Tomorrow the Victoria Real Estate Board will likely release their June sales data and commentary. They may wait until Monday, but if they know anything about delivering bad news to the public they'll do it on a Friday right after a holiday right before a weekend when no one is paying attention. Of course, they'll find a way to put
lipstick on the pig a positive spin on the lowest June sales volume in 8 years - by focusing on average price stability.
Thankfully readers of House Hunt Victoria do not have to subject themselves to the spin of the VREB or the lack of critical analysis by the Times Colonist - unless it's simply to mock that dying breed of journalism. Here we benefit from the excellent industry insider information and analysis by valued commentators like Double Agent. Here are the really, really, ridiculously good looking graphs and analysis for June 2010:
What do all these graphs point to? Soon-to-be falling average prices due to the overwhelmingly poor supply versus demand ratios emerging in the Victoria real estate market?
Check (warning: VREB PDF). Desperate sellers willing to give up two years worth of "equity" to get out of their home?
Check. REALTORS® getting called out on a mommy forum (and not by HHV) for trying to pass off a house as a "sure thing" investment?
Check (Now removed with no response to the original query, which likely says a lot about the integrity of the REALTOR® in question, no?). Dinner party conversations changing from "buy now" to "sell now"?
Check.
Times are changing. Quickly.
Happy Canada Day everyone.
35 comments:
Thanks HHV and Double Agent. These graphs really speak for themselves. Happy Canada Day to all.
I think we can say now that the only 2 things that would always go up are age and debt.
Happy Canada Day to all
Happy Canada Day all. Wish the sun was shining though. Unfortunately, rainy days are ahead for so many.
It is great to have those graphs Double Agent........."the facts in a nutshell"....."a picture is worth a thousand words"........"gloomsday at glance" and so on and so on.
Good link to that KIV thread. I almost bumped it up, but it is better the way it is.
British Columbia Real Estate future ?
Man you guys are in for a wild ride over the next few months! I think a slowdown in government spending is starting to show up.
Enjoy the fireworks! :)
It is truly a happy Canada day indeed. :)
S2
Month of June stats:
Total Sales 625
Total New 1503
Total Listings 4730
sales/active 13%
sales/new 42%
MOI 7.6
Crash!
wow, even worse than we thought. thnxs for that.
Wow, that is bad.
The headline the Times Colonist should write:
Victoria real estate sales plummet 34 percent
The headline the TC will likely write:
Buying opportunities increase while prices remain stable
The prices are only "remaining stable" because the $500-700k range is so down.
VREB press release is out. They must have recognized they needed to get it out while no one was paying attention. I wonder if Carla is working today?
Spin machine in overdrive.
Here's the true state of affairs:
625 sales, that's an 11% decline from May and a 34% decline from June 2009.
Prices remained "stable" because of 27 sales over $1Million and a lack of sales in the lower end.
"Prices remained "stable" because of 27 sales over $1Million and a lack of sales in the lower end."
Weren't there 27 sales over $1 million the month before? Every month I hear the same thing, prices remained stable because of the million dollar sales; however, to me it seems 27 in a month is not an outlier. Every month is pretty much over 25.
Yes, I know volume was down this month so these sales skew things slightly more, but still.
If prices don't drop in July 1 I would be shocked.
"Yes, I know volume was down this month so these sales skew things slightly more, but still."
But still what?
27 is 4% of June 2010 sales.
27 is 2% of June 2009 sales.
That's almost 100% greater in terms of "skewing things slightly more" isn't it?
Anyway, it's only one character in the story. The lack of sales of low end condo units invariably had more impact on average condo prices inflating slightly than did sales of higher priced condo units.
Much the same as the lack of mid-range home sales that mack up the bulk of SFHs in Victoria will have more impact on SFH average prices than will higher end sales.
Some examples from the Falls this month. I am also seeing lots of people pay full price of building lots. Once again, why do people use real estate agents when they are willing to pay full price in a market that has red flags left, right and center?
Current Price $409,000
Sale Price $439,000
*Must have got another parking spot*
Current Price $404,000
Sale Price $404,000
Current Price $489,000
Sale Price $489,000
Current Price $399,000
Sale Price $399,000
Current Price $419,000
Sale Price $419,000
price is always the last to crash - if you look back at 2008 it followed the same pattern - inventory growing and growing and sales dropping off and prices magically staying "stable" - that is until the summer when suddenly prices crashed at a rapid rate (going from average price of 600,000 down to 525,000 in 5-6 short months). We'll see the same again now. Back then everyone was also saying "wow lots of inventory but prices stable" - prices stable my ass - prices ABOUT to crash is more like it - the next few months are going to be wild and prices are going to fall so fast peoples heads are going to be spinning. The all the dumb-asses are going to be saying "weird - prices just suddenly fell - what a shock - so unexpected!?!" except that it is sooooo expected and obvious when you follow the stats - increasing supply and decreasing demand at the same time - only one logical outcome. PRICES TANK!!!!!!!!!!!!! We are going to see AT LEAST a 10% price drop before Christmas. The writing is on the wall.
Here is what the Times Colonist has to say about June sales. They actually don't completely sugar coat everything. Well, I guess it's kinda hard to do that now.
Finally, the tide is starting to turn. (Just as I move out of the country.)
It'll probably take years to hit the bottom.
Yes, just look at the US. 3 years in and no bottom in sight... In fact home prices there are still way above "fundamentals" (rent).
We have a long way to go folks. The good news is we are finally underway.
Looks like that KIV thread has been pulled, I guess no one is allowed to call out a realtor on their "investment opportunity" BS.
I wrote a nice long respectful response to the realtor on KIV and went back to read it to find the whole thing was gone.
I think there is going to be some big emotion going to come out from many homeowners, realtors, mortgage brokers on the way down.
When you start as a realtor in 2006you have never seen a downturn before. Well here it is. Ain't pretty is it?
S2
Aston: Congrats on the new job! My sister lives in the area where you'll be working. As nice as Victoria is, she prefers the weather there. Good luck!
I wonder if all those people who said well, we bought our house for $350,000 and now it's worth $500,000 will one day say well, we bought our house for $350,000 and now it's worth $200,000.
I bet we will never see that.
That was me, S2, above. :)
I Think the TC is starting to get it. They ran the VREB story again today but with a negative tone.
Real estate sales sag in Greater Victoria - Falling mortgage rates fail to sway wary homebuyers
Home sales cooled and inventory continued to rise last month as some real estate buyers in Greater Victoria chose to take the time to shop around.
A total of 625 homes sold in June through the Victoria Real Estate Board's Multiple Listing Service. That was down from 695 sales in May and about a third less than the 946 sales in June a year ago.
Meanwhile, for-sale signs continued to sprout as inventory levels rose to 4,730 properties, up 25 per cent from the 3,794 available a year earlier.
Major banks last month inched some mortgage rates down, but the small decreases didn't create a rush into the market as potential buyers mulled over increasing inventories for better deals. Observers also note waning consumer confidence in the overall economy may be a factor in the softening market.
Readers will read between the lines and realize the boom is over
Hey Jack we are already seeing "we bought our house for $350,000 and now it is worth $200,000"
...EXCEPT IT GOES MORE LIKE THIS.... DIRECT FROM THE BAYVIEW:
......"you know we bought our condo six months ago for $1,440,545 and the guy three floors above us with the same floor plan, an extra parking stall and superior harbour views just moved in and paid $549,000 for his."
And now he is planning to get on the council to encourage a mini golf course to be built on the grounds. He figures we could all just "chip in" an extra $40,000 via a special assessment to pay for this great new feature.
Gulp...it looks like all the newer buyers will be voting in favour of this!!
The Times Colonist article that was published today will have a big impact on sellers and agents in Victoria.
- Sellers reading this article will realize that they are competing for the few buyers out there. Some will be panicking. Those on the market for more than a few weeks will figure out they need to reduce the price to unload. Even if they can't figure this out for themselves there will be agent pressure to "help them" come to this conclusion.
- Agents will see the commission income slipping out of their grasp. The only way to make a buck is to get a sale. And the only way to get a sale is to snag one of the few buyers out there with an attractive price. Current clients will be pressured to lower prices and new clients will be told to be realistic if they want to sell. Agents don't want to do a lot of work and incur advertising expenses if there is no chance of a sale.
And the sales count will only get worse as the months pass by in 2010. History shows this to be true every year.
Good article about purchasing homes with suites. Google in.....Wed Jun 30 Malcolm Morrison Canadian Press
Don't get lure at the 50% off . Bayview has been offering the same since Sep. 09 , what they have done is.
Bayview Sep '09
They have been trying to unload their inventory with false "Low Prices" tags for quite a while.
This is what happened in the USA before the major crash.
I will bet that before 2012 we will be seeing the non desirable areas with price tags of around 120-150K .
Short the Canadian Housing Bubble
1653 Hillview Ave V8N 2N4
This property was just reduced from 590k to 550k.
"Distress sale, Distress price, This price is fim. No bargain.Gordon Head Prime!"
I think that is supposed to say "no bargaining on this final price". Perhaps they shouldn't announce their desperation in the line previous however. I hate to see anyone in distress, but it is still 10k over assessment and that, combined with the REMARKS kinda makes me hope they get nothing but low-balls.
I think this MLS write-up/description is about to become very common. I've heard numerous stories recently about people leaving the city for work.
Panza,
That Hillview property at 550K has had two price reductions. Here is the PCS screenshot.
Please buy me - Agent needs income
Astonishing: The last time a condo sold in my PCS (2-bed, under $250K) is still May 12, 2010.
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