The number of property sales throughout Greater Victoria declined in October while prices remained stable.
A total of 316 homes and other properties sold in October through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) down from the 512 sales in September. There were 708 sales in October of last year. The number of properties available for sale at the end of October was 4,680. That represents a 41 per cent increase compared to October of last year but a slight decline from the 4,754 properties available for sale at the end of September.
Victoria Real Estate Board President, Tony Joe, says despite the decline in the number of sales, it is important to keep the market activity in context. "The last six years have seen extraordinary growth. Last year in particular was truly exceptional both in terms of sales and prices so comparisons must be made with care. A more realistic comparison would be with 1998 -- a year in which sales and inventory levels were comparable to today and a time when the market was considered to be strong and stable." Joe noted there has been a total of 6,012 sales in the first ten months of this year compared to 4,571 in the corresponding period in 1998. There were 4,057 active listings at the end of October, 1998.
The average price of single family homes in Greater Victoria last month was $565,741, up from $549,284 in September; the six-month average was $574,848 though the median price in October was considerably lower at $495,000. There were seven single family homes that sold for over $1 million in October, including two in Oak Bay, one of which sold for between $2 million and $3 million.
The average price of all townhomes sold last month was $389,731, down from $405,287 in September; the six month average was $425,866. The median price in October was $369,500. The overall average price for condominiums at $323,028 last month was up from $319,562 in September. The average for the last six months was $316,644. The median price for condominiums in October was $280,000.MLS® sales last month included 184 single family homes, 76 condominiums, 26 townhomes and eight manufactured homes.
H/T to Billy Corgan at VV for the link.
101 comments:
Numbers are out!
http://www.vreb.org/mls_statistics/current_statistics.html
Gotta say, pretty disappointed in the median price drop. Sales are down 55% though!
Scary to think that this whole thing has been so driven by naked emotion and raw greed, as well as a colossal sense of entitlement, that many people even in Victoria may actually react somewhat like that (if a bit less OTT).
that was too funny HHV.
Did they fudge the numbers ?
From 286 SFH's down to 168 is a massive decline. Yes prices should have dropped more but this is just the beginning people. We have a long winter to get thru then the desperate become even more desperate. Look at the markets today down another 500 points on the DOW, this is so far from over.
"A more realistic comparison would be with 1998 -- a year in which sales and inventory levels were comparable to today and a time when the market was considered to be strong and stable."
Tony Joe once again reaches so far back into his bag of BS lines of comparisons it is getting quite sad to witness such a pathetic performance. 1998 ? c'mon Tony, thats the frigging stone age in comparison to today. How about 1988 ? really now, this guy is a total joke.
I'm still laughing about the "comparisons must be made with care" line and "a more realistic comparison was 1998 (ten years ago)"
too bad they didn't do any of that careful comparison on the way up...
According to my million dollar plus metric, there are now around 4 years of million dollar plus inventory...
It's obvious the sheep that are still buying don't have the cajones to low ball, guess it's not politically correct yet in sleepy ole Victoria.
When a few more agents lose their livelihoods then the practice of asking fair value will be back in vogue. This town is always late to the game in every bust or boom.
VG,
I don't think there were enough sales... my guess is the upper range really skewed the lower. Wait two months. The story is definitely out.
hhv,
agreed,it doesn't take many high price deals to throw the numbers out on such weak over sales....wait til the masses open up their monthly investment statements.
I spoke to my realtor recently - he actually told me that it was too early to buy - wait another year for the 30% +++ drop.
If Tony Joe wants to make market comparisons to 1998 why doesn't he compare PRICES, not just number of sales!!!!
Oh my god, I laughed so hard with that Video, I had to pause it for a minute and get some water. Thanks for sharing that.
I had another good laugh when Tony Joke had to go all the way back to 1998 when the markets were "strong" for his latest 5 day delayed report.
A few more reports down the road and we'll probably be back to the early 1980's comparison, when Tony Joke will announce this is the buying opportunity of a life time! ROFL
"If Tony Joe wants to make market comparisons to 1998 why doesn't he compare PRICES, not just number of sales!!!!"
Yes ! as Tony says we have to use a "A more realistic comparison" so why not prices too ? what a total twit. He is embarrasing his profession with these kinds of comments.
All you FTB's no worries, Tony knows you were probably still in high school back then and too toked out to recall what the hell the real estate market was really like. Yep the good ole days of $150,000 two bedroom bungalows in nice areas of town. Let's get "realistic" eh Tony ?
I'm definitely waiting for the 2 bedroom SFH for $150,000 and not a penny more.
A few comments:
(1) if we normalize house sales from 1998 with population increase to 2008 ~10%, then the comparison to a decade ago doesn't look so good
(2) if we take out the ~2.5M sale (let's say 2.7M), the average goes down to 553K from 566K
(3) Sales have dropped off the floor.
(4) Median still down 1% MOM (trend continues)
(5) The low end has fallen out, giving a right skew to the sales distribution, artificially raising both the median and average.
The YouTube video is priceless.
14.8 months of supply total...
hmmm... where does this put the supply/demand curve, and where is the pressure on the curve?
Dumb Canuck,
where do you get 14 months supply from, I'm only showing around 12...
:)
I am too busy at the moment but how about we use stats and compose a letter to the editor in response to the "1998" crap.
A logical thing to compare against would be average family income in 1998 and average house price against today in inflation adjusted terms.
pondering,
VREB is free to say and do anything they like with the information they collect and publish. we may think it's a junk way to report, and therefore their credibility is further diminished.
The best way to change this is to not use a REALTOR associated with VREB. Go comfree if you want to send them a message and tell all your friends and family to do the same.
Money can walk as well as talk.
Here is my monthly analysis of the VREB stats:
October 2008 Statistics - Monthly Analysis
September 2008 shown in ()
MLS Sales - 316 (512)
MLS listings - 4680 (4,754)
SFH Average - 565.7K (549.3K)
SFH 6 mo. Avg. - 574.8K (585.6K)
SFH Median - 495K (500K)
All SFH Sales - 184 (309)
Condo Average - 323K (319.6K)
Condo Median - 280K (276K)
All Condo Sales - 76 (111)
Town Average - 389.7K (405.3K)
Town Median - 369.5K (370K)
All Town Sales - 26 (53)
Year-over-Year Analysis
GV - Greater Victoria
October 2007 shown in ()
MLS Sales - 316 (708) - Down 56%
MLS listings - 4680 (3311) - Up 41%
GV SFH Average - 565.7K (556.2K) - Up 1.7%
GV SFH Median - 495K (495K) - No Change
GV SFH Sales - 168 (344) - Down 51%
GV Condo Average - 323K (343.3K) - Down 5.9%
GV Condo Median - 280K (291K) - Down 3.8%
GV Condo Sales - 76 (196) - Down 61%
GV Town Average - 385.5K (407K) - Down 5.3%
GV Town Median - 350K (370K) - Down 5.4%
Town Sales - 25 (79) Down 68%
I don't think there were enough sales... my guess is the upper range really skewed the lower. Wait two months. The story is definitely out.
My guess is these were mostly trade up transactions, Boomers moving on up. I'll also bet that many of them are holding two properties at once trying to get their wishing price for the old place.
tony,
i think you are right. my dad is in this boat. he owns two houses right now, both you could consider "executive" for empty nesters. they plan to sell one and will likely put them both on the market in the spring and keep the one that doesn't sell.
i'd guess there are many people thinking the same thoughts. Feb/March listings will likely skyrocket.
TC has a short story on VREB's news release:
House sales tumble
Residential real estate sales in Greater Victoria tumbled 38 per cent last month -- and slid by more than half from October a year ago, according to data released late yesterday by the Victoria Real Estate Board.
The average price of a single-family house in the region rose last month to $565,741, up from $549,284 the previous month. The median price declined slightly to $495,000 in October from $500,000 in September.
There were 316 sales in October, down from 512 the previous month. Last month's sales represented a 55 per cent drop from October 2007, a further example of how real estate markets are cooling amid a turbulent global economy.
Tony is now a ventriloquist:
Bill & David
Victoria Real Estate Agents Bill Ethier and David Wardel and the Properties In Victoria Professionals™ Team working for Royal LePage Coast Capital say despite the decline, (which is not uncommon for this time of year) in the number of sales, it is important to keep the market activity in context. The last six years have seen fantastic growth in the Real Estate sector in Victoria.
Last year was an outstanding year both in terms of sales and prices so comparisons must be made with that in mind. One should really compare this year with 1998, reason being that sales and inventory levels were comparable to today and then we considered the Victoria Real Estate market to be strong and stable.
Bill has been a REALTOR® in Victoria since 2006. Originally from the Vancouver area, Bill moved to Victoria to attend the University of Victoria where he received his Bachelor of Science. Not only does Bill have a wealth of real estate knowledge he is also an active member of the community.
"I don't think there were enough sales... my guess is the upper range really skewed the lower. Wait two months. The story is definitely out."
I don't think it's anything that convoluted, I think we're just lagging Vancouver by a few months. Sales fell off a cliff there before prices started to really fall. They just had a 4.8% price drop in one month, but sales have been down for a while.
Conversely, we haven't had the MOI to justify price drops until now. According to Greg's numbers, we were just creeping up above 6.5 MOI until this month, when it jumped to almost 11.5. Now we have the inventory to drive large price drops.
I think Greg's numbers are off of searches of MLS.ca, which only shows 2 out of every 3 listings.
With September's numbers of 512 sales and 4754 listings, that was 9.2 MOI.
With October's numbers of 316 sales and 4680 listings, we're up to 14.8 MOI....
I've been tracking the difference between the PCS/Matrix listings and the MLS.ca listings on my blog and it's been a constant 1.4 to 1.6 multiple since I started.
Bill has been a REALTOR® in Victoria since 2006.
LOL. What an incredible amount of experience.
"There was a total of 316 pices...
If we look at the Victoria luxuary real estate market"
Sigh. The sad thing is, this kind of semi-literate communication is rife across many industries these days. Why are we supposed to trust someone on a $500k purchase when they can hardly spell, have less than 2 years of experience in the field, and clearly only just recently graduated with their BSc?
womp -
I try to be clear that what I am offering is a snapshot based on the MLS. I don't have access to PCS in a fashion that would allow me to give a more detailed analysis like you provide.
Along with PCS, there are any number of private developers selling presales off the MLS, so I'm not even trying to capture that part of the market.
However, I also like to think that my more conservative take on these stats should also make them even more compelling - in other words, if these more conservative stats look bad, the situation will almost be even worse than my stats make it appear, if that makes any sense.
Also, I like to take some satisfaction from looking at where the listings are versus the sales activity. That's why I keep hammering the million dollar plus metric. Sales are completely out of whack with listings and have been for more than a year - I mean7 sales and 325 listings in this price range? Almost 4 years of inventory?
I'm curious to see when the top of the market starts crumbling.
I doubt all the estate sales in Oak Bay can hold out for top 2007 dollars too much longer...
Greg,
Sorry, I didn't mean that to sound like your numbers were inferior.
I enjoy looking at your analyses immensely. I was just trying to clarify the MOI from what Ryan was saying. He is also right though, we've only been in a high MOI situation for a couple of months, and it took Vancouver several months like that to see their -4.8% decline.
I also enjoy taking a conservative take on things, and the totals that I get from PCS never match the end of the month VREB report anyway (it's always overshot).
Thanks Womp,
while overall MOI has been on the rise, MOI above the medians for the various property types has been in bear (not balanced) territory for awhile. The fact low end properties were still selling doesn't do much for the more expensive properties out there.
I'm sure some seller distress and fatigue will start to take its toll. On more expenisve properties, I expect that to be sooner than later.
In other words, I think its happening now.
Anyway, I enjoy your stats womp, just wanted to make sure people understood the relationship of my stat snapshots to the VREB stats.
Maybe I'll look up some 1998 assessed values and make a lowball offer at that figure. I'll just tell 'em Tony Joe said so.
I'm seeing traffic picking up again looking at listings. Two sold signs and two listings dropped in the past 3-4 weeks. November will be interesting in deed.
Greg and Womp - thanks for clarifying - I'd used the MLS reported numbers at month end to get the MOI of 14.8. Doesn't matter which way we shake it, its darn high, with the MOI for the million plus getting ridiculous.
Update on one of the flips in my neighbourhood (now there are four within a block):
MLS®: 250314:
~ 1 million 1.5 yrs ago (bought)
250-300K reno cost
95 K carrying cost (5%/yr)
45 K agent fee (assuming 1.5M sale)
20 K staging cost
1,410,000 Total Cost
~1,790,000 list in the summer
1,675,000 (first week of Oct).
1,595,000 (list shown Nov. )
??? sales price
10.9% list price drop
??? % drop to sales price
weekly open houses, some lookers, stopped 2 weeks ago. movers brought in furniture last week. now staged, lights on in evening, etc.
http://www.theglobeandmail.com/servlet/story/LAC.20081106.BARBER06/TPStory/?query=slump
Here is an article from a major publication calling out the realtors and their excuses!
Link didn't work. Here we go:
http://tinyurl.com/5nguyo
If this guy is even 1/2 right, Real Estate will tank worse than 50%.
Excellent read on the future of the US economy and the collapse of the USD.
Actually, 1998 was about a year from the bottom for SFH and a few years short of the bottom for condos.
It took until 2003 to get back to the 1993 peak in Victoria.
There was nothing healthy about 1998. I can't believe he'd pull that one out of his hat.
Why gold *might* soar over the next few weeks.
Nov 20th is the key date, not Nov 28th as I previously mentioned.
Good luck,
Mr.4AM
So Victoria has the lowest unemployment rate but just where are all these new jobs supposed to be that have the clout to buy overpiced real estate ?
I still think Victoria is late to the game as usual and this winter will show sharp drops, especially in tourism/service/retail areas as this recession sets in.
mr. 4am,
What is your view on copper, zinc and other core metals in the near term?
This economy needs to shrink at least 25% just to get back to capacity. I own a couple small rental properties and have a very difficult time getting plumbers, electricians etc to perform any work.
I look forward to the contraction.
"Actually, 1998 was about a year from the bottom for SFH and a few years short of the bottom for condos."
Not very comparable to anything given the leaky condo crisis that was happening at that time and clear through 2002. It's pretty difficult to make any rational comment on the condo market from that era - accept buyer beware.
and also except buyer beware
I have prepared two new slideshows and added them to the Victoria RE Stats Gallery.
Greater Victoria Stats Analysis - Oct08
VREB Graphs - Oct08
Use the controls at the top to pause and single step the slides. Clicking the big X starts full screen viewing.
Roger,
Great work on the graphs. The median value continues to decline.
Does anyone know when Victoria had a lower number of sales in October? How many years back do you have to go?
hp
Oak Bay sellers getting desperate.
http://victoria.en.craigslist.ca/reb/910803482.html
Owner must sell !
Like I was telling you folks...
Somebody always has to sell, but nobody has to buy.
I have several acquaintances who are caught in the trade-up bind here in the CRD; each having bought a second property before selling the first. In each case, their listing is just floating on the market. They are getting "lookers" during respective open houses, but buyers have no confidence even with "fair" pricing. The Calgary tide has ebbed, the expat US buyers are gone and our local flipper-realtors are holding depreciating properties that they will rent out in the short term. Beware the ides of March... RE is in for a major correction..
"caught in the trade-up bind here in the CRD; each having bought a second property before selling the first"
been there- done that -never f'in doin' it again.
(too stressful in a buoyant market----- in this market-----------???)
"We are, to a large degree, insulated against the vagaries of the world market here."
This chick has shit for brains. I have never read something so ridiculous. The TC stoops to a new all time low.
" The worst market we have witnessed in recent memory was in the early 1980s but there are few similarities between now and then. "
Of course not, the US RE never crashed,every country in the world didn't have to pour billions of dollars into the coffers on a daily basis to keep the markets and banks from closing up for good,the stock markets didn't crash the worst since the great depresssion... etc etc. Is this person on drugs ?
There is a comments section at the bottom of the article.
I have several acquaintances who are caught in the trade-up bind here in the CRD; each having bought a second property before selling the first.
Sounds familiar. Where have I heard that story before? Oh yeah...
All over the US for the last two years!
What planet do people think they're living on?
Here's what I contributed to that TC fantasy by Dallas Chapple. Let's see if the editors post it:
"In a search of Current, Pending and Sold listings in Oak Bay, with a sales price between $400K and $500K, listed between Nov 1/07 and Nov 8/08, none of the 16 sales that meet that criteria were more recent than Sept. 26 and none sold at $470K.
So I flat-out call DALLAS CHAPPLE A LIAR."
In case readers here didn't memorize her whole bit of nonsense, here's an excerpt:
I have clients who had been looking for a house for two-and-a-half years. They finally found one this month at a great price: $470,000 for a home in Oak Bay.
Here's the irony: For calling B.S. on another realtor, I could be sanctioned. The board and the RE Council of BC couch it in mumbo-jumbo about treating each other professionally and with respect, blah, blah, blah. But these collections of superannuated realtors and bureaucrats never stop to think how the lies harm consumers.
Ours is an industry that has grown fat on its own arrogance and self-interest. You can't blame people for hating us. We deserve it.
But just in case the usual suspect wants to blame the run-up in prices on us: Realtors didn't cause the bubble; buyers did.
I found that claim BS as well that it has taken these people two years plus to find a house.
As well I was disgusted how the TC gave this article prime spot in the editorial section printed edition at the whole top third of the page. Clearly an effort by the industry and those who pay the TC bills. Self serving hype job all the way.
"Realtors didn't cause the bubble; buyers did."
That's like saying, the gun didn't kill the person, the person who pulled the trigger did. Relative truth, but without a talking gun screaming (pull the trigger! Now's you're last chance!!!), nobody would be dead ;-)
So allow me to rephrase your conclusion...
Greed, speculation & imagination (of becoming wealthy) were the root causes of the bubble. The purpotrators, were quite simply everyone who participated: buyers, realtors & their various organizations, the media for pumping biased info, loan officers who looked the other way, apraisers who fudged the numbers, loose government policies allowing all this to ensue and continuously encourage (and still do) eternal economic expansion (a mathematical impossibility), and overall lack of oversight in company/banks off-book transactions, derivatives market, hedge funds, etc.
The only inocent parties were:
1) The ignorant buyer- Those whose real intent & aspiration was not climbing the ladder of material success, or keep up with the Jones', but simply trying to buy a house to live in, out of basic need, not greed.
2) The bears who refused to part take in the insanity & greed (I'm afraid I wasn't one of those, as I made $$ from all this)
Sadly, all will be punished, but only the smart and/or greedy will manage to escape - at least, at an individual level. Society, and standards of living as a whole will still sink.
But it's not all negative, in fact, humanity matures the most, the fastest when it suffers the most.
Suffering forces one to face their own mistakes and promotes internal (psychological) growth.
We've gone on aloof for far too many years. Time for a little suffering & introspection, no? :)
"but only the smart and/or greedy will manage to escape "...
I neglected to mention that this 'escape' is superficial, in the sense that, you are only escaping a chance to face yourself and mature as an individual. In actual fact, your escape will only likely guarantee even bigger sufferings down the road, as ultimately, nobody escapes karma.
/end of philosophical rant :)
B.C. to see steepest house sales price drop in nation next year
The association predicted a 7.8 per cent decline next year in the average residential sales price in B.C., compared to a 2.1 decrease across Canada.
Dallas Chapple says Victoria's fine, the CREA says we're headed for another 7.8% down. I just don't know who to believe.
Single Family Home (SFH) prices are definitely tumbling in the City Of Victoria (James Bay, Fairfield, Rockland, Fernwood, Mayfair & Downtown).
- Average price peaked in March 2008 @ 619.3K and was 484.5K in October which is a drop of 22%. Last time it was this low was November 2007.
- Median Price peaked in December 2007 @ 568.5K and was 434K in October which is a drop of 24%. Last time it was this low was also Nov. 2007.
- There were only 15 sales this month compared to over 38 sales in October in the previous 3 years.
You can view the complete slideshow here
Hey Everyone,
http://www.msnbc.msn.com/id/27648884/
Here’s a GREAT article today from MSNBC about how a lot of home owners in the US are STILL in denial. This is what’s happening/going to happen here in the not too distant future.
Cheers.
Roger, the data doesn't seem right to me. I did a search on the median in that general area (using realtor.ca) and I only came up with 33 SFHs for < $450k. That would mean only five months inventory at that price level.
In any case, one month does not a trend make.
I think the stockmarket meltdown caused many buyers to hold back. Some of that demand might show up over the next few months.
Victoria has the lowest unemployment rate in Canada and is growing in size. It is constrained by the ocean on 3 sides and something like 50% of owners own their home flat out. Overall, I am expecting less downside for Victoria compared to Vancouver or Kelowna.
David said:
Roger, the data doesn't seem right to me. I did a search on the median in that general area (using realtor.ca) and I only came up with 33 SFHs for < $450k.
I just plotted the data from the VREB monthly reports on a graph which you can easily check for yourself at www.vreb.org.
Are you saying you don't trust the accuracy of VREB stats or you think I am not plotting the data correctly?
I think the stockmarket meltdown caused many buyers to hold back. Some of that demand might show up over the next few months.
I doubt it. The stock market isn't going to recover for some time and when folks get their annual statements in January they will be shocked at their total 2008 losses. Also ,if you look a the RE sales data here you will see that November to December are historically low months for sales.
Victoria has the lowest unemployment rate in Canada and is growing in size. It is constrained by the ocean on 3 sides and something like 50% of owners own their home flat out. Overall, I am expecting less downside for Victoria compared to Vancouver or Kelowna.
We do not have the high excess inventory like the mainland so we will probably not drop as far. But we still have a long way to go. Greater Victoria SFH median has dropped 6 months in a row!! Buyers watch TV and read the paper and few want to catch a falling knife.
WHY did the SFH average go up in October??
In previous posts many bears and even VREB have stated that a few high end sales can have a big effect on the Greater Victoria (GV) average price when overall sales are low.
Last month there were several high-end sales in Oak Bay, Sidney, Highlands and Waterfront areas that resulted in the October SFH average exceeding the 6 month average in these areas. If you click here you will observe that 13% of the sales generated 22% of overall GV sales volume. The end result was a bump in the SFH average for Greater Victoria.
We can expect to see more of this in the coming months. For example, there are over 325 SFH on the market over a million dollars and only 7 sold last month. If you visit Greg's site you will see that there are 13 months of inventory (MOI)over the median. Some sellers will say uncle and offer a substantial discount to unload. This will have a temporary effect on average and to some degree median prices during the slow Nov-Jan sales season.
I'm not in agreement with the thought that the physical constraint of Greater Victoria and the Western Communities being surrounded on three sides by water will dampen the fall in market prices.
The preceeding would have to assume a near 100 percent of the appropriately zoned and available land to be built up. Which is not the case of Greater Victoria.
In my opinion, the physical constraint of Greater Victoria may be a strong point for the decrease in property values. For example, if a starter home's value is $400,000 then it is near impossible for most of the young propspective purchasers to enter the market.
Without new prospects, the market value beast has nothing to feed on and prices would decline due to a dommino affect.
The market beast has to be fed new meat to sustain itself. Right now it appears that the beast is feeding upon itself, hence the lower sales volume. We no longer have a large pyramid base of first time buyers. This makes the market place unsustainable.
Agreed, in 1982 crash it didn't make any difference as I bet 50% owned outright as well back then as most of the established families would have had mortgages from back in the late 50's, early 60's when they were first built and almost paid off or were tiny mortgages if anything.
It's the psychology and financing ability and the opposite of on the way up. It doesn't take many sellers to set the pricing lower if they have to sell and Joe the Neighbour locks in his horns and refuses to lower his. Just as the buyers on the way up who want to bid them overprice.
This collapse is just warming up, wait til we hear of job layoffs in high tech and more construction jobs lost as projects complete.
It is constrained by the ocean on 3 sides
Kinda like Hong Kong, Tokyo, and New York City?
All have seen 50% busts (90's, 90's, and 70's respectively).
Roger,
Thanks for pulling out and analyzing the numbers for the City of Victoria specifically - those are the areas I'm most interested in, so I appreciate seeing them. Also very cheering to see how much the median and averages have dropped for CoV SFDs, esp. in contrast to the GV average increase in October.
Is the Burnside Gorge neighbourhood included in your figures - in Mayfair? Just wondering, as it's usually one of the cheaper areas.
Thanks again.
VG said:
It doesn't take many sellers to set the pricing lower if they have to sell and Joe the Neighbour locks in his horns and refuses to lower his.
VG - I agree with you. The guy that lists and says "I won't sell unless I get my price" helps the market to go lower even if he never sells.
The reason for this is simple. He is another listing in a rising inventory and this gives the buyer more confidence to lowball. The other sellers get more nervous due to the increased competition and those that need to sell are more likely to sell at a lower price.
The key point that many homeowners fail to understand is that the houses that sell set the market value for the neighbourhood. Those that stay on the market for months dreaming of the good old days and never sell only make the market downturn happen faster. Listing high with subsequent price reductions only adds to the buyers perception of a sinking market.
Muriel said:
Is the Burnside Gorge neighbourhood included in your figures - in Mayfair? Just wondering, as it's usually one of the cheaper areas. Thanks again.
Here is a VREB map of the Victoria MLS area that includes Burnside.
VREB defines the Gorge area as Saanich West
mr4am writes: The only innocent parties were:
1) The ignorant buyer- Those whose real intent & aspiration was not climbing the ladder of material success, or keep up with the Jones', but simply trying to buy a house to live in, out of basic need, not greed.
Sorry, man. With all due respect, that conclusion denies that we have free will. Nobody puts a gun to a buyer's head, no matter how colorful that metaphor might seem to you.
And your use of "greed" is typical Marxist ideology and Puritan righteousness masquerading as economic theory. You cannot have divined the intentions of buyers. Each made a decision appropriate to his own circumstances at the time.
That is not the realtor's fault for aiding in the transaction. That is not the builder's fault for building the home. That is not the TC's fault for advertising the home. That is not the seller's fault for maximizing his return.
Like I said, realtors have a lot to account for. But buyers must man-up and take respnosibility for buying when they did and for how much.
Anything else is an acknowledgement that you are a trainable monkey.
The key point that many homeowners fail to understand is that the houses that sell set the market value for the neighbourhood. Those that stay on the market for months dreaming of the good old days and never sell only make the market downturn happen faster. Listing high with subsequent price reductions only adds to the buyers perception of a sinking market.
I'd also add the BS figure of 50% outright home ownership in Victoria. This stat means nothing to the market, it's meant to quash the foreclosure fears. DC was trying to get us to believe that prices can't fall without foreclosures, which is utter crap. Only 3-4% of total properties in Victoria change hands every year. It is only properties that sell that set the market value for all. It matters not a lick if the seller has a mortgage or not, just the same as it matters not a lick if the buyer is financing the purchase.
Price is determined by supply and demand. We have a supply bubble right now because people are looking around, seeing prices falling, and are either waiting to buy when prices are normal again, or are putting their properties on the market trying to get full value. The forced to sell will set the price, regardless of whether someone is just testing the market or whatever...
hhv,
good article in the globe today :
"Ms. Birk said she expects many people will take their homes off the market in December and wait until spring to list them again.
The question is whether the picture will brighten next year."
"But next year's price drop could be more severe than what CREA is estimating, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.
A “disturbing” run-up in personal bankruptcies in September and a weaker employment outlook suggest tougher times loom, he added.
The downturn means some sellers will be unable to wait for better times, something that may have helped buffer the market this year, Mr. Porter said."
http://www.reportonbusiness.com/servlet/story/RTGAM.20081110.whousing11/BNStory/Business/home
These real estate pumpers don't get it that once the oil tanker starts to make it's turn you cannot just spin the wheel back on a dime,the momentum is too massive.
The ignorant buyer.., but simply trying to buy a house to live in, out of basic need
Nobody needs to buy a house to have a place to live. In fact as we all know, you can rent the same house for way less than it costs to buy.
Another point made by Dallas Chapple is the high tech industry is so huge here now.
According to a BC government study,the average high tech wage is $1100 per week which is about $57,000 a year. Now if you are a young techie guy(or girl) and you happen to have $50,000 to put down on the average condo here in town of $350,000 then you will still have a monthly mortgage with condo fees of about $2000 a month. That is still 70% of that persons take home pay ! How can she possibly use this sector as a driver for the market now that toursim is in the tank ?
I don't buy the "spouse is paying too " excuse as more young people are choosing to live solo more than any other time. Her research efforts are garbage for someone bragging about her university credentials.
City home construction slides
New building is down 17% from last year
Tuesday, November 11, 2008
New home construction in Greater Victoria has slid by 17 per cent this year and B.C. is forecast to see the largest drop in average housing prices among provinces in 2009, according to separate reports released yesterday.
http://www.canada.com/victoriatimescolonist/news/business/story.html?id=46fa5db0-dc9f-46e5-a51c-311046813f36
VG said:
These real estate pumpers don't get it that once the oil tanker starts to make it's turn you cannot just spin the wheel back on a dime,the momentum is too massive.
But the US election is over and the sub-prime story is old news so real estate should be going up again very soon!!
Dallas in the TC
Dallas Chapple, a real estate agent for 20 years, said, "The problem now is fear and everybody is just sitting on the fence not knowing which way to jump."
Once the U.S. election is over and the bail-out following the American sub-prime mortgage crisis is further away, "people will start to get on with their lives" and the market will improve, she said.
"But the US election is over and the sub-prime story is old news so real estate should be going up again very soon!!"
roger,
I am so thankful we have a spokesperson here in Victoria who is a whole step ahead of the market and we can sweep this silly stock market crash under the rug and just "get on with our lives".
Comments like those is what continue to give real estate agents a bad name and insult our intelligence at the same time.
The stock markets have only tanked a week straight ( and two days in a row this week) and are headed to new lows but who cares, I'm buying a house now before all those scaredy cats miss out,those fools ! ;)
VG said:
The stock markets have only tanked a week straight ( and two days in a row this week) and are headed to new lows but who cares, I'm buying a house now before all those scaredy cats miss out,those fools ! ;)
Now if there are any FTB's out there who still want to buy now but don't have the cash don't worry there are still lenders willing to help you.
100% mortgage financing 'still around'
Invis mortgage broker Paula Siemens counts three ways where buyers can either still get 100-per-cent financing, or skirt the 100-per-cent rule by borrowing a down payment or taking so-called "cash back" mortgages that many institutions still offer.
The maximum amount Canadian lenders can now advance on a mortgage is 95 per cent of a home's value to still qualify for mortgage insurance, which is guaranteed by the federal government.
However, Siemens said, home buyers can still borrow their down payment -- sometimes even on lines of credit or credit cards -- and their mortgage will comply with the new federal rules as long as the actual mortgage is no more than 95 per cent of the home's value.
Then, Siemens said, there are the cash-back mortgages that banks have offered for several years where the lender offers the borrower anywhere from four per cent to seven per cent of the home's value as "cash back" on closing.
Siemens added that the cash-back options do come with a price: a higher interest rate.
Dallas Chapple, a real estate agent for 20 years, said, "The problem now is fear and everybody is just sitting on the fence not knowing which way to jump."
How can you be an agent for 20 years and get this completely wrong. If anything, people who are now waiting to get into the market were more fearful when prices were increasing so wildly. They were scared that if they did not buy, they would never be able to afford a home. This is ludicrous, as we now know.
Now that prices are no longer increasing, I can sit back, relax, and take my time, and chose the house and the area that I want to live in for the next 15-20 years.
We're not fearful, Dallas. I'm excited to be a homeowner, eventually. If you're so desperate to make some sales, convince your sellers to lower their prices. But there's no need to hurry, we can wait.
Maybe Dallas was referring to fear in the RE agents as they watch their income fade away. Some are sitting on the fence and considering whether they should get another career.
Here is a classic line from the Vancouver Sun:
"As much as we are hearing across North America about the challenges facing the auto sector, and the credit crunch and all of those things ... auto sales are kind of defying gravity in Canada," Qualey said.
http://www.canada.com/vancouversun/news/
story.html?id=7ce508dd-1f1a-46f9-aa62-178bf82ecf33
hmmmm. Wiley Coyote anyone?
Spring 2009 could be unbelievable!
Homeowners' new reality: You're suddenly poorer
After years of making Canadians feel steadily richer, home ownership is starting to do the opposite.The average value of a resale home is expected to be $297,600 next year, according to the Canadian Real Estate Association. Just three months ago, it was forecasting that number would reach $320,200.
The level of existing home sales is also expected to drop both this year and next, leading to the first back-to-back declines in home sales activity since CREA started tracking the numbers in 1980.
Ms. Birk said she expects many people will take their homes off the market in December and wait until spring to list them again.
The question is whether the picture will brighten next year. Prices are expected to fall slightly this year and by 2 per cent next year, reversing earlier expectations for yearly gains of 3 per cent in 2008 and 2 per cent in 2009, CREA added.
But next year's price drop could be more severe than what CREA is estimating, said Douglas Porter, deputy chief economist at BMO Nesbitt Burns.
A "disturbing" run-up in personal bankruptcies in September and a weaker employment outlook suggest tougher times loom, he added. The downturn means some sellers will be unable to wait for better times, something that may have helped buffer the market this year, Mr. Porter said.
Maybe the next "commentary" we will see in the TC editorial section is someone who works as a car salesman for GM in town telling us how it's a great time to buy a car. That is how ridiculous that whole article is.
You mean it's a great time to buy an SUV or Pickup since the price of fuel is sooooo low!
Dallas should read the news once inawhile that is factual and pertains to her livelihood.
MARKETWATCH FRONT PAGE
http://www.marketwatch.com?siteid=nwtpm
U.S. stocks fall for a second day after quarterly results and outlooks from luxury home builder Toll Brothers Inc. and coffee retailer Starbucks Corp.
illustrate softening consumer spending.
Sorry for being Mr. Doom and Gloom but I never hide from reality like some we know of.
Canadian consumer, business bankruptcies poised to rise
Reuters
Published: Tuesday, November 11, 2008
TORONTO - There will be a steady upward march in personal and business bankruptcy filings in Canada as overspending and falling home prices catch up with individuals and as a slowing economy hurts businesses, experts in the field say.
"We're definitely seeing an increase (in calls), I think that people are caught, they've been living on credit," said Linda Stern, vice president of personal restructuring services at Deloitte & Touche Inc in Toronto.
Stern estimates her office is working on 30 percent more filings - actual bankruptcies or proposals to pay off a portion of debt - than at this point last year.
We're busy, every day we're getting many calls and e-mails" as people explore their options, she said.
Her colleague, Rebecca McKinley, a trustee at Deloitte in Windsor, Ontario, a manufacturing center a stone's throw from Detroit, said her office is dealing with about 17 percent more bankruptcies than last year.
"In the past year I have seen more and more instances of people who cannot afford their mortgages," while at the same time their house values have dropped, McKinley said.
Canada's Office of the Superintendent of Bankruptcy said last week that total bankruptcies in September jumped 28.4 percent from the same month a year earlier. Individual bankruptcies were up nearly 30 percent nationwide, but businesses also posted a 9 percent increase.
Economists at Bank of Montreal said this year-over-year surge in consumer bankruptcies marks the fastest rise since the mid 1990s.
At Toronto-Dominion Bank, economists said the numbers suggest headwinds for Canadian consumption at a time when the export side of the economy is hurting.
http://www.canada.com/vancouversun/news/business/story.html?id=34f0288f-3f71-4604-9f5a-44facdf2d6ac
Does anyone know how much 919 Stafford Street in Saanich East, MLS# 255045, sold for?
919 Stafford Street listed for 519.9K and sold Oct. 30 (after 10 days on market) for 513K
From the Financial Post:
Home building slump will be deep, widespread: industry
"The acceleration in the international financial crisis in recent weeks is quickly taking a toll on the Canadian economy in the form of decimated consumer confidence, tighter lending standards and plummeting prices for energy and commodity prices," it noted in its forecast. "A strong likelihood of an economic recession has emerged from the crisis, and along with it dramatically weaker housing demand.
"Expect sharply lower housing markets in 2009 as Canadian housing markets get pummeled by these forces," it warned, adding there's a risk the economic downturn could also be sharper and more prolonged that it assumed in making the forecast, and that the housing slump could be similar to those of the early 1980s and 1990s rather than the shallower housing recessions of the 1950s and 1960s.
Readers that follow the financial markets might find these Year-to-Date (YTD) numbers interesting.
More tax money for our troubled banks. I thought they were the best in the world?
http://tinyurl.com/5rp9a7
HHV,
I wonder what happened to some of our regular posters? I miss their posts.
S2, Olives, Just Jack, Percival, VicReBear - Have they left the building?
Hi Roger, I'm still here and read numerous times per day - I anxiously await your charts every month. There are so many more people posting now - it's great.
It's amazing seeing everything that had been predicted to occur a few years ago (credit crunch with resulting equities, commodities and real estate declines finally) actually occurring. I am watching with fascination (and anxiety) although I personally feel as prepared for hard times as I can get. (Hey I even grew some food this year and am holding onto a second job!)
I see some fear from some i know and still a lot of denial from others. Now that we are well into the crunch and deflation it's easier to see how the whole house of cards is coming down and real estate values will drop dramatically.
I'm still here too.
This market is total "shock & awe".
I run my numbers for November and I am in disbelieve! Roger, I don't know if your seeing what I am. I'll wait another week or so and see if the sales activity improves. I just think I'm some how missing a whack of data.
Read this article about Wall Street's part of the financial crisis. It's a bit long, but the last few pages gave me chills.
The End of Wall Street's Boom
Hi Roger,
I'm still here, too. My typing fingers are just too covered with butter from the "Credit Bubble Burst" popcorn I've been scarfing for me to have posted any comments of late...
I add my gratitude for your hard work on the charts; they will be a great resource for someone doing a Masters' thesis in a few years on the Great Victoria Housing Correction of '08 to '13.
I wonder what happened to some of our regular posters? I miss their posts.
I miss them too.
I feel that the effort it has taken over the last two years to continue to believe (and profess) that the housing market was going to be a disaster has exhausted many.
I for one feel vindicated. It has taken a lot to stick to my guns in the face of the "buy now or forever be priced out" crowd. Rodger - your charts are invaluable and are my main source of inspiration. They are also an educational tool to the unwary around me.
For the first time my co-workers are acknowledging that things could be bad. A co-worker announced that instead of a vacation this year he took his extra cash and paid down his mortgage --- he is one of the few who didn't trade up and is now very grateful that he is only a couple months away from being mortgage free.
While this housing bubble was fairly easy to read, I can't say that I saw such a massive market correction.
I hold a bunch of gold stock (ABX, GTU/UN, G) and expected to weather any downfall much better. My portfolio is currently down 30% as of today.
That said - I sleep soundly in my rented house with my debts fully paid off.
Now if only I had more cash to buy up some of those distressed stocks.
Just Jack - are the numbers worse than October so far? Can you give us a comparison, say October 1 to 13 compared to the same time period in November?
Thanks folks for the encouragement to keep generating the monthly charts. It is nice to hear that you are passing them around to prospective buyers and sellers.
I will put up the CMHC based slideshow as soon as I get the report. It will be interesting to see how the SFH average, without waterfront, acreage and duplex sales included, compares to the VREB overall SFH average.
Just Jack - Is it possible that the new Matrix database is not up-to-date or having problems? The switch from the Ambiance platform last month did cause VREB some heartburn when it came to producing monthly stats.
Now that we are well into the crunch and deflation it's easier to see how the whole house of cards is coming down and real estate values will drop dramatically.
Prices, not values.
"Price is what you pay. Value is what you get."
Warren Buffett
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