Monday, February 1, 2010

Carla & Darren, I know you read this

And here's the independent analysis your "journalism" should have provided when you republished VREB's spin in today's online edition:
"For the first time in four years, January sales volumes failed to meet or exceed the preceding December's sales. In January 2010, sales volumes failed to match the same numbers as January 2007 and 2008 despite record low interest rates not available to buyers in those years.

While out-performing a dismal January 2009 is surely a sign of an improved real estate market in Victoria from the doldrums of last winter, the lack of sales volume in January 2010 compared to December 2009--typically the slowest sales month of the year--marks a significant shift for the over-heated Victoria real estate market. Interested readers can review the detailed sales statistics freely available on the Victoria Real Estate Board's website."
You'll have a chance to redeem yourself in tomorrow's print edition. I wait with baited breath. Tell you what, you can cut and paste my words above, without attribution. You can even claim the words as your own. I know you're more than capable of doing this.

By the way, did you even write any of your own words today? I can't tell. Looks to me like you just parroted, er, paraphrased what Michael Sampson, VREB's Manager of Communications made available for you. I hope you at least get an occasional lunch out of this incestuous relationship, you certainly can't be experiencing any journalistic pride.

February 2 Update: They do read, they did listen, they didn't copy and paste, but hey look, they did five minutes worth of digging through previous years' stats (yes that's plural, they went farther back than 2009) and they tried to inject some balance without upsetting their largest local advertising revenue source.

I guess that's all we can ask of a media company firing on its last cylinder. Of course, they probably blame Craigslist and the internet when they sit around the lunch room reminiscing about the good old days. Here's a hint people: it's the product, not the competition.


Leo S said...

Wow. Let it out HHV, let it all out!

Just Jack said...


Personally, I would have started
my point/counter point argument with:

Carla, you ignorant .....


HouseHuntVictoria said...

Carla must have had to work on the weekend to get out the other more-balanced piece of real estate business writing they published. I guess Darren had to jump on the proverbial grenade for today's less balanced piece.

Animal Spirit said...

yellow journalism. print stories based on what advertisers think. daddy taught me not to eat yellow snow.

Animal Spirit said...

That was a 40K jump in the median price to a record 595K, mostly driven by a huge change in Victoria itself. There's been quite a few higher end places selling near where I am - is this a distributional change or actual increases.

Does lend some weight to the lower end starting to drop out and move up buyers hitting the middle-upper end of the market.

Makes Victoria an even more unreasonable place to buy. I'll continue to rent for a third of buying where I'm living.

think said...

Check this out...

(I'm not sure how to do a link - sorry)

Canada has done the same as Australia - just trying to cure a hangover by getting more drunk... you may be able to delay the crash but you can't stop it.

omc said...

Yikes, that aussie stuff is crazy. It makes sense though as the only other place in the world as expensive as western canada is australia.

It reinforces my opinion that this could be a while until we see the downturn though. Who knows what kind of nonsense the gov't here could try to pull to keep the bubble inflated.

Robert Reynolds - GBA said...

tonnes of stuff on the twitter-sphere today about the NDP wanting to extend Employment Insurance Benefits.


Anyone know:

A) how many people are on EI in Victoria

B) how many of those are near the end of their benefits (say less than 30 days)

C) how many of those are homedebters?

PS: missed you Roger, come back again soon.

omc said...

A working link
for the article think posted. It is very worth a read, if you haven't already. Mish links to some articles that will bring warmth to a bears heart.

BTW, if you mosy on down to the vancouver sun's site you will find the same trends that we saw here, in Vancouver.

Robert Reynolds - GBA said...

PPS: The recession is starting to hit Victoria, one of my builder clients just closed up shop, laid off 17 EE's and today terminated their employee benefits plan, cuz there are no more employees.

Sucks for my client, sucks for me, and sucks for the insurance company (not that they need the money).

Marko said...

"The recession is starting to hit Victoria, one of my builder clients just closed up shop, laid off 17 EE's and today terminated their employee benefits plan, cuz there are no more employees."

That is interesting. A tradesperson working on one of the houses I am building right now told me today that a builder I know bought a 7.5 million dollar house in Uplands earlier this year. Obviously much smarter than myself and your friend who closed up.

You can make lots of money during recessions if you know what you are doing...

For example, this house was bought 11 months ago in Oak Bay for $350,000 with another $100,000 to 150,000 investments in renos. Now listed for $899,000...

This lot next to Hillside Mall sold for $205,000 last year, plus max $200,000 for a house, listed for $619,000...this builder is going to make at least $180,000 on this home...

While everyone was running for the exists last year some people had the insight to buy the right piece of property, at the right time, and they are being rewarded.

I wouldn't encourage people to necessarily buy right now, but if you are always on the sideline waiting for a 25% + correction, good luck with that strategy.

Vic said...

"While everyone was running for the exists last year some people had the insight to buy the right piece of property, at the right time, and they are being rewarded. "

It was crap luck,not "insight". The guy gambled and won,nothing more. The world financial system was within a day of crumbling and he can only thank two people, God and the FED.

I find it amazing someone with so much on the line can be in denial of what has happened before in Victoria. A 25% correction can easily happen wether you are selling homes or tulip bulbs. Sooner or later the fool pool runs dry, even in the millionaire boys club.

Heard the first wave of the government layoff notices started today, I can imagine how many happy owners are in that unfortunate group.

Vic said...

Looking at your two house examples there Marko, I call bullshit. No way they got those type of deals especially the Oak Bay one unless it had mold,fire or a poltergeist.

A new home with by the looks of it is 2000 SQ FT and his cost is only $200,000 ? Thats only $100 a Sq Ft which means crap quality if even half true and built by IKEA.

Sorry but not buying it.

tropical_vic said...

Long time reader, first time poster. I guess I’m one of many that qualify as a “lurker”, so decided it was time to start putting in my two cents whenever the opportunity arises. I’m not an expert in finance, nor connected professionally with real estate. I found this blog more than a year ago when I was looking for information on real estate in Victoria. Since then, I’ve been checking the blog on a regular basis.

Here’s an interesting article from MacLean’s Magazine about Canadians’ record debt loads. Awash in a sea of debt

Marko said...

"Looking at your two house examples there Marko, I call bullshit. No way they got those type of deals especially the Oak Bay one unless it had mold,fire or a poltergeist.

A new home with by the looks of it is 2000 SQ FT and his cost is only $200,000 ? Thats only $100 a Sq Ft which means crap quality if even half true and built by IKEA.

Sorry but not buying it."

The address of the home in Oak Bay is 2120 Fair Street and the lot next to Hillide Mall is 1575 Westall Av., perhaps DoubleAgent can confirm the sales prices of this home and lot for everyone. I looked at both properties at the time and the lot next to Hillside Mall came with plans for that exact home, I believe it was 1580 sq/ft = $126 sq/ft which is more than reasonable on a simple home.

"It was crap luck,not "insight". The guy gambled and won,nothing more. The world financial system was within a day of crumbling and he can only thank two people, God and the FED."

I really think there is more to real estate than luck. Recently, in the same subdivision I saw a builder spend approx $540,000 - $560,000 on a home, had it on the market for 14 months and eventually sold for $524,000. In the same subdivision I saw a builder spend $410,000 - $430,000 on a home and sell in 4 days for $570,000.

I've seen this phenomen a number of times in real estate and not just in new construction.

Buying, building, renovating, flipping, selling, etc. involved more than just "luck" in my humble opinion.

Look at Chard Development downtown, third 14 story building going up downtown in the last 5 years, over 50% sold already. Planning another release this spring.

At the same time Bayview is offering massive discounts and half of the building is essentially unsold since completion.

Panza said...

Thanks for two heartwarming links (Think and Tropical)! More fuel for the fire - we're just waiting for the spark that lights it (rate increase? more widely spread common sense?). The Mcleans piece unfortunately neglected to explain how taxpayers were on the line for all this through the idiocy of the CMHC.

Without a doubt, australia should beat us to the punch with a great big, noisy bust. I only hope it will happen before any legislators here are tempted to propose anything as stupid as cash incentives to buy a house.

I think Marco is right that a savvy market-player can make money in almost any year, and certainly a skilled renovator can. I think Vic was right too – the market should never have gone up like it did in 2009 and it was a lucky gamble to buy last march.

Vic said...

I'm not doubting that one can pick up deals where a run down place can be reno'd, especially a year ago at the low. I just find it hard to believe even the most run down place "entire house" went for $350,000 without some serious nasty history in it. Even the cheapest 2 bed bungalow in Oak Bay wasn't going for less than $400,000 at the low and this is a 4 bed,3 bath,2400 Sq ft place.

Either the buyer scammed some old lady or there was something major wrong with it.

The other place can hardly be called "simple", it is "custom crafted" and has all sorts of perks that are not basic. The floor size you claim with 4 bedrooms and 3 baths says they are closets.

No mention of landscaping costs on the pile of dirt yard either, that can add at least $25-50,000 at builder cost. Buyers won't suck that cost up at that price he is asking.

omc said...

most people think of oak bay as the avenue and south oak bay. There are some less prime areas such as amongst the apartments by fort and cadboro bay road. The house in question is just up the road from that on what is known as landsdown slope. I remember when that house was sold, it did go cheap. The builder would have to get a lunatic to pay that price, for that clunker, in that location.

Robert Reynolds - GBA said...

I remember that one on Fair St. i was tempted to pull the trigger on it. it did indeed go for $350,000

it was a falling down hovel, it looked like it had terrible smoke damage from cigarettes for 40+years. it was a tear down. new place looks great, hopefully there aren't many of the old bones left in it. the place was a wreck.

Vic said...

Thanks for the clarification Robert and OMC, as suspected it was a tear down shack so you were paying for a lot. I pity the new sucker who won't have a clue what has been boarded over. Scary !

Vic said...

You can see the shack on Google earth in stripped down mode. I seriously doubt it was only $100-$150,000 in builder cost and labor. The place is double the size with high end fixtures. I've known many people who had $100,000 renos done and never got anywhere close to half of that place.

omc said...

As someone who used to be in the business, I would avoid the place like the plague. Yes it is all dressed up, but you don't know what lies underneath the surface. This guy really pimps 'um up with flat screens and such, it makes me very suspicious. That, and it is in no way a $900k location.

Just Jack said...

I cycled past that home in Oak Bay last year. It was an itty bitty house in one of the least desirable areas (yes there are some) of Oak Bay. I'm surprised that the builder didn't crush the house and build new, because I could not see any redeeming features at all. And I guess that's why the property went for what some people would call less than land value in Oak Bay. Because, the property fell between two markets.

The house itself fits a first time buyer or poor pensioner, but listed at a middle income price (originally listed at $479,500).

The price of the home was not appealing to first time buyers (price).
And the improvements were not appealing to a middle income household (too small and crappy).

Enter - the developer- the lone bidder.

A very very good example of where our market can go, when families stop looking at properties and only the solvent developers are left to buy.

The lot on Westall is an itty bitty one. One similar on the same street sold for nearly $300,000. So this builder appears to have made a good purchase. But why did the seller sell so low - FEAR.

The scare of a world wide collapse?

A very very good example of how sellers could react to falling market conditions in Victoria.

When a market starts to break apart, these are the anomalies that occur. As time continues, these anomalies string together to become the market.

Vic said...


I agree, that is not a $900,000 location and is a gouge,you can buy up near the Uplands/Landsdowne area for the same price.

I seem to recall that area was a bit of a mini flood plain years ago in the heavy rain years being at the bottom of a hill. Same with the Westall St. area too. The whole Hillside area was notorious for basement floods as it used to be a massive bog in the pre-mall days. Maybe it's been fixed over the years.

Vic said...


I don't see the logic either,why not tear it down and build a decent place for $300,000 and still make $100,000 ? ...unless there were some ground problems ? hmmmm.

Just Jack said...

I think Marko will agree that renovating a home is much more expensive than building on a vacant lot. After 90 years, the home has settled and very little is square or level. Any savings you have in material is vastly negated by hand stripping the home down to the studs, and the extra labour cost to make the old fit the new.

I can understand keeping the home, if there is some redeeming feature to the home or the size of the home is larger than you would be allowed to build. Then keep it, otherwise the homes value is only the cost of a book of matches. And probably less as you have to pay to have it demolished.

olives said...

This brings up a good point - a lot of those old houses (Foul Bay, Fair Street area) are built on a flood plain (anywhere where Bowker Creek would flow naturally if it was not contained) - and it doesn't take a 1-in-100 year flood to have a serious problem. New builds likely have floor plain covenants on title - this accounts for many low-lying areas around the city and new areas, such as South Wilkinson Valley. Good idea to check for this prior to making any offers in the future..

Robert Reynolds - GBA said...

Fair St. house pictures and old listing detial


Thumbnail pics

Sorry I wasn't able to find any bigger/better pics. You will notice on the two interior pics some slight "discoloration" on the walls, that was where pictures etc were hanging, and didn't get embedded with tobacco smoke. Yuck.
original listing was $437,000 sold price was $350,000

Welcome to 2120 Fair Street. This home is located in one of Oak Bay's great neighbourhoods just around the corner from Oak Bay high school and many other excellent shops and amenities. The house is one of the originals in the area and sits on a beautiful large and spacious flat lot with wonderful fruit trees. Act fast to carry on a great tradition and start a new beginning in Oak Bay.

Just Jack said...

If the home is in a flood plain, would that just mean you could only build on an engineered floating slab? ie - no basements here unless you want an indoor swimming pool.

Anyway, from what I understand, most of the low lying areas in Fairfield may be subject to flooding as well. The worst areas would have had the marginal small homes. These are the areas where the "poor" people lived in the early 1900's.

And if the market collapses and the property taxes keep going up these could again be the areas were the poor people live. If you rent the movie Grand Torino, you may notice that the character Clint Eastwood plays, lives in a neighborhood that looks a lot like Fairfield! And its a ghetto with drive by shootings.

Vic said...


I lived in a place in James Bay once that was a total rebuilt on the existing foundation with an add on. I know cause I got a look in the crawl space once and was shocked.

Not sure what the requirments are to get away with that as it was a two storey place originally a bungalow, but you would never catch me buying a supposed "new" house with a hundred year old foundation.

FYI, there were many "poor" families in Oak Bay in the 60's-80's much to most peoples amazement. I am sure there are a few still if they bought in lately at these insane prices.

Ryan said...

Comparing previous sale prices to current listing prices is overtly disingenuous. Sure, if he gets his asking price the developer could make a lot of money. But why would he get his asking price? The previous seller didn't.

Just Jack said...

Well hopefully the city building inspectors have improved since you lived in James Bay.

When I first moved here, the builders did their own percolation tests in the Western Communities to get septic approval to build on a lot.

I understand that because of all of the problems with "leaky" condos, the city no longer inspects condominiums but relies on the developer to do their own inspection.

twentysomething said...

Wow..that Fair street house, I distinctly remember checking that one out. I hated the entire interior and the neighboors were not stellar. Two streets over was pretty nice though :P

Me and my partner were considering putting in an offer, though we were going to low ball in the 350 range as well due to the amount of work it required. Crazy to see it at 900k now lol.

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