Monday, August 2, 2010

July sales volume sucked

July sales data (unconfirmed) via local REALTOR® Marko Juras:

July 2010
527 Net Unconditional Sales
1,119 New Listings
4,477 Active Listings

July  2009
933 Net Unconditional Sales
1,357 New Listings
3,632 Active Listings

Net Unconditional Sales volume plummeted 44% from July of 2009 and is down 16% from June 2010. The number of new listings however dropped 18% from July of last year, although it matters little to the overall picture at this point as Total Active Listings remains high at 4,477, 19% higher than one year ago.

Prices
July 2010 vs (June 2010)
SFH: $615,004 down from $649,280 or a 5.3% drop
Townhouses: $420,578 down from $429,549 or a 2.1% drop
Condos: $322,905 down from $331,131 or a 2.5% drop


July 2009 (YOY % change compared to July 2010)
SFH: $563,282 (+8.5%)
Townhouses: $443,109 (-5.1%)
Condos: $328,441 (-1.7%)


Sales and listings graphs courtesy of Double-Agent:

55 comments:

kabloona said...

Very interesting....will be enlightening to see how the Times Communist spins these stats out in its reporting....

;-)

Slightly off topic, but...is there any chance we can see Fred Carver's "cached" commentary on this blog....?

I'm in the dark about what the dummy actually wrote....did he really threaten a lawsuit?

Sheesh....

msr said...

It's not just this month, 2010 has been a terrible year for sales. I have compiled some graphs to compare 2010 to 2008.

2010 vs 2008

The this graph we can see that 2010 has been below 2008 every month except March; which was prime time to get in before the CHMC rule change happened.

So what do people think? Will 2010 sales be below 2008?

Double-Agent said...

It's Monday and time for a graphical look at the Victoria Real Estate Market. Here is how July stacked up to previous years...

July was the worst month for sales in the period 2002-2010 Click here. It was even worse than 2008 and we all know how things turned out after May 2008.

Active listings reached a level last seen in 2008 but well above every other year seen since 2005. As a result the sales to activity listing ratio dropped to a multi-year low. click here

Poor sales and an active listing level that stayed stubbornly high resulted in the highest Months-Of-Inventory in many years. click here

A slowing market means fewer move-up buyers and a slowdown in new listings. click here However the sales-to-new listings ratio was still below every year since 2005 with the exception of July 2008.

When you put this all together you get a market that has run out of steam and is slowing to a crawl. And forget any talk of a pickup in the fall. Historically, Victoria sales trend downward in the second half of the year. You can see this clearly in these VREB sales graphs.

sales 2006-2008

sales 2008-2010

JustWaiting said...

A local real estate firm, The Properties In Victoria Professionals, seems to disagree with Fred Clowner's view of the real estate market.

Facebook comments

"July sales numbers out for Greater Victoria. 527 net sales last month compared to 933 for July 2009. Definatley noticed the low down in the market. Some 4400 properties now on the market. Last year just over 3600. Looks to be a Buyer's market again."

Marko said...
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Mr.4AM said...

Awesome graphs, I really do appreciate them; however, what ultimately matters to most people is price... and I know those graphs aren't so bearish looking - rather the opposite - at least at this time, but let's get the whole picture a la Roger's old graphs. We can't just cherry pick the bearish info, or else we won't be taken as seriously as 'we' deserve. Besides, we all know what happens to prices next. Let's get pricing and sales/MOI/listings etc overlayed on top of each other ... Please :-)

Also thanks again to all who provide such great educational posts here week after week - they are much appreciated. :)

Mr.4AM

jesse said...

Your last two graphs are labeled only going to June.

Double-Agent said...

Jesse,

The graphs run from June 2006 to June 2008 and June 2008 to June 2010. Click here to see what they look like side by side.

patriotz said...

HST is definitely having an effect on the market.

The effect was that idiots who thought that HST would lead to higher prices rushed to buy in the first half of this year. Those who bought at the market top will be unable to buy cheaper later.

As HST applies only to new properties, there is no fundamental economic reason for it to affect the used market at all. As for the new market, list prices would have to be dropped by 7% to stay competitive.

a simple man said...

take home message form the vreb release this morning...

"The average price for single-family homes sold in Greater Victoria last month was $615,004 down from $649,280 in June."

a simple man said...

and this gem...

"Property sales throughout the Greater Victoria area in July returned to the kind of normal level seen in the late 1990s while overall prices declined slightly compared to June."

HouseHuntVictoria said...

A glaring inconsistency with the VREB press release:

The use of "historically average" to explain the lowest sales volume we've seen in a decade followed by this beauty statement rendering it all BS: "Masters added that sales activity is expected to pick up again next year as we return to a more balanced market over the coming months." (emphasis mine)

Essentially, Masters admits that buyers are sitting on the sidelines expecting prices to fall. Sounds an awful lot like the dismal late 1990s in the local market where prices were eroded by inflation to the tune of almost 18%. I guess if you're the VREB, this is the best possible outcome for the coming years ahead.

Skeptic said...

Here is what I like in the VREB press release....

A total of 527 homes and other properties sold in July through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), down from the 625 sales in June. There were 933 sales in July of last year.

The number of properties available for sale last month declined to 4,477 but this was still 23 per cent higher compared to the 3,632 available properties in July of last year.

The average price for single-family homes sold in Greater Victoria last month was $615,004 down from $649,280 in June.

The overall average price for condominiums was $322,905 last month, down from $331,131 in June.

The average price of all townhomes sold last month was $420,578 down from $429,549 in June.



In one month the average price of SFH dropped 5.3%, condos were down 2.5% and townhouses 2.1% but Randi Masters said "overall prices declined slightly compared to June."

How far do prices have to drop in one month before slightly is reported as significantly?

VREB has really is a pathetic organization that misleads the public in order to help their members make a buck

HouseHuntVictoria said...

Skeptic, it's telling that the bottom end (condos and THs) of the market is sinking faster than the SFH market. Those that bought condos and townhouses as short term "investment opportunities" planning to flip or move up are going to find it nearly impossible to do so this year and next.

Skeptic said...

HHV,

There has been little average price change in condos in the last year. Townhouses went up briefly but have been dropping since Christmas. Even SFH has had no average price change since November 2009.

Here are VREB's average price graphs

Now that the spring sales season is over, sales are dropping off fast and listings are high. Watch for more price drops. Looks like 2008 all over again with no more incentives left to pump the market.

Skeptic said...

North of the Malahat real estate sales tumbled in July. Here is the press release.

There were 347 sales of single family properties in the VIREB area in July 2010, down 35% from 536 sales in July 2009. Sales were down 16% from the 415 recorded in June.

Average prices were back to July 2009 levels with many areas seeing a big drop from June 2010. Price and sale details can be seen by clicking here.

Board spinners sound like they are panicking... Here are some examples.

July 2009 was a bit of an anomaly having higher than normal sales volumes than that of
previous years,” says Cliff Moberg, President of VIREB.


That's right Cliff. The days of big commission cheques are over.

I think the misconception out there is that the HST applies to existing home sales, which it does not.

A few people may believe this but the vast majority have just moved to the sidelines. No rush to buy now.

We have to remember that average price information can be useful in establishing trends over time, but does not indicate the actual individual prices,” says Moberg.

Hmmm. The board doesn't mention this when prices are going up

That is the job of professional REALTOR®’s, who are experts in local neighbourhood market conditions. We as REALTORS® have to continue to educate the public that properties that are priced right are continuing to sell.

Translation - PLEASE give your agent an opportunity to BS you to buy or sell. We need the commission and the board needs MLS fees.

“Overall the market is showing its stability. Prices are expected to remain constant for the remainder of the year and increase slightly heading into 2011,” he says noting the market is settling back on par with historical trends during the summer months.

No crystal ball at VIREB. Just the usual misleading statement intended to keep the buyers and sellers from hearing the truth.

Skeptic said...
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Skeptic said...
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Marko said...
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JustWaiting said...

There are some sad faces over at VREB and in real estate offices around town. Why? The Times Colonist is finally telling readers that the bubble has burst. Here is the story.

Real estate sales in Greater Victoria fall, prices slide from peak

July sales in Greater Victoria down nearly 50 per cent from a year ago

A chill swept Greater Victoria's summer real estate market last month, as both the number of sales and average prices moved downward.

In July, 527 properties changed hands -- down 43.5 per cent from 933 sales during the same month in 2009, when a red-hot market blasted sales to the highest point in nearly 20 years.

The total value of all July sales through the Victoria Real Estate Board this year came in at $257,050,956, a fall of 40 per cent compared with $434,462,082 in July 2009.

Average prices for single-family houses, condominiums and townhouses all slid from their levels in June, the board said in its monthly report yesterday.


The article goes on with some wishful thinking quotes from Randi Masters and the "boomers are coming" mantra but they fall flat against the bad news.

Buyers will really move to the sidelines now. Lowballs will become more prevalent. Look out below...

JustWaiting said...

Here is a souvenir for bears.

Screenshot of TC Business Headline

I think the local TV news will be something to watch tonight. CHEK seems to give the best coverage.

Robert Reynolds - GBA said...

I think we should get that headline printed on a shirt for HHV

Robert Reynolds - GBA said...

Also, sales down, listings high, DoM high, Price Changes abound, the sun is shining.

Bear Beers?

Skeptic said...

Tony Joe the former VREB president, real estate pumper and head spinmeister appears to be in a state of shock..

Tony On Twitter

TC did not use the word "bloodbath" however paints an ominous picture. Did prices slide from peak?

So what does he do? He posts the VREB spin on facebook.

Tony on Facebook

The media will be reporting this as a bloodbath however consider this: July 2009 was the highest July ever. 500 sales was typical in the 1990s, or before the market exploded. There were 511 sales in 1999 and 450 in 2000. Sales may have slowed but if anything are returning to a more normal state.

Talk about living in denial. When you have to go back ten years to find a stat that sounds good you really need to face reality. The boom is over and small commission cheques are the "new normal" for agents.

HouseHuntVictoria said...

It's undeniable that this city has grown exponentially from the 1990s. If we use the 1990s sales volumes number, we have to use the active listings numbers too in order to find any value in the comparison. Of course, the VREB doesn't make those stats publicly available anymore. Perhaps an insider here, or someone with a clear recollection, can provide us with insights. My guess is that 400-500 sales represented 20%-25% of active listings, making active listings number around 2000-2500, roughly 40%-50% less than we have today.

Skeptic said...

The real estate rollercoaster climbed to the top and is on the way down. Usually drops faster than it went up.

VREB Historic Annual Average Price Graphs

The condo coaster is the first one down...

JustWaiting said...

Real estate collapsing in BC..

Vancouver homes market goes cold

It may be hotter than usual in Vancouver this summer, but the residential real estate market is as cold as it gets.

Calling the city a “buyer’s market,” the Real Estate Board of Greater Vancouver said sales were quieter than “most Julys over the past decade.”

Sales in July fell 45 per cent from last year, and prices have fallen 2.8 per cent since peaking in April. The average price of a resale home is now $577,074, compared to $593,419 at the peak.

And there’s a lot of supply on the market, threatening to pull prices lower, with inventory levels 33 per cent higher than this time last year, according to the Real Estate Board of Greater Vancouver.


B.C. Lower Mainland real estate sales plummet in July

VANCOUVER — B.C. Lower Mainland real estate markets saw their slowest July in decade, the region's real estate boards reported Wednesday, with sales down by almost half from July 2009's red-hot markets and prices slipping from the previous month's levels.

In Metro Vancouver, excluding Surrey, realtors saw 2,255 sales registered through the Multiple Listing Service, a 45-per-cent decline from July 2009. In the Fraser Valley, July MLS sales were off 47 per cent with 1,001 transactions.

asmoboba said...

/A\ Vancouver Island (Ch. 12) is putting together a story on this for tonight at 5, and the reporter has definitely been pointed to this blog.

kunwak said...

"The real estate rollercoaster climbed to the top and is on the way down. Usually drops faster than it went up.

VREB Historic Annual Average Price Graphs

The condo coaster is the first one down..."

I quite dislike the VREB plots since the give a truly distorted picture by not adjusting for inflation. 2 plots should be always shown IMO, one inflation adjusted and one not...

inflation

kunwak said...
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kunwak said...

inflation

Marko said...
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HouseHuntVictoria said...

Desperate sellers will try anything to make a sale, including dropping their price a whopping $300. Word to the wise: when you're chasing the market down, and you're doing anything to grab attention for an offer, dropping your price by less than 100th of one percent isn't really all that effective. Just saying.

Rhino said...

They are just doing that so it gets bumped to the top of everyone's PCS account. So amateur hour

HouseHuntVictoria said...

Rhino, well, finding a condo amongst the horde of unsold listings in Victoria right now is a bit of a needle in the haystack routine in the PCS right now... that agent should be commended for at least not re-listing it.

Double-Agent said...

July has been a disaster with only 527 sales. In August there has to be more than 517 sales or once again it will be the worst month for sales in the 2002-2010 period.

My prediction - under 500 sales, stubbornly high inventory and lots more price reductions.

BTW - I watched the A Channel report. Little in the way of stats, usual spinning realtor interviews and predictions that sales will go up in the fall. Take a look at the sales charts I posted earlier; sales don't go up in the fall, they keep dropping till Xmas.

What happened to Think our bear cheerleader? No posts in a long time.

Skeptic said...

Dropped by KIV tonight and not a single post on the real estate downturn news. Maybe no one wants to stir the pot and upset the real estate believers.

Just Jack said...

Does the market really suck that bad or is it like Tony says its the MSM's fault.

Well, its actually worse. Because for single family homes 70 percent of all the sales are in the core municipalities. 20 percent are in the Westshore and only 10 percent are in the Saanich Peninsula.

So if you are selling in the Westshore you're seeing about 10.5 months of inventory as opposed to 3.7 months in the core municipalities.

The great asset devaluation has begun.

Just Jack said...

I did. I did. I posted on KIV. It's under the subject Brenda N.

I don't want to stir the pot or upset people but I did post.

:-)

S2

green_dog said...

Thought I'd add a few charts I've been updating over the years covering the situation north of Victoria. I've used data from VIREB only, which is inadequate to tell the whole story. Still, the charts show:

o lowest total number of July sales in the past ten years;

o lowest total cost of July sales since 2004;

o a trend that looks to continue;

o median sales price has been fairly flat for several years.

Nanaimo average price has been staying high but total number of sales is low, so it seems likely to be just higher-end sales. I wonder if people are bugging out of Vancouver and buying there due to the ferry and air links?

Overall, it looks like a head-and-shoulders pattern, with the right shoulder just about completed.

Average price

Number of sales

Total sales cost

Median sales price

kabloona said...

Alright, where's Fred Carver now that we all need his calming voice to reassure the Bulls....?

:-)

WiseInvestor70 said...

We've bought some time, now enjoy the ride downhill. They were claiming a 25% decline in prices 2 years ago, but we manage to increase prices by almost 20% in 2 years, so do the math, maybe 30, 40, 50 % decline ? when that happens, everyone gets scared and the result, well you have seen it in USA

Canada's housing bubble could soon burst: Merrill Lynch

So far, USA still the best place on earth to buy RE at the current prices, awesome what you can get down there for you money, even cheaper than Panama or any other country in America.

Phil said...

In the US you can lock in for 30 years... SO, this 2006 home in Tampa Florida would set you back $590/month for the the length of the mortgage.

Florida home

1000 people retire to Florida EVERY DAY...

Mark said...

So then WTF are people doing retiring to Vic and paying 600k for the same house????

That really is the 6 million dollar question.

Are Canadians really this stupid?

Oh wait....this is the "best place on earth" LOL

fairfield said...

What about the opportunity costs though?

WiseInvestor70 said...

"So then WTF are people doing retiring to Vic and paying 600k for the same house???? "

That is a GOOD question, a LOT of people is not longer considering to retire in Victoria, when they can keep their home in Alberta, Saskatchewan, etc. and buy cash a nice property in Florida, California, Texas, etc. Also a lot of foreigner investors (including myself) do not longer consider Victoria, nor Vancouver as an investment option.

That is why these markets are starting to see a decline, which is just the beginning of what it comes. Remember that the ones that always loose are the ones that live and work there, no the investors as we can cash out our money and take it somewhere else.

c said...

Phil,

The problem with that house (and it's location--check it out), is that it could well be worth zero dollars in a blink of an eye. Much like I expect someone could lose 100k seemingly overnight on a starter SFH in Victoria's housing market this fall. Point being, I see similar risks to buying into both options.

Other than that, after looking at the pictures and the map, I would suggest that this house in particular is a walking advertisement for the merits of retiring to Victoria as compared to that part of Florida.

Further, it is easy for me to imagine that 1000 people per day can be dead wrong about a thing--especially where good taste is involved.

Phil said...

c, you have a valid point. I guess we have to remember that house in Florida probably sold for $400K in 2006 at the peak of their bubble. My point is that if "The retirement capital of America" can crash then it can happen in Victoria too. A 500K home in Langford isn't too appealing to an outsider either.

Locking in for 30 years is an option we don't have here either. If rates do go up we will be that much more exposed.
In Victoria $590/month gets you a bachelor in view towers next to the laudry room. I know where I would rather live!

Mr.4AM said...

Well guys, I'm probably about as excited as most of you. After watching this thing stay afloat for far longer than it should have (no thanks to government subsidies and unwarranted intervention), it's possible, *but not guaranteed* that this time is it - The beginning of a long price downward trend.

However, having been surprised once with a longer than expected dead cat bounce, I must say I'm still not 100% convinced yet (I'm about 70%) that this thing won't bounce back again.

While we appear to have plenty of coffin nails to put this thing to rest, the casket door (high, or extended trend of increasing mortgage interest rates) are still missing from the picture.

Now, while one could argue that the US is still in a housing slump while interest rates are still at all time lows, the fact of the matter is that it was fast and continuously rising interest rates which played a significant part in their bubble burst.

So what I'm saying is that while the Canadian government subsidies appear to be over, while affordability peaks have likely been tested more than once, and while at present much of the near term future buyers have been eaten up by last minute panic buying during pre-rule change and pre-HST implementation, there's still the possibility of:

a) After a few months of downward pricing, affordability errodes far enough that the irrational buyers catergory who simply can barely afford to buy again do start buying again resulting in another potentially long dead cat bounce or price flattening as opposed to continuous price deterioration.

b) North America (Canada/USA) have opted for the typical Keynes stimulus/prop-up the economy approach to dealing with the recession, and appear to be talking about more of the same (QE 2.0) if the economy threatens to double dip as it may still this year. This while, Europe has taken the opposite austerity approach and China the fake-the-numbers and pretend (and pray like hell) everything's under control. My point being, that if we (Canada) do the monkey-see-monkey-do/follow the USA down the keynesian debt hole, low interest rate extensions and even some kind of further government intervention to prevent a full blown RE crash is still very much within the realm of possibility.

As such, until the proverbial fat lady sings, and the casket is fully closed from all sides (was she buried alive?), I'm not betting the entire farm (yet) that THIS IS FINALLY IT(!)

Just playing devil's advocate.
Mr.4AM

jesse said...

@Mr.4AM, it's worth considering how much more demand can be pulled from the future to support current prices. There was a massive exodus from renting into owning in 2009. I just don't see that many buyers being left to clear the market.

The home ownership rate has increased way beyond what is sustainable. I think it reverting closer to its long term average is likely and that means a large portion of people selling or defaulting.

Low rates are no free lunch. They mean low growth and high unemployment. It could actually be argued that BC's rates need to be lower, odd as that may sound.

Marko said...

Okay guys...synopsis of the market for the day.....

Two listings today I thought reflected a weaker market...

$360,000
1546 Ryan Street - Fernwood, SFD - this home a teardown; however, this is the first time in a while that I have seen a home on a decent size lot below $400,000 in Fernwood.

$449,000
2500 Foul Bay Road - SFD - 7000 sq/ft flat lot with rear lane access. Home has a suite. Looks updated and well kept inside.

So far this month, 19 sold SFDs...average price 534k (being dragged down by no sales over 1 million so far).

Marko, I will make a youtube Video tomorrow.

patriotz said...

I think (the home ownership rate) reverting closer to its long term average is likely and that means a large portion of people selling or defaulting.

Or simply very few new owner-occupiers for some years, and normal sales from owners going to investors, not owners.

But under any scenario that spells DOOM for prices.

Skeptic said...

Recently we have been hearing from a number of real estate agents and clowns like Phil Soper of Royal Lepage that HST is a big factor in declining real estate sales. Take a look at these stats for July sales across Canada. (source: here)

July Sales YOY by City

Vancouver 45%
Victoria 44%
Calgary 42%
Edmonton 42%
Toronto 34%
Halifax 33%
Regina 28%
Ottawa 27%
Montreal 26%
Saskatoon 18%
Winnipeg 13%

Look at the big drops in Calgary and Edmonton, a province with no HST! Even Regina and Saskatoon had drops and they are in a province that had the best economy during the recession and no HST.

So why has demand dropped throughout Canada?

- new mortgage rules affect 1st time buyers
- investors now have to put down 20% instead of 5%
- interest rates have risen (both fixed and variable) from record lows
- demand was brought forward for years and now the buyer pool is pretty shallow
- the affordability wall has been hit and there are only a few fools left who will buy
- the word is out that real estate is slowing down and buyers are moving to the sidelines
- buyer confidence is shaky and this years poor stock market performance has folks nervous

Agents can live in denial and try to convince you that this is just a temporary setback but savvy buyers won't fall for this. The boom is over!!

jesse said...

"Or simply very few new owner-occupiers for some years"

Perhaps but an unsustainable home ownership rate means distress for those who should never have owned in the first place, and part of the reason why prices can undershoot.

Marko said...

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