Here's a similar chart expressing housing costs inflation adjusted into 2007 dollars.
If real estate doubles every ten years as our Realtor keeps telling us, where should we be right now? Well, RE didn't double between 1978 and 1988, so I guess you can throw that theory out the window. It didn't double between 1988 and 1998 either, it was a 50% gain during that period--roughly equal to the previous boom period between 1978 and 1982 right before a 43% decline. And then between 1998 and 2007 we've witnessed an unprecedented 85% plus run-up.CMHC shows that rental rates have increased at a rate of just under 1%/year between 1992 and 2007. I'm looking for a 35%-45% correction in Victoria. The signs are all there if you open your eyes wide enough to see them.
Of course, a good number of househunters seem to still be wandering around with their eyes wide shut. But that pool is getting smaller. Thankfully.
221 comments:
1 – 200 of 221 Newer› Newest»Well if it's double than what it should be, and bubbles always overcorrect, then it makes sense that we will have a greater than 50 percent drop - 60%? 70%?
Doug Noland thinks the U.S. has now entered Stage II - in Stage II Predicaments:
"Importantly, the Fed’s aggressive “reflation” is being stopped dead in its tracks by market forces. U.S. market yields are moving sharply higher, with benchmark MBS yields now all the way back to last summer’s levels. This is forcing another round of speculative de-leveraging in the highly leveraged mortgage Credit market, which is tantamount to a further tightening of already tight mortgage finance conditions. This is another huge blow for the vulnerable Bubble Economy."
http://www.prudentbear.com/index.php/CreditBubbleBulletinHome
Would you please add the fundamental value line to the graph. As it would be interesting to see the average market value plotted against the average fundamental value.
Siobhan
The other thing that has to be taken into consideration in this boom period vs many past booms is average wages. They have really stagnated over the last number of years but real estate prices have still gone up
so I expect the ratio of debt in this boom must be higher. That could add a little more on the downside in this bust compared to booms that also included wage inflation.
I second the motion... that would be very telling indeed.
Roger,
I'm assuming you're using the graph function in Excel for these right?
Siobhan said:
Would you please add the fundamental value line to the graph.
This is easier said than done. Calculating fundamental value over 30 years requires data that I do not have access to. For an accurate presentation you not only need valid rent data for a particular type of housing but also the corresponding sales data.
Perhaps Patriotz would like to jump in at this point. He has made numerous posts on this subject.
You're right of course, Roger. We can get CMHC data on 2-bed apartments going back as far as 1992. We can average out the increases downward back to 1978. But can we use those rental multiples against the SFH prices?
It would give us a good baseline, but it wouldn't be accurate.
I've never seen any statistics of fundamental value, as it has to be based on estimates of future interest rates, ownership costs and rents.
But there is an excellent proxy - the historical price/rent ratio, which is the market's own estimate of risk adjusted fundamental value. Needless to say, we are way, way above historical price/rent - around double in fact.
I will also second Beagle's point - I think the historical trend of RE prices increasing at inflation+3% is not sustainable, even starting from a base in 2000. Post-WWII real household incomes rose because of rising real wages and increasing labour force participation - women entering work force and boomers growing up. Those factors are now static or reversing.
I think we, and much of the rest of North America, are headed into a long-term bear market in RE not seen since 1926, when prices started falling and did not recover until WWII.
"I think we, and much of the rest of North America, are headed into a long-term bear market in RE not seen since 1926, when prices started falling and did not recover until WWII."
Absolutely, look at North American demographics, especially in the year 2025 (thats only 17 years from now) when the Boomers purchase their last plot of land.
As an economics professor once said
"The difference between long term and short term is that in the long term we're all dead."
We will be back to the days when you bought investment properties for the income and not for appreciation.
Of course this is for rental properties. People looking to buy a home to raise their family will always pay a premium over the person wanting the income stream only. This is where the price to rent ratio (which is correctly known as the Gross Income Multiplier (GIM) in real estate) is not consistent, accurate or applicable as single family homes are not purchased on their income producing potential.
Siobhan
Single family homes may not be purchased based on their income potential, but there are plenty of people like my husband and I who are renting because we see NO SENSE in paying over twice what we pay to rent just to be able to "rent" a property from the bank that we may call our own some day. If and when the day comes that it is cheaper to buy than rent, or at least very close, then and only then will we consider buying. It has happened in the past, and (I believe) it will happen again. We are patient. I refuse to give up a huge portion of my income just to call a house my own. Big deal. I have a life/travel/freedom/no debt. I won't give up those things.
June 16, 2008 News Release from British Columbia Real Estate Association
http://www.bcrea.bc.ca/news_room/2008-05.pdf
According to CREA, year to date dollar volumes and unit sales are down in all areas of BC but one, most in double digits, and Vancouver?Victoria in the 5% range.
Meanwhile, average prices are higher.
Higher prices can't continue if dollar volume and unit sales continue to fall year over year.
Times-Colonist jumps on the bandwagon with this news story on their Web site:
B.C. real estate sales drop from one year ago
Muir added that the inventory of unsold properties may edge lower as properties priced in anticipation of a still accelerating market get pulled off the market or re-priced "according to today's market realities."
...translation into English - if prices go lower more people will buy. Prices need to go lower!
Duh - If prices go a lot lower, a lot more people will buy!
At this point, even if prices dropped by 50% in one day I think there would be a period of low sales. It's not just a case of prices finally hitting the magic number above which people are unwilling to pay, there's also the issue of demand borrowed from the future.
A lot of people bought earlier than they would've without the bubble in order to avoid being priced out "forever". That borrowed demand has to be paid back. There are a lot more people who bought early with high-ration mortgages than there are people who decided to wait and save.
On top of that, all the speculators represent demand that just plain doesn't exist in a flat or falling market. So, even if the market corrected all at once, there would still be a period of lower demand and lower sales, to cull out the real estate agent bubble.
But I thought Mr Muir said a few short months ago this wasn't going to happen and we should all keep using our credit cards as a down payment ? These liars have no choice now,the spin meisters have run out of lines and excuses.
VG said:
These liars have no choice now,the spin meisters have run out of lines and excuses.
Maybe I'm a little suspicious but why did BCREA feel they had to issue this news release in the middle of the month? Could it be that the June sales so far are way down and listings are continuing to rise?
By predicting a turn in the market now they can claim next month that the RE is market is unfolding as predicted by the economists at BCREA.
We have been thinking that we would like to buy a lakefront recreation property (as in cabin or cottage, or maybe just a piece of land) lakefront somewhere in the Interior or Okanagan. We would buy in partnership with three or four siblings, in order to have a nice family cottage to meet at and enjoy summers.
Now, we are NOT thinking about buying right now, so please don't jump all over me.
My (slightly off topic) question is, when the market corrects, what can be expected to happen to these types of properties (i.e. not primary residences). Would they decrease in price more? less? the same? no research or theories either way?
Thanks
How about all those rats in Victoria? Nice selling feature for those speculators who enjoy those wiskered and furry creatures. 300 found in a restaurant downtown; 60 in one house according to the TC today!
Man, we are worse than NYC. The city of Victoria doesn't even have rat control program in place (checking their website)! All major cities do. What's wrong with our delusional city?
roger,
Mr Muir just stated on Global TV news at 6 that prices will infact go down several percent over the next few years til the new cycle begins. Can you believe it roger ? Muir has unearthed something we have never heard about before called a "cycle" and that indeed things do actually go down in price after going too high. Can you fathom that concept ?
Thank God Mr. Muir gave us this breaking news and insight that we were told never existed in La La Land. I coulda swore he said a couple months ago " get over it you bozos , high prices are here to stay,find your 500 sq ft condo and get a 40 year mortgage now or you will be priced out forever ". Funny how the times they are a changin. ;)
Correction roger, he said prices will go down several percent "each" year for the next few years. So he is calling for at least a 10% decline roughly in his perfect world. In reality lets call it a 30-50% decline.
VG,
considering that they were calling for 8% this year and 3% next, now a "few" % down each year should be read 10-15% down each year. 30-45%, sounds about right to me, thanks Cam.
Roger,
BCREA and CREA are almost always mid-month, seems they have to wait for all the regional boards to report in the first week before they set there geniuses in their comm department to work telling Mr Muir, er, I mean, their economist what to say.
Anon,
regarding recreational properties, there the first to get sold and the last to get bought. their market is smaller and therefore the prices will trend down faster and further I would guess. do a google news search, i'm pretty sure i read something today about interior recreational properties getting hammered.
It'd be interesting to know how many condo assignments this "economist" unloaded last year when he was delusionally praising the merits of ever pricier real estate market in the "best place on earth". Garth Turner made a good point on his blog the other day, that Vancouver has some sort of an inferiority complex thinking they are "a world class city" and yet they don't even a highway from the airport to downtown.
I hear there are no rat problems in China, or Vancouver. Many those "wealthy Asians" that invest so heavily in RE there know what to do with them?
as single family homes are not purchased on their income producing potential.
Well by investors they are. It doesn't matter if some or even most buyers (owner-occupiers) are insensitive to return, the investors are and this will set the market price. It's the same houses after all.
One price appreciation stops, so does speculative buying and investors will only buy - or hold - for yield. That includes SFH just as much as any other property.
Would they decrease in price more? less? the same?
Recreational property gets clobbered in RE busts/recessions because it's the first property to be let go when the owners get into trouble. It's also more prone to speculation than residences, and the fundamentals (potential rental income) are much more vulnerable to economic downturns. Rental income for residences does not go down even during recessions, not so recreational property.
Whoa! That press release shows the Fraser Valley as having an average price *DROP* of 1.1% from last May!!!
Oddly on the next page the increase for MLS data for the FV is +3.9% YOY. I wonder what the difference is.
But to see negative YOY numbers for the FV in any official stats for May is amazing. I wasn't expecting it until the fall.
Only going by the quotes here, since I haven't been following Mr. Muirs' comments. Our(Canadian) Real Estate market seems a lot more willing to recognize a downtrend then quotes coming out of the US when things just started to unravel.
Yes, slow to recognize trends and eager to dismiss them. But in general, more willing to accept falling prices. Or it's just selective quoting on your parts. =)
It's hard sometimes to believe the B.S.; that being bear shit or bull shit. But I must say the opportuniy exists now for serious consideration to get in. It doesn't have to be now, but the cycle is on the the down turn. 18 to 24 months will be the bottom. Bears get your money ready! For all the bear talk here, you all know you wanna be bulls. I think the 10 year doubling of re prices is a bit on the "high" side, but 15 years has been the norm. 1 million dollar AVG. SFH BY 2020. I'm already in. See you there if you dare.
HO,
speaking only for myself, I don't want to be a bull, i want to be a homeowner who paid a fair price for my home that I can live in long term in a neighbourhood I like without having to have tenants. I want to be able to afford this on my above average family income and still save for retirement and a rainy day.
I could care less about RE as an investment. Frankly, my money has done way better in the stock market long term than in RE. It's only the power of leverage that makes RE attractive to the un-wise... who are about to get burned IMHO.
Hmmmm... interesting, thanks. We would love to buy a cabin just before next summer, but we are not going to jump the gun, either. All of our potential 'investing' partners are all financially secure, so we will just have to be ready to roll when the prices are right. Saw a few interesting properties on Shuswap, but they are 15 year native leases, and I don't know enough about this type of purchase to feel comfortable about it at this particular time in history.
they are 15 year native leases, and I don't know enough about this type of purchase
Well if the natives take the property back in 15 years, that's about all you need to know isn't it?
Spend X dollars now and get nothing back. How much is 15 years use worth to you?
For all the bear talk here, you all know you wanna be bulls
It's not a matter of "wanting to be" anything. The bears think RE is bad value now. When the prices make sense, we'll buy. We're waiting for the market to change, not ourselves.
Bombastic,
A couple of other things to consider.
In Ontario cottage prices are dropping due to the price of gas. It costs a lot to go every weekend during the summer. In your case the ferry costs (which are rising rapidly) are also a consideration.
The second point is how you arrange the purchase. I have friends that are in a joint family ownership arrangement. Maintenance can be a big issue: costs, labour by each family member and repair decisions. The sellout terms also needs to be resolved at the beginning. A part owner may run into financial problems, family issues, kids education etc. and may need to sell their share.
Short term leases are bad news. I read recently where the leases were not renewed and the owners just destroyed the cottages rather than giving them to the land owners. This was heartbreaking for the owners that had the cottage in the family for years.
18-24 months is tad ways off there HO, your making it sound like next week. All indications are this will be a long drawn out decline exceeding the great depression declines. I have many sleeps til I have to "get my money ready". And whats the next boom supposed to be based on ?
We have just milked a whole generation of youth who had to use 40 year mortgages to buy the past 2 years,the pool of buyers is hooped for the next 10 years. The new crop will be so scared shitless watching the present crop lose their shirt they won't want to touch a leaky condo or an old shoe box bungalow in need of a $100,000 makeover.
VG said:
Mr Muir just stated on Global TV news at 6 that prices will infact go down several percent over the next few years til the new cycle begins. Can you believe it roger ?
VG - Hard to believe he actually said that!!I have to watch the Global news tonight @ 11.
VK - If you are around is it possible you could post the video clip??
happy owner said:
It's hard sometimes to believe the B.S.; that being bear shit or bull shit. But I must say the opportuniy exists now for serious consideration to get in. It doesn't have to be now, but the cycle is on the the down turn. 18 to 24 months will be the bottom.
Glad to hear that you are still happy with home ownership.
You don't understand what being a bear means!! It doesn't mean we don't believe in buying real estate. We just don't believe it is smart to buy NOW. Heck I sold my place up Island last year and couldn't be happier.
Only a few months ago the real estate hucksters (CREA, BCREA, MSM, agents, CMHC) were all telling us it would keep on going - up to 11% this year alone. Now they are scrambling to spin the story so they don't look like idiots.
This is the beginning of a multi-year decline. Who wants to catch a falling knife? When the punters finally see that the train ride is over it will be hard to convince them to buy again.
But no worries for you. I recall you stating that you own your house outright and bought for the long term. You also said you like to poke the bears to get a response. Keep it up - we will be more than happy to let you know about falling sales and prices as the months go by.
"It's not a matter of "wanting to be" anything. The bears think RE is bad value now. When the prices make sense, we'll buy."
Thanks for making my point. Most if not all the "bulls" want to be future owners which makes me feel optimistic with regards to future re pricing.
I absolutely agree with most of the "bear" crowd to wait the market out for now to see where prices finaly land. But once the flippers are shaken out, I don't think there will be much distress selling.
By all means, hold on until you see that 50% reduction, but lets get real. Cherry picking stats to back up that scenario is easy. The reality is that's not going to happen. So live with that fact and plan for the future. Get your finacial ducks in order and get ready. If you insist on waiting for the 50% discount, well, just keep renting...and renting....
As I biked past, even the sign at Save on Foods Arena had, in big overbright yellow lights "B.C. Home Sales Plunge in May"
- Dumb Canuck
happy owner said:
But once the flippers are shaken out, I don't think there will be much distress selling.
The buyers that bought at the top will get real nervous when the market value of their home drops to less than what they paid for it. How will those FTBs that purchased with little down (0-10%) feel when their mortgage exceeds the market value of their home??
Then there is the matter of interest rates. The majority of recent purchasers are using variable rate morgages. When rates go up due to inflation (oil driven) they will see less going towards principal resulting in an increase in amortization. Switching to fixed means bigger payments. Some will bail.
Don't get me wrong - I don't want to see folks in financial straits. I am only stating what I have seen before in previous cycles. When you buy something with little down you are highly leveraged and profits and losses are magnified. Many buyers did not realize what they were getting into and this will lead to distress selling when housing has the inevitable downturn.
BC housing sales drop - GlobalTV
The two other lead stores were also economic
1) the massive decrease in BC Ferry traffic, ostensibly due to gas prices ... hmmm might be the fares ?
2) huge decrease in tourism - 23% decrease in US visitors to BC YOY
The end of the BC tourism death spiral story was a bit about the increase in Mexican visitors ??!!!
However, no numbers as usual ; my guess is a 500% increase YOY from 10 in 2007 to 50 in 2008 :-)
I'll post a link later for those stories.
All is not looking well for our decoupled economy ... decoupling ? a look back to June 2007
VG said:
"18-24 months is tad ways off there HO, your making it sound like next week. All indications are this will be a long drawn out decline exceeding the great depression declines. I have many sleeps til I have to "get my money ready".
As we see prices of RE, oil, bread, rent, etc etc going up up up, where do you think the suggested "depression" (which is rediculous IMO) will lead? Where is the smart money in times of high or maybe hyper-inflation? Not cash.
What would all that cash be worth? Doesn't the dirty 30's remind you of the wheelbarrows full of cash heading to the grocery store? Ever tried to pull that money out when there's such a slide? Not pretty.
Not everyone was poor and destitute in the 30's, how did the landlords make out back then?
Regarding all these 40 year 0 down mortgages, this homeowner will be the happiest one as he has an opportunity to walk away. Paid nothing, looses nothing. And guess who will pay for the priviledge - CMHC? Nope, at the very least it will be future 1st time homebuyers, and more likely all of us taxpayers in someway.
Happy owner: thanks for bringing a little rational discussion here. Totaly agree, a 50% reduction is a pipe-dream. There may be some decline, but it will be driven by rising costs: oil, bread, and ensueing interest rates.
Do your mortgage calcs bears, 20% RE decline from 600K and then at say 7-8% prime rate in three years from now. Think the banks will be offering P-.8? I think they will be a little tighter than that.
Want to convince me that you have $400K just waiting there for the great opportunity? Come on now.
There's not many that can afford this scenario. The risk will be eternally too great and your cash will be worth less and less every year. Pretty bleak if this is the picture you're waiting for.
Real estate pounded by skyrocketing gas, food - TimesColonist
Is it my imagination or did Cameron Muir seem like he was trying not to laugh at the end of the clip? Perhaps he was having trouble giggling at his own line of BS. Still amazing that he would even suggest that prices might fall.
my favourite line from that TC story: "and less flush with equity to take on second-home purchases, the B.C. Real Estate Association believes"
No speculative buying here, nope, no bubble, and therefore no chance of any declines more than 20% eh, anon?
Anon 6:42
In the 1930s, North America was in a deflationary depression and cash was king. There were no wheelbarrows needed in Canada except for gardening.
Landlords suffered as unemployed people moved in with family or people doubled up, and rents were drastically lowered.
Your point about walking away from your zero-down 40-year amortized mortgage is exactly why Canada will suffer a similar fate as the U.S.
Nice to see that the housing bulls are disgruntled - confirmation we are on the right path.
The reality is that's not going to happen. So live with that fact and plan for the future.
Well, according to me and many others, the reality is that a massive crash is going to happen. So live with that fact and plan for the future.
Honestly, what's with making pronouncements of fact as to where the market will go? That's your opinion, and I have mine. End of story.
What would all that cash be worth? Doesn't the dirty 30's remind you of the wheelbarrows full of cash heading to the grocery store?
No, it doesn't, because you've got it completely backwards. There was hyperinflation earlier in places like Germany, but the '29 crash and its aftermath were massively deflationary. There was in effect a massive monetary contraction that caused the depression.
Happy owner: thanks for bringing a little rational discussion here. Totaly agree, a 50% reduction is a pipe-dream. There may be some decline, but it will be driven by rising costs: oil, bread, and ensueing interest rates.
Again with the pronouncements of fact. You should rewrite the above "I believe a 50% reduction is a pipe dream. It's my opinion there may be some decline, but it will be driven by rising costs".
All this inflation scare talk may well be totally misguided. Read Mish's expositions on the subject (http://globaleconomicanalysis.blogspot.com/) to see why we may actually be facing a massive deflationary crisis, in which cash would do very well, thank you very much (and property "wealth" will be wiped out).
The change.
The “Association” and “RE Economist” are dumping the homeowners instead of intimidating potential buyers.
To make money, before they asked people to buy quickly or will be priced out; now they are pressing homeowner to reduce price for a quick deal.
Forest, GM, AirCandada, next are many realtors who will be crashed out.
There are not many cards left in their pocket to play with. It is inevitable, it is a nature of everything, cycle. Goes up quick, comes down quick.
VK,
Thanks for the Global video clip and the link to the TC story in today's Times Colonist.
What a headline!! I was surprised that the TC would actually make this the lead story in the Business section.
I bet the price reductions and listings will be increasing over the next few days/weeks.
anon 6:42 said:
Regarding all these 40 year 0 down mortgages, this homeowner will be the happiest one as he has an opportunity to walk away. Paid nothing, looses nothing. And guess who will pay for the priviledge - CMHC? Nope, at the very least it will be future 1st time homebuyers, and more likely all of us taxpayers in someway.
I don't think you understand how foreclosure works in BC when a homeowner "walks away". The house is sold for what it will fetch subject to approval by a court judge. The former owner is now on the hook for the difference between the loan and the selling price plus sales costs. The owner can pay up or declare bankruptcy in which case CMHC pays the bank. Paying off the loan or bankruptcy - not great choices.
You might want to read up a bit more on the Great Depression if you are going to talk about it. IMHO we will have a recession, not a depression, but history is always interesting.
How dare they report negative news for RE? Wouldn’t they fear loss ad income from these realtors?
Seems TC betrayed these people. No, TC is smart. They need change too. They need the readers more than these realtors. They are the top of the cycle.
Next month on July 2, the headline on TC will be the RE numbers.
Did anyone else see "Condo Conroy's" ad in the TC yesterday? It went something like this:
"Have you heard the market is slowing down???? I HAVEN'T!!!!!".
I hope some of his clients grill him about that one, hahahaha.
Hehehe. What is he trying to say, there, exactly? That he's such a rock star that his properties are still flying off the shelves? Bloody hell.
Maybe he is asking someone to tell him what the market is doing right now as he is completely clueless.
Hmm... Even Oak Bay and Fairfield sellers are reducing prices
Did you guys hear that "Reflections" ad on the radio?They are giving you RRSP money if you buy one of their units.This seems awfully desperate to me.
I guess this slowdown means that The Radius will stay a hole in the ground for the foreseeable future.
"Totaly agree, a 50% reduction is a pipe-dream. There may be some decline, but it will be driven by rising costs: oil, bread, and ensueing interest rates."
yep, thats what they said in 1982 dudes, while I sold at the top and bought back two years later at almost a 50% reduction.
Rising costs,ensueing interest rates ? hmmm sounds like 1982 all over again but that was different right ? Party on Garth ! :)
"Your point about walking away from your zero-down 40-year amortized mortgage is exactly why Canada will suffer a similar fate as the U.S."
olives,
and that is why there will be a massive shortage of buyers for a decade when none of these "walk aways" will ever requalify for a mortgage again. Bankruptcy in a depression is the kiss of death.
just caught this on Vancouver Condo blog, came from a Province article :
"Finance Minister Jim Flaherty is touting the idea of banning the 40-year mortgage."
You mean they are going to screw my kids out of their last chance to own a home in this town ? So much for hoping for 100 year mortgages coming, guess I'll have to go camp out with those nice people behind the court house. ;)
I am finding that the sense of 'urgency' regarding the purchase of a home in Vic is now completely gone. In fact, it has been replaced with 'the price will only go lower'. Of course, current prices are still absurd, in spite of some dramatic price drops.
Regarding the post headline 'How low can we go' I want to report that my Vic hairdresser's brother (in TO) just purchased a waterfront condo in Florida for
$79K, and his parents (in Edm) a SFH in Las Vegas for $129K!!!! I expect nothing less than a 50% drop in Victoria.
Impossible, the weather is so much better in Victoria than Fla or Vegas and we get so many more tourists.
Also Victoria's world-class employers mean continued high demand for RE.
18,000 empty condo's in Vancouver BC Hydro study finds vacant condo's and Mayoral candidate suggests that owners pay business property taxes to encourage renting the units
BC Hydro stats show there are 18,000 condos in the city that only use enough electricity to power a refrigerator that is never opened, i.e. 18,000 condos that are sitting empty, presumably while speculators wait for land values to rise ...
VK,
But my sister's cousin's father's girlfriend's brother-in-law who knows someone who has a family friend who is married to a mortgage broker who knows a Realtor told me there is no speculation going on in the Victoria market and only rich retirees from Alberta are buying crack shacks on Glanford for $500K.
Mr Muir just stated on Global TV news at 6 that prices will infact go down several percent over the next few years til the new cycle begins.
If the usual suspects are predicting any declines at all, it means they are really expecting a bust. You cannot have a small decline from a price peak this high because once prices start falling the speculators start running to the exits. Not to mention the impact from the US recession that we are already experiencing. They are just saying this so they don't look like complete fools when the bust comes.
Everything in BC is playing out like in the US two years ago. It's sort of like Canadian Idol - different faces, same format. Once people realize they are watching the same program, look out below.
Thanks VK for the above hydro link to ecohousing.
In the 80's boom, the talk was about affordable housing for the poor.
Today, the talk is about affordable housing for the middle income family!
This market is out of whack with reality. To pay $600,000 or more for a 1970's middle income home in Gordon Head is ludicrous.
I would have to sell two condominiums that I bought five years ago to get the down payment and still pay $2,500 per month in mortgage payments.
Or sell one, rent the other for $1,000 per month.
Or keep the condo and put two suites in the basment of the Gordon Head home.
mmmmmm I'll be rich, rich, RICH
-----------SLAP!!!------------
until prices fall.
just jack
Interesting article in today's Times Colonist
"For home sellers, 'staging' is the new show in town"
http://www.canada.com/victoriatimescolonist/news/capital_van_isl/story.html?id=5a7cecf2-36d6-43e1-9b96-8acd4e3edc55
Hey guys, here's a new real estate article linked to off the TC page, that discusses real estate in the Lower Mainland. Basically, the article says that prices there should continue to appreciate but then strokes the egos of any potential buyers by calling them "pretty savvy" and "incredibly sophisticated."
http://tinyurl.com/3vrnuq
As a bonus, check out the link off that page to the full list of "15 B.C. real estate myths and realities." No. 3 is that "Real estate prices in Greater Vancouver can't keep going up; they're too high already" with the argument being that Vancouver is still adding jobs and wages are rising and this will offset any decreases induced by increased inventory.
A special shout-out is given to us anonymous bloggers who have been "calling for an imminent end to the record upswing [in real estate prices]" to whom Chipman is quoted as saying "but they've been saying that for two years."
http://tinyurl.com/3tm4sm
- StargazerXL
Why do the "experts" continue touting low unemployment and rising wages as supports for current prices.
Current wages or employment status in the vast majority of cases are insufficient to support an entry into the market without a vast downpayment. And I'm talking about condos!
Vancouver houses? hahahahaha!
patriotz said:
If the usual suspects are predicting any declines at all, it means they are really expecting a bust. You cannot have a small decline from a price peak this high because once prices start falling the speculators start running to the exits.
Won't happen here!
I assume everyone has seen the front cover of the Vancouver Sun as reported on Condohype!
Ozzie Jurock was just on the noon news and the news person asked if prices are going to go down and he said clearly they would given the increase in inventory. All the experts are starting to change their tune.
With all the disastrous news for housing out of the states. It doesn't seem that builders there have adjusted strategies at all. It appears they are all desperately holding onto properties and trying to keep prices high.
Wouldn't it make sense (for those companies that can) to purchase land on the cheap from failed developers and build new housing stock that undercuts competitors and resales? If your lively hood depends on moving product. Then you think they would find ways to move or create the necessary product.
All the stories make them seem like deer in the headlights.
b2b said:
I assume everyone has seen the front cover of the Vancouver Sun as reported on Condohype!
Here is a scan of that Vancouver Sun Front Page
This is really getting rolling fast. I am seeing price reductions all over town. Up Island they are already a buyers market and there are lots of price reductions every day this week.
Pretty soon this will be the conversation around town
Would someone be able to post a link to Ozzie Jurock on the noon news?
Whoo hoo! Front page Vancouver Sun. Whoo hoo!
I don't see how people can continue to say it won't happen when it clearly is happening.
Correction here we come.
S2,
Did a quick search for Ozzie/Noon News on Google and came across a page on his website. He's got all of his global tv news segments up - dating back to September 2000. Unfortunately, he doesn't yet have his latest appearance.
http://www.ozziejurock.com/insights/bctv.asp
Chipman is quoted as saying "but they've been saying that for two years."
I think Churchill had been warning about Hitler for two years too.
"For home sellers, 'staging' is the new show in town"
Another echo of the US two years ago. The bust is on folks.
And if the government had stepped in two years ago to slow the appreciation instead of adding fuel to the fire with 40 year mortgages - then we would not be looking at an American style melt down in our home values, and contraction in our economy.
just jack
Actually, I thought it was so out of hand (pricewise) here 2 years ago even before the 40 year mortgages that I'm sure there would have been a major correction either way. It probably would have started sooner though.
Chickinvic
In the news:
Eroding consumer confidence puts a pause in B.C. housing market
News that housing sales in British Columbia are slowing down should not come as a surprise.
For the past six years there's been a remarkable boom in the residential real estate market. Booms can go bust. But this isn't a bust -- at least not yet: It's a breather.
Canada recorded a decline in gross domestic product in the first quarter and there's little to suggest a rebound in the second. Two quarters of falling GDP defines a recession although continuing job growth and rising incomes have mitigated the impacts of the economic slump.
However, the effects of soaring food and fuel prices are not so benign. People are panicked by the rapidly escalating costs of essential goods. Consumer confidence dropped to a seven-year low last month as Canadians worried about their future finances and reconsidered major purchases. Sales of new vehicles in B.C., for example, fell nearly 11 per cent in April from a year earlier.
RBS issues global stock and credit crash alert
Realtor fired after making false statements
B.C. Housing sales slow
Canada's "six-year housing boom has indeed fizzled," Robert Kavcic, an analyst with the stock brokerage BMO Capital Markets wrote in a recent note.
Sales of previously owned homes in Canada's major markets declined almost 17 per cent, Kavcic said, with activity in 19 of 20 markets below 2007 levels.
Kavcic said Calgary and Edmonton, in Alberta's oil-fuelled economy, actually experienced year-over-year price declines in May of 2.4 per cent and almost five per cent respectively.
Tsur Somerville, director of the centre for urban economics and real estate in the Sauder School of Business at the University of B.C., said the experiences of Calgary and Edmonton are evidence that real-estate prices can decline even in locations where the economy is strong if prices get out of equilibrium with fundamentals.
"We're not magically immune to the fact that overpriced markets have to adjust," Somerville said.
From today's Vancouver Sun
"Realtor fired after making false statements"
http://www.canada.com/vancouversun/news/business/story.html?id=ceb92829-2add-469d-8f12-3fdc91827ffd
S2
S2,
Go here and choose features and you will find the latest Ozzie Jurock segment.
Thank you very much beagle and vancouveritis.
Has anyone else seen this Special to the Sun.
"Prestigious properties in Vancouver"
I love this part "Vancouver's prices continue to be reasonable when compared to other world-class cities such as Sidney, Tokyo, Hong Kong, London and New York."
And I guess they are just going to get even more reasonable as the bottom falls out of the real estate market there.
Of course, it is just a big sales ad.
http://www.canada.com/vancouversun/story.html?id=ab32a683-1e7e-44c0-a2bb-0a25b78d4598
S2
"vancouveritis" - like it's a disease LOL. Maybe you've got the "bear fever"
:)
In other news, Glasgow's prices continue to be reasonable when compared to London.
It never fails to amuse me how people insist on comparing property prices in Vancouver to say London. What these people fail to realize, in addition to the fact that Vancouver is an irrelevant backwater to most Europeans, is that property in parts of London and just outside London are LESS THAN VANCOUVER. I sold my house recently which was in the 7th-richest postcode in the UK, about 25 miles west of London, and though it was tiny, it was freehold with a big garden (by UK standards), and on the end of a cul-de-sac. We sold it for the equivalent of around $340k CAD. Another house that was in the family was in a rough but up-and-coming area of northwest London (think Commercial Drive). It was a 3-bed, 1 bath and sold for the equivalent of just over $500k CAD last year. You wouldn't get a run-down house in Vancouver of this size for $500k. And this was in London proper, on the tube fer crissakes.
I try to tell people here that Vancouver and Victoria are more expensive than the UK, and they don't believe me. But they're usually people who don't leave here much, or have visited the UK once or twice and saw the prices in central London, which are justifiably eye-watering. But I lived just outside London for 4 years, and I can verify that if anything, housing in general is more affordable in and around London than in Vancouver. That's not even figuring in that incomes are far higher there, and employment prospects far better and more varied. These days, the weather is even better.
B2B
I used to hear the same thing about how expensive it was in Japan. when I lived there, it was actually cheaper than Vancouver (substantially). Taxes were taken off the top, what you get from your employer you keep - and rents were lower than comps in Vancouver.
Oh well, everyone knows Japan isn't world class...
Nevermind London or Tokyo. Think Hawaii. Honolulu to be precise. You can get a nice house in Honolulu for way less than a house in Vancouver and it's a tropical paradise and everyone really does want to live there. They even have a thriving dope growing economy although not too many gangsters.
I can verify that if anything, housing in general is more affordable in and around London than in Vancouver
But rents are are higher. That means that house prices are much more inflated here than there.
It's all about rents. If a hosue will rent for 4K a month, it's worth 600K. Whether it's in London, Vancouver, or Fort McMurray.
What if its on 50 acres?
just think about it! It's not that simple, if it were - only a few people would get mortgages.
just jack
Why do you think there doesn't seem to much inventory in say, Fairfield? Seriously, I am just wondering.
Typical average Fairfield homes appear to be 620 - 680 (depending on area.) They haven't risen in the same percentage as other areas. Also, the average family are upper wage earners that are not interested in going elsewhere. There are streets there where the homeowners have been there for 50+ years and not going anywhere anytime soon.
Just my own impressions.
Think an area like Fairfield will suffer as quickly as, say, Sooke?
Think an area like Fairfield will suffer as quickly as, say, Sooke?
The bubble collapses from the outside rim inwards. The outer edges will fall first ie Sooke, Duncan, Sidney or Chilliwack in the Lower Mainland. Those that came to the game the latest will fall first.
Then the inside starts to get it.
anon 6:20 said:
Think an area like Fairfield will suffer as quickly as, say, Sooke?
The city of Victoria, including Victoria, has had a downward trend in median price for several months as shown in this graph. You can see all the stats in this slideshow
Pretty hard to apply that median over all areas. Fairfield prices will be far stickier on a downward trend than others as people actually dooo want to live there.
Glad to see some prices coming back to actual market where they have actually been selling for the past year. Most price changes we are seeing were simply over-stated and adjusting back to where they should have started.
Fairfield at $620K is a good deal depending on the house. Given that you often see people come in after paying over $620K and then adding another $100,000 in renos, it's safe to suggest that they are not the "0 down 40 year mortgage" crowd. Not exactly a first time homebuyer's location.
So, so, naive. Last time I looked there wasn't a wall, either physical or economic, built around Fairfield.
One of the largest myths of real estate is "location, location, location". A meaningless statement that every one implicitly knows the meaning of.
All markets correct and all neighbourhoods adjust in relation to each other. If prices decline 20 percent in Rockland, Oak Bay and Fernwood - so will Fairfield.
just jack
"Not exactly a first time homebuyer's location."
Neither was West Palm Beach Florida. With its white sand beaches and tropical weather it really might be "The best place on earth." Now that prices there are in a nosedive, we can see that no one is going to be spared the return to fundamentals. 50% drop, minimum.
I thought the bear symbolism was about the teeth, I see now that it is about the Sh*t. You simply run around poopin on everything that you think might not be bear. Too bad a person can't have a rational conversation. 50% drop? Location means nothing? Talk about naive.
You go ahead and wait for those 50% price drops...and wait.....and wait.
Here's a fact: rents exceed my mortgage and maintenance costs and by 2015 will be paid off.
I love living in Victoria, it's the nicest place in Canada.
Apparently the Real Estate bubble burst wont affect> CANADA
then:BC
then:Vancouver
then:Vancouver Island
then:Victoria(just N. of the Malahat)
then:SFHs (just condos)
then:Fairfield
then: MY street?
then: MY house?
lol
"Fairfield at $620K is a good deal depending on the house. Given that you often see people come in after paying over $620K and then adding another $100,000 in renos, it's safe to suggest that they are not the "0 down 40 year mortgage" crowd. Not exactly a first time homebuyer's location."
In my opinion Fairfield is over rated,it's cold and damp in the winter/spring and the summer as well on the warmest of days just like in James Bay. The shopping sucks too as the local plaza is a gong show to park in as ancient people who shouldn't be allowed to drive take 15 minutes to park not to mention the yuppie arrogant attitudes that abound. Anyone spending that kind of dough there needs their head examined.
"50% drop? Location means nothing? Talk about naive."
Royal Bank of Scotland calling for a global stock market crash in the next 90 days due to the ongoing and escalating credit crisis. Talk about the naive believing "it can't happen here". Wake up time people, it can and will happen.
VG said "In my opinion Fairfield is over rated,it's cold and damp in the winter/spring and the summer as well on the warmest of days just like in James Bay."
Must depend on the area of Fairfield, because my direct experience is that parts of Fairfield are exceptionally warm and a great atmosphere. Pretty down to earth actually. Some call it a bubble. (Yes, I planted that for your entertainment, I can hear the BS grunts already:-)
Fairfield is an ugly lower middle place akin to riverdale in Toronto. Plain ulgy small homes on tiny lots with a lot of places that were chopped into multi-units. It sure is not worth the money. I remember a lady told me that she bought her house there in 74' for $15K, and at the time, Fairlfield was thought of as the ghetto of Victoria. At least Riverdale has a world class city you can walk to.
The poster obviously must poor and cannot afford to travel. Probably, he/she/it has never seen the true "best places on earth". Probably couldn't even afford a night at a hotel in London, NYC, Paris or Madrid.
Just another loser who inherited his/her/its mama's dumpy house after checking her in at the Glengarry place to die hospital and thinking how much money he can underservingly make.
It is well known that that Fairfield has a significant problem with rats, being so close to the port area.
I have a friend who sold her house in Fairfiled 5 years ago who told me that everyone on the street has problems with them. She herself constantly kept big rat traps everywhere, and eventually decided to move (to Sydney) because of the stress dealing with that vermin.
Fairfield is not that bad. Nice big trees ,walking distance to many things, city, ocean, parks. The air is fresh from the ocean breezes.I think it will hold up better than some other neighbourhoods. I see the 620K house bottoming out at about 450-500K.
Anon 9:21 said
Here's a fact: rents exceed my mortgage and maintenance costs and by 2015 will be paid off.
I think you are not considering your true occupancy cost. In addition to mortgage interest and maintenance you need to include appreciation, lost investment income, property taxes, condo fees (if applicable) and increased utility costs if you want to make a comparison to renting. The calculation can be complex and a good rent vs. buy calculator is here
I love living in Victoria, it's the nicest place in Canada.
I have lived in a number of places in Canada and this country has some very pleasant places to live. One thing I find puts me off is that many folks in Victoria are smug and use expressions like "world class", "best place on earth" and "everyone wants to live here". I have not seen this attitude in the other cities in Canada and Europe.
Ya , roger it's always funny how people think their city or neighborhood is the best. Human nature I guess.
Here's a fact: rents exceed my mortgage and maintenance costs and by 2015 will be paid off.
Here's a fact: as before, that's irrelevant to the discussion, and nobody gives a rip.
"I have lived in a number of places in Canada and this country has some very pleasant places to live. One thing I find puts me off is that many folks in Victoria are smug and use expressions like "world class", "best place on earth" and "everyone wants to live here". I have not seen this attitude in the other cities in Canada and Europe."
That's because most Victorians are insecure and have travelled very little. A lot of people in Victoria have not been beyond Vancouver. And then they are constantly brainwashed by the RE oligarch media with those ridiculous self-absorbing claims. After a while, chimps and parrots can also be conditioned to say those things.
If everyone wanted to live here, we'd be the city of f-kin New York City. We'd have a metro population of 20 million. What a bunch of in- bred bozos we have in this city. Certainly, those are say that are no smarter than chimps or have bird sized pea brains.
And on the topic of our world class status. Where is the opera house, the zoo, the numerous art galeries, the NHL, NFL, NBA, etc teams? Where is the Bloomingdale's, Macy's, etc department stores? Where is the subway system? Where are headquarters for the national media, banks, insurance companies, etc?
"everyone wants to live here"
Yes, all the hobos, homeless, drug addicts, thiefts and con artists.
Friends just had their house ripped off.
Wife came home early and the guy was in the living room with the house ransacked - stuff everywhere.
She grabbed a bottle and started yelling at the guy. He calmly walked out, GOT IN HIS TRUCK, and drove off. Police never caught him but they got his prints on everything --- repeat offender.
They figure he cased the house for a bit and noticed she was usually came home after 3pm with the kids. This day she just happened to come home early.
Love how the thief was driving a truck --- maybe he needed gas money?
Fairfield? Oh, please... under water in a decade or two once the greenland ice sheet finally finishes slipping off into the Atlantic. With the rest of downtown Vic.
World class city... like Atlantis!
Fairfield prices will be far stickier on a downward trend than others as people actually dooo want to live there.
People actually do want to live everywhere, because they are willing to pay money to live everywhere.
The issue is how much of a premium the upscale neighbourhoods can command. If the premium was, say, 50% pre-bust, it's going to be 50% post-bust.
Vancouver West Side took the same % hit - 45% - as GVRD in the early 80's bust, and believe me a lot more people with money want to live there than anywhere in Victoria.
Everybody wants to live in China.
With the Olympics, all the European, American and Asian investors in the world will flock to China and discover the hundreds and thousands of world class cities with the best climates in the world.
They will enthusiastically and unabashedly buy every piece of Real Estate in sight to secure a spot for their retirement in the best place on Earth.
China is the best place on the Earth. Already, due to the Olympics, bachelor apartments are being rented for $500,000 a month. Do not miss this opportunity of a lifetime, or you will be priced out from the best retirement and climate on Earth.
Nobody wants to live in Fairfield. Everebody want to live in BURNSIDE. Burnside will hold its value. Everybody wants to live in Burnside.
See MLS# 244398
Fairfield is an ok location, but full of delapidated 100 year old homes. Add in narrow lots with no parking and I have to say that it holds little appeal to me. Last year my realtor said that a number of Fairfield properties were sinking. I have no idea how extensive that is. Holding at
$620k?? I doubt it.
Today I dropped in at an open house in a neighbourhood that I do like. The listing agent was disgussing the $500K mortgage the buyers would need, suggesting that they could get $3000/month in rent on this 'investment property'. I had to stop myself from jumping in with "we rent for less than half that price". Still fools out there
Today I dropped in at an open house in a neighbourhood that I do like. The listing agent was disgussing the $500K mortgage the buyers would need, suggesting that they could get $3000/month in rent on this 'investment property'. I had to stop myself from jumping in with "we rent for less than half that price". Still fools out there
Yeah, some of them can't spell, either.
Ya , roger it's always funny how people think their city or neighborhood is the best. Human nature I guess.
Funny how the bears think their neighborhood is the worst. Bullshit and bitterness, I guess.
Annon said "Today I dropped in at an open house in a neighbourhood that I do like. The listing agent was disgussing the $500K mortgage the buyers would need, suggesting that they could get $3000/month in rent on this 'investment property'. I had to stop myself from jumping in with "we rent for less than half that price". Still fools out there'
Then??: Why are you looking at open houses if you aren't interested in buying or worse, actually think people are wasting their money considering it? Do we need to prove to ourselves over and over again that we are making the right decision in waiting? Get on with life man.
For that matter, why is anyone having this conversation if they are so bearish on the market? Is there some perverse enjoyment in taunting, hoping, and waiting for a market to drop? I find the Bear conversations on here to be so far from reality that they are beyond rediculous.
I also find that when there is an obviously rediculous bear posting (as is often the case) it goes unchallenged by the other prominent posters on here. It really eats away at the apparent honest efforts of posters like Roger or Siobhan.
Wouldn't this blog be better served discussing possible strategies to enter the market when the timing is right? Maybe get positive dialogue going that leads to reducing costs of entry - which is easily as big an issue as the actual pricing.
Wouldn't this blog be better served discussing possible strategies to enter the market when the timing is right?
The bityter renters have no intention (or ability) to do this at any point.
This renter isn't bitter, and can write a cheque for a SFH in Victoria right now.
All it takes for prices for houses in Victoria, or anywhere else, to come down is for people to quit buying. Stay tuned.
By the way, my bedsore is finally healed. I should be able to get up soon and go take a shower. It stinks something awful in the bed though. Oh well, that's what happens when you don't get out of bed for 3weeks. Got it find my dentures now.
I also got the old bitch out into the extended care facility. I should be able to sell that Fernwood piece of shit house now for a good profit. I'll get new dentures. You know with all the mortgages payments, I couldn't afford toothpaste, so I let my teeth go. Oh, it stinks here, better get those bed sheets changed. Oh, but I couldn't afford another set of bed sheets.
Oh mine, I see my some lice in my you know what.
anon 9:03pm "rediculous"
Can't you spell?
anon 9:03pm "rediculous"
You "own" a house and you can't spell?:) Now that's ridiculous.
Only literate individuals with annual incomes of $150,000 are allowed to enter the market here. We don't need lumbejacks and low lifes here. Investors are coming from China and San Francisco and we don't need wannabe real investors who can't spell milling about. We need to show outside investors that we are smart worldly people here.
My mortgage helper is starting to drive me crazy. First he starts abusing the hot water priviledges, next he brings in a bunch of guys whose voices carry and then they play loud annoying music. And last week the bank told me that his cheque bounced. Now, his cigarette smoke is getting through my floor and it is giving these awful headaches. I don't want to get LUNG CANCER. And, he told me he was a non-smoker, as was the deal. I don't have a lease with him, because I don't want anyone to think that I'm getting money from my mortgage helper guy, so I guess I can't go to court. What a nightmare this mortgage helper. He told me that he works for Scotiabank at the head office, but he is always around. I think he is on welfare. I think I'll have to turn the water off.
"sitting pretty" is not the same person as "sitting pretty" but the other "sitting pretty" may be the real "sitting pretty" (or not)
OK, so I don't make $150,000 a year and I do need a mortgage helper. But, that's what my banker told I would have to make in today's market. Anyway, I'm in deep doo doo now with the bitter renter in the basement not ponying up. I don't want to lose my $200,000 of equity in this dump.
Ozzie Jurock's latest interview is now posted on YouTube.
Ozzie clearly states that supply and demand forces are kicking in and prices will head down in the Okanagan and Vancouver.
What about Victoria? The punters that are still buying here will be OK because everyone wants to live here
No Roger, everybody wants to live in China. Did you hear that they have the Olympics there?
Roger, thanks for the video link.
Interesting what Ozzie had to say. I knew the smart money was buying in the US for a while. My friends in Calgary bought a detached single family home with an in-ground pool in Phoenix for $225K back in February. Those Bear Mountain condos are going to have sell for $100-120K in order to compete.
Speaking of investing in the US, some of you on this blog are well traveled. What is your opinion of buying a property in Phoenix versus Las Vegas. Both cities have been battered in the housing crash, however Las Vegas is driving distance to LA, Palm Springs, plus long term Las Vegas will always be the entertainment capital of the world. What do you think?
Bet you Ozzie has sold his investments in Vancouver and recently bought in Phoenix.
The trouble with Ozzie's logic is that it assumes that real estate somewhere still has to be the best current investment. It's bizarre that he doesn't suggest that the US has a long way to go down, and as it trending down here too, that there are myriad better places for your money.
I can see Canwest soon dropping Ozzie off of Global TV. What is he thinking?
Suggesting that everyone, no matter the cost, does not want to buy a slice of paradise on the best place on Earth, in beautiful rainy Vancouver. All the rich Albertans, wealthy Asian, oil soaked Arabs, Silicon Valley whiz kids are supposed to be investing here to secure a spot in retirement heaven, a place that they can only dream of. This is where are happening. The entire universe will be watching us.
My gosh, how can Ozzie spread such things?
Here's a nice SFH in Las Vegas for $139,000.
http://www.century21
.com/classic/property.jsp?
ref_code=Trulia-Redirect&tr_key=
34716156&WT.mc_id=Organic
I think Bear Mountain condos will have to sell more at the $75,000 to $80,000 price point to compete.
Just makes you want to load up on overvalued Victoria real estate eh SP ? no doubt in my mind a 50% a crash is coming.
RBS issues global stock and credit crash alert
19/06/2008
The Royal Bank of Scotland has advised clients to brace for a full-fledged crash in global stock and credit markets over the next three months as inflation paralyses the major central banks.
"A very nasty period is soon to be upon us - be prepared," said Bob Janjuah, the bank's credit strategist.
A report by the bank's research team warns that the S&P 500 index of Wall Street equities is likely to fall by more than 300 points to around 1050 by September as "all the chickens come home to roost" from the excesses of the global boom, with contagion spreading across Europe and emerging markets.
RBS warning: Be prepared for a 'nasty' period
Such a slide on world bourses would amount to one of the worst bear markets over the last century.
From the UK, but no worries here, we aren't considered "global", we are an island that is immune right SP ?
House prices ‘will fall by 30%
House prices are set to fall farther for at least the next 18 months and will not recover for at least another four years, leading economists say today.
Nearly two thirds of members of the Society of Business Economists said that house prices would not rise above last year’s peak until at least 2012. Nearly 15 per cent said that prices may not rise to last year’s levels until 2015.
http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article4144576.ece
Re: Penthouse in Burnside MLS#244398
What is UP with insane asylum white? Why is everything white? Doesn't housework suck enough? Who wants to have their molding and walls painted every year?
About the only thing worse is "decorator" "colors" tan and grey. Isn't it grey enough outside with 8 months a year of rain?
Bleech.
Sitting Pretty, what are you really, an oriental real estate agent?
Ridiculous is spelled rIdiculous, NOT rediculous.
Or the latino spelling, reediculous.
Talk about ridiculous.
The main difference between Las Vegas and Arizona, is in Arizona you have 110º F thunderstorms.
In Vegas you are lucky to get five days of drizzle out of the year, and any thunderstorms last about five minutes tops.
No humidity either, while in Arizona it is excrutiating.
And you can have a huge 6 bedroom 3-4 car garage Mcmansion in the suburbs for what they want for a postage stamp one bedroom studio condo here.
And every house; forced air conditioning.
Check out the prices; you'll soil yourself.
From today's Van Sun. Another article about those Parksville condos going up for auction.
I particularly like these lines:
"Besides the apartments being auctioned, at least six are listed for resale at prices ranging from $489,000 to almost $1.2 million."
"The concern is, especially for those who have their properties for sale, is that [the auction will] just blow [the units] out the door and devalue those on sale," Limer said. "That's relatively a realistic concern that one would have."
http://www.canada.com/vancouversun/news/business/story.html?id=62c67e23-dbb5-4431-abe8-ac85ea78b472
Oops, sorry. Yesterday's Vancouver Sun.
It is true. Time does speed up when you get old.
PARKSVILLE Condo Auction results.
(borrowed from another blog)___________________________
COPY>>Bluesman" posted this gem today on the Vancouver Condo Info blog:
Hey folks,
I just went to the auction at River Rock Casino in Richmond where they were auctioning the 5 condos from Parksville (Onyx at Craig Bay) and the bidders were either at the Richmond location, a Parksville location, a Calgary location, on the internet or submitted a bid by proxy.
It turns out the first unit listed at $545,000 went to a Parksville bidder for $480,000 (12% haircut), the next one listed at $535,000 went to a bidder for $380,000 (a 29% haircut), the next one listed at $435,000 went for $350,000 (20% haircut), then next one listed at $425,000 went for approx. $325,000 (memory failed on that one--approx. 23.5% haircut)and the last one listed for $425,000 went for a mere $280,000 (a 34% haircut).
Two went to Parksville bidders, two to Calgary and one to an internet bidder.
Does this mean the end is nigh for BC real estate? You be the judge. The investors who bought these properties bought them through an auction - they paid, in effect, the highest possible price.
Posted by Ken Simpson at 10:49 PM
1 comments:
mold city said...
Fascinating how the prices dropped so dramatically as the auction went on - its like a scale model of a real estate crash.
We start with 12% off and end up at 34% off. I look forward to seeing if this we stick to this range as Vancouver prices 'correct'.
--------------------------------
END COPY
Past experience with condo auctions in Toronto and Vancouver indicates the first few auctions actually did quite well for the developer. (much bigger cities obviously)
Bid prices really started to drop when they started getting commonplace.
I guess its a bit difficult to draw any conclusions from the Parksville one as its pretty much of a unique situation----but I sure wouldnt want to be an owner trying to sell a unit in the same building----or even be the first auction bidder-looks like they overpaid somewhat..
The Parksville condo auction was promoted in a TC article. I wonder if they will do a follow-up?
Here is an article on UK housing they ran yesterday:
Britain's housing market sputters
British homeowners have seen the value of their properties plummet by one billion pounds per day, as the housing market downturn gathers pace.
Almost 300 billion pounds have been wiped off the value of Britain's homes since the start of the housing market downturn last September, according to property valuation website Zoopla.co.uk.
The total combined value of residential properties now stands at 5.8 trillion pounds, down from 6.1 trillion pounds nine months ago.
The Royal Institution of Chartered Surveyors said this week that house prices have continued to fall at close to their fastest rate in 30 years, although sentiment in the housing market improved marginally in May.
Even at $280K, the Parksville condo is overvalued. Should have gone for $80K. The secret is out, all those rich Albertans are heading to Phoenix, etc and Ozzie (finally) confirmed. I can condos selling in Victoria in the low 100's by spring 09', and SFHs for $240K.
Speaking of condos...
This slide predicts the future for of condo prices in Victoria.
Here is an update on condos in Victoria.
Speaking of condos...
This slide predicts the future for of condo prices in Victoria.
Here is an update on condos in Victoria.
What this slide says is sales volume has bobbed around the same level since 2005 while listings have doubled. So what, exactly, is the "prediction?"
SP
try here
You will also notice that the graph basicall mirrors itself unitl 2008 when "one of these things is not like the other".
Anyone can spare some change? I'm in deep doo doo that my DEPENDS cannot handle ever since my mortgage helper bitter chain smoking lung cancerous loud music tenant stopped paying rent.
Sorry for the O/T. I'm looking at moving my family to vancouver island and wondering which communities on the island are best for raising a family in. Thoughts on Ladysmith, Duncan, Cowichan Valley? What about areas around Victoria? We won't be buying but renting, looking for something on the edge of town with an acre of two of land. Any thoughts?
Thanks,
Ozzie clearly states that supply and demand forces are kicking in and prices will head down in the Okanagan and Vancouver.
Wow he's really sticking his neck out there, isn't he, given listings are exploding all over the province and the US is headed into a major recession.
So did the Wizard actually say how much he thought prices would fall, or did he just follow his usual style of not saying that could be proven factually incorrect?
for the person looking for 2 acres to settle on for a while. I can't speak for the best place, but I can throw a vote in. I grew up in the country around Ladysmith and loved it out there. In my youth I hated Ladysmith as a small town, it's only in my 30's living in Victoria that I see the positives.
If you do move down to that area in the summer be sure to learn about Nanaimo river. It's the place to go on a hot summer day.
anon 1:36 am said:
Sorry for the O/T. I'm looking at moving my family to vancouver island and wondering which communities on the island are best for raising a family in.
Depends on many factors. You will spend less on rent if you move further up the island. Parksville-Qualicum and the Comox Valley will have better acreage rental options than any area close to Victoria.
I think you will get a lot more information if you sign on to Kids in Victoria (KIV) in the KIV Cafe forum and post your question. They had a thread on other places on the island last week. KIV is very family oriented and has members with families from all over the island.
Good luck in your search.
Just bought a place in Fairfield for 580,000 on a private sale. It's really really beautiful and cheaper than rent. I find Fairfield to be quite warm and friendly. It's kind of like the Uplands but far nicer for me. The owner is throwing in a lawnmower. I'm so excited because I haven't mowed a lawn since I was a kid. I've been renting for years and now I can finally mow the lawn.
anon 10:29 said:
Just bought a place in Fairfield for 580,000 on a private sale. It's really really beautiful and cheaper than rent. I find Fairfield to be quite warm and friendly. It's kind of like the Uplands but far nicer for me. The owner is throwing in a lawnmower. I'm so excited because I haven't mowed a lawn since I was a kid. I've been renting for years and now I can finally mow the lawn.
OK I'll bite. I know this is a troll post with the cheaper to buy than rent bait. Good luck with the lawnmower. I hope the previous owner throws in a tank of fresh gas.
I didn't realize I was so lucky to be mowing lawns. Maybe I should be paying higher rent in exchange for this privilege.
anon 10:29
Don't come here sobbing and slobering when your bank tries to unload your place for $200-250K. You are a "GREATER FOOL" or is it just plain loser. Maybe idiot.
Fairfield is no Uplands. Fairfield is the Bronx of Victoria. Anyway, it's China where the future's at. They have the Olympics and everyone wants to move there on account of that. You better go look now before you are priced out of the beautiful serene tranquil Chinese retirement heaven. Everybody wants to move to China. Long live Mao!
I'm assuming Sitting Pretty's username is being hijacked. It's rather childish and not at all amusing.
"I'm assuming Sitting Pretty's username is being hijacked. It's rather childish and not at all amusing."
No, this is just what happens when people stop feeding a troll. I'm not up on the psychology of trolls so I can't say why it happens, but I've seen it enough times to recognize the pattern. And yes it's childish, but trolling by its nature is childish.
Village,
I find sitting pretty rather troll, I mean drole of late. Gives us some laughs. Come on, you don't do justice to your people, village people, isn't it, by being uptight about it.
Sitting Pretty must have lost her marbles. With all those condo assignments worth nothing, who can blame her. By the way, do we have a loonie bin in this city?
Doesn't every world class city have a psychiatric hospital? There's the Bellevue in New York, the Douglas in Montreal....
"The owner is throwing in a lawnmower. I'm so excited because I haven't mowed a lawn since I was a kid."
My gosh, talk about being deprived? I wonder he/she'll say the first time he/she'll step into a plane?
I find Sitting Pretty to be much more interesting as of late.
Today's News Release from CREA:
"New law requires real estate agents to verify ID of buyers and sellers and track deposits"
http://www.crea.ca/public/news_stats/pdfs/fintrac_newsrelease.pdf
"By the way, do we have a loonie bin in this city?"
Yes - the venerable Eric Martin Institute (EMI) associated with the Royal Jubilee Hospital. However, the BC Liberals axed a bunch of beds a few years back, and the inmates who had them are now the ones you see wandering downtown, shouting to themselves. Sad situation. Anyway, Sitting Pretty doesn't need to be there. She and a few other more juvenile contributors to this blog just need to show a little maturity and respect for everyone's opinion.
I think there's a lot of jealousy going on here about Fairfield, the upper east side of Victoria. I rented for years and years and saved and saved and am now moving to Fairfield complete with lawnmower. I will be cutting grass all summer long and will love it.
"I think there's a lot of jealousy going on here about Fairfield, the upper east side of Victoria."
Oh ya. And, Douglas Street with all the skyscrapers is Wall St.
Obviously this girl has never stepped off the island. :)
roger.
I love that "we haven't".
I wouldn't want to buy or list with these people.
Anon. You may want to use your $100 green cheque to buy a push mower.
Well I'll certainly enjoy taking a nice stroll down to the quaint cook street village with all the cafes and restaurants after mowing my lawn.
S2 & Olives
A while ago you were having a discussion with Tim Ayres about sales and inventory in Sooke. Tim said they were having a good month in May. Sales were up in Sooke in May, from April, but the action was all under 500k as shown here. Only 6 sales over 500K and 93 for sale in the Sooke district. There is 10 MOI in the 500-600K price range.
anon 3:35 said:
Well I'll certainly enjoy taking a nice stroll down to the quaint cook street village with all the cafes and restaurants after mowing my lawn.
Too bad you don't have any money left to buy anything after paying the mortgage, lawyers, property taxes and utilities.
Just drop byn Starbucks and ask one of the renters if they will buy you a coffee. No problem - they still ahve disposable income :>)
S2 & Olives,
Here is the same style of graph for Langford
You can see that they did well under 600K. Over 600K there were 14 sales and 77 for sale (MOI of 5.5)
It will be interesting to see what June brings for Sooke and Langford. Any folks with PCS that have info to share??
Anyone see that the real estate listing channel is back? Anecdotally it appears that it's dominated by listings in Calgary.
I'm assuming Sitting Pretty's username is being hijacked. It's rather childish and not at all amusing.
Correct. I (the original) have only posted twice in this thread (8:47 and 8:51)
Soft landing seen for Canada's housing market
Sheryl Kennedy, the central bank's deputy governor, said Canada's financial prudence has helped it sidestep the sharp home price declines being experienced in countries including the U.S., Britain and Spain.
Looks like all is good according to the Central Bank. Party on!
BC, with its -8% savings rate and housing unaffordability rivaling any world bubble market, is not "Canada".
But yes, I don't think there's a housing bust coming in Thunder Bay or Trois-Rivieres.
"Luxury" Condo Auction in Parksville:
An earlier edition on the TC had 30% reductions from other current listings and 40% for the low end condos...
Kaboom goes the market in Parksville - bet there are a lot of very nervous developers, RE agents and recent buyers up there.
"One Craig Bay resident, who declined to give her name, said bargains were picked up Saturday, as prices were as low as half of what had been asked."
"Kevin Clayton, a realtor with Coast Realty Parksville, said the units that sold in the range of $300,000 to $500,000 probably went for true market value.
Other units in the Onyx complex had pre-sold before completion at inflated prices, he said, because the market was rising and demand was keen. Now, the market appears to be softening."
http://www.canada.com/victoriatimescolonist/news/story.html?id=77787411-e18b-4bb3-aa03-e6aa04cc0bba
- Dumb Canuck
Fairfield Uplands????? I think not!!!! The only thing that is great about Fairfield is its proximity to Downtown and Beacon Hill Park. Other than that, there is absolutely nothing special about the neighbourhood. In terms of temperature, it is special as the climate maps show: Fairfield along with James Bay are the coldest, dampest parts of Victoria. Most of the houses with the exception of a few near Beacon Hill Park are actually quite plain Jane stucco bungalows without really interesting features. Nothing endearing and nothing architecturally at all like neighbouring Rockland. The lots are quite tiny and not private. Many parts are quite bare in terms of trees. Someone said Bronx and I would say architecurally it is like Levittown - lots of little '50's tract home type houses. OK - I'll grant that the prices are not cheap there and yes, many annoying, pretentiously unpretentious yuppie types live there. In other words, Fairfield is home to many of the Subaru and sandels set with their irritating sense of superiority over you.
Each to their own, but for me, I think Fairfield would rank about #18 on my list of neighbourhoods in Victoria. It is a pale substitute for South Oak Bay and even parts of Gordon Head are way nicer. Fairfield is an excellent microcosm for Victoria generally - it thinks it is world class because it is expensive but really is nothing special at all.
Sitting Pretty has fallen off her rocker. She's got some multiple personalities syndrome now. I guess anything for a troll to get attention.
"Well I'll certainly enjoy taking a nice stroll down to the quaint cook street village with all the cafes and restaurants after mowing my lawn."
Forget about getting $250K for your place. Haven't you heard Ozzie? We are now OFFICIALLY competing with Phoenix and Las Vegas for the rich Albertans' money for retirement and second homes. A SFH in Phoenix goes for $150K. Your place in Fairfield won't even fetch that.
Man, or woman, you've got to get off the island. Travel a bit.
This self-absorbed delusion that some local yokos here have is a sign of their naivete and immaturity.
anon 7:59 PM
Do you have a link you can point us to for the climate maps?
What I have found is that the people who think that Victoria is the truly the best place on earth and that everyone in the world is beating a path to our door were born here or have lived here for so long they forgot anywhere else.
They love it here so they think everyone else in the world loves it here.
s2 - if you loathe Victoria so, why are you still here?
anon 9:52 said:
s2 - if you loathe Victoria so, why are you still here?
Why is it that when someone makes a comment critical of Victoria or certain citizens' attitudes they are either told that they "loathe" the city or are asked why they don't leave?
Victoria is a city, like many others, with good and bad attributes. On balance it is a pleasant place to live. However, there are lots of other nice places in Canada as well. Each has something special to offer.
The smug attitude about this town by some of its residents is a bit distasteful and somewhat provincial.
Yep,looks like the condo market is tanking when the true value for prime location goes for $285,000 when they were asking $430,000, ouch !
Hey Beagle 6:03, Yes, Sheryl is a good spin doctor....ooops I mean good friend of mine. Yes, party on!!! There is no such thing as a 'soft landing' in this part of the world!!! I am printing like mad as we speak.....WOW, I LOVE FIAT CURRENCY!!!
Central Banker
Vg said:
Yep,looks like the condo market is tanking when the true value for prime location goes for $285,000 when they were asking $430,000, ouch
Did you catch the CHEK news at 6? The guy who bought for 300K plans to do a quick flip for the "firesale price" (his words) of 369K. His cost after GST and 2% buyer premium is around 320K. Take out the realtor fee of 15 K and he hopes to make 34K before negotiations.
Only one flaw in his plan. There are currently 136 condos on the market in Parksville-Qualicum and 6 (yes six) sold last month. Why does he think the five units sat there for a year with no takers? The other 195 registered bidders didn't want to pay more either. One thing he will do is cheese off the rest of the owners.
Maybe someone should call him next month and offer him 280K (which is still a bit high).
Climate maps for Victoria....
http://www.victoriaweather.ca/twod.php?zone=victoria
Yet another article about those Parksville condos.
Here is an excerpt:
"Kevin Clayton, a Realtor with Coast Realty Parksville, said the units that sold in the range of $300,000 to $500,000 probably went for true market value.
Other units in the Onyx complex had pre-sold before completion at INFLATED prices, he said, because the market was rising and demand was keen. Now, the market appears to be softening."
Can these real estate agents not make up their minds. Now they are going for true market value but pre-sales went for inflated prices.
"Parksville luxury condos auctioned at bargain prices"
http://www.canada.com/victoriatimescolonist/news/business/story.html?id=979867e6-b482-4cc9-bf10-ca5c98b74aeb
Do your mortgage calcs bears, 20% RE decline from 600K and then at say 7-8% prime rate in three years from now. Think the banks will be offering P-.8? I think they will be a little tighter than that.
Want to convince me that you have $400K just waiting there for the great opportunity? Come on now.
Sorry, late to the party...
Just wanted to say... Follow this logic. This poster is saying, basically "everyone is gonna be priced out forever."
Without realizing that if you follow that train of thought, the end result is that there will be no one left to buy his house.
Durrrr...
Why is it that when someone makes a comment critical of Victoria or certain citizens' attitudes they are either told that they "loathe" the city or are asked why they don't leave?
Because you're either with or against us. If you don't buy a house right now, you're letting the bearrorists win. :-)
But seriously, I can't think of any other city outside of BC where people hold this attitude. People in Calgary, Edmonton and even the centre of the universe, Toronto, understand quite well that their cities are not perfect and a lot of people only live there because that's where the jobs are.
But just like people who think they are perfect, cities and provinces that think they are perfect (the best place...etc) can't tolerate criticism.
US market : Four years of home-price gains have been wiped out
Prices fall in all 20 cities in Case-Shiller index in past year.
"Prices fall in all 20 cities in Case-Shiller index in past year."
Yup, saw the story on CNN this morning. So much for the bottom that people have called. They still have a long way to go. Option Arm's here we come!
So realtors are going to have to be the eyes and ears of FINTRAC, or face fines and jail time. I wonder what will happen to Vancouver's market when all those condo sales carried out to launder filthy drug money have to be accompanied by ID checks and maybe soon the names and particulars of co-investors...
http://lfpress.ca/newsstand/News/CanadaWorld/2008/06/23/5958021-sun.html?ref=patrick.net
well that should put a big dent in the Vancouver market and maybe even the Victoria. When you see internationally wanted illegal gun smugglers getting taken down at Hillside and Cook with flash bangs cause the guy was considered armed and dangerous then you know Victoria cannot be immune from organized crime trying to stash cash.
Gotta love that RE agent spin
Condos sell at auction below listed price
Harry Greenberg, a realtor with Royal LePage in Parksville, who has two of those resale listings, said he wasn't "totally thrilled" with the outcome, but added that Ritchie Bros. can't be faulted. There simply weren't enough bidders to push the prices higher.
"This is a sign of the times," Greenberg said. "Calgary, Edmonton, Vancouver and Victoria have slowed down, real estate wise, and that certainly showed."
However, Greenberg doesn't believe the low auction prices will affect resale values in the building over the short term. He said the last five units were the least desirable to begin with, and other units up for resale have more upgraded features.
As well, the reported auction prices don't reflect commissions, GST and property transfer taxes that new buyers will have to pay.
Gee, as I recall MLS reported sales don't include property transfer tax either. Harry thinks those big cities may be having a downturn but Parksville is different. After all, as one Parksville REALTOR® said on the TV news last night " the boomers are coming to this area". Harry forgot to mention that there are 136 condos for sale in Parksville-Qualicum and only 6 sold in May. Must have slipped his mind in all the excitement.
Roger,
there you go quoting facts again, what are the realtors going to do about that? They need a marketing plan to deal with factoids like sales numbers, one that focuses more heavily on lifestyle choices and demographic positivities, while falling short in the guarantee and trend analysis department.
We should set that as a homework assignment for all realtors reading this blog, and get them to post their homework in a couple days....
Hey guys,
I've finally decided to sell my Fernwood house, in great part because of the useful info in this blog. Everything is practically ready, except I don't yet have a *good* realtor.
If any of you can recommend a good realtor, I would appreciate a brief email (adeptus AT telus.net)with their contact info and why you are recommending your realtor, or a post here in this blog. I am also open to the 1% realtors.
My idea of a good realtor is the following:
1) Experienced. If your realtor has less than 3 years of experience, I may not be interested.
2) Above average negotiation skills
3) Not too busy. I will need his time as will people wanting to see my place.
4) Honest. Nuff said.
5) Tell me about your experience with this realtor and why you are recommending him/her.
6) Wow factor - What makes this realtor above average?
Thank you very much, and keep up this great blog everyone :)
Adeptus
adeptus
There are adequate realtors and rather crappy realtors-just like in any other job---however in my opinion most of what you are really buying with your commission dollars is exposure on the MLS system- which unfortunately remains the only 3d party marketing vehicle in real estate.
1% realty also gets your home on MLS but other realtors are going to be less interested in showing your place because there is substantially less money in it for them(and most homes are NOT sold by the listing broker). (Its pretty neat though to sign up with 1% if the place next door is being sold by a full commission shop)
In spite of all the "my marketing plan will get YOU top dollar for your house" hype-- often co-incident with simultaneously advertising "guaranteed to get the best deal for BUYERS",any competent and basically literate Realtor will do the job as well as another.(and really, most are competent)
My pet peeve is the condescending attitude that many realtors seem to feel is necessary to succeed in the shark pool they swim in.
One thing for sure--- the right PRICE is the key,regardless of which marketing genius you get to list your place.
Adeptus said...
"Hey guys,
I've finally decided to sell my Fernwood house, in great part because of the useful info in this blog."
It's nice to see that some folks can use logic and reason to come to an informed decision on real estate. This summer will likely be the end of the good times, its all downhill from here.
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