , including the USA(sure!) and---wait for it: ---------------------ALBERTA
lol
Following up on the Calgary comparison.
Here is a comparison to Nanaimo.
Detached homes (SFD)in Nanaimo - 23K
Sales in April - 164
Active Listings today on MLS - 717
Months of Inventory - 4.4
SFD median price - 358K
SFD in Greater Victoria - 68K
Sales in April - 336
Active Listings today on MLS - 1239
Months of Inventory - 3.7
SFD median price - 558K
So Victoria is 3 times the size of Nanaimo but only has twice the sale of homes. Inventory is only 1.7 times Nanaimo.
So it would appear that higher prices for homes results in fewer people buying and selling in Victoria.
Comments or other conclusions??
I have not seen a recent a blog post from Tim in Sooke so I took a close look at the numbers today. Sales of houses (SFD) dropped from 36 in March to 23 in April. MLS shows 174 SFD listed for sale today.
Here are some charts of sales and active listings. There are a lot of listings for buyers to choose from over 400K as shown in this slide.
I wonder what will happen in May??
Looks like the outerlying areas - Sooke, Metchosin,Mill Bay, Langford, will lead the way down.
A friend of mine in Mill Bay is trying to sell and an agent told her last week that nothing is moving there.
"So it would appear that higher prices for homes results in fewer people buying and selling in Victoria."
Roger,
I fear that this really has become the issue. Numbers indicate that very few preprties in Victoria change hands year to year. While we hear agents talking about how hot the market is, given that there are over 1200 of them, very few of them are actually doing a brisk business.
Unless you want to move on, or you are looking to downsize, or you have to sell, there really isn't much incentive to sell your place these days.
My gut feeling on this market is really starting to shift. I don't think we're in for any prolongment of this boom, but I can see a year or two of stagnation before a major correction.
What happens to the psychology of buyers and sellers when they realize the party is over? Do sellers rush to be the first to leave? Do buyers wait a little longer on the sidelines?
I still think that there is a staring contest going on. It may take longer before one of the sides blinks.
HHV said:
My gut feeling on this market is really starting to shift. I don't think we're in for any prolongment of this boom, but I can see a year or two of stagnation before a major correction.
I believe prices will be "sticky" for a while as the realization that the boom is over becomes apparent to everyone. You were right about sellers and buyers staring at each other for a period of time.
You can see this in Calgary right now with their huge inventory. Folks resist the pressure to sell for less than their neighbours but some have to sell and down we go. The builders have to sell and they will try offering extra stuff to begin with but will quickly lower prices when this doesn't work. Calgary will be interesting to watch in the next few months as we pass the May peak buying.
Once the downturn happens in other parts of Canada it will not take as long in Victoria. The "we are a special place" myth will crack quickly when the national MSM starts broadcasting that real estate can drop in Canada too. But bears shouldn't expect much change until late summer and will have to wait until 2009 for the snowball to really get rolling. Inflation will be kicking in later this year and those BOC rates will start going up as fast as they went down.
I agree with the above but can someone explain to me why the BoC must start raising rates just because we have inflation? It would seem that the big boys don't care what we pay for gas and bread, they just want to keep the flow of cheap money going, even if the banks don't pass it on to Joe Public. It would also seem that any significant increase in the rates would devastate the entire housing market (and the economy) overnight.
anon said:
I agree with the above but can someone explain to me why the BoC must start raising rates just because we have inflation?
The answer lies in the Bank of Canada's role in controlling monetary policy. They have a firm mandate (periodically reviewed) to keep inflation between 1 and 3% (2% target) and raising short interest rates is the big hammer in their tool box. You can read more about it here
The elected government is responsible for fiscal policy (budgets, taxes, expenditures etc.)
Olives said:
Looks like the outerlying areas - Sooke, Metchosin,Mill Bay, Langford, will lead the way down.
Langford will be interesting to watch over the next few months. Tonight I prepared some charts on Langford in the same format as the earlier ones on neighbouring Sooke. There were 48 sales in April which was lower than the 56 in March.
The April sales in Langford and current MLS Listings, by price range, are shown here. The 400-500K price range is still "hot" but it drops off quickly above 500K.
HHV,
I see that you are talking real estate over on the KIV site. I don't post there because I don't have kids but I do follow Olives & S2 posts. Interesting to read the viewpoints of the average homeowner.
Many people are visual and prefer pictures over stats in text form. That is why I developed the slideshows, which can be paused and single stepped. Feel free to link to any of my charts or slideshows if you feel that it would be useful.
The City of Victoria slideshow definitely shows that the inner core market has peaked.
The public gallery has a number of new stats presentations as well.
Cheers Roger,
I plan to use them around here too.
Roger,
the slideshows are great, I posted a link in my blogroll...
"okay, I just read the whole thread again to make sure, and the only thing the realtor says that doesn't make sense is that houses at the lower end won't go down "
they will go down when the Mortgage Depot's etc stop lending out high risk money to kids with no business owning with no down payment. When that day comes the low end will tank just like the $700,000 club is now.
VG,
There is another reason the low end will go down. The market is currently compressed with far more inventory above the median than below. Sales are down and inventory is up from last year. Those who have to sell at the high end will lower their price and set a new benchmark in that price range. So the houses that sold for 750K will drop to 700K and the ones at 700K will then have to drop and so on.
This will ripple down until the low end starts to become affordable for the average joe again. The real crappy houses will fall off the edge because the flippers will be gone.
This will all take some time. The low end will not see the effect until 2009. By then interest rates will be rising due to inflation and there will be a different kind of financing pressure that many have not seen before that will cause things to accelerate downward.
REALTOR DISHONEST ALERT:
Don't believe what you read when you see “new listings.” I’ve seen an increasing number of properties pulled off the market and relisted at lower prices, apparently in an attempt to hide the fact that the property sells well below the original asking price. For example:
202-2710 Grosvenor (2BR in Hillside):
Feb 12 2008 listed at $315,000
Mar 12 2008 re-listed at $299,900
Apr 1 2008 re-listed at $289,900
On April 14 the property sold for $282,000. Looks like it sold for 2.7% under the asking price, after 11 days on the market, right? Well, no, actually it sold for 10.5% below the original asking price after two months on the market.
One word comes to mind: “slippery”
- awum (too lazy to log in)
"REALTOR DISHONEST ALERT:
Don't believe what you read when you see “new listings.” I’ve seen an increasing number of properties pulled off the market and relisted at lower prices, apparently in an attempt to hide the fact that the property sells well below the original asking price. For example:
202-2710 Grosvenor (2BR in Hillside):
Feb 12 2008 listed at $315,000
Mar 12 2008 re-listed at $299,900
Apr 1 2008 re-listed at $289,900
On April 14 the property sold for $282,000. Looks like it sold for 2.7% under the asking price, after 11 days on the market, right? Well, no, actually it sold for 10.5% below the original asking price after two months on the market.
One word comes to mind: “slippery”
- awum (too lazy to log in)
May 13, 2008 4:38 PM"
If anyone feels inclined to do similar research (or just happens to notice these events, which are common) and post the results here, I will happily keep a running list of agencies, not individual agents, who allow this practice. I'll even hotlink the e-mail addresses so you can send them emails asking why they allow this.
And please remember, for every Realtor doing this, there is a seller allowing them to.
I got my data from PCS, which unfortunately doesn't identify the realtor.
Another example: 1-1120 Richardson recently sold for $335,000 after being re-listed at $349,900. However, it was originally listed a few weeks earlier for $383,000.
- awum
anon 5:27 said:
I got my data from PCS, which unfortunately doesn't identify the realtor.
But PCS does give you the MLS# which you enter here for a detailed realtor listing.
This re-listing scam has been going on for years and one of the agents that frequents this blog even admitted to doing it for the benefit of his client.
If you haven't seen CondoHype's post today you should check it out.
It is amazing what the BCREA let's agents do and get away with.
I can't wait for this whole thing to burst and have these clowns taken to task over what they do and say to promote their industry, much like the shady practices in the corporate world.
Considering that for the most part, Boomers have major portions of their future financial security tied up in this asset class, I think we can expect to hear the same kind of call for investigation as we did when the accounting scandals broke post 2001.
I read that on the weekend,funny how these scumbags show up at market peaks but more disgustimng the BCRA didn't pull his license. In the coming market decline these types will be back selling vaccum cleaners door to door. I can only imagine how many of his 25 listings cancelled on Monday morning.
From British Columbia Real Estate Association website:
"More homes for sale - welcome news for homebuyers"
http://www.bcrea.bc.ca/news_room/2008-04.pdf
S2
Post a Comment