In the SFH category there have been 12-14 listings (some of these are price reductions that appear new based on my filters) and no sales recorded since April 22. That isn’t to say nothing has sold, just that the PCS isn’t showing them as sold. So it could be that there are conditional offers in this list of properties that haven’t had the conditions removed yet. So much for bidding wars and unconditional offers only being accepted stories, eh?
Condos are only a mildly different story, slightly more listings, maybe 25-28 and one sale since April 29. I’ve seen price reductions and re-lists (again bringing previously higher priced units into my screening) and more “realistically” priced new listings. Same caveat around “sales” as above.
Back when we first started watching these categories we’d often see houses around $380-$400K and condos around $210K, then over last summer and fall asking prices jumped up closer to $415K and $230K. Something has definitely changed here. It appears like the buyers have up and left the building. And the sellers are starting to realize this.Why may this be? I think the FTBer is long priced out of the market. Maybe some with help from the bank of mom and dad are still playing around, but even these, in my opinion, will be already in the market if they were going to get in with help. So the rest of us who have to rely on income and savings to support our home purchases can’t get value, or can’t get financing, so we don’t buy.
My guess? I’m thinking the only people buying right now are the same ones who are trying to sell. The market is flat. You have to be blind not to see it. This summer’s activity will be people trying to move across the market while they still can. I don’t expect to see anything more than a few percentage points price changing through the summer (normal for what we’ve witnessed over the past 6 months or so) but come October no one will be able to ignore the changes and the inevitable rush to the exits will ensue. Much like what is happening in Vancouver right now.
Update: Thought I'd show you all that sale on May 6, only because it's beautiful.
Original price $270K, sale price $225,000, for a 17% reduction.
70 comments:
My PCS is more expansive for SFH w/ Suite 350-500k. It's showing the same pattern though. Only 2 sales so far in May which I would expect to be hotter.
My perception is skewed from being bearish. But very few of them look like there is any value to it.
My bro is one of those people trying to sell buy at the same time. They need the money from a condo to put down the down on a house.
Being a long time bear, I hope the condo fails to sell and the house falls through, but I would never actually tell him that. I even asked him to promise to sell the condo FIRST, and then buy the house, but he told me it's different in Victoria and everyone wants to live there, so I shut up.
BTW, I think he timed the house purchase absolutely PERFECTLY (if today were opposite day,) corresponding to what will now, in retrospect, be the absolute PEAK of Victoria's market.
My PCS criteria is for condos under $210,000 in the Victoria core and Victoria West. Even in this low-end segment, only 3 have sold since the middle of april and there are 23 listings.
I also have a criteria for the same price in the rest of Victoria (Oak Bay, Saanich, Esquimalt, View Royal...). There are 23 listings and only 6 have been marked as sold since April 1!
You'd think in a crazy market like this, the low-end condos would be selling like hotcakes. I guess investors are running and new buyers are getting smarter and waiting (like me!).
Oops, I forgot to mention in my comment above, the sold condos aren't included in the listings count. The 23 listings in each category are all still for sale.
HHV,
Great post and the responses are providing good "intel" on the market.
As I recall Mrs. HHV works in the financial industry in Vancouver. Mohican and Paul B. show inventory blowing through the roof over there. Has she given you any anecdotal stories from customers and colleagues about sales conditions that you might pass on?
Roger,
The Mrs went corporate so she's not dealing with clients at the retail level anymore.
I'm guessing the recent announcements on mortgage rates show they're having trouble selling them.
Here's a slightly OT question for you bears, and any others. Are any of you, e.g. Village, considering buying houses with a suite when you eventually buy, to make them affordable? I'd be curious to know if any bears would consider this, since it seems like more of a bull desperation move. It's been more visible to me lately given the difficulty I'm having in finding proper whole houses for rent that haven't been suited.
Personally, I've both been a landlord and lived in suites in the past, and to me the whole point of ownership is no landlord/tenant hassles, and no people in the same house. So (IF and) when I eventually buy in a few years, it will be a smaller house rather than a larger house with a suite. But this is just my preference. Any comments?
I totally agree Billy2 - I have owned a house with a suite and it pretty much sucked. Even with good tenants it was still a major inconvenience.
I wouldn't rent half a house, so why would I own one?
When it is time to buy again, I will be looking for a house that hasn't been "ruined" by a suite.
My own PCS search (2BR condos under $425K Victoria, Oak Bay, Saanich) now yields over25% more active listings than it did at the beginning of May. Sales are slow, but do happen, but the number of listings is growing, dramatically, daily. What happened? I think that's a "pop!" my friends...
- awum
Olives, B2B,
I think you’ve touched on an interesting issue. A house with a suite isn’t my ideal choice. But as an FTBer buying in a market that has undergone a significant correction, can I expect to find a quality product in my price range?
I won’t kid myself into believing that a small bungalow (1200-1300SF) in Oak Bay will come down in price enough to be my FTB product. Even if that home corrected 50% it will still be $350K and require $100K renos to make it what I want. We can’t carry a $450K mortgage so its not realistic.
It’s pretty safe to say that more homes than not, especially in places like GH and most of Saanich will have suites in them after the past run-up in prices. IMHO these places have been ruined. More often than not the suites were built by amateurs without permits and not to anything that resembles code.
I seem to recall in trough markets people looking for a home to live in steer clear of these places. It’s only in a hugely inflated market that these places are easier to sell. Just my 2 cents.
One small part of the reason why we are waiting is so we can buy a house without a suite. If we need to have a suite to buy then we truly can't afford it.
If I'm going to be a landlord it is going to be from an income generating apartment building and not someone living in my basement.
I would say good luck with the suite thing.I've seen people suiting out townhomes to help the mortgage.A lot of illegal suites and purpose built suites in new homes.That was how one mortgage broker was justifying lending me 500000k to buy a house.This was before we even looked at my budget,income and what i was willing to spend.Scary thing is he almost talked me into it before my wife hauled me out of there.He didn't even want to hear about the down payment I wanted to make.Why waste your money he said,the hose will make you that much equity in 1 year.
That was 2 years ago and was right,at the time.But 35 years is a long time to live with a sagging market and tenants that won't pay 100-1200 a month for a suite to help me pay my mortgage.Then what?I have to lower rent or suck it up.3000 a month is a lot to suck up.It all sounded so easy back then,slick salesmanship.In retrospect it did feel like a used car sale except it was a lot more money and risk.I admit,I chickened out and still am but my gut and my nubers don't lie.Believe me I've gone to the absolute edge of affordability in my budget and it was scary.Even my in-laws who are well off and were considering moving here shook their heads and they spent 3 months here checking out the market.
B2B,
Realized I didn’t really answer your question. Our plan, if we end up in Victoria long-term, which is looking less and less likely, is to find a lot in a neighbourhood we like and build a home we can live in.
Ideally I’d like a townhouse. But I don’t like the strata thing. So we’ll build small and easy to maintain on a lot we can live on forever. I have close friends and family in the industry who I trust to build a quality product.
When land values drop, so to will building costs. Right now it’s close to $250/SF. I’d expect to see that down around $100-$125/SF at the bottom of the cycle.
When I see an in-town lot at less than $170K and building costs at $120/SF I know my 1300SF “dream home” will likely cost me around $350K. By then I should have $120K down so I’ll be financing $230K on an accelerated payment plan… I’m thinking 14 years till debt do us part is a realistic expectation.
If this doesn’t happen here, I either save more or find somewhere where this can happen.
HHV,
As for your bungalow in Oak Bay, don't rule it out for the future, especially with your huge downpayment. When we bought our first house many years ago (with a suite), there certainly were quite a few in our price range in Oak Bay that met the criteria, even with only our 5 percent downpayment and much lower salaries. (Most of them did need work though.)
If the market overcorrects (as is apparently the norm), you should have no trouble at all.
I would really worry about any houses in Saanich with suites, since they are not legal and could have all sorts of potential issues. There are enough problems in buildings that have actually been inspected, never mind ones that god-knows-what has gone on during the building process.
And don't EVER buy a house in Broadmead with a suite... the association will sue you right out of your home, and the neighbors will be the first to report you too.
Toss in the FED stating again today they aren't lowering interest rates any further regardless of a recession combined with high inflation numbers and the markets on both sides of the border speaking huge to the downside and BC's bubble is popped.
Muir and Pastrick can pump the BS all they want but there will be no more price increases,the game is over.
Here's a slightly OT question for you bears, and any others. Are any of you, e.g. Village, considering buying houses with a suite when you eventually buy, to make them affordable? I'd be curious to know if any bears would consider this, since it seems like more of a bull desperation move. It's been more visible to me lately given the difficulty I'm having in finding proper whole houses for rent that haven't been suited.
I personally don't like the idea, even though I'm looking at it. Rents have been pushing up, and I'd be hard pressed to find a 3bdrm 1 1/2bath place I'm in now for the $1200. More likely $1600+ and take pets. Once I'm looking at price to rent, it starts making more sense for me to look at a place with a suite that rents out at $800-$1k a month that brings down my costs to near the same as renting. Obviously, not accounting for all the other expenses owning would entail.
Generally, I'm looking for the mythical place that if housing drops, the economy goes south and I'm jobless (or working at McDs). I'd be able to rent out both halves, move into the parents basement to weather the storm.
Of course, there is interest rate shock. If I can barely afford it at variable 4.5%. Which I am assuming most people are using to buy these days. What happens if we reach, oh say a modest 6% or 7% when I renew.
It's all a numbers game.
OT (a bit) - If you can't stomach US news like FOX and CNN, have a look at www.democracynow.org
To keep on topic be sure to check out this webcast regarding the "six or seven sharks" in the financial "tank" of the US economy and what they can do to them (and by default us).
http://www.democracynow.org/2008/5/6/bad_money_reckless_finance_failed_politics
Renowned political analyst Kevin Phillips argues successive administrations have imperiled the US economy by a combination of shortsighted policies and a trend against regulation. These include unparalleled credit card debts, the expansion of financial industries such as hedge funds, ballooning national debts, and deliberately altering statistics like inflation and unemployment to mask the accurate picture.
We have a suite in our house in South Jubilee and i don't find it to be a hassle at all.
We only rent to quiet female students and have never had a problem. We have a spacious 1800 square feet upstairs and they have 900 sq. feet everyone says we could charge more but i have two daughters who are students so i know what students live on) a month which covers 70% of our mortgae payments.
A suite can be a wonderful income supplement if you are very picky about who you rent to.
"We only rent to quiet female students and have never had a problem."
And do you also not rent to Asians or old people? Your statement is discrimatory.
I can afford a house without a suite right now (albeit low end). And when I buy it will be without a suite.
I would much rather have a dinky little house to myself than a fancy house with a suite. That's the whole point of buying for me.
I would buy a house with a suite, but only if the suite was already, or could easily become(without major $$) substantially nicer than the crappy majority of stuff out there now - meaning it had full height ceilings if in basement, really good light, spacious, well-finished, etc. I don't think I'd mind being a landlord if I could offer decent accomodation at a reasonable price, and I do think secondary suites are part of the solution to affordable housing, even in a normal market.
Another aspect to this question for me is the contribution suites make to compact, livable communities that allow people to get by with fewer or more cars. This kind of density makes public transit viable.
I see living a little closer together as part of what we North Americans can do to lessen the negative environmental effects of our resource-heavy lifestyles. Living closer together in what used to be a SFD is more appealing to some (including me) than doing so in a big multi-family building. So for financial, as well as environmental reasons, I would do it.
Nothing is selling over $1 million. Where are all the rich Americans, Albertans etc.???
One real estate agent said in an interview that the Albertans were buying up property and one called his cell phone as he was giving the interview.
Why are they not buying up these houses and waterfront eh?
anon 10:38 said:
Nothing is selling over $1 million. Where are all the rich Americans, Albertans etc.???
Interesting comment. How can you tell?? Do you have PCS?
Americans are not here cause they have enough problems at home with housing. Albertans have more inventory now than they know what to do with. Many can't sell at the inflated price they want so they sit hoping for the good old days. You can really see it in Comox - high inventory and lots of price reductions because Westjet is no longer full of Albertan retirees.
If there are only a few $1M plus sales this month the average and median prices will drop.
To Anon 9:14,
(Re: only renting to quiet female students)..."And do you also not rent to Asians or old people? Your statement is discrimatory."
And I say to you, your statement is naive. Having lived in Europe and travelled around the world in Asia and South America, only in North America are people so worried about what they say or do as to be walking on eggshells all the time. Seriously, give me a break. People have the right to choose whom they want in their house. If my 70 year old mother depends on her suite's income to live and is scared to rent to a couple of college rugby team guys who will likely throw parties every other week and stand a greater likelyhood of inducing damage or neglect to the property (no I'm not sorry for the stereotype), then that's her perogative and yes it is descriminatory, but I still back that up 100%.
It's not a racist thing, it's the intelligent thing to do because she doesn't want to live a life style of having to worry about wtf is going on downstairs all the time. Renting a house is not like running a starbucks. You are not serving the world on a daily basis and saying only quiet females can enter and buy coffee, you are serving 1 or 2 people for many months or years at a time.
See the customers as long term business partners and then perhaps your perspective will also change. Would you sign a long term contract with people who have all the signs that they will breach the contract and when the law gives so many rights to the tenants (many of them justified - I would agree, but thats another story)? I think not.
Mr.4AM
hi Roger!
Yup I have the PCS - $500 and up for all of Victoria, Saanich, East, West, Elk Lake, Dean Park etc.
Drive down Beach Drive near Glen Lyon Norfolk school - there are 4 houses in a row for sale. One has been on for over a year and now is on again. On any given street in Oak Bay there is a house for sale (if not 2 or 3).
Mr. 4am. I agree. I would only rent to international students. They are quiet and study a lot. The local students, no matter female or male, are a risk because of drugs, parties, polluting rusting cars, dirty (they don't take baths) and they smell. They keep apartments like roaches.
The ONLY good thing about being a landlord is the rent cheque.
IMHO,What makes being a landlord bearable is only renting out premises that you wouldnt mind living in yourself, thoroughly checking references, and then treating your tenants with respect and like the valued paying customers that they are.
Then it generally works ok.
((Former multiple landlord))
1rst post here.
We have a suite built in our home by the builder which we bought to accomodate the inlaws who otherwise couldn't get in the market. We have a 70/30 ownership agreement and adhere to terms/conditions set out before we bought. Personally and ideally to have a house without a suite is preferrable but there are many advantages to a suited house. We went from a 1954 to a 2006 house and some health issues improved- asthma especially. We more than doubled our square footage- more for us in our area of the house alone. The suite is quality and big to accomodate all- 3 bedrooms 2 bathrooms and in a great area- not an expensive one. So I think for many- multi-family or good friends (with agreements) is a good way to go to bring down the costs and be able to afford ownership. I see more people looking at suited houses in the future. The key I think is respect, agreements having your own space.
Mohican tells us all about the condo downturn in Vancouver based on personal experience.
Interesting reading for bears. Condo bulls are strongly advised not to read this post.
Another update from Vancouver where Paul B. keeps weekly stats
Inventory just keeps climbing and sales are not nearly keeping pace. The sales/new listings ratio last week on SFH was 23% and for condos 25%. A month ago it was 48% and 44% respectively. Buyers have left for the sidelines.
Roger, look at the daily stats. PaulB reports a coupl of healthier days of sales this week. A blip?
- awum
With the in-laws in the basement, saves on gas (and wear and tear on the rust bucket) when visiting. Got to have a good sound-proof floor though if you don't want the in-laws to hear that bed rock too much when you have s*x.
It's just amazing, inventory is higher, sell/list ratio is lower, and yet prices for SFHs are inching up? WTF? Those Vancouver buyers are in for a reality check very soon.
Ka-pow! Victoria inventory now 4513 with sales dropping fast. I look forward to VREB's June 1st spin on that.
awum said:
Roger, look at the daily stats. PaulB reports a coupl of healthier days of sales this week
Too much variability in daily stats to be significant. Thats why I look at weekly and monthly.
Listings Up + sales Down = irrational exhuberance
Excuse me but I greatly resent any implication that I am racist (what the F?) because I only want to rent to female students. Where did I say anything about race? You don't know me at all but if you did you would find the racist comment hilarious. I tutor ESL students and have been involved with homestays for years as well. I have and will continue to welcome people from around the world into my home.
I have rented to males but I found the noise of their voices carried to us upstairs-they are bigger creatures who just make more sound when they move around! :-) I love guys-especially my husband and son. :-)but I/we live in our house and I will rent to whomever I feel most comfortable with.
I have a wonderful relationship with the young women who rent our suite-I AM picky and make no apologies for that. I tell the women that if they like to party and make alot of noise it simply won't work out. in 8 years we have three sets of tennats. . We have never, ever had a problem- except a couple who though 40 minute showers were okay.
This is my home not an apartment building.
Roger, (like Paul B.) are you able to obtain average days-on-market statistics for Victoria and area?
anon 7:59 - I always wanted women in my basement suite too because of the voice thing.
that said your comment "this is my home, not an apartment building" is the exact reason why I never ever want other people living in my basement again. Even if the tenant is quiet, wonderful, clean, your best friend, etc., in order to be respectful you have to be quiet too. Personally I like to watch my movies with surround sound, I like to do my housecleaning with the stereo cranked, I like to yell across the house at my bf when I need him, sometimes I like to take a bath at midnight, etc, etc. etc. I am just not suited for "apartment" living I guess, and I want to be free to do whatever I want in my own home.
This is my home not an apartment building.
Sorry, but "your home" is your dwelling unit. A suite with a separate entrance is not part of your home. You are the landlord of a multi-unit building. That is your choice, it was not forced on you.
You are subject to the same legal obligations as any landlord, and that includes not applying discriminatory criteria to your tenants.
And yes that applies whether the suite is legal with respect to city zoning or not.
Before everyone goes ga-ga over suites here, know that suites are a MAJOR dealkiller for anyone who can afford a house over $800,000. Unless it's a completely separate house for guests, the rich don't want to have to or need to deal with tennants. Way too many large Victoria houses were ruined with suites back when they cost $250,000 or less. Now that they are pushing a million and only the rich can afford them, the last thing the rich want to do is tear out crappy basement kitchens and convert suite "living rooms" to theater rooms. I told my realtor to quit showing us houses that had been suited out, we weren't the least bit interested. And we're not even that rich. I don't know how anyone could want strangers living around their kids nowadays or worrying about their possessions disappearing without taking daily inventory. Who needs that?
I wonder how many people in Victoria are left that can afford to buy at today's prices. If I was rich, and cost wasn't a factor as anon@9:42 says. I would not want a place with a suite. In my dream world, I would like to pay $250k for a 3/1 70's built house (like out in Wishart area) with an unfinished basement.
Just seems unlikely proposition, and with 40yr mortgages not going anywhere soon. Prices will drop, but I don't expect them to go back to historic levels. Historic + X% to make up for whatever percentage the new mortgages revalued the market at.
To the person who says they don't want to change their lifestyle for tennants-we are a very quiet family and so have not changed the way we live one bit for our tennants.I take baths at midnight if i wantand so do the women downstairs. We sleep on the next floor up so it causes no noise problems. We do try and limit our water usage too so that they always have adequate hot water.We also like to conserve energy because it just makes sense.i have never felt deprived of my hot baths.
Our rent is extremely reasonable and includes unlimited use of the laundry,heat, electricity,and internetand the suite is totally furnished-right down to a microwave, cutlery etc. We don't demand that the girls restrict their water use and i have only talked to the girls who took 45 minute showers at 8am. It is a consideration thing and that is how I approached it.
We do not meddle in each others lives but we also create an atmostshpere of mutual respect. I like the young women who rent from us and they like us.
I forget most of the time that they are down there-they are always out at school or work. :-)
"I don't know how anyone could want strangers living around their kids nowadays or worrying about their possessions disappearing without taking daily inventory. Who needs that?"
It's not the tennants sometimes you have to be concerned about,it is the people they bring home with them. I've heard some ugly stories of tennants and their friends that turned me off the idea.
I would never have a tennant just for the sake of home ownership either. If you have to do that then it isn't worth the BS and the loss of privacy cause having it all to yourself is what it is all about in the first place.
Anon - May 22, 2008 7:59 PM
How about the "noises of the male voices" of your husband and son. They don't carry to the basement downstairs? They don't affect your tenants? Typical, self-absorded slumlord. No respect for the tenants, why with those boomer carrying male voices affecting them 24/7.
To woman with basement mortgage helper. Can basement young woman have boyfriend? Can boyfriend come to house? Can boyfriend sleep in basement? Or do you restrict to girls have girlfriends only (lesbian)? Also, do you tell government about your rent income? You pay capital gains tax on portion of house rented?
I always rent only to "6 whil truck man" and "night ladies". Remember that guy/gal? That was priceless.
Interesting anyhow to see the opinions on suites. I am not surprised that most bears wouldn't want suites - after all, why would I buy a house with a suite when I can rent a nicer full house for far less money and zero committment? I've been looking at some very nice fully renovated houses lately - and if they got a little tired after a few years I can just up and move to another newly renovated house. The good thing about restricting your search to full houses is that those few you find tend to be people with higher standards and also longer-term landlords.
Historic + X% to make up for whatever percentage the new mortgages revalued the market at.
"Exotic" mortgages do not revalue the market. They only borrow demand from the future. Buyers cannot trade up because they lack equity. Equilibrium price depends only on incomes, rents, and interest rates, not mortgage amortizations.
This has been proved in spades in Japan and currently in the US.
Unsold homes in U.S. at more than 20-year high
http://www.reportonbusiness.com/servlet/story/RTGAM.20080523.whomesales0523/BNStory/Business/home
olives said:
Roger, (like Paul B.) are you able to obtain average days-on-market statistics for Victoria and area?
Yes, I can get DOM stats but only by month, not weekly like Paul B. Only available by dwelling type (i.e. house, condo etc.) and for Greater Victoria (not specific areas).
What are you looking for?
Roger,
When I saw Paul's stats I was curious about Greater Victoria (both SFH and condo) and also Mill Bay (friend has house for sale).
With all the reductions lately and new listings, I was wondering if DOM was increasing much - and also how we compare to Vancouver.
Maybe you could graph different categories (say, DOM for Victoria condos under $400,000, etc. - including "relists") and we could watch this increase in the next few months - since I know how much you love making graphs! (and many of us love to see them).
"Exotic" mortgages do not revalue the market. They only borrow demand from the future. Buyers cannot trade up because they lack equity. Equilibrium price depends only on incomes, rents, and interest rates, not mortgage amortizations.
I disagree and think that exotic (now normal) mortgages have shifted the goal posts. Unless there is a major psychological shift or banking standards, it is still the monthly nut that matters more then the long term cost.
If 40 year mortgages are allowing people to buy 15%(back of envelope math) more house. Then I would expect, going forward, historic average price will be +15%. The market itself will never be 'average' as it will always be moving from one side to the other.
Japan I don't know nearly enough about their situation, finance or policies. But wasn't their peek in the 1990's valued at more then all real estate in the world.
VillageBC
"If 40 year mortgages are allowing people to buy 15%(back of envelope math) more house."
This may be the case if you already have equity. But the advent of the zero-down 40 year mortgage has allowed 15% more buyers to enter the market who up until 3 years ago would have had to save money first. This will at best slow down growth because it moves the equity cycle from 7 years to 15 and at worse add to the impending correction when these people realize they're holding a money losing investment. and bail out.
"Unless there is a major psychological shift or banking standards.."
I would say that both these things have begun to occur - reduction in confidence by the consumer (shown by lower sales and higher listings), and banking standards will be forced to change due to credit contraction.
As we have seen down south, regardless of whether the homeowner can afford their monthly payment, there is the "psychological" impact of paying a huge portion of your salary on a quickly-depreciating asset with negative equity. The news stories indicate that much of the "jingle-mail" falls into this category.
That place was assessed at $231,000. Thar she blows baby!!!!!!!! Get the clippers out.
Look at the last price change, 10 grand on May 7, to a sale of $15K less two days later. $25K in 3 days. That's what I call a motivated seller.
They still made money on the place I'm sure, but WOW.
I disagree and think that exotic (now normal) mortgages have shifted the goal posts.
Wrong, because the 40 year amortization greatly reduces future equity and future buying power, as I have already said.
Demand is simply being borrowed from the future with interest. Today's boost is tomorrow's bust.
Asset prices always adjust to fundamentals, and amortization schedules are not a fundamental.
Oh and neither are lending standards.
As the current bust in the US demonstrates.
olives said:
Maybe you could graph different categories (say, DOM for Victoria condos under $400,000, etc. - including "relists")
Olives I tend to not even look a the DOM stats because with the re-listing scam they are almost meaningless. The same goes for the ratio of sold to asking price.
For example say a house is initially listed for 530K. After 90 days it doesn't sell even after one or more price reductions. The listing is cancelled and the property is relisted for 500K. A buyer recognizes the shop worn listing and offers 485K and the deal is done in 5 days. The sale is report as going at 97% of asking price and 5 DOM and goes into the stat pool where it biases all the other data (including other re-lists). In reality the DOM was 95 and it sold for 92% of initial asking price.
So I focus on the stats that cannot be maniplated by relisting: average and median prices; active listings; new listings and sales.
Speaking of stats. The May numbers will be out soon. In my opinion sales will be down YOY from last May and inventory will be at levels not seen since 2000. This is good news for bears.
However, I will not be surprised to see that average and median prices have increased. This is typical of what has been observed in other falling markets. When buyers reach the affordability wall there are fewer sales at the bottom end. There are also significant reductions at the top end and high end buyers snap up what they perceive as a bargain. The net effect is that the average and median prices increase while the market value for houses overall is falling. This is a short term anomaly because it only takes a few months for price reductions to occur in all price ranges and low end buyers to purchase what they now perceive as a good deal.
Absolutely correct, although I would qualify that the adjustment period may be longer.
This was the case in California, where the median remained constant while prices at all levels were actually declining. Of course the REIC trumpeted this as evidence that the market was healthy.
It was only in late 2007-2008 that sales at the high end dropped off substantially and the median took a huge dive to catch up with the actual decline in same-house prices.
I'm sticking to my theory that the average home is going to be higher then historic going forward. =)
Housing, in Canada and really much of the world has been driving force in the economy for a number of years. As this unwinds, I do wonder where global money is going to rush next. Oil would have been my guess. But people will stand by and not worry about inflation when stocks, housing and other expenses go up since they perceive benefit.
I don't think that will be the case with food, gas and everyday expenses spike to adjust to $150+ oil.
However, I will not be surprised to see that average and median prices have increased.
Rationalize all you want. If the prices are increasing, it's tough to argue the bitter renters hoping to buy an Oak Bay bungalow for 30 cents on the dollar arn't a bit silly!
SP--"Rationalize all you want"
absolutely
--Irrationality rules!
lol
Housing, in Canada and really much of the world has been driving force in the economy for a number of years.
This is exactly the reason why housing is headed for a worldwide bust. It is not an economic perpetual motion machine. Housing cannot support the economy - it's the economy which must support housing.
And just what is left in the BC economy today except construction?
Hey all,
Have you heard the gossip about the Sooke River Hotel? We were in there recently and a couple staff showed off the plans a developer from the Netherlands apparently has for the site. It's a $400M plan for 3 sail-shaped buildings not unlike the Burj Al Arab in Dubai. They would be called "The Sails" and one would contain a 400-unit hotel.
Apparently the mayor and council are all in favour but the T'souke (apologies if misspelled) band and other first nations are not keen.
Sign of the times? It certainly stretches credulity to think Sooke could support a 400-unit hotel when I'd heard anecdotes that the many Sooke B&Bs are not fully booked. I suppose it'd be easy to verify B&B bookings by going online.
Sooke! The Greatest Place on Earth. Because everyone wants to live there. Blah, blah, blah.
Roger----you'll like this: On the PCS link you provided for condos over $400k I see the giant throbbing brains marketing 770 Fisgard (the BAY project) have adjusted some of their prices---UPWARDS.
Where can I get some of the recreational substances these guys are on?
Sun River Estates is already putting plenty of strain on the Sooke, especially it's tribs. That river needs all the help it can get and a huge development on the banks of the estuary doesn't qualify.
Why don't they build on the Goldstream estuary instead? That thing is all but dead with a whooping Chinook return of 4 males and 0 females this past fall.
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