Saturday, December 27, 2008

Predictions

Happy holidays everyone.

2008 has proven to be a year chock-full of surprises. We've seen the average single family home lose almost $100,000 in value. We've seen listings skyrocket and sales plummet. We've seen panic from within the real estate industry. We've seen the MSM go from head cheerleader to pallbearer to cheerleader to confused. We've seen "real estate industry experts" continue to demonstrate their inability to accurately predict "what time the 3 o'clock ferry to Vancouver will leave."

And we've seen the MSM tell us the "bloggers got it right" but not before Re/Max confirmed BC bear blogger's numbers with their own admissions.

So what could possibly occur in 2009?

Dear readers, I'll give you my predictions and I'll ask for yours in comments.

Spring 2009 is the turning point. One thing will definitely happen: listing will jump drastically, hitting all time highs in March/April, probably nearing 6000 total units. I expect to see a slight rise in sales volumes in March/April, not reaching spring 2007 levels, but somewhere in the neighbourhood of 450-500 units. January and February will look like Oct/Nov 08 and see drops in prices as a result.

As far as prices go, I expect to see a leveling-off of price declines (the proverbial dead cat bounce) over the same stretch, prior to a 2008-like plunge that will see month-over-month average changes in the negative 2%-2.5%, totalling up to somewhere in the neighbourhood of 18%-24% total annual decline.

I expect to see a total drop in average sales prices from the April 2008 peak nearing 30% by the end of 2009. That will mean a house that sold for $625K in April 2008 will be selling for around $440K next December. Something to look forward to bears: those crappy, neglected, homes with suites in neighbourhoods you'd rather not live in that are currently sitting on the market for around $425K, they'll be sitting on the market at the end of 2009 for somewhere around $300K.

Remember people, my predictions are worth exactly what you paid for them.

115 comments:

Anonymous said...

The prediction is right if everyting is "normal" as 2008.

If something goes wrong, like Mr.4am said before (war, big lay off..), then the drop will be faster and deeper.

Nick said...

Here's hoping, I like the sound of a 30% drop from peak. When do you think the market bottom might hit? I would have said spring/summer of 2010, but I've been surprised to see many US markets continue to drop well into their 2nd year of price declines. I'm not too concerned about finding the absolute bottom though, I'm more concerned about finding the right house at the right price, whenever that happens.

Dumb Canuck said...

HHV - where is your tip jar? Your predictions are similar to where I am. The only difference I see is that with: (a) falling construction/ RE agent / mortgage broker employment; (b) government halting discretionary spending and slowing down hiring; (c) greatly reduced savings due to the stock market crash; (d) reduced employment in retail due to the consumption drop; and (e) foreclosures hitting the market - the market price drop will only slow in the spring, and then plummet in the summer.

Have a great new years!

Anonymous said...

Anon 7:08, a problem with your terms:

The folks who create wars don't ever see them as anything wrong, but rather a solution to some rather thorny economic problems.

Therefore, if everything goes right according to their war plans, the real estate crash will certainly be faster and deeper.

Probably before Obama is coronated, but Obama has said he's not opposed to war; just dumb wars. WWIII is already seen by him and his to be a very "smart" war, unfortunately, which is the ONLY reason he was allowed to be where he is, against all reason.

Anonymous said...

all should enjoy this article from gq mag, no its not about jen, hahaha
http://men.style.com/gq/features/landing?id=content_7779

adw

mln said...

adw, thanks for that. Good read.

Nick said...

Personally, I don't really enjoy the tales of human misery such as the ones in the GQ article. Sure, there's a bit of schadenfreude because I didn't make the same mistakes as those people. However, strictly as a human being, I can't help but feel empathy for the people such as the Ukranian immigrants profiled in the article, seemingly decent people who made a horrible, but well-intentioned error. They were fed the line by the media, financial advisors, relators and likely friends and family that real estate was the path to wealth, something I certainly heard plenty of as my new homeowning friends told me as the paper value of their homes soared. I certainly feel an element of "there but for grace of God go I" one of the reasons I'm so thankful to have found these real estate blogs and Garth Turner's Greater Fool book.

I don't want droves of my neighbours to go bankrupt, although that may be inevitable. Even it was extremely affordable, I wouldn't want to live in the neighbourhoods profiled in these articles, it sounds depressing and a short step away from being post-apocalyptic.

mln said...

Nick, I doubt very many people can read an article like that and "enjoy" it.

It's supposed to be sobering, not enjoyable. :)

Nick said...

Hi mln, the poster of the article had said "all should enjoy this article," which I interpreted as it being posted in that more mean-spirited tone that occasionally pops up on bear blog postings where people are actually enjoying the misery that people are going through as the real estate market unwinds. You are right though, the poster may have meant to inform, not to gloat, it's hard to infer intent through web posting.

Anonymous said...

opps, my fault, and i apologize. should have said enjoy the well written article, not the prospect of so much misery.
adw

Anonymous said...

Although I would love to take glee in watching some of my prick coworkers lose the little chop they have on their shoulders, the reality is that none of us live in isolation to the greater economy.

If my boss loses bucks in the stock market or in real estate then I can bet that he will be looking to make back some of that dough by cutting staff. If my neighbour feels poor because of losses then she will cut back on spending which will also hurt the business that I work for and ultimately me as well.

VicREBear said...

When I read about that woman trying to find a home for her house plants before burning the place down and committing suicide, I felt sick and had tears in my eyes. Obviously an extreme reaction from a deeply stressed and psychologically unstable person, but still... what a damning indictment of this whole monstrous affair.

Anonymous said...

I remember my wife wishing for prices to come down.

And I said to her "be carefull for what you wishes for - as you just might get it".

As ugly as the market was on the way up for people to buy, it is absolute horror to watch friends and neighbours suffer on the way down. People's life savings are going to vanish.

hhv said...

Anon at 6:08

"People's life savings are going to vanish."

This is a real problem.

I don't take any pleasure from people's economic pain.

That said, we all need to look at our friends and family right now and say to them "wtf were you thinking when you put your life savings into one house?"

If the correction does one thing, I want it to be this: people should see their home as a home again, not an investment, not a get rich quick scheme, and not a stand-alone retirement plan.

I want people to see owning a home as a prudent financial decision. One that sets them up to pay off their mortgage entirely, and as quickly as possible. Because then, when they are living on a fixed income, they will know they have no rent to pay, nor mortgage payments to make. They'll have a hedge against inflation and annual costs that are known and managable during their retirement years.

If it takes more than 30% of after-tax household income to manage a mortgage, then people are better off renting and saving for retirement the "old fashioned way."

Anonymous said...

regarding 'predictions' for 2009 I think we can anticipate foreclosures in Victoria. These will, as they have in the US, acclerate house price declines. But the spring is indeed the time to watch, with surging listings (look for the U-pack boxes on the driveway as a predictor of a subsequent listing). Sellers are currently not willing to accept that the market is dropping fast, so a buyer must wait at least for the summer for that message to become more mainstream. I predict a 50% drop over the next 18 months.

Anonymous said...

"If my boss loses bucks in the stock market or in real estate then I can bet that he will be looking to make back some of that dough by cutting staff. If my neighbour feels poor because of losses then she will cut back on spending which will also hurt the business that I work for and ultimately me as well."

Finally someone that gets it. For the rest, I'll see you at the finish line.

patriotz said...

As ugly as the market was on the way up for people to buy, it is absolute horror to watch friends and neighbours suffer on the way down.

Suffer from what? The market price of your house is simply what someone else is willing to pay you for it. If you're not selling, market price movements to the downside don't matter any more than market price movements to the upside.

You can either afford the price you paid for your house or you can't, and if you can't you shouldn't have bought it in the first place.

And as far as job loss goes, you can protect yourself from losing your house due to job loss simply by not paying more than you would be able to get by renting the place out. If you are willing to pay more, you are putting the house at risk from job loss, That's your choice.

Anonymous said...

As for people watching their 2008 "0 down" purchased homes drop in value, what were the banks thinking? Clearly the peak was upon us even by November 07', did they actually think it was going up forever? Can you afford a zero down $600,000 mortgage with payments at perhaps $3,500 or more? I couldn't. Would you sign for one? Me either.

I predict that 50% of the bears on here (those with substantial cash) will be homeowners by the end of the new year, and if they shop around looking for distressed properties they will have saved at least 30% off today's listed price.

I'm already seeing prices on Craig's that are opening my eyes.

olives said...

"I predict that 50% of the bears on here (those with substantial cash) will be homeowners by the end of the new year..."

I would bet that if prices are 25 to 30 percent lower a year from now that most bears will not buy - most will hold onto their cash anticipating bigger drops and/or worse economic problems, unemployment, etc.

But maybe that's just me - I realized I'm more bearish than most.

olives said...

There seems to be a huge volume of rentals available lately.

roger said...

Today's Times-Colonist had an article on the future of Victoria real estate.

Housing ends in a whimper after hot beginning this year

Here are some price charts from the article.

Single Family Homes

Condos

Townhouses

roger said...

Excerpts from the TC article in italics.

Tony keeps spinning as he heads for the door.

"It may be quiet but it won't die," said outgoing Victoria Real Estate Board president Tony Joe, noting he's seen a little life in the market this month -- there were 201 sales as of Dec. 22, just off November's total of 268.

"It killed the momentum of the previous five years of growth," said Joe. "We knew it would happen at some point, and frankly I think the numbers were affected a little harder than anyone could have expected."


"than anyone..." What about all the bears and newspaper articles that predicted a fall ages ago??

Incoming VREB president Chris Markham keeps the spin rolling.

"I like to think we are the last people to catch this cold and will be one of the first to get out of it," he said, noting the city's diverse economy, low unemployment rate and low interest rates set the table for recovery.

"I can't believe we will be in decline a year from now, I think our worst case is we don't find a balance for six months."


Chris - next December you will be just liked Tony. Watching it all fall apart and happy to be out of the spotlight. Telling stories no one believes gets old after awhile.

The out-of-town buyer myth won't die

Markham also believes the out-of-town buyer, which makes up about 25 per cent of the market, will continue to have a strong presence.

"People still want to come, they may be delayed [by their own slow sales] but they still will come," he said. "In some cases it may mean sitting on a second home or renting out, but they will come."


It will get better later in the year

Having said that, Markham expects the year to start more slowly than usual. While sales tend to pick up in February, the expectation is there won't be a lot of activity until late March or April.

"We may not see appreciation but we will see greater volumes," he said.


December is the slowest month of the year so I guess he will get this prediction right.

dub said...

I like this, from the TC article:

"Things are looking up for first-time buyers," he said. "Prices are probably coming down to the level where people can get into the market. There are opportunities and some deals in nice areas -- in Fairfield you can now get a decent house around $500,000, and the last couple of years that's been challenging."


Yep, what a great opportunity for a FTB making, maybe, $60K per year - 1/2 million dollars... no problem!

hhv said...

you know Roger, by now I shouldn't be surprised, but I still am. I can't believe the bold faced lies that Chris spouted out about 25% of the market being "out-of-town" buyers and I can't believe that Andrew didn't bother to fact check. No wonder why Canwest is near bankruptcy: no credibility left with these people whatsoever.

roger said...

HHV,

Your "favourite" economist Helmut Pastrick is back in the TC news.

Economic forecast paints bleak scene for B.C. in 2009

Helmut Pastrick, chief economist for Central 1 Credit Union, said he is in the process of revising his economic forecast for 2009.

He said he expects it will call for a contraction of B.C.'s economy somewhere between 0.5 per cent and one per cent or more following the "good run" of growth that lasted between about 2002 and 2007.

"I think [2009] is just going to be one of the worst years we've seen in many years," Pastrick said.

He said it will perhaps be worse than the province's last recession in the early 1990s, though probably not as deep as the 1981-82 downturn.


You can see Helmut's track record with predictions over on the Quote Wiki. Cameron Muir's comments on the BC RE market are also available.

olives said...

That must have been Mr. Markham on CBC radio this morning spouting off the same crap - people will always want to move to Victoria, buyers market, blah blah blah

I used to think these type of statements were ignorant, now they just seem sad and pathetic.

roger said...

Our neighbours in the US keep watching their house prices fall.

US home prices drop record 18 pct on year in Oct

NEW YORK, Dec 30 (Reuters) - Prices of U.S. single-family homes plunged a record 18.0 percent in October from a year earlier, Standard & Poor's said on Tuesday, with the drop in prices accelerating as the broader economy deteriorates.

Prices fell at the fastest monthly pace since March, an indication that government steps, such as encouraging lenders to modify delinquent loans, have not cushioned the housing bust, which continues to weigh on the economy.


Here are the charts from the Seattle Bubble Blog

roger said...

The rumour mill is alive and well over on Vibrant Victoria

hhv said...

Wow, Roger, that makes two great big holes in the ground only a block apart... Victoria's "Yaletown" not so much anymore eh? Maybe we could do like they did in the downtown eastside and fill the holes with water so that we can go freshwater canoeing in the city on our lunch breaks.

Wenna said...

HHV - where did you hear Canwest is near bankruptcy?

greg said...

2009 predictions....

Okay, I'm gonna go out on a limb and predict at least 3 large Victoria area projects get the plug pulled mid construction - which will result in ugly urban blight, but also will also consolidate the local condo market a bit when presale money gets released to slosh into the next development or , er, to the sidelines.

victorianna said...

Olives, I totally agree with you. This is one bear that won't be in the market with just a 25-30 percent drop. I've done the math, and I'm still much better off renting unless things drop more than that. The house I'm living in, bought last year by a developer, shows no signs of being "developed" in the near future, so I may be here awhile.

Regarding the human misery issue, it does make one ill, and yes, I think we all need to realize the horrible personal toll this is taking. I have a very close friend in the U.S. who bought a lot of rental property in the past several years. I'm pretty sure he's facing bankruptcy, and I'm certainly not happy about that; I hate to see him going through that. But....I hate to say it but I did tell him....And unfortunately, the human cost of unsustainable markets crashing doesn't justify keeping those markets at unsustainable levels. I do think it calls on us to become a more compassionate society, however, and find ways to extend lifelines to those in serious trouble.

olives said...

The "rumours" on VV about the Hudson, although not surprising, are distressing - a heritage building and larg parkade have been destroyed, and it now looks worse than the hole in the ground beside it.

There's a discussion also about Town & Country being stalled after completion of only the Walmart.

vg said...

"Markham also believes the out-of-town buyer, which makes up about 25 per cent of the market, will continue to have a strong presence."


This guy is dumber than Tony,did we not already show that it is only like 12% of outside buyers and most were from Oilberta which is as good as broke ? and he thinks the US buyers will flock back in spades ? I have friends in Florida right now looking at a beautiful house a block or two from the beach with a pool for $50,000. Which would you buy first if you were an American with cash ? an overpriced box here or paradise for drop in the bucket ?


As well as those concerned for those losing out on the decline in real estate and stock markets, is the market supposed to go up forever ? is there not supposed to be a point where sanity must prevail ? ah yes.

Every business cycle has winners and losers and people have been too stupid with their cash for a long time now, the consumer needs a wakeup call like never before and it's here.
The amazing part is I have coworkers completely out to lunch on the whole market collapse, they are barely aware it has happened but still think their homes are still worth peak value a year ago and are planning home equity loans to buy condos. Boggles the mind and shows the stupid money is still out there.

vg said...

"The "rumours" on VV about the Hudson, although not surprising, are distressing - a heritage building and larg parkade have been destroyed, and it now looks worse than the hole in the ground beside it. "


I always believed that was a massive mistake trying to inject big bucks condo owners who probably won't even live there full time into a down and out area when you could have built a classy old style library down there and increase foot traffic and the business spinoff effect. The city really screwed that one up bigtime and not suprised it got shelved.


I hear BM is completely shut down now,even a new grocery store for the locals is shelved.

Anonymous said...

ok, here is another "good" read
http://www.nytimes.com/2008/12/30/us/30divorce.html?_r=1

adw

Anonymous said...

VG said:

"Markham also believes the out-of-town buyer, which makes up about 25 per cent of the market, will continue to have a strong presence."

About 25% of the buyers are not from the Victoria area according to this VREB news release

Buyer profiles

- over 74 per cent of all home buyers were from the Greater Victoria area last year

- 14 per cent of all buyers were from elsewhere in British Columbia

- nearly seven per cent of buyers were from Alberta

- three per cent of buyers originated from elsewhere in Canada

- buyers from overseas represented less than two per cent of all buyers with less than one percent of buyers originating from the United States.


So technically Chris Markham is correct about the historical out of town buyer stat but his prediction is flawed. The 14% buyer pool from other parts of BC is drying up - their house prices are dropping too and they will be reluctant to sell and buy here.

The 10% from Alberta and the rest of Canada are in the same sinking boat. And when you consider that many of the Alberta buyers were condo investors his argument holds even less water.

But that is what "spin" is all about. Giving part of the stats story and leading the public to believe things are still OK.

Anonymous said...

Meanwhile in Fairfield, everything continues to be great! Most of the snow is now gone and buyers are everywhere looking for that perfect home to put the unwrapped presents in. Fairfield is the most desirable neighbourhood in Canada and possibly the world. When I travel I mention fairfield and everyone suddenly likes me a whole lot more.

Anonymous said...

Anon said...

Meanwhile in Fairfield, everything continues to be great! Most of the snow is now gone and buyers are everywhere looking for that perfect home to put the unwrapped presents in.

Wow things are happening in Fairfield!! I guess Mike Holmes (TC article above) was dead on about those FTB's buying there.

According to Mike Holmes, managing broker with Pemberton Holmes, the city's largest real estate firm, low interest rates coupled with prices coming down around the region should play into the hands of real estate newcomers.

"Things are looking up for first-time buyers," he said. "Prices are probably coming down to the level where people can get into the market. There are opportunities and some deals in nice areas -- in Fairfield you can now get a decent house around $500,000, and the last couple of years that's been challenging."

Anonymous said...

I think where Chris Markham is at is either the denial or the bargaining stage of the 7 stages of grief as listed below:

Shock stage: Initial paralysis at hearing the bad news.

Denial stage: Trying to avoid the inevitable.

Anger stage: Frustrated outpouring of bottled-up emotion.

Bargaining stage: Seeking in vain for a way out.

Depression stage: Final realization of the inevitable.

Testing stage: Seeking realistic solutions.

Acceptance stage: Finally finding the way forward.

S2

Just Jack said...

Just playing with December sales in Langford and Colwood, but did you know that:

There are 249 single family homes for sale in the Langford and Colwood areas.

That 63 percent of the homes for sell were built in 2003 or later! Lets break it down further

2003 or later - 63%
2004-60%
2005-55%
2006-50%
2007-43%
2008-37%

Like our southern cousins, the neighbourhoods that are hit the hardest by a recession are neighbourhoods with a disproportionally high number of recent mortgages. I think Bear Mountain will be the worst of the worst and will have vacant lots for the next decade as well as a higher than typical amount of court ordered sales.

I know of one home in Bear Mountain that originally was listed for $1,300,000 and has recently sold for $840,000.

roger said...

Just Jack,

I read your post with considerable interest. 249 homes currently listed in Langford & Colwood and only 15 sold in November.

Are you implying that some of these folks weren't buying their home for the long term or that maybe the payments were a bit too high??

Just Jack said...

Have to make a correction to the above that home in Bear Mountain sold for $874,000 and not $840,000.


Just to add a little more about homes built in 2003 and later. On average for the last three months some 10 homes built in 2003 or later sold each month in Langford and Colwood. This represents a 16.6 month supply of newer housing in these two communities alone.

The point that I am trying to get at is that there is a glut of new homes on the market. This glut of new homes will have a dommino affect throught out the marketplace in the comming months.

Just Jack said...

I have tried several ways to estimate the level of speculation in the marketplace. At one time, I read that the typical Canadian owns their home for 7 years. I have no idea where or how this 7 years came from - perhaps someone reading this does?

What I have found by looking at the sales history of homes for sale is that most homes listed for sale were bought some three or less years ago and not the seven that I expected to see. This has lead me to believe that the level of speculation in single family homes, like that in condominiums, is quite high.

As our market prices rewind to 2007 values, then 2006, then 2005 we will be having a lot of crowding of listings of homes that had been originally purchased less than three years ago.

I don't know what this all means. It is just something that gnaws at me for being different from other markets. I think that there will be a big psychological shift in what buyers will accept in the next year as sellers start to lose money (in relation to their original purchase).

Or maybe not.

olives said...

Personally I would be concerned about the quality of many of the homes built in the past few years in view of the labour shortage in this city.

hhv said...

It's a well known fact that Bear Mtn has quality issues. They have from day one.

Many new homes have been shoddily constructed, in crappy places that should never have been built on to begin with (Sunriver).

JJ, I think the stat is not really the "typical" Canadian moves every 7 years, rather that sales numbers when compared to total household units averages out to something like that.

My guesstimate is that it very much has to do with what people expect of their homes. I know plenty of people who either have owned a home for a great length of time or their parents have never moved. These people tend to be professionals who have much more going on in their investment worlds than their homes.

I know plenty of trades people and average wage earners who have taken to buying and selling homes as a way to increase their earnings from one year to the next. Some years they have success, some they don't.

For the past 7 years or so, they've been fairly decent earning years. The smart ones have battened down the hatches and resigned themselves to living in their project house for the next 5 years or so while waiting for this market to even out. The not so smart ones are holding more than they can afford and are going to get caught with the bag.

I suspect that this segment represented as much as 30% of the buyers over the last 3 years at least.

hhv said...

It's a well known fact that Bear Mtn has quality issues. They have from day one.

Many new homes have been shoddily constructed, in crappy places that should never have been built on to begin with (Sunriver).

JJ, I think the stat is not really the "typical" Canadian moves every 7 years, rather that sales numbers when compared to total household units averages out to something like that.

My guesstimate is that it very much has to do with what people expect of their homes. I know plenty of people who either have owned a home for a great length of time or their parents have never moved. These people tend to be professionals who have much more going on in their investment worlds than their homes.

I know plenty of trades people and average wage earners who have taken to buying and selling homes as a way to increase their earnings from one year to the next. Some years they have success, some they don't.

For the past 7 years or so, they've been fairly decent earning years. The smart ones have battened down the hatches and resigned themselves to living in their project house for the next 5 years or so while waiting for this market to even out. The not so smart ones are holding more than they can afford and are going to get caught with the bag.

I suspect that this segment represented as much as 30% of the buyers over the last 3 years at least.

patriotz said...

Here's an interesting price point for you:

1735 Emerson St, asking $347,000, assessed $371,000.

Now 1736 Emerson across the street is assessed at $384,200 and sold for $386,500 on 15/Jun/2007. That house is the assessment point for the block since it sold right before the assessment date of 1/Jul/2007.

At the market peak in spring 2008 our house at 1735 would have sold for about 400K. If it sells at all now it would not go for more than 320K. That's a 20% decline in market price from the peak, and this party is just getting started.

Anonymous said...

Fairfield buyers are shrewd and do not speculate rather they buy because Fairfield is the most beautiful neighbourhood in Canada according to the UN. Fairfield is Canada's first nuclear free zone as well which is a huge factor in Fairfield real estate.

Anonymous said...

Check out this:
http://www.cathyduncan.com/braefoot3903b.php

MLS# 256773

Apparently appraised @ $767,000 a few months ago....being offered @ $599,900 now. I still think it is too much to ask for a home without a suite.

Personally know the developer of this property... a realtor a few houses up the street is building a home on the corner of Braefoot and Cedar Hill. He's cussing this dude out hardcore cuz he just knocked at least $100k of his project before he even put his house on the market.

Anonymous said...

Great summary HHV.

I agree with Anonymous (7:00 pm) that foreclosures are going to be a big story in the Victoria market in 2009. Any 2008 buyers with 5% down or less are already underwater on their mortgages. If they are forced to sell, they will have a choice of making up the difference with the bank or declaring bankruptcy. Remember that significant US foreclosures did not start to occur until after the house price decline started.

Looking at Case-Shiller house prices in US bubble markets (Miami, San Diego, San Francisco, Las Vegas, LA) typical rates of decline are about 2.5%/month from peak price. It is reasonable to expect Victoria prices to decline at this rate or more since we are now in a recession. The Vancouver detached benchmark price has declined by about 2.5%/month from the peak price this summer, but at closer to 4%/month for the last 2 months reported.

A decline of 2.5% per month over 18 months would result in a 45% decline from peak price. So a 50% decline is possible, if we follow the same pattern as seen in the US. We have not seen the bottom of the US housing market yet.

Conclusion - we have a ways to go yet.

hp

Anonymous said...

"Canada’s falling housing market is often compared to the United States, where prices nationally have fallen by 20 per cent since their peak in mid-2006, and up to 40 per cent in some cities.

The market crashed as a result of a risky and reckless mortgage practices, which led to billions of dollars in defaults, and turn caused millions of Americans to lose their homes. A second wave of those mortgage renewals is expected to hit in 2009, causing prices to fall further and defaults to rise.

While many real estate experts say Canada does not have the same problem with risky lending practices, Merrill Lynch Canada economist David Wolf maintains Canada is following the same path as the U.S., but with a two-year lag.

He said while mortgage defaults might seem low at 0.29 per cent of about 3.9 million mortgages as of September, it’s a 17 per cent year-over-year increase. It’s also larger than the 0.18 per cent of mortgage defaults in Canada in 1990, “right around the peak in house prices and just after the cyclical trough in unemployment.”

He also cited a Bank of Canada study released a year ago that said mortgage default rates would rise to 2.25 per cent under a “very extreme” scenario of a 23 per cent aggregate drop in house prices.

“In sum, the relatively low level of mortgage arrears in Canada is of no comfort to us,” said Wolf, who in recent reports has turned bearish on the Canadian housing market. "

Source: Ottawa Sun December 28, 2008 Housing Market "back to reality".


Just Jack

roger said...

Bernard von Schulmann is a Victoria real estate consultant that analyzes stats on the local market. He posts frequently on Vibrant Victoria and has his own blog. I think readers will find his comments interesting:

Vibrant Victoria

Bernard's Blog

B2B said...


There's a discussion also about Town & Country being stalled after completion of only the Walmart.


I can go one better on the rumour front - I heard only days ago from a credible inside source that only the parkade will be capped off and finished at Town & Country, and that the existing Walmart will stay where it is...

B2B said...


MLS# 256773

Apparently appraised @ $767,000 a few months ago....being offered @ $599,900 now. I still think it is too much to ask for a home without a suite.


Houses with a suite are a bubble phenomenon. They will be worth less, not more, when sanity returns to the market.

patriotz said...

The (US) market crashed as a result of a risky and reckless mortgage practices, which led to billions of dollars in defaults,

The direct cause of the US crash was because prices were too high. Lending practices were the main reason why prices were too high. But mortgage lending at prices not justified by rents and incomes is risky by definition. Here just as must as in the US - no matter what label you give it.

Also the mortgage defaults were the result of falling prices, not the cause. As will be the case here. In a rising market an owner in trouble can always sell for cash or refinance.

Anonymous said...

B2B: Houses with suites are worth less NOW (and some could argue worthless; they are as far as I'm concerned); anyone who could afford those kinds of prices didn't want a second postage stamp kitchen they'd only have to tear out to have a decent home theater or family room/office.

Or to have strangers living in their homes around their young kids. BAD idea.

Not to mention the impossibility of finding tenants for more than half of the large houses on the island ruined by suites. Look how many are available, and the number is growing every day. With rents and prices falling.

Suiting out a large house was the stupidest thing anyone could ever do to it to ruin it (besides Victorian remodeling) and unfortunately, it was quite an epidemic up here long before the current bubble.

olives said...

"I can go one better on the rumour front - I heard only days ago from a credible inside source that only the parkade will be capped off and finished at Town & Country, and that the existing Walmart will stay where it is..."

B2B, just to clarify, are you saying that you hear that nothing is going to be built other than the parkade?

Anonymous said...

Thanks B2B, went onto the site and looke at MLS 256773

So in February of 2008, this property was appraised for the Royal Bank at $767,000 and now is listed for $599,000. Thats a minimum drop of 22%. If the Royal Bank lent at 80% of the appraised value, then the vendor is upside down in the mortgage. All this in 10 months.

I went back and looked at a couple of sales of similar homes that sold around that time and I don't see how the appraiser can justify that value when homes that were 500 square feet bigger were selling for less than the appraised value at that time.

I think the lesson to be learned is to do your own homework and not rely on someone else. Imagine if you had bought based on that appraisal.

Anonymous said...

"Houses with a suite are a bubble phenomenon. They will be worth less, not more, when sanity returns to the market."

Absolute BS. Houses with suites in Victoria have been around for decades. Even if prices returned to $250,000, an average family would still need the help of a suite. Do you really think suites are going to remain empty???

As for strangers in your home, a proper suite is not different than a next door neighbour. Just because it's not for you doens't make it worth less - I would happily pay extra.

Anonymous said...

"Suiting out a large house was the stupidest thing anyone could ever do to it to ruin it (besides Victorian remodeling) and unfortunately, it was quite an epidemic up here long before the current bubble."

Sounds like a new landlord of one of the new $450,000 / $1,800 per month condos trying to reduce vacancy. Bring on basement suites, they are family friendly.

Anonymous said...

On the contrary, I've got 2 million (and growing) waiting for my next huge house. Without a suite. If I wait long enough, I could probably grab Villa Madrona, if it wasn't so damn ugly and pretentiously Victorian... and then there's those useless guest houses.

You missed the fact that I'm a bear. Of the vulture variety. Own a condo? You've got to be kidding.

Anonymous said...

Then why would you be commenting on properties of which you are above, oh lord?

roger said...

There are many advantages to having a suite in your house. The rental income is a mortgage helper but you really need to consider the other benefits.

Some FTBs do not realize how much fun you can have as a landlord. With the right attitude you can join the late night parties and meet new friends. Eavesdropping on tenant arguments is better than second hand gossip. Having a BBQ with the tenants is better than eating alone. And there is also the opportunity to learn new things like the landlord tenant act and anger management.

HHV commented in an earlier post that he might buy a suited house, live in the suite and rent out the upstairs for a nice monthly income. That way, in 25 years when he had built up enough equity to swap places with the tenant, it would be like "moving up" in the housing market.

Anonymous said...

I've got an inside source on the Town and Cuntry construction too. The rumour now is that the Walmart is going to stay where it is and on the parkade a Bestbuy will be built. Then Futureshop will close and a Chapters will open up there and the superstore is not going to be built and Saanich is going to make it an official skate park with overflow parking for Mayfair for christmas.

Anonymous said...

It's interesting to me that this blog goes on and on about the cost of homeownership and how prices in Victoria are above the average family's ability to pay, yet redicules one of the possibilities that FTBs have for earlier entry into the market. I say to each their own. I like being a landlord.

Anonymous said...

And I know, I spelled it wrong.

Anonymous said...

Anon 7:49: Because I never overlook a chance to criticize what I dislike.

Sue me.

vg said...

"I like being a landlord."

LOL. In other words you paid too much and have no choice, you "have" to like it. Yes I would love to have strangers in my basement,it's such a fulfilling experience.

Anonymous said...

Especially when they take such a wonderful interest in my prepubescent kids and babysit for free...

dub said...

My sister and husband bought their home for $230,000 (yes, quite some time ago). They have a suite which they rent out. The rental income is higher than their minimum mortgage payments.

Yeah, I'm sure she has to put up with crap from tenants every once is a while - making money isn't always easy. But as I see it, she'll have her home paid for a lot sooner because of that suite...

A suite in your home may not be for everyone. But making blanket statements of how crappy and silly it is to have one in your home is kinda ridiculous.

dub said...

Here's one of my favourite condo's to keep an eye on - obviously bought to flip.

Current MLS# 252765

Sold: Feb 15, 2008 for $235,000.

Relisted: May 25, 2008 for $262,000

After a few price reductions (and a new mls #) -
Current price: $239,00

They haven't lowered the price again since it was relisted in Sept.

Bought to flip (assuming that was their intent) at precisely the wrong time...

sitkako said...

http://www.bcrea.bc.ca/economics/trends/2008-10-08VIREB.pdf

interesting presentaion by BCREA to its own VIREB - but does not seem to match what is saisd to the meida??

Worth a storey from maybe a Consumer Advocate

Dumb Canuck said...

sitkako - interesting how they are basing their projections off of boomers with high net worth moving to the area, while discounting the significant resource industry job losses in the area. Unfortunately, a lot of boomers just lost 40% of their net worth and probably won't be buying as much retirement home in the future.

Good historical data with an unfortunate bias in how the future will turn out. Which is very typical as we all tend to skew analyses into what matches our world view (particularly if $ are involved)

Anonymous said...

"LOL. In other words you paid too much and have no choice, you "have" to like it. Yes I would love to have strangers in my basement,it's such a fulfilling experience."

Quite the contrary, our mortgage is likely less than your rent; we have a beautiful home that is near 3000 sq' and the tenants pay 60% of the mortgage plus their share of utilities. Admittedly, the $12,000 per year that is what I like the most about being a landlord.

As for the "stranger and pediphile" comments, you have more to fear from your own fathers and other close male relatives than you do from strangers or tenants.

mln said...

Judging by some of the comments, it looks like we're somewhere between the "denial" and "fear" phases.

Anonymous said...

"A suite in your home may not be for everyone. But making blanket statements of how crappy and silly it is to have one in your home is kinda ridiculous."

....until it's your kid that gets raped. Then, it's not so ridiculous anymore, somehow.

"As for the "stranger and pediphile" comments, you have more to fear from your own fathers and other close male relatives than you do from strangers or tenants."

Ah, expert advice, coming from someone who doesn't even know the correct spelling of pedophile... which isn't surprising.

Those "family member" statistics you're misquoting include tenants; they don't report perpetrators who live under the same roof as "stranger to the victim" for the purpose of the statistics.

They figure if you're in the same house, you're family.

Word to the wise.

Anonymous said...

That's why I rent to chix only, especially hot ones like the current tenant. If she wants to rape me she can do so anytime she pleases.

Anonymous said...

I wasn't quoting stats, just well known facts. The fear mongering has again gone past laughable and again we see a weak response that has to focus on spelling mistakes to get through an entire paragraph.

I too rent primarily to females (currently its two cute college girls, don't tell my wife) and I am very wary of any male tenants - but to suggest that they are more likely to rape your kids than a neighbour is a bit of a stretch. on.

vg said...

"I too rent primarily to females (currently its two cute college girls, don't tell my wife) and I am very wary of any male tenants "


Of course, now we are hand picking females only showing paranoia of half the renter population. I rest my case.

PS the females can sometimes be far worse and bring home the scum of the earth at 2 in the morning. So much fun being a landlord.

I have owned homes before for the solitude and pride it is MY family's place and no one elses, and not to pay it off any faster. No matter who you pick,sooner or later the tennant bites back bigtime.

Anonymous said...

And now you take up being a renter with no control over anyone that comes in and no control over where you or your family might be at the end of the current lease? This only gets better and better.

Suddenly owning your own home was all about safety, security, and pride? Where'd the profit and loss statement go? Why all the hype about prices?

I think we're getting to the bottom of some pretty murky bear BS here.

greg said...

Can we please have some bull posts on here where the bull points out the tenant is paying 20% of their mortgage payment (just bought the house based on Ozzie's advice in summer 2007), and oops, they gotta pay he tax man for that unreported income and, oops, too bad about the repairs from the extra wear and tear.

Love all the bulls who frequent these blogs but constantly report they paid prices that were available back in, oh, 2002 or earlier...

Try making it work with a suite in a house paid for in the $550,000 range with 5-10% down.

Oh, and by the way, house is now underwater so there is no home equity loan available for necessary repairs.

Stressful for some, I'm sure....

patriotz said...

the tenant is paying 20% of their mortgage payment (just bought the house based on Ozzie's advice in summer 2007), and oops, they gotta pay he tax man for that unreported income and, oops, too bad about the repairs from the extra wear and tear.

If you have a suite in the house all expenses of the house (interest, taxes, maintenance, etc) can be pro-rated on a per square foot basis against the rent received. For anyone buying a house in the last few years this nets out to a loss, which can claimed against your employment income.

I wonder how many of these geniuses know this though.

vg said...

"Love all the bulls who frequent these blogs but constantly report they paid prices that were available back in, oh, 2002 or earlier..."


agreed Greg, why the sudden influx of "in the money" landlords ? sounds like they need some soothing as their paper profits fly out the window month after month.

greg said...

Exactly Patriotz. I suspect osme of these "landlords" have a natural tendency to "hide the money" which gets in the way of operating the suite as a business.

Even for those who do that, and pay the taxes then claim the losses, at prices the last 2-3 years, with only 5-10% down, it's a stretch for anyone earning median income to manage the payments on a $500,000 plus house - I mean, mortgages close to $3000 subtracting suite income but adding taxes and repairs (on the suite) doesn't equal a very easy financial situation.

You can't compare the smarts of renting out suites in houses bought ten years ago that cost half as much as houses selling now, where the suite is the only way the purchaser can make their payments.

Two completely different scenarios.

olives said...

I doubt many have a suite in their home because they "love" having someone living in their basement. Rather it is a financial necessity for most.

I have owned a house with a suite (and a good tenant), and while it wasn't the end of the world, even with a good tenant I would say it sucked - lack of privacy in my yard and really put a damper on what I could do upstairs - watch movies with surround sound, take baths late at night, listen to music, have parties, have friends park in my driveway, etc., also I would have loved to actually USE my basement for my own purposes. I hear that many people with small children are constantly stressed about their children creating noise.

It's all about what type of "lifestyle" you want - and I feel I have a better lifestyle now renting a full house than owning half of one.

Anonymous said...

Look, I'm just a bear vulture here, ready to buy a nice big house when it hits what I think is going to be the horrific Depression bottom, and I can promise you, it won't ever be a house that's been ruined (in my opinion) by a suite. And unfortunately, that's far more than 75% of all the big houses in and around Vic.

My bottom line. Your mileage may vary.

My advice? When you can't find a tenant after a year, and the house is still unsold, DO THE MATH.

Maybe the suite is why. Maybe it's NOT the big deal selling point rabid lying desperate realtors try to make it out to be.

"Mortgage helper"? The only "mortgage helper" anyone needs is a decent enough income, a low realistic post-crash price, and, if you can't buy cash, a realistic mortgage as opposed to a Kamikaze 40 year one.

roger said...

VREB Dec-08 stats released

December 2008 Statistics - Monthly Analysis

November 2008 shown in ()

MLS Sales - 239 (268)
MLS listings - 3824 (4459)

SFH Average - 548K (524.1K)
SFH 6 mo. Avg. - 556.5K (562.8K)
SFH Median - 507.5K (500K)
All SFH Sales - 140 (153)

Condo Average - 280.5 (273.9K)
Condo Median - 253.8 (258.5K)
All Condo Sales - 53 (77)

Town Average - 389.4K (447.4K)
Town Median - 368K (372.3K)
All Town Sales - 28 (20)

Year-over-Year Analysis

GV - Greater Victoria
December 2007 shown in ()

MLS Sales - 239 (408) - Down 41%
MLS listings - 3824 (2799) - Up 37%

GV SFH Average - 548K (624.5K) - Down 12%
GV SFH Median - 507.5K (536K) - Down 5.3%
GV SFH Sales - 132 (187) - Down 29%

GV Condo Average - 280.5K (332.8K) - Down 16%
GV Condo Median - 253.8K (292.9K) - Down 13%
GV Condo Sales - 53 (120) - Down 56%

GV Town Average - 392.3K (455K) - Down 14%
GV Town Median - 370K (387.9K) - Down 4.6%
Townhouse Sales - 27 (44) Down 39%

mln said...

Put me down as another buyer who skips past all the suited house listings.

greg said...

Hey Roger, not surprised, but definitely find it interesting that even after the December decrease in listings, they are sitting well above where they were at the price peak last spring.

Is 6000 listings possible this spring as posited by hhv? Maybe...

roger said...

VREB Comments on 2008

2008 - A Year of Change in Victoria Area Real Estate Market

Following several years of significant price increases and exceptionally strong sales in 2007, the Victoria area housing market softened in 2008. Total sales of homes and other properties fell by 27% compared to 2007 while the value of all property transactions through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®) dropped from over $4.1 billion in 2007 to $3.1 billion last year.

Victoria Real Estate Board President Chris Markham noted that due largely to increases in the early part of 2008, overall average prices for the year as a whole showed modest increases compared to 2007. "The overall average price for single family homes rose three percent last year; the average price for condominiums rose just under one percent while the average price for townhomes rose 5.6%." Markham notes there has been some softening in prices in recent months and anticipates the market will stabilize during 2009.


------------------------------------

This month's news release was mainly facts and was devoid of spin. Saying that the market "will stabilize during 2009" is a reasonable statement by the board.

Readers will note that annual averages were reported this month. These are calculated by taking the total annual sales volume, in dollars, in a given category (i.e. condos) and dividing by the total number of sales in a year. There were modest increases for condos, townhouses and single family homes using this statistic.

This stat gives different results than the Year-over-Year and six-month rolling average stats which are negative and trending down. I will be working on the stats slideshows later today and will post the results so that readers can get the usual monthly overview.

Just Jack said...

Are homes with basement suites more costly than homes without?

The simple answer is yes. But how much more should you pay for a home with a suite?

You should not pay more than the reasonable cost to build a basement suite. In the case of a fully finished basement, that may mean upgrading your main floor cabinets and installing the older ones in the basement, a fridge, a stove, and some electrical and plumbing work. An unfinished basement would of course require much more. The minimum cost would be around $7,500 and I would not consider installing a new basement suite at more than $50 per square foot reasonable.


Scenario 1 (The prudent buyer)
If you installed a new 2-bedroom 1,000 square foot suite at $50/sft. that would be $50,000. Rent for the suite on average would be 1,100 per month for roughly a pay back period of some 48 months or 4 years.

Scenario 2 (The bulls eye on the forehead buyer)

An extra $1,100 per month will allow you to finance another $120,000. So this walking target buyer may pay up to $120,000 more for the basement suite. This scenario has played out over the last few years due to the lowered lending standards and that buyers could not come up with an additional $50,000 to build a suite - they had to buy a home that already had a suite.

At one time lenders only used 60% of the basement rent to calculate debt service. Today some lenders use 100 percent.


Today, with the slowing market and increasing lending standards, the scenario 2 buyer has disappeared.
Consequently, you may see homes with suites battered in this declining market. They will always sell a little higher than homes without suites, but far from the premium paid over the last few years.

Just my opinion, Jack

greg said...

JJ -

I also wonder about this premium in homes with sub 7 foot ceilings. Really, these can never meet basic codes, should be discounted as such, however, in City of Victoria, many, many of the basements were never built with the idea they would one day be redeveloped and suited out.

What kind of value can you put on a suite in a house where the house would have to be lifted to meet basic code?

In my mind, a house with a usable, but undeveloped 7 foot plus basement should be worth more than a fully completed suite with ceiling of 6 foot two.

Maybe some people don't care, but I'm 6 feet tall, hardly that tall by averages these days, and it seems a great many basement suites are just too darn short.

Dumb Canuck said...

Interesting MLS Stat of the day:

SFH (Greater Victoria) Median: 507.5K, 132 sales
SFH (Other Areas) Median: 378.5K, 8 sales
SFH (Total Single Family) Median: 487.5K, 140 sales

The number of data points is so low, that an additional 8 sales (likely 7 below the Victoria median) moved the median by around 20K.

BTW - how can View Royal have -1 sales of condos in December?

Just Jack said...

The pre-1940's homes mostly had low basement ceilings, not because people were shorter back then but to reduce the home owner's taxes. At 6.5 feet high the basements were not taxed as livable space.

Of course today, most of these basements have been finished with a good proportion of them suited.
I think at the heart of your statement is legality. From what I understand, Victoria has now moved to allowing basement suites in all homes. However, the suite has to meet current building codes. So, I don't believe that a 6.5 feet high suite would be allowed. However, someone would have to make a written complaint for the city to inspect the suite in order to shut the suite down.

So, the bigger picture is one of legality. Do homes with legal suites get higher prices than homes with illegal suites?

I think in a stable market with lots of choices the answer is most probably yes. In a hot market, I don't think that there is a discernable difference in value between the two. Having said that, in our current declining market, in order to move back to the stable condition, homes with illegal suites will have to lose more value than homes with legal suites.

greg said...

JJ -

I agree with your assessment, but there is one other major element I forgot to mention.

There were quite a few houses in Fernwood, Fairfield etc where the legal suites in place resulted in the house being broken into strata properties, with garden, er, basement suites being sold for a quarter of a million dollars or more.

This potential to have the house broken into strata is potentially far more lucrative than a 6 foot two basement with a rental stream, in the same way a single house sitting on an R2 zoned lot should be worth more than its identical neighbour sitting on an R1 zoned lot.

I don't think many people gave that much thought on the way up, but I think it is going to be quite relevant in the near to mid term future, when I expect many, if not the majority of listed properties not to sell. These are the types of differences, like location, amenities etc that will be crucial in differentiating a property from the over-priced neighbours.

Thanks for the interesting comments, they're worth thinking about since I am looking around and thinking of buying later this year.

Anonymous said...

Bill comments on Real Estate In Victoria And a Positive Attitude.

Just about every day do we read about all the bad news and how bad it is supposedly going to be in the future. We thing the Victoria Real Estate Market will do well in 2009 and we are not alone. The most important part of all of this is for us all to keep a positive attitude and ignore all the people that complain.

WARNING - Ozzie quoted here!

hhv said...

My favs from Bill:

"4. There will be a dozen deals of a lifetime. I.e. a 3-year-old $60,000 (lease return) American SUV will go for under $20,000. Good."

Word on the street is many REALTORS can't afford the last year on their leases and will be "walking away" from their Escalades a year early. Get your checkbooks ready bears, then go buy a Yaris, Escalades are so last year, and so ex-sales professional like.

"6. The bad companies, the bad products, the overbuilt real estate condo areas will all continue to be cleared out or crash and burn. Good, they should."

Not one to "focus on the positives" for too long in Victoria, Bill calls for the end of the condo-crazed-boomer-migrant-dependent-developing.

"7. As investors we will not so readily trust someone else to manage our money. We will do some learning and not get scammed as easily. Good."

And we won't take statements from REALTORS like Ozzie Jurock and those who quote him as "expert" anymore.Isn't irony delicious?

Just Jack said...

If you purchase one of these R-2 zoned homes and hope to strata title the main and basement, remember that you will have to bring both of these stratas up to current building regulations. Which is costly. There is also costs to strata title as well as development cost charges payable to the city. And after investigating these costs you also have to deceide how much should you be paying yourself for taking on this project. I would suggest that you pay yourself at least the same as what you pay the agent for selling both properties.

Now, I don't want to come across as a "wet blanket" but most of the time these costs to strata title a main and lower level are too high. This is why you find so few of them in Fernwood. If it were profitable more people would be doing this type of development. However, you will tend to find more of this type of development in James Bay where the cost of the land is much more expensive than other areas of Victoria. (James Bay is just wierd when it comes to what people pay)

One should also remember that when the market prices are going up anything attached to land sells. Not so, in a falling or flat market. Those 350 square foot condominiums (Mosaic) and half duplex homes become very hard to sell, even in the better areas of Victoria.

As for which property is more valuable a home on a single family zoned lot or the identical house on a duplex zoned lot. The answer may be that both are the same value. If the home is substantial in size or fairly new, the improvements may have so much value that it is not economical to demolish the home and rebuild two new homes. Hence, you will get your highest price, as a seller, as a single family home. This is why you can still find these homes on R-2 lots today, when they should have been re-developed in the 1990's boom.

Maybe the lot is large enough in frontage and site area and the current house is situated on the lot in such a way that you may be able to "link" a new home to the older one. This may be a viable method of developing the house on a duplex lot. But my expierence has been that the person selling the property as a house on a R-2 lot, does not get any more money that a house on a single family lot. The profit of any development goes to the developer of the property who is taking the risk.

There are a lot of exceptions to the above. For example a small house on a CORNER R-2 lot that is large enough to develop (just because its blanket zoned R-2 does not mean you can build a duplex). Having two road frontages is really helpful in this type of development.

If your planning on a career as a land developer, this is a good way to get your feet wet. If you screw up and lose 50 or 100 grand, well chalk that up to a life lesson. Lose half a million and your wife may be calling a divorce lawyer.

Anonymous said...

Was on the bus today with my 3 year old and she pointed at a bulding and asked me what it was.

I told her it was condos and she got all excited and said she found condos.

I pointed out another condo building to her and again she got all excited and said she found condos.

I then pointed out another building to her and a condo building site and she got all excited again.

I told her that you could throw a stick in this town and you would hit a condo building.

I wonder if there were any condo owners on the bus?

patriotz said...

in City of Victoria, many, many of the basements were never built with the idea they would one day be redeveloped and suited out.

That's because people had the quaint idea that in a a small city in a big, affluent country like Canada ordinary families should be able to afford their own house.

What a concept.

roger said...

The Times-Colonist had an article in today's paper on Victoria Real Estate. It should give buyers, sellers and RE agents something to think about.

Monthly housing sales off 40%

The Victoria Real Estate Board has an unenviable task ahead of it. Each month, it will have to release the region's sales summary and compare it with one year ago -- and it's unlikely to be pretty.

It started yesterday, as the board released December and year-end statistics showing sales last month dropped by more than 40 per cent from December 2007. The median selling price of a single-family home fell to $507,500 from $536,000...... The average price of a single-family home dropped to $548,025 from $624,450.

The year-end data showed the Victoria real estate market softened considerably last year, as total sales fell by 27 per cent compared to the year before, while the value of all property transactions through the multiple listings service dropped to $3.1 billion in 2008, compared with $4.1 billion in 2007.

Anonymous said...

My prediction? Dallas will try and sell anything...look familiar? And at peak market price too, but don't forget the $100K+ in renos...

http://www.dallaschapple.com/properties_details.htm?id=257010&ct=

Anonymous said...

What really makes me laugh about this listing (mls 257010) is trying to sell a million dollar property with a ghastly history yet excluding a cheap fridge and stove.

Anonymous said...

Or how about this almost million dollar home in a so-so neighbourhood. Ad says as seen in Homes & Land of Vancouver Island.. he forgot to mention CHEK news, Global, the Times Colonist, Vancouver Sun, the Province....but a new coat of paint on the outside and you'd never know it was the same house, at almost the same price.

http://adrianlangereis.homesandland.com/Listing.cfm?MagId=ANY&ListingId=12045917&WebsiteId=110292

kabloona said...

Geez, don't they have to reveal that uhh, detail to a potential buyer of a stigmatized property? I mean, with all their R/E "ethics" and everything...???

In California, I believe that kind of information has to be revealed by Law.

Wenna said...

Since I'm new to the area... can you expand on what makes these properties "ghastly"? I assume something infamous happened there that I may not be familiar with by just looking at the property.

patriotz said...

Geez, don't they have to reveal that uhh, detail to a potential buyer of a stigmatized property?

Nope, all they have to do is correctly represent the property itself, not what happened in it or who owned it. Unless material to the property like a grow-up.

If someone is selling you a used car they don't have to tell you who previously owned it or what they did in it either.

Anonymous said...

Wenna, both those homes were the site of recent high profile murders. The first was a family murder-suicide, the second was the still unsolved killing of a young female real estate agent.

Anonymous said...

The house should have been bulldozed.

The agent does not have to disclose the history of the property to the next buyer as there has been one owner in between.

Shame on the agent, if she does not volunteer the information.

Anonymous said...

Anon 7:43, what's the big murder mystery? Same thing happens in Southern California every day.

Family murder-suicide happened when they parents lost both jobs, were already upside-down in the mortgage, it was foreclosed, and on the day the constable came to evict them the father shot everyone and then himself.

There was one survivor, and THEY shot the real estate agent when she came to sell the house because she was the same agent that sold the family the house at the peak of the market by telling them "it was the best time to buy" and "values go up forever" and "buy now or be priced out."

Not so hard to figure out. In Southern California they're not even pursuing the cases marking them "unsolved" as well they are so numerous.

Real estate lies kill.

Ok, so all right, it's black humor. Didn't happen this way. But could have...

Anonymous said...

I think the dumbest buyer in history has been located. I heard an anecdotal story of someone who bought a house. The buyer was approached by another buyer who paid them more than the list price before they even closed on the deal. Talk about greater fool.

Anonymous said...

Yet another indication that prices will not be falling as far as we hope. I think it might be 2012 for us.

Anonymous said...

Don't count on it. By 2012 you'll see 60% drop. Perhaps more.

Nuclear war in the US will have a way of doing that to home values. While hyperinflating everything else.

And with Obama? It's a done deal.

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