Victoria, BC real estate blog - "because we never know when interest rates will be increased to stimulate the economy" ~ VREB
what a bad place to be - underwater and job loss in your near future.
A third of Canadians see lower house prices: survey“Almost one-half of those surveyed gave a neutral answer while the number who thought prices would go up fell from 40 per cent to 20 per cent,” it said in a news release. “Westerners, who have endured particularly hot housing markets, are most negative, and in British Columbia, 48 per cent of those surveyed said they expect prices to fall, far above the national average.”
because it is sub-prime that is responsible for the meltdown in prices
No it's not. Prices fell because they were too high. Subprime is just a scapegoat for those who claimed that prices don't matter. “The reason prices are falling is because of gravity,” Thornberg (pictured here) told the Register after delivering the UCLA Extension Real Estate Forecast at the Skirball Cultural Center in Los Angeles. The run-up in home prices over the past decade was “ludicrous,” he said, noting that the increase wasn’t accompanied by a comparable increase in income.By Thornberg’s math, a typical Southern California house payment equaled about a third of its owner’s gross annual income in 1999. By 2007, it equaled about 70%. “That’s why prices are coming down. They have to come down.”Thornberg on California prices70% eh? That number sounds familiar.
patriotz,agreed... i was practicing my online tongue in cheek ineffectively
Thanks for the h/t hhv. Did I miss the Times Colonist article(s) on the construction layoffs at Bear Mountain? I tried searching the TC online but couldn't find much.Have the links to these articles been posted on hhv's or other's blog? If so, could someone direct me to them. ThanksS2
Its much more than gravity. Sure, our prices in relation to income were and still are ludicrous, yet other places like Hawaii and Miami had even higher ratios. Why should our market not have continued on to reach those high ratios of ten or more?Our prices have historically been in the 3 to 4 times gross income range in flat markets and during the last few years have risen to 6 or more. But this is just a ratio, it does not mean that the Joe Six-Pack was buying his first home at 6 times his earnings at the 7-eleven store. What actually was happening is that people were rapidly building up equity in their homes and with the lower rates and large home equity, refinancing their homes and buying a second, third or fourth home. Others were simply moving up the property ladder and using the larger down payment from the sale of their home. Others were speculating on pre-construction housing with 5 percent down and making fortunes in real estate and others were just using their home equity lines of credit to buy vehicles, vacations or other luxuaries. And some were giving down payments to their children.And the market prices kept rolling onwards and upwards. This market eventually exhausted itself when the spread between starter homes and middle income homes became too large for people to move up or make a profit in the market. It was not necessary for interest rates to dramatically change all that was necessary was for interest rates to marginally increase over a period of time or the pace of home prices to slow.We reached our peak in market activity well over a year ago. Since then the trend has been for lower sales and more listings. Eventually, prices had to begin their decline.The key to why prices continued to the ludicrous levels is to do with the rapidity of the price increases as well as events that occurred in the local market that would stimulate demand and reduce listings in order to create a shortage real or perceived.We are now on the down cycle. Writing cheer leader articles or trying to pump the market is not going to turn this market. How far prices are going to decline can not be determined. Perhaps Patriotz will get his house at 150 times rent. I don't know how good of a deal that would be if prices keep falling after he buys. But thats his method of madness. I'll buy when its right for me, and since everyones circumstances are different, that home price may not be the same as yours.
Well my payment is under 25% of our gross income, but it still sucks to be massively upside down. Hi folks, underwater homeowner here. I see you are enjoying the carnage. Glad I could provide you with some entertainment. I take it you are all on the sidelines waiting to buy? Or are some of you in the same boat with me?
miss m - I'm on the sidelines for now. I agree your situation sucks, but what really is bugging some of the posters here is the cheerleading for the local market (which has clearly turned), and where people who are buying and won't have relatively small payments to gross income will soon be underwater and overwhelmed.Hyping the local market right now to the last couple suckers who don't realize what's happening just seems indecent at best.
Hi S2,I can't take any credit, as this was posted elsewhere on a blog somewhere. But this is the only link I've seen for the Bare Mountain layoffs:http://baremountain.notlong.comI imagine that (a) the journalists at the T-C are such shitty journos that they simply haven't picked up the story, and/or (b) Len Barrie or whatever his name is, and his pals, have called in a favour at the T-C to not run the story, so as not to "unduly alarm the populace."
Yeah there's pretty much no hyping left for the LA market, everyone knows it's a disaster. The LA Land blog at LA Times used to be interesting with a big tug of war between those cheerleading for real estate and those cheerleading the crash. It's gotten boring lately now that everyone agrees the worst has come.
Mortgage payment under 25% of gross and yet "massively" underwater? I'm trying to discredit that comment but every time I start I can see how someone could get themselves in trouble down the wrong path.People need to be realistic, and not take the advice of "professionals" talking them into the deep end. (note the extreme sarcasm on the use of "professionals.")
@anon 5:37 - you're more than welcome to read my story and if you visit my main blog you can pry into the gory details of my finances. I'm no paragon of financial virtue, over the last two years I paid off $20k in credit card debt and a $30k car loan. I'd be alot further ahead if I hadn't gotten into so much debt. Even so, if I save $1000 a month it will take over 8 years to right the ship. I paid $345k in 2005, way below the median at the time and the lowest priced house in the area. My neighbor's house is now listed at $205k and no takers. I was a first time home buyer, I put 5% down. Anything else you'd like to know?
s2 - it was me - the story was on Vibrant Victoria - not yet confirmed - could be a rumour, but also seems to have some reality.
OT - Calculated Risk on the Vancouver Condo bust (comments are a must read):http://calculatedrisk.blogspot.com/2008/11/condo-projects-postponed-in-vancouver.html(parsed version of URL)http://calculatedrisk.blogspot.com/2008/11/condo-projects-postponed-in-vancouver.html
Perhaps Patriotz will get his house at 150 times rent. I don't know how good of a deal that would be if prices keep falling after he buysIt doesn't matter if prices keep falling, because at that price point buying is cheaper than renting. I am not a speculator. I don't care about future sales prices.Nobody can call a market bottom, but it's easy to calculate when buying is good value.
Miss M:My comment wasn't directed at you; not everyone in Canada or the USA will be underwater and some will be ready to take on another home when the time is right. As I said, people need to not follow "Professionals" into the deep end. It really is a personal choice when we sign those papers. These bankers, brokers, RE Agents and "financial planners" (what a joke), have no interest in your future. It sounds like you could use a trip to Susy O.
Trying to purchase a home through a mortgage broker and a Canadian bank. Have my 25% down, 780+ credit score, decent paying long term job, and property assessment to show that the house is worth what I am paying for it.I have been going back and forth with the broker now for 3 weeks as the bank keeps asking for more and more. Want to see pay stubs, tax returns going back 3 years, print-outs from my bank account showing I have enough money to pay 3 months mortgage payments, letter from employer, etc, etc.I have bought lots of houses in my time and this is by far the hardest deal I have ever had to close. No wonder people are not buying.
Anonymous 9:03 "property assessment to show that the house is worth what I am paying for it"Could it be that the bank doesn't believe that the house is worth the property assessment?
Trying to purchase a home through a mortgage broker and a Canadian bank. Have my 25% downThat's your problem right there. That's an uninsured mortgage so the bank is on the hook if you default.Go for 5% down, that's CMHC insured so the bank won't care if you can pay or not. :-)
Just came back from a very sobering discussion. Friend of mine runs a very small reno operation, just him and one other guy, they do mainly high end jobs. This past week his phone has been ringing off the hook, not with requests for quotes, but requests from "guys he knows" in the industry looking for work. The speed with which this is all unfolding is incredible. No wonder why no one thinks it's like 1982. It's happening faster than people can recognize.
I have a question about mortgage insurance.If you have a CMHC-insured mortgage, and you decide to mail in the keys because you are underwater on your loan, why would the lender come after you?Once they sell the property, wouldn't the CMHC cover the difference between the sales price and the balance on the mortgage? Isn't that the point of mortgage insurance?
The lender doesn't come after you, CMHC does. They are assigned the lender's claim against you.
"The speed with which this is all unfolding is incredible. No wonder why no one thinks it's like 1982. It's happening faster than people can recognize."It's deja vu all over again,like Yogi Berra once said. This going to be worse than 1982,the lending markets are all messed up for a long while which was never seen in 1982. If we see daylight by late next year I will be suprised.What is suprising is my broker is always working on new deals and there still is a pile of deals coming at him every day and good ones too but the prices are getting way cheaper as well as the terms. The trick is getting the ones that are financeable in this market. I am also of the belief we will get a multi week/month bear market rally if not soon, in the new year. This will deke many out that all is OK then the rug comes out again. Greed will always be in play,it just takes a rest once inawhile.
this going to be worse than 1982,the lending markets are all messed up for a long while which was never seen in 1982.Remember also that mortgage rates took a huge drop from 20%+ in 1982 to 12% in 1984 which provided a big boost to the recovery of the RE market.Now we have a bust with mortgage rates already low. They are not coming down, no matter what happens to the BoC rate.
For those of you that follow the markets, here's:Two potentially massively globally impacting financial events that may be transpiring in the very near future (few days to few months).1. COMEX gold default. I've mentioned that one on here before, so I'll just provide a couple of links for those that haven't heard of it yet. The pundits I follow do *not* acknowledge this event will happen for the Dec contracts, so perhaps this is still in tinfoil hat territory for now, but I wouldn't put it completely out of question. The nearest event horizon for this is Nov 20th, 2008. If it doesn't happen (COMEX fails to deliver physical gold based on their sold contracts), then it may occur further down the road as the markets deteriorate further and eventual Commercial buyers ask for physical gold delivery (for which COMEX doesn't have enough gold). Results will be a trigger for a USD and world wide currency crisis like we haven't seen yet:LINKS:a) Youtube Video clip from BNN (skip to 14 minute mark)b) 'Market Oracle' Summaryc) iTulip acknowledges Gold will massively revalue eventually, but does not mention COMEX default in article. Be sure to read the user comments, lots of goodies there too.2. The Multi-Trillion *planned* $ynthetic CDO blow-upI'll admit I'm still a bit fuzzy on this one as the article is somewhat technical, but it seems as if some banks knew all along EXACTLY which companies were going to fail (AIG, GM, Fannie/Freddie, etc) and created complex investment schemes using off-shore accounts so that when enough of these companies failed, they would rake in cash to the tune of TRILLIONS! Just imagine the global impact this baby will have. This is a timely article because if the big 3 auto's are left to go bankrupt, this could be the trigger event for these Synthetic CDOs. a) A Tsunami of hope, or terror?And you thought the DOW at 8100's was the crash... I'm going to go hide back in my bunker now :PMr.4AM
Dumb Canuck,Bank orders the property assessment to make sure that the value of the home is accurate and that they are not being asked to finance too much.
"I have bought lots of houses in my time and this is by far the hardest deal I have ever had to close. No wonder people are not buying."Amazing, things are actually going back to the good old days where you had to be accountable for borrowing enough money to bankrupt you. I am getting sick of these news reports saying Canada was more responsiblle in lending and is why we have no problems. I know several couples who would have never qualified under previous lending rules and now they are maxed out on all credit cards and LOC's.
I went to the UVic organized event last night.Markets, Money, and the Meltdown: the President's Panel on the Economy, with the panel ofTony Gage, JEA Pension System SolutionsRobert Jawl, Jawl Properties Ltd.Basma Majerbi, Faculty of BusinessTom Siemens, Royal Bank of CanadaGraham Voss, Department of EconomicsI thought the faculty members did a great job being scientific in there presentations and explaining the numbers. The VP from Royal Bank seemed to be towing the line and kept saying things like, "We have never been busier providing credit". Robert Jawl actually said our climate and golf in the winter will help mitigate real estate price declines. The only non-academic I respected at on the panel was Tony Gage. He didn't come across like a poorly written press release.Did anyone else go?Futura
Thanks for comment on that meeting. Tony Gage was on the news yesterday and seemed level headed.I want to know why HHV was not on the panel ? :)I think Jawl owns half of downtown so there is a tad bias going on there. Royal Bank seems to be having some problems of late. Did they say where all this lending in town is supposed to be going to ? not to the ones with the holes in the ground thats for sure.
s2 - it was me - the story was on Vibrant Victoria - not yet confirmed - could be a rumour, but also seems to have some reality.Dumb Canuck - I have a close friend who is a carpenter at BM who was laid off last week. So I can't confirm the numbers, but I can confirm directly (and sadly) that at least one good carpenter with no personnel issues has been laid off from Bare M.
From today's TC. Another "special" to the TC that is predicting a stock market recovery. Of course they don't say when, or if they called the recent crash...http://tinyurl.com/62uy22
Latest Real Estate NewsB.C.'s got the real estate bluesHousing Slump Hits Canada as Seller Offers C$100,000 Deal Bonus B.C. resigned to real estate price declines
"Pollster Ipsos Reid took a baseline pulse of British Columbians feelings about real estate. Some of their responses are below.- Currently, is it a good time to buy a home?LOWER MAINLAND61% Very/somewhat good.35% Not very/not good at all.REST OF B.C.57% Very/somewhat good.37% Not very/not good at all.- Currently, is it a good time to sell a home?LOWER MAINLAND16% Very/somewhat good.80% Not very/not good at all.REST OF B.C.21% Very/somewhat good.75% Not very/not good at all."I honestly thought we'd be collectively smarter than these numbers suggest.
I was at the Market Meltdown panel discussion last night, as well. I thoroughly enjoyed it. I agree that the RBC guy felt like he was giving a sales pitch the whole time, although I enjoyed his speech. I didn't know much about how banks work and found it helpful. I also thought Jawl was good - he seemed objective despite his bias. He may have made the golf comment, but he also didn't pull any punches about the fact that things will go down.What I took from last night was that this "dream" some of us have of seeing house prices lower to an affordable range is not actually going to happen. Some minor drops, sure, but nothing like what most of the posters on here want to see. Maybe I'll eat my words, but nobody can predict it, really.
I heard that this year, nobody got the nobel prize in economics, too.
What I took from last night was that this "dream" some of us have of seeing house prices lower to an affordable range is not actually going to happen. Why not?Median at $375,000 would be in the historical range - it only needs to drop another $120,000 to get there....
The City of Victoria comprises 10,484 single family homes and 10,101 condominiums (June 2005) within an area of 2,335 hectares and has a population of 78,659 (2006).Currently, there are 123 single family homes for sale in Victoria. Since the first of the month there have been a total of 4 homes that sold.As for condominiums, there are 369 for sale and only 13 have sold over the last 18 days.Yes Wenna, with numbers like these you can predict the future for Victoria Real Estate.
Jack - how many single family home sales for the entire VREB area so far this month?
Thanks Roger for the above post on the $100,000 bonus.As I read this article. The builder originally listed at 4.3 million then reduced to 3.99 million and now states that if he lowers the price 700k to 3.3 million he would almost be giving the property away!Okay folks, thats a million dollar difference from his original list price. Note, he did not say that he would lose money - just that he would be almost giving it away.HEY PEOPLE, what the heck have these builders been making over the last couple of years. A miniumum million dollar profit on a house.The bulls feel that prices can not drop much mainly because housing is a tangible item made up of brick and mortar. But "poof" what about that million plus dollar profit for owning a cell phone and a hammer.
Wenna said:What I took from last night was that this "dream" some of us have of seeing house prices lower to an affordable range is not actually going to happen.Some minor drops, sure, but nothing like what most of the posters on here want to see. Maybe I'll eat my words, but nobody can predict it, really.Wenna - Welcome to the blog. I think that this may be your first post. The correction is already happening and you can see for yourself by taking a look at the stat slideshows in the Victoria Stats Gallery.These slides showing single family home prices falling and sales tumbling prove that a correction is well underway. A 10% drop in median prices in 6 months looks good to me!! And when you consider the high MLS inventory and low sales it looks like the trend will continue.A drop in prices of 1-2% per month might seem like minor corrections but it sure adds up over a year.
Just Jack,Thanks for the numbers!!Looks like I will have to update this slideshow as sales keep tumbling. Prices will probably continue to fall with few buyers and lots of sellers.
Anonymous at 9:03 PM said:"Trying to purchase a home through a mortgage broker and a Canadian bank. Have my 25% down, 780+ credit score, decent paying long term job, and property assessment to show that the house is worth what I am paying for it."I was speaking with a loans officer at the Bank of Montreal. She said that they started a new mortgage product on Monday which is a five year mortgage at 5.25%. Which is about $517 per $100,000 on a 35 year amortization. I doubt that you'll find a broker beating that rate. So a little bit of extra work digging out those documents may not be such a bad idea.
Your welcome Roger.Because of the low sales volume, I started playing around with a little Case-Shiller style analysis. I only did some random testing of recent condo sales, but it looks like condo prices are rolling or rewinding faster than the median and averages show.Unlike Shiller, I don't have Yale University doing my research and data crunching. It appears that condominium prices may have rolled back to mid 2006 prices.
You will often hear real estate agents and VREB's Tony Joe say that sales are down compared to last year but 2007 was a record breaking year. They then go on to say sales in 2008 are not bad compared to other years.Well here are the facts - judge for yourself:House sales 2005-2008House sales - 6 year average
Okay, I'm just goofing around with numbers here and there is no scientific validity to the following, but say for example:The total sales from the real estate board for 2007 was 4,464We see now that October and most likely November sales are half of what they were in 2007.If we extrapolate this drop in sales activity out to 12 months, that would make an annual number of sales of half of 2007 or 2,232.From the real estate board's historical stats site, the last time annual sales were this low was in .........1982Not scarry enough how about:Considering that our population has increased some 25 percent or more since 1982, on a per capita basis this would be the worst real estate market in the Victoria real estate board's recorded history.jj
Ya, I'm feelin real bad about real estate ownership at the moment, I would have much rather sold my home and put my money in stocks!!
Just Jack - Case Schiller is based on resales of the same home. This is very different of course than VREB stats which are (i) not resales of the same house and (ii) include both new sales and resales. I suspect that the VREB new sales are at time of contract signed, not when occupancy occurs. In any case, VREB data will be severely skewed by the amount of new condo and townhouse construction as well as the amount of home improvements done. This implies statistically that the resale value of the identical house will have dropped a lot more than the VREB data shows. Additionally, given the low number of sales now, the median gets increasingly subject to distribution of sales in a single month, not the overall trend.
"What I took from last night was that this "dream" some of us have of seeing house prices lower to an affordable range is not actually going to happen. Some minor drops, sure, but nothing like what most of the posters on here want to see. "A few hopefulls with financial interests at an open forum do not make a good case. Where was someone with a bear point of view ? I didn't hear any talk of outragous prices and affordability....sounded like a hand holding type of meeting for those "in the money". I am not sure how the current market meltdown can not hit us with some serious force over the winter. I saw it in 81/82 and I am quite shocked how some can't wrap their mind around this thought. When serious world economic events happen no one is ever immune. A home in Phoenix with a pool by a golf course is $150,000 but a crack shack in Victoria is still pushing $400,000. Why is this thought so unthinkable ? I guess we have a whole generation that has never lost on real estate,they have to learn you can never count on paper profits unless you take them.
One more thought I meant to say. If the stock markets hit 2003 levels today then why should real estate be any different ? Thats almost a 50% decline which is unthinkable in trillions of dollars of value out the window but Victoria houses should stay basically the same with minor drops ? not likely.
but vg, i don't think they can go down much, i mean people can't afford to lose that much, so they just wont sell until they get the price they want, so i think you're wrong....i love the "i don't think" reasoning we see perpetuated without anything to back it up.
Anonymous said Ya, I'm feelin real bad about real estate ownership at the moment, I would have much rather sold my home and put my money in stocks!!I'm no expert on stock markets, but I'm making quite a good return these days. A couple of months back I bought a reverse index ETF. I'm riding this stock market tumble all the way down. 35% return on my money so far.
Anonymous said "Ya, I'm feelin real bad about real estate ownership at the moment, I would have much rather sold my home and put my money in stocks!!"Everything is deflating, with the Victoria housing market more or less at the tail end of things, just as it was on the way up. If people can get rich on paper they can get poor on paper.Wait until the masses get their retirement plan statements early next year. LOOK OUT!
Today's Real Estate NewsBring on the Real Estate CrashSpinning in the real estate cycleReal estate opportunities 'are still available'
Ya, I'm feelin real bad about real estate ownership at the moment, I would have much rather sold my home and put my money in stocks!!It's important to refute this, as Geek has already done, since it is a prime example of the common but ignorant meme that you have only two places for your money: houses and "stocks". It also ignores, of course, as Geek has pointed out, that when the stock market is in a secular bear market (as it undeniably is now) you can make good quick money by buying bear ETFs.But also, if you had sold your house a year or two ago, and kept the resulting money in say 50% cash, 20% gold, 20% carefully selected bonds, and 10% carefully selected currencies, defensive stocks, and perhaps bear ETFs, you would be just fine today and in a much better position to weather the storm than relying solely on a Victoria house to get you through.
One of Roger's listings actually states, "In the sought-after Glanford area". Sought-after by the grow-oppers, maybe.
And here's a local realtor who missed a few Spin Class lessons...MLS®: 252628
As I mentioned on Prarieboy's site:'Looks like we were wrong guys, prices will only go through a shallow dip according to Scotia...10-15%. They do at least say that Western Canada will take the worst of it.http://tinyurl.com/64mbvy'
LOL Anon nice find!"PRIDE OF OWNERSHIP? You won't show off this 10 bdrm rental property to your friends. The only thing your friends will envy is the positive cash flow it generates. If the $399,900 purchase price doesn't scare you, call now for details on an exceptional investment. "10 bed, 2 bath crackhouse for sale. My god. I wonder what the rent is, just out of morbid curiosity? And why in god's name would anyone sign up for that when they could buy SJR (Shaw) shares that also generate free cash, but from a slightly larger and more stable population (TV watchers and internet surfers in BC and Alberta) than 10 crackheads???
Here's Adrienne Warren, Scotiabank senior economist's prediction back in May."...she is forecasting a "soft landing" for the Canadian housing market, with somewhat lower sales and construction, and period of flat inflation adjusted home prices."These experts consistently amaze me in their ability to ignore affordability as a factor which could affect house prices.
These experts consistently amaze me in their ability to ignore affordability as a factor which could affect house prices.I've noticed that too. The fact that non-current owners (including all of those teenagers to toddlers who'll all be growing up soon enough) can't reasonably afford to buy a house doesn't seem to matter or come into consideration for these guys.
Don't you know rich boomers are going to buy them all houses with the excess cash flow of their HELOCs?No problemo, jr.
"I've noticed that too. The fact that non-current owners (including all of those teenagers to toddlers who'll all be growing up soon enough) can't reasonably afford to buy a house doesn't seem to matter or come into consideration for these guys."They don't care about the future,they care about "NOW" and their paper profits and people with big bucks moving here to buy all the high end housing being built .... or attempting to build is a better term. They don't get that a community is made up of multi age levels. Who is going to buy their shack when they want to downsize in 5-10 years and it still costs 60% of their income for a crap house ? When Tony Joe publishes that pile of self centered garbage then there is no doubt what he wants and that is not a correction no matter what.Hey Tony, the stock market tanked almost another 800 points today and any concern is unwarranted right ? utter crap.
Thanks, Roger. That was my first post. I've been reading the archives and have found this blog very helpful in educating me in Victoria real estate. Your charts, etc. are particularly helpful! You do a great job!I cashed out of another market just before things started going down, so I am currently a renter with cash in the bank, waiting to find a good house for a good price. I felt that the presenters on the panel the other night who had an agenda didn't hide it very well, but what about the economics professors who still predicted a rise in GDP next year, albeit a much slower growth than we've seen previously? They were obejctionable, I should think. What I am noticing in this choatic market is you can always find an opinion out there that supports whatever position you want to take. If you want housing prices to go down 30%, you can find something to support that. If you want to believe things aren't really that bad, you can find support for that. It's very hard to know what is really going on!
Wenna said:What I am noticing in this choatic market is you can always find an opinion out there that supports whatever position you want to take. If you want housing prices to go down 30%, you can find something to support that. If you want to believe things aren't really that bad, you can find support for that. It's very hard to know what is really going on!Like you I sold my house in 2007 before the RE market peaked. I am renting now and will continue to do so until I see some stability in the RE market. SFH median prices have fallen every month since May, sales are way down and inventory is at multi-year highs. Why buy when the market is dropping?We are in uncertain times and no one has a crystal ball that works!! I am very wary of anything economists, politicians, investment analysts or other "experts" say about the economy. Most of them will never yell fire because they are more concerned about maintaining calm and protecting vested interests than helping you or me preserve our assets.However, in this economic downturn things are different. The joker in the pack is the Internet where alternative views can now be expressed and folks can discuss things with others in order to share knowledge and ideas. The MSM, politicians and corporations no longer have control over information flow.IMHO in 6 months we will see some of the smoke starting to clear. The state of the economy will be better known, real estate trends will become obvious and the stock market will likely have found a bottom. But heck - what do I know? I am just a fuzzy real estate bear!!
VicREBear commented...One of Roger's listings actually states, "In the sought-after Glanford area". Sought-after by the grow-oppers, maybe.Looks like it got snapped up
Yeah I snapped that one up. What a deal! Don't you know the average price went up last month? What are these sellers thinking, lowering their prices - we're insulated here! Buyers are just on vacation since August.
Tony,Thanks for dropping by and making your first post. I guess you know a deal when you see one. I only hope that more professional REALTORS® follow your example and personally buy up lots of properties over the next few months. Nothing would make the bears happier than knowing that your colleagues are true real estate believers®. You will also make local mortgage brokers and bankers happy too.
A local experienced REALTOR® in Victoria answers the question When should I buy Real Estate”Real Estate; Now Is The Time To Buy!We often get asked “When should I buy Real Estate”? We have always had a standing answer for that: It is always a good time to buy Real Estate.The consumer has to understand that Real Estate is a long term investment. If you buy a house today, in 25 years you will have it paid off. If you don’t you are still paying somebody else’s house off. You pick.
I heard that this year, nobody got the nobel prize in economics, too.Are you calling Paul Krugman a nobody, or are you just uninformed?He was right about the housing bubble in 2005 BTW.
The world is falling apart.. and all this as a result of greedy RE speculators. Rejoice oh you Victoria speculators, your days are numbered and I and many others will relish your misery and losses. You are evil (having deprived so many young families from owning a home as you made a house a speculative instrument) and will burn forever in (financial) hell. Good riddance.
patriotz, it was a (very) oblique response to the poster before me who claimed that "nobody" can predict future prices.My point was, a certain "nobody" who correctly called the deflating housing bubble also won the Nobel prize this year.
Today's T/C:"Tactex Controls Inc., established for 10 years using Kinotex -- a smart fabric initially designed for the Canadian Space Agency -- has suspended trading on the TSX Venture Exchange, dissolved its board of directors and laid off 10 research and development staff."Captain Picard: "Gordie! Remodulate the shields! The Borg are breaking through!"Chief Engineer Gordie LaCampbell: "We have diversified our economy, I think we won't see nearly the impacts that we might have expected."
Some fantastic price reductions this morning on some of my "favorite" properties. 250881 - shaved another $35k off. Now below assessment! A first for Fernwood?253895 - dropped $39k to $330k. Someone must have tipped them off that townhouse prices in this city are stupid.Whee!
Today's NewsBank adds to opinions on shallow housing dipPrices predicted to drop up to 15% nationally, more in B.C.The latest assessment from Scotiabank Economics predicts price corrections in the 10-to-15-per-cent range from peak to trough nationally, though Vancouver and B.C. markets -- where prices soared highest -- will see more significant drops.Warren's assessment, in her Real Estate Trends report (pdf) released Thursday, follows forecasts by the Canada Mortgage and Housing Corp., B.C. Real Estate Association and Central 1 Credit Union, which forecast B.C. prices to fall between nine and 18 per cent before bouncing back.
Chief Engineer Gordie LaCampbell: "We have diversified our economy, I think we won't see nearly the impacts that we might have expected."Assistant Chief Hansen: "No worries Chief, we will baffle them with the "no recession in BC techno bullcrap and that will pacify them til the election at least, after that sir our ship may be taking on some water to the "port" side". ;)
"Ireland 167%U.K. 146%Spain 117%France 108%Australia 92%Canada 61%Italy 61%U.S. 50%Germany -20%Japan -30%"I guess because we didn't rise as high as Ireland, we can't fall as far as the US. Oh, wait...
patriotz, it was a (very) oblique responseOh OK, I guess I was a bit too thick for that one. :-)
The run up in prices first began in the inner area of Victoria and steadily expanded to the outer communities like Sooke. In 1999 you could buy a character home in Oak Bay for $375,000. By the end of 2007, $375,000 would buy you a starter home in Sooke.For the last 6 months the market has been contracting in the reverse order as mentioned above. Property values have been declining in the outer areas first which has lead to a decline in the inner city.It seems to be taking around six months for the prices in Langford and Colwood to reach Victoria.Let me try to make this point a little clearer. If one was to look at today's price of a 1970's basement entry home in Langford or Colwood. In 6 months from now that would become the price of a similar home in style, age and condition but located in Gordon Head.
Wow, has anyone checked out how many rental listing there are for Nov 21st alone??Maybe there was a rental bubble too, that is now collapsing? :)
I was looking at prices a few days ago and wondering if rents have gone up yet again. 1 bedroom for 800 - 900 appears to be the norm.
Rents seem to be high, but I've seen the same ads posted again and again. One place that I almost went to see in October was relisted a couple days ago. So maybe it's just a case of a lot of unrealistic ads on Craigslist and not what people are actually willing to pay.I haven't gone through the TC yet because I'm still in my lease, but last time it seemed like the TC has the serious ads and Craigslist has a lot of amateur crap. Like the person trying to rent a 2BR in Reflections for $1800. The landlord may have been stupid enough to buy it for that, I doubt any renter will be similarly inclined. That's more than I pay for a whole house, that's not on the parkway.
"John Fong and his wife almost bought a home in a middle-class Vancouver neighbourhood this summer. But after putting in their conditional offer, they decided to shelve the purchase.Speculation was already swirling about falling housing prices, and friends were encouraging them to hold off. The couple, who own a townhouse in nearby Burnaby, withdrew their offer."Both of us feel really good about that," the 36-year-old accountant said. "We think that prices will decline even further. If prices are going down, why not wait? That attitude - combined with the deepening slump, strenuous efforts to reduce the vast amounts of debt sloshing around the economy and a strong aversion to risk stemming from the stock-market plunge - is helping to pave the way for a deflation threat, the most destructive and hard-to-fix of all economic calamities."Consumer behaviour is deflationary. There's no question about it," said Vitaliy Katsenelson, director of research with Investment Management Associates in Denver."http://tinyurl.com/5oy27k
Agreed Ryan. I reckon you're dead on.
Maybe there was a rental bubble too, that is now collapsing? :)You cannot have a bubble in rents. A bubble exists when people are buying something in expectation of reselling it for a profit in the future. Rents are paid for in real time. You cannot pay for a future rental today and resell the right to live in it to someone else.Just because something is getting cheaper doesn't mean it was in a bubble. It can be plain old increased supply or reduced demand, both of which I think we are seeing in the rental market.
Patriotz,Have you ever heard the the word pedantic before?
Wouldn't that descibe the mailman Cliff off Cheers?
"Just because something is getting cheaper doesn't mean it was in a bubble. It can be plain old increased supply or reduced demand, both of which I think we are seeing in the rental market."The supply has probably increased slightly, but the demand has not changed. Still basically a "0" vacancy rate. Even if it went to 5% (which is probably a normal structural rate) rents would not stop going up; unless we are prepared to move once a year our rents are not going down.
As others have noted, the rental market really consists of several segments which have their own dynamics.The high-end condo rental market has a high vacancy rate due to unrealistically high asking rents, and those asking rents are going to have to come down to rent them out, because the owners can no longer afford to let them stay empty.Note also that this segment does not show up in the official statistics.I agree that nominal rents in purpose-built rentals are not going to come down, they never do.
Never is an imprecise term...
Great article in the Globe and Mail today comparing our housing and stock market crash with that of Japan's in the 80's. Key point:When the bubble finally burst, it was a wipeout. The Nikkei dropped by two-thirds over the next two years. Commercial land values in the big cities fell by 80 per cent between 1991 and 2000. They never returned to their bubble levels. Neither did stocks. Today, the Nikkei stands at one-fifth of its 1989 peak. If the Toronto stock exchange were to perform as badly, the index would stand at 3,000 in 2027, compared with about 8,000 today.Stocks and real estate always appreciate over time?
I saw this ad mocking new condo buyers in the TC today. Is this how professional REALTORS treat the real estate consumer??
Indeed that ad exposes the real contempt realtors have for their customer base.
Tony Joe,I read your post a few days ago and thought you might like to use this picture in your next VREB ad. Truth in advertising is a good idea.
Wow, has anyone checked out how many rental listing there are for Nov 21st alone??I watch the 3 bed units on Craigslist. In the past 3 years of causal monitoring it usually averages about 100 listings at any given time. Right now there are 346.I especially like this beauty for $3500 / mo. http://victoria.en.craigslist.ca/apa/925003617.html Not in my rental bracket but much better than the mortgage on 1.2 million to purchase! (see the link on that page to the sales webpage)
I think that house is on my PCS. for sale
I especially like this beauty for $3500 / mo.A very generous multiple of 200 gives a value of 700K, and yes we will see the market price reach that. Having high-end properties for rent and for sale at the same time was one of the early indicators of the US bust.
Look like someone is getting serious about selling:PRICE REFINED BY $69,000! HOME WARRANTY INCLUDED! Seller wants this home sold - All reasonable offers will be entertained!! Assessment is 285.5K - that looks low to me.I'm amazed. SFH on a big lot for 380K in just the area I'm interested in, and this bust is only six months old. Looks like late 2006 or early 2007 pricing.But I have no desire to buy for a couple of years anyway (personal reasons). Should be able to get a much nicer place for less money then.
Is that what you're waiting for???1,000 sq 1945 box on Shelbourne St near Hillside for $369,000? What would that thing rent for? $1,100? Ambulances every 30 seconds, transient high rental area, the only thing going for it is that it's not mine!! LOL It's nice of them to drop the unrealistic price by $69,000. I would hardly call this a Hair cut though and would put that New price at about Nov 2007 when real prices stopped going up. Let me know when that crap shack hits about $180,000.Move away while you still can!
Oh sorry, it's $380,000 - even better LOL.
Look at what that buys you in West Palm Beach - maybe not the best place on earth, but close! (And a little nicer than Shelbourne st, no?)http://tinyurl.com/5f9zsgWe've got a long way to go folks!
phil, who would want that place when we can have a cozy little crack shack on the Gorge for the same price ? ;)Victoria needs a major reality check.
Is that what you're waiting for???Well no. What part of "Should be able to get a much nicer place for less money then (i.e. 2010)" didn't you understand?I felt that it was significant that a house on a big lot in Fernwood was listed for under 400K, that's all. This snowball is just starting to get rolling.
"Is that what you're waiting for???Well no. What part of "Should be able to get a much nicer place for less money then (i.e. 2010)" didn't you understand?"I guess it was the part where you also said "But I have no desire to buy for a couple of years anyway (personal reasons)."This suggests that but for your personal reasons, you would find this an attractive purchase. Maybe you didn't realize that it was a crap shack on Shelbourne. It's still no indication of falling prices unfortunately.
mr.4am,your comments on gold is somewhat right (around Nov 20). now the price is going up!!
This suggests that but for your personal reasons, you would find this an attractive purchase.What part of "Should be able to get a much nicer place for less money" is synonymous with "attractive purchase"?I was saying that today's prices are a moot point because I don't want to buy now.I would not buy any house in Victoria at today's prices, even if I wanted to buy now. Those who have read my postings know I fully expect a bust comparable to the 80's.
Thank you for making your comment a little clearer.
No problemo. For the record, this house is the kind of place I would be willing to pay 350K or so for, and I think I'll get the chance.
B.C. apartment sales drop by half November 24, 2008 at 9:53 AM ESTThe commercial market for apartment buildings in British Columbia has “come to a near standstill,” according to a report issued Monday by real estate firm Avison Young (Canada) Inc.
Now your talkin and I agree that's a nice home. But I think you could probably rent that place for about $2,000. Why buy even at $350,000 plus property tax etc? Seems such a waste.
BC economic insulation getting thinner!B.C. surplus drops more than $800 millionVICTORIA -- British Columbia's total financial cushion has dropped to $950 million from $1.77 billion, Finance Minister Colin Hansen announced Monday morning.However don't worry because...Premier Gordon Campbell has said he is confident B.C. can avoid both a recession and a deficit.Consumer confidence at recessionary levelsFalling home prices and the worst bear market since the Depression combined to drive consumer confidence down further in November, the Conference Board of Canada said Monday.The Ottawa-based independent research association said confidence fell 2.9 points to 71, a level last reached in 1982 and 1990, respectively. Both were periods of recession. Regionally, overall consumer confidence "tumbled" a record 7.4 points in the Prairie provinces, the board said. Sentiment fell 4.8 points in British Columbia, while Ontario and Quebec experienced declines of 2.8 points and 0.9, each.
Why buy even at $350,000 plus property tax etc?Well if you're a cash buyer you have to compare the after-tax return of the money you have sitting in a GIC or whatever to the net rental value of the property. Puts a different spin on the numbers from someone borrowing.I'm in no rush, but on the other hand I'm not going to be too picky about the last 50K if I see something I really like.
I picked up a copy of the November 17-30, 2008 Business Examiner and on page 9 there is an article "Realtors urge calm as unit sales fall".Also, check out Page 31 for Who's Suing Whom. Six for Accredit Mortgage Ltd. suing various developments and such. S2
Patriotzthat property you like, they're not even following the market down - most recent price drop was $5000 - after about 2 months on the market.I don't think those sellers really want to sell right now, but I could be wrong.The place will probably still be for sale when you want to buy. Just put in an offer $150,000 below asking and see what happens, hey?
CHEK news had another report on the real estate downturn up Island. Seems realtors are leaving the business because it is hard to make a buck. Only 40 homes sold in Comox last month and there are over a 1000 for sale. The broadcast should be on again at 6 PM and 11 PM
Hurrah, the Realtor bubble is correcting! In addition to cheaper house prices, we can expect fewer flyers cluttering up our mailboxes and an overall improvement in the quality of Realtors as the herd is culled.
Anonymous Nov 24, 8:50AM said... "mr.4am, your comments on gold is somewhat right (around Nov 20). now the price is going up!!"Yes, the prices are going up, but not for the 2 reasons I mentioned (COMEX default or CDO explosion). Believe me, if or when either one of those happened, Gold would not be going up 5 or 10%... more like 30 to 300% in a few days.The current uptrend in gold from a Canadian perspective I believe may carry on for another few weeks, but it is bound to be volatile (VIX is off the charts). I believe the #1 reason gold moved up recently was simply because people are getting more and more fearful that the situation is getting worse. The following negative events had a big impact on the stock market recently and specifically Gold's rise: 1. US dollar decline/volatility2. 3 Autos on the brink of bankrupcy3. CitiGroup stock price collapse.4. Multi-country strong gold demand for numerous reasons: India, USA (citizens), China, Iran, Dubai and recently Saudis.5. Technical Analysis of gold charts suggest an uptrend.I'm bullish on gold, but only with money that I don't need and can afford to lose and only mid to long term (max 3 years or until DOW reaches part with gold. I.e. Gold = $5,000 & DOW = 5,000). Short term, I wouldn't gamble with gold, you might get lucky, or you might get whiplashed by the volatility and lose 1/2 your shirt.Cheers,Mr.4AM
part = par
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