Tuesday, September 2, 2008

Property sales and prices soften in August

No need for spin: straight from the horses mouth (VREB)

Sales of homes and other properties in the Greater Victoria area followed the expected trend and softened last month as many people enjoyed vacation time. Prices also moderated slightly. A total of 517 homes and other properties sold in August through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) compared to the 616 sales in July. There were 846 sales in August of last year.

Victoria Real Estate Board President, Tony Joe, notes that today’s buyers now have more properties from which to choose than at any time since 1996. "The number of properties available for sale is now at the highest level in over 12 years, increasing in August to 4,657. That represents a 39 per cent increase compared to August of last year." Joe notes that prices moderated last month with nearly 46 per cent of single family homes selling for under $500,000. "The average price of single family homes in Greater Victoria last month was $549,914, down from over $578,000 in July; the six-month average was $592,582 though the median price in August was considerably lower at $512,000." Joe noted that eleven single family homes sold for over $1 million in August, including two sales on the Gulf Islands.

The average price of all townhomes sold last month was $413,994, down from nearly $455,000 in July; the six month average was $435,309. The median price in August was $382,000. Joe noted that the overall average price for condominiums at $302,200 last month was virtually unchanged from July. The average for the last six months was $319,825. The median price for condominiums in August was $280,000.

MLS® sales last month included 269 single family homes, 160 condominiums, 53 townhomes and eight manufactured homes.
Roger has a good analysis (from comments in last thread):
August 2008 Statistics - Monthly Analysis

July 2008 shown in ()

MLS Sales - 517 (616)
MLS listings - 4657 (4557)

SFH Average - 549.9K (578.2K)
SFH 6 mo. Avg. - 592.6K (596.7K)
SFH Median - 512K (529.9K)
All SFH Sales - 269 (359)

Condo Average - 302.2K (302.5)
Condo Median - 280K (285K)
All Condo Sales - 160 (168)

Town Average - 414K (454.9K)
Town Median - 382K (417.5K)
All Town Sales - 53 (52)

Year-over-Year Analysis

GV - Greater Victoria
August 2007 shown in ()

MLS Sales - 517 (846) - Down 39%
MLS listings - 4657 (3352) - Up 39%

GV SFH Average - 549,914 (576,632) - Down 4.6%
GV SFH Median - 512,000 (515,000) - Down 0.6%
GV SFH Sales - 244 (399) - Down 39%

GV Condo Average - 302,200 (298,478) - Up 1.3%
GV Condo Median - 280,000 (275,000) - Up 1.8%
GV Condo Sales - 160 (217) - Down 26%

GV Townhouse Average - 415,327 (396,129) - Up 4.8%
GV Townhouse Median - 382,000 (378,950) - Up 0.8%
Townhouse Sales - 51 (95) Down 46%
I'm assuming he'll have updated graphs in the next few days...

Comment away. H/T Roger (apparently the TC already is)

48 comments:

greg said...

Things are falling apart faster than I expected. Lower median on everything, and much lower sales, and listings 40% higher than last year. There must be quite a few listings now that are many months old. Do you think some of those sellers are starting to get nervous or at least to wonder what's going on?

BTW, if you look at my site today it's gone, should be back this evening. I'll try to post some other stats....

G said...

Take a look at this property...
a 100K haircut!

http://victoria.en.craigslist.ca/reb/805252514.html

http://victoria.en.craigslist.ca/reb/821722464.html

womp said...

Just posted a comparison to April on my blog... here's a quick recap:

Highlands: -20%
Saanich East: -17%
Vic West: -9%
Oak Bay: -9%
Victoria: -7%
Colwood: -5%
Central Saanich: -5%
Esquimalt: -5%

This is in just four months. Try annualizing this kind of drop. :O

olives said...

Womp,what's your blog?

womp said...

http://www.restats.ca

I usually link my name when I post on hhv's blog too so you can just click my name above the posts.

roger said...

Womp,

Nice updates on your site. I found your chart showing the drop from the April peak quite interesting.

Here is a chart showing overall SFD average and median percentage drops from the April peak. Things are changing quickly!!

roger said...

I have updated the Victoria RE Stats Gallery with new slideshows using August data.

Readers might find the slideshow analysing Greater Victoria VREB Stats interesting.

Use the controls at the top of the screen to pause and single step the slides. You can watch fullscreen by clicking the big X.

Disclaimer: These slideshows are intended for RE bears and those looking for a market analysis of the Greater Victoria housing market. Happy homeowners, flippers, speculators and some REALTORS® may find the presentation unsettling.

hhv said...

welcome back roger, ive missed your commentary of late. thanks for the quick work today.

womp, i'll add u to the roll as soon as i get a chance.

roger said...

VIREB releases August Stats
The Vancouver island Real Estate Board put their stat package for August on their website today. There was no press release this time.

Here are some of the stats:

Sales down 26% MOM and 43% YOY

August 2008 sales - 328
July 2008 Sales - 444
August 2007 sales - 574

Average price down 2.4% MOM and up 2% YOY

August 2008 average price - 346K
July 2008 average price - 354K
August 2007 average price - 340K

Parksville Qualicum YOY is now -7% and Port Alberni is -5%. Cowichan Valley at 0%; Nanaimo at 8%; Comox at 11% and Campbell River at 7%.

roger said...

Here is some more info on the Single Family Home (SFH) sales north of the Malahat. On August 1st there were 3205 SFH for sale and only 328 were sold during the month of August. So several thousand sellers will be around this month as we enter the historically slow fall season.

I checked the Parksville-Qualicum area and their average and median prices have been falling every month since April, just like Victoria.

Watch the news over the next few days. Vancouver, Fraser Valley and Okanagan preliminary numbers indicate that they are in worse shape than the Island.

Anonymous said...

Taking the approximate peak average price in Victoria of 605K (April's 630K is likely an outlier), and the 2000 average price of 250K (per Roger's graphs), the factor is 2.42, or 242. With drops to date, the factor is down to 2.2/220.

Comparing this to the Case-Schiller Home Price History data (http://www2.standardandpoors.com/spf/pdf/index /CSHomePrice_History_082653.xls ), we get an approximate (admittedly different methods) look at which U.S. cities have had similar price increases to Victoria. The most similar (for peaks) are San Diego (250, Nov. 2005), Washington (251, May 2006), Tampa (238, July 2006) and Las Vegas (235, August 2006). The Composite 10 index is also close (226, June 2006).

We are just four months from the recent peak. For each of these cities, here is the drop to date and what it would mean for our average (median would be less) prices:
San Diego: 175, 437K in three years.
Washington: 197, 492K in 27 months
Tampa: 175, 437K in 25 months
Las Vegas: 158, 397K, in 24 months
Composite 10: 180, 450K in 26 months

The drop of 20 on the factor in four months is much steeper than for any of the American cities at the start, and is more similar to recent drops in Los Angeles and Miami than anywhere else.

This analysis could of course be messed up by things like inflation, mixes in selling types, etc., but the message for me is that the bottom is dropping quicker at the start here than in the States, so we may see overall faster declines with a bottom date much earlier than we might think (reversing the analysis on the 77 composite 10 index value in 1992 (to account for inflation) gives a true value average price estimate of 325K for Victoria, FWIW.

Roger - a graph of this would be great - let me know if you need help.

- Dumb Canuck

Anonymous said...

Thats pretty good analysis. The fast rate of decline is what I have been noticing too. Since this is only the begining I thought that my numbers wera an anomaly. As it is not very accurate to extrapolate at the start. My preliminary data was showing a decline that ranged between 1.5 to 3.0 percent per month or 18 to 36 percent per year for Victoria.


just jack

boomer said...

From VIREB press release showing 2007 "BUYER PROFILE"
(RE buyers North of the Malahat which presumably would have a higher percentage of relocating retirees than Victoria-also these are last years numbers so they may be drastically changed by now-but interesting anyway)--

Broken down, the Vancouver Island numbers show
32 percent of buyers from within the same area,
16 percent from elsewhere on Vancouver Island,
6.1 percent from Victoria and
1.3 percent from the Gulf Islands.

(AND From the rest of BC and outside of the province:)
14 percent of Buyers originated from Alberta,
7.7 percent from Vancouver,
8.4 percent from elsewhere in BC, 4.4 percent from Ontario,
2.6 percent from the rest of the world,
3.5 percent from the Fraser Valley,
1.6 percent from the rest of Canada,
2.1 percent from Saskatchewan and
Manitoba.

kabloona said...

Times Colonist: Real estate prices slide, listings pile to 12-year high


http://tinyurl.com/65cjyj


Carla Wilson, Times Colonist

Published: Wednesday, September 03, 2008

The average price of a single-family house in Greater Victoria slid to $549,914 in August, almost a five per cent drop from July and the lowest average since spring of last year.

Fewer sales and a rising inventory have had their effect on the capital region's real estate, Tony Joe, president of the Victoria Real Estate Board, said yesterday. "It causes things to soften a little bit," he said.

But don't count on massive price drops, either -- the likelihood of that happening is "pretty slim," Joe added.

S2 said...

Recent news release from the British Columbia Real Estate Association:

"MLS Home Sales Generate $2 Billion in GDP and 28,800 Jobs"

http://www.bcrea.bc.ca/news_room/2008-09-02GDP.pdf

sockpuppet said...

kabloona posted:

Times Colonist: Real estate prices slide, listings pile to 12-year high

Looks like the TC has decided to shift gears in that article

Here is a screenshot of the digital edition which won't make for happy sellers and real estate agents when they open today's paper.

roger said...

On June 2, 2008 Sitting Pretty said:

I'm pasting in my comment on the April stats, because it also applies to the May stats.

The VREB stats for April[May] are out. Doesn't look good for people looking for a crash. That median price graph for 2008 is still comfortably above the 2007 graph on every data point for Victoria, Saanich and Langford.

Yawn.

roger- I'll check back next month, and most likely post the same message


Looks like sitting pretty won't be posting that message any more.

YOY Average & Median Prices

Anonymous said...

Tony Joe sure has got some balls.

Imagine making those statements in the Times Communist today....takes some serious balls as his credibility is quickly getting flushed down the poo poo hole.

It's realtors like this that are doing a HUGE disservice to anyone contemplating buying now or even in the last 3 years......pices will not go down, everyone is moving here, THE OLYMPICS!!!!!!

Damn that shit is getting old. I hope someone is copying and pasting all of Tony's BS realtor speak somewhere. Let's pull it out 3 years from now after the market has corrected 30 - 50%

Guys like this make me want to puke to be honest. Frikken vultures and it's BS like this that is going to hurt a lot of people over the next 2 - 3 years.

Funny thing is....the sheep are still buying into it. Go figure????????

Anonymous said...

Vancouver sales down 50% YOY.

"Good time to buy" said some "ecnomist". Isn't this kind of comments criminal misleading?

What kind of law or regulations do we have to regulate these #@^& people?

greg said...

I don't think too many sheep are buying into it. When sales for August 2008 are around 500 vs 850 in the same month in 2007, a lot of buyers have walked away from the table.

Nick said...

How many real estate agents are operating in Victoria right now? There seem to be thousands of them and I'm guessing these low sales figures aren't so good for their pocketbook...

roger said...

Lots of price reductions this week on PCS. After today's TC article and TV news reports buyers will become more demanding before putting down their cash.

greg said...

I remember talking to the GM of Coast Realty back in 1997 about what was happening up island - around that time the market had dipped and had basically been stagnant for years.

The upper island (VIREB) had around 1500 agents a year or two earlier - it had been whittled down to around 800 by the end of 1997.

So at least half were driven out of the business or gave it up.

The glamour and hype are giving way to a much tougher reality.

Think about it, let's use the VREB average house price of around $550,000, and figure on 7% on the first hundred thousand and 3% on the rest - that's Commissions for the industry of about $20,500 to be divvied up between the broker and the listing and buyers agents.

Multiply that by 300 and you get $6,150,000 less in estimated gross commissions paid in August 2008 versus August 2007.

If you look at the month by month drops in unit sales in 2008 vs 2007, this is a much leaner year for realtors I'm sure.

That's healthy, right?

Libre Esprit said...

"Decline in home sales hits economic growth" from the Vancouver Sun

http://tinyurl.com/57yzkb

"Central 1 Credit union, in its latest forecast, reduced its expectation for economic growth in B.C. to 1.5 per cent this year and 1.8 next year, compared with 3.1 per cent in 2007."

Of course, as bears, we knew that this was not sustainable. And some of us have been there before!

Anonymous said...

"I don't think too many sheep are buying into it. When sales for August 2008 are around 500 vs 850 in the same month in 2007, a lot of buyers have walked away from the table"

500 sheep is still a lot of sheep....when are sheeple going to figure it out????

Last of the bagholders I guess...

Anonymous said...

"500 sheep is still a lot of sheep"

I'm quite surprised by 500 and what 1-2% in prices? I have to admit, not exactly "shock and awe" eh?

Must be time again for a beear!

roger said...

Vancouver stats are out and Mohican has an interesting set of graphs on his Financial Planning blog. Months of Inventory (MOI) now sits at an unbelievable 12 as we head into the slow sales season.

womp said...

We're not very far behind. I'm pegging inventory at 9.88 MOI... so basically 10 MOI.

It'll be very interesting to see what happens this month, as it's getting late in the year. Will sellers panic and keep listings high, or will we get the yearly winter falloff in inventory?

Anonymous said...

You keep mentioning the slow fall season. My limited understanding was that the two busy (relative term) seasons were Spring and Fall.

Is September - November not traditionally busier than the summer months?

greg said...

Fall gets busier, but not as busy as spring...

roger said...

anon said:

Is September - November not traditionally busier than the summer months?

This is true in the snowy parts of Canada but NOT in Vancouver or Victoria.

Sales will follow a downward trend until January 2009. Here are the sales graphs for Vancouver and Victoria. Here is a sales graph published by VREB

Anonymous said...

A flipper I know is trying to sell her flip right now and is planning on buying right away. The realtot apparently has a bunch of offers right around the corner any day now. Talk about stupid.

Anonymous said...

Is September - November not traditionally busier than the summer months?

This is true in the snowy parts of Canada but NOT in Vancouver or Victoria.

Thanks for clearing that up, I was wondering where that bit of 'wisdom' was coming from. Someone pointed out that in the last 10 years, summer selling season is always busier than the fall season except for one year (2002).

Thanks for all the work you do on your presentations, Roger. Good show!

kabloona said...

Speaking anecdotally, of course, I have observed "hot" housing markets in the GTA start as early as february. That's an indication that Spring will be hopping. If the Spring market is slow, then the Summer market will be dead...nothing will sell and people will pull their homes off the market and wait until Fall. This Fall things are dying in the GTA according to a realtor buddy of mine....places like Markham, North York, Scarborough, Etobicoke north of Eglinton, Woodbridge, they are now seeing real price declines along with much lower sales volume. Only "good" pockets ( some parts of North Toronto, Rosedale, Leaside, Forest Hill, Cedarvale) are holding their value and selling if price isn't ludicrously high.

That's the word on the Street from back East... ;-)

Ryan said...

"500 sheep is still a lot of sheep....when are sheeple going to figure it out????"

Remember though that price changes affect current homeowners a lot less than FTBs and people moving in from other markets. Most of those 500 sales are going to be people who are selling one house and buying another in Victoria. They only get burned by the price drop if they buy without a 'subject to sale' clause. Otherwise, the price of the house they're buying and the one they're selling both move in the same direction.

Of course, lower prices overall mean the percentages work out to lower dollar figures for realtor fees and price differences if they move up. But it's nowhere near as pronounced as for FTBs.

Anonymous said...

It looks like people are still buying. Two house are sold in fairly short period around Allenby and Henderson. Maybe they are "reasonably priced:, but the other one, MLS 248108, which is asking 300k$ above its assessed value, still sits though with some price reduction. It would be interesting to see how much it will sell. 500K, I guess.

S2 said...

Does anyone else think that this is going to go down faster and further and be uglier then we even thought possible?

vg said...

"Does anyone else think that this is going to go down faster and further and be uglier then we even thought possible?"


Yes, just look at the markets today here and the US, total washout in progress. Just makes you want go out and buy an overpriced box.

Anonymous said...

And it will get really bad when everyone's five year terms expire in 2010-2013.
They will have to swallow a higher interest rate AND the fact that their homes are down 40-60% in value. Expect rampant bankruptcies and a serious recession to follow.

Anonymous said...

Recession (maybe depression) and high interest rates. And this will help future home buyers how?
Sounds like lose-lose to me.

Anonymous said...

Higher interest rates? Huh? What planet are you on. Interest rates have been drifting lower. The 10 yr bond has been drifting lower. BoE & ECB's next move is lower. The variable rate has fallen lots in 2008 and will likely be lower by year end/Q1 2009 when the BoC lowers rates.

We are soo not Phoenix or Miami. Where are the mountains of unsold vacant homes in Victoria?
Foreclosures are all but non-existent in our market. Whereas they are 40% of the sales in California.

The rental market is also extremely solid. A friend of mine just rented out his super doggy house on a busy street w/a low basement for over $3k.

Do I think that this is just a blip. No. This is the new reality for the next 2-3-4 years. But the average price is not going much lower. I predict it will stabilize in a range between 525,000 to 550,000. (aug avg price was an outlier w/all of the lower priced sales IMHO)

Its the mid 90s RE market all over again.

Anonymous said...

Generally agree wholeheartedly, although I can't completely deny the possibility of a 10% drop over 3 years. It's not fundamentals, it's mood. And the mood appears to be an expectation of mild decline for a year or two.

B2B said...


The rental market is also extremely solid. A friend of mine just rented out his super doggy house on a busy street w/a low basement for over $3k.


This is totally unbelievable based on my recent rental search, during which I looked at dozens if not a couple hundred properties online. Brand new houses are renting for just under or just over $2k. A crappy house on a busy street will not rent for $3k.

Anonymous said...

Better search again, there's as many people advertising suites / houses wanted as there are for rent adds. The rental situation in Victoria is not good from a renters perspective.

roger said...

anon 10:00 said:

Do I think that this is just a blip. No. This is the new reality for the next 2-3-4 years. But the average price is not going much lower. I predict it will stabilize in a range between 525,000 to 550,000.

anon 10:20 said:

Generally agree wholeheartedly, although I can't completely deny the possibility of a 10% drop over 3 years. It's not fundamentals, it's mood. And the mood appears to be an expectation of mild decline for a year or two.


Average SFD prices peaked in April and we are down 13% in 4 months. The median is down about 8% since the peak.

If you want to look in the rear view mirror you will see that SFD's are negative Year-Over-Year (YOY) and the trend has been down for most of 2008.

Anonymous said...

IMHO April was an outlier month on the upside. I bet that August will be a bit of one on the downside (compared to what we will see in Sept and October's avg numbers). So if you say April's number should have been more like $605k and September comes in at $560k, then we are down more like 8%. Time will tell.

I predicted in 2004 to my friends, based on my research of past booms, that the market would peak at an annual avg price of $619,000. Basicly 250% above 2001 levels.
That looks to be a bit high, but I got the $620k level close enough.

Thanks to our mostly prudent bank mort lending we just won't have the same issues as down south. eg pick a payment, heavy use of interest only, teaser rates that differed much more than a 1% or so.

Plus on the supply side, we don't have the vast unsold product sitting vacant.

In past downturns, the annual avgerages just drifted slightly lower over a number of years. I expect the same thing here.

We just don't the issues like down south in both the vacant supply/demand and we are not going to see increases in interest rates for a long time.

There are 'some' excellent deals out there for those who dare.

Anonymous said...

Well said.

das said...

A total of 512 homes and other properties sold in September through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) down minimally from the 517 sales in August. There were 632 sales in September of last year. The number of properties available for sale at the end of September was 4,754. That represents a 41 per cent increase compared to September of last year.Victoria Real Estate Board President, Tony Joe, says despite the recent global economic uncertainty, the latest sales and price figures are encouraging. "These figures attest to the continuing stability and strength of the local real estate market despite the troubling economic news that we hear so much about," said Joe. "While the average price of single family homes sold last month was virtually unchanged from August and the average price for townhomes dropped slightly, the average price of condominiums sold increased last month," Joe added.

------------
Mobin

Link bulider