Marko Juras, local REALTOR®, gave us the month-to-date numbers current to August 30, 2010, leaving two business days to process any weekend completions and finalize the stats:
MTD August
2010 (2009 in brackets)
Net Unconditional Sales: 396 (764)
New Listings: 877 (1,094)
Active Listings: 4,254 (3,509)
Double-Agent continues to provide us with fantastic graphs so we can visually see the proverbial cliff at which the Victoria market finds itself perilously perched upon:
Sales and Active Listings, by Week
Active listings volume grew in the final week of August while sales volumes tapered off to ensure the the VREB will have to go all they way back to 1978 to find a comparable monthly sales volume statistic in an effort to reassure home buyers and sellers, despite the rash of price reductions and stale listings, the Victoria market remains balanced and poised for a comeback this fall and into 2011.
New and Active Listings Volumes, by Week
Typically, the Victoria market experiences a sales and listings volume decline, usually beginning in July and continuing for the remainder of the year. Despite the spin we will soon be hearing from the usual suspects, there is no statistical proof to the assertion that market activity picks up in the fall from the late summer. The image above shows us that new listings are slowly tapering, as they always do, yet total active listings volume remains stubbornly high. Properties are sitting on the market longer, and this time it's different, as would-be sellers aren't taking their homes off the market in any great volume to try again in the spring. Everyone knows prices are falling, buyers and sellers, the race down appears to be on.
We'll likely see a finalized sales volume number near 450 with single family average home prices near $600K and the median price near $550K. It's getting ugly out there.
39 comments:
HHV wrote: Active listings volume grew in the final week of August while sales volumes tapered off to ensure the the VREB will have to go all they way back to 1978 to find a comparable monthly sales volume statistic.
Wow! Is the comparison to 1978 based on population-adjusted numbers? The population of Greater Victoria in 1978 was about 180,000 - about 55% of what it is today.
More bubble talk in the MSM.
Increasing prices in hottest Canadian housing markets a concern
Steep housing price increases in six of Canada's hottest real estate markets since 2002 have all the hallmarks of an "accident waiting to happen" if mortgage rates rise too sharply, warns a new report.
"While housing may be 'affordable' based on record low rates, the affordability situation in Canada could change rapidly if mortgage rates return even part way to their historic norms," the report says.
And now the sharks turn on themselves...."Big-name realtors plot rival listings site".
Good to know that realtors themselves agree that more competition is needed for the MLS website.
*laughs at the irony*
*smiles at the benefit*
Mr.4AM
Wow - the companies planning an alternate include Century 21, Royal LePage and ReMax.
They will meet today to try and agree to an alternative listings site that would pool their offerings.
Realtor.ca would be dead in the water without those firms...
DavidL, my line about 1978 numbers was tongue in cheek.
Mr4am and SimpleMan, I suspect this "alternate site" is purely diversionary in the face of the Comp. Bur. challenge, no more. Why compete with yourself?
1407 Richardson...started out a 575k, now down to 399k. Decent deal?
PS. It was overpriced at 575k, I know.
Marko, it's overpriced at $399K.
All relative. I think compared to a condo it has solid value (obviously you would negotiate down from 399k) given the location and the 4200 sq/ft lot on this side of the duplex is bigger than most SFH in Fairfield.
Marko, it's relative to incomes. You'd have to look at who is going to buy that property. It's likely the same person who would buy a $250K condo. Without suite income to make up the difference, the buyer can't buy it. In a market with more equilibrium between condos, TH and SFH/Duplexes, the price differences wouldn't exceed $75K, IMO. That place, IF condo prices were normal at $250K (they're not), shouldn't exceed $325K.
Only "all relative" in this overpriced, irrational market Marko.....
It's overpriced and big time!
But you're a realtor now so of course you think their is solid "value" there. Will that solid value still be there when it's selling for 250k in 2 years?
Come on dude!
The G&M asks Is Canada in a housing bubble? Rhetorical question, right? Discussion starts at 9AM PST.
To give us a sense of where this discussion will head, here's a report by the so-called expert they've got lined up: Why the housing market may be heading for correction.
When prices hit 1978 prices (still far higher than out neighbors to the south who are dealing with lower prices and greater losses), I'll THINK about buying. Not a moment until. Right now it's just too good in Las Vegas not to be looking. Hard.
"But you're a realtor now so of course you think their is solid "value" there. Will that solid value still be there when it's selling for 250k in 2 years?
Come on dude!"
Market is really difficult to predict. If I knew that this place would be worth 250k in two years I certainly wouldn't be a Realtor or blogging on here. I know where all the signs point, but the signs weren't very good either when the Dow hit 6600.
As far as incomes go, I am really not100% set on the theory. There are lots of countries were a condo is 10x income. Given a global economy, I don't think Victoria we ever get back to something like 3-4x.
I have travelled, a lot, and Victoria is pretty damn nice. Is it 6-7x income nice? That is up for the market to decide...we will see how it plays out.
I was predicting 500 sales for the month two weeks ago, it is going to be less then 450...I was wrong...I wasn't trying to pump the market...where is the trust guys...ha ha.
@ PainInThe said: When prices hit 1978 prices ... I'll THINK about buying. Not a moment until.
Uh, my house was brand new in 1979 and sold to the first owner for $69,500. Good luck finding a SFH for that price! ;-)
@ Marco
It seems that REALTOR® bashing has become a new sport ... I appreciate you taking the time to provide your input to this blog.
A diversity of opinions is essential to meaningful discussion and learning.
"Uh, my house was brand new in 1979 and sold to the first owner for $69,500. Good luck finding a SFH for that price! ;-)"
You are making the classic mistake of neglecting inflation. 69 k in 1978 equates 200k in 2010.
@kunwak
I am well well of inflation ... as PainInThe said "When prices hit 1978 prices" - I took the blogger literally. ;-)
Interestingly, the same house was assessed in 2001 for $198,000 - so growth in real estate was matching the inflation rate for the entire economy.
love it - almost every major media source I have glanced at today has the "bubble" as one of their top stories.
This is the first day that I have truly felt the media make a hard turn towards the truth (somewhat). This will change emotions fast.
This will spur on a lot of discussion over the Labour day long weekend and hopefully thereafter some price reductions from people who have finally seen the light and are trying to get out while they can.
Whut... Canada's real estate is in a bubble?!! Oh, no!
Where's that "bubble n' fizz" guy or "jim_tan" now that I need some comic relief?
Down we go!!
:-)
DavidL:
"Interestingly, the same house was assessed in 2001 for $198,000 - so growth in real estate was matching the inflation rate for the entire economy."
That is interesting. I was talking to a colleague from Portland a while ago and he bought a house there last year for inflation adjusted value of approx 1990...
@kunwak
According to relatives who live there, Portland real estate has been sliding - but not as badly as some other parts of the US.
However, $198,000 in 2001 currently equates to about $525,000 in 2010. I sincerely doubt that prices will ever drop to 2001 levels ... but 2005 levels might be more realistic.
Makes an interesting read:
Canada's housing bubble
http://www.policyalternatives.ca/newsroom/updates/canadas-housing-bubble
"However, $198,000 in 2001 currently equates to about $525,000 in 2010. I sincerely doubt that prices will ever drop to 2001 levels ... but 2005 levels might be more realistic."
I am personally hesitant to predict anything. It's such a complex system that prediction is somewhat pointless. All I am pointing out is:
(a) inflation matters big time and most people don't consider that when they say something like "Back in 1973 my house cost this much, now look what it's worth!!"
(b)Other markets have undergone dramatic corrections, so it cannot be ruled out.
Personally, I am not interested in buying in Victoria as I see myself live elsewhere within ~5 yrs. I also became pragmatic (over the last few yrs) to a degree where I don't care much about owning if it does not make financial sense. I find the emotional aspects of potential buyers somewhat strange (including on this site). But the whole situation the Canadian market is in is very interesting to follow...
CBC Radio 1 had a 5 minute spot on the Bubble today.
Some "expert" real estate investment guy was the guest. He gave all the usual "it's a great time to buy" spin.
They had about 3 callers, I was hoping someone from here would have gotten on.
One caller was a developer, saying how his houses are selling for less than $X so they don't have HST!
another caller, kinda rambled, didn't make any sense or ask a real question...
Last caller was a women in Burnaby who was bitching about not being able to afford a house because now she needed 25% down.
So yes people out there are that dumb and don't know that 5% down is still around.
Overall a terrible 5 minutes, however, the one saving grace was they never once asked the question "Is there a real estate bubble?" it was always referred to as "when the bubble bursts" as in, they all accepted that we ARE in a bubble and it was just a given fact. So that's a start I guess. Public sentiment is changing.
If I can find the podcast I will post it later.
Somewhat off topic - but related to real estate ...
Check out this photo essay and just be glad that are not suffering the same economic woes of Cleveland:
http://www.time.com/time/photogallery/0,29307,1738458,00.html
DavidL...thanks for those pics of
Cleveland. Couldn't get over that entire street of abandoned homes and an almost abandoned shopping mall. Very sad, very depressing.
Rent or Buy? These videos help.
Renting vs. Buying a home
http://www.khanacademy.org/video/renting-vs--buying-a-home
Renting vs. buying a home (part 2)
http://www.khanacademy.org/video/renting-vs--buying-a-home--part-2-
Renting vs. Buying (detailed analysis)
http://www.khanacademy.org/video/renting-vs--buying--detailed-analysis-
My comment just disappeared!? I wrote that the CBC's The National had a story tonight (Tuesday, August 31) where a couple were talking about waiting to buy a house because they thought prices would keep dropping.
It should be availablehere, at the 32 min mark.
HHV,
VREB will be releasing the official stats Wednesday. Will the TC reprint it or do some investigative journalism? All these bubble articles in the other newspapers and on TV might influence the TC editor.
Hi Double-Agent;
I am hoping that they run a great in-depth piece that looks at all the factors in this market, but I do not hold hope.
We will see!
Thanks again for all of your great work in bringing the truth to the masses (or as it is, the few here - something tells me our legions will swell soon)!
Check it out:
4260 Springridge Cres just sold (pending) for $62,000 under assessment. I never saw inside so maybe it's a dump, but that's the biggest number under assessment that I've seen.
(assess: $542,000 sold: $480,000)
This is bad......very bad....
Month-End Market Statistics
Posted by
Sep 01 2010
Monday September 1, 2010 8:30am:
Aug Aug
2010 2009
Net Unconditional Sales: 425 764
New Listings: 956 1,094
Active Listings: 4,356 3,509
It looks like we've negotiated a two year extension on our lease - we love our location and the house meets our needs (4 bed 2 baths) and is far, far more affordable than buying the equivalent place. We couldn't cover the carrying costs for what our rent is. Our rent will go up $100 per month, but as it hasn't gone up in the last two years and won't go up in the next two years, it's not bad.
I'm hoping by the time our lease comes up again we'll be in an ideal position to by, both in terms of ability to purchase (which we presently ace) and in terms of where the market will be (what we're waiting for.
I like all the bubble stories being batted around - however unlike most folks, I don't believe an increase in interest rate s is necessary to start the slide.
Thanks Marko - now take that sales number and put it onto the graph that DA gave us under the heading of "Projection: August 2010 sales volume worse than July" a few blog posts before this....this was far and away the worst Aug in the past ten years, maybe more.
Interesting to see what happens to prices, but I am not expecting too much of a slide from them for another couple months yet.
from the mouth of vreb:
"The property market throughout Greater Victoria softened in August with fewer sales and a decline in overall prices for single family homes and condominiums; overall prices for townhomes, however, rose in August.
A total of 425 homes and other properties sold in August through the Victoria Real Estate Board’s Multiple Listing Service® (MLS®), down from the 527 sales in July. There were 764 sales in August of last year.
Victoria Real Estate Board President, Randi Masters, noted that a softening of sales this year compared to last year was not unexpected given that 2009 was an exceptional year. "Looking ahead, we anticipate that the market will remain relatively stable as any increase in interest rates in the near future will likely be modest. While there may be some further slowing of sales and moderation of prices compared to the unusual year we had in 2009, we expect such changes to be gradual for the foreseeable future," said Masters. Masters added that the Canadian experience has been very different from that in the U.S. where the significant correction in home prices is set against a massive oversupply of homes due to distress sales, combined with a drop in housing demand due to high unemployment. "There is no indication at present that we will be faced with a similar situation arising in our market," commented Masters."
I agree with you Just Janice, the interest rate is not the "trigger" to this market. For the last decade price did not directly increase or decrease with the rise and fall of the interest rate. The interest rate is only a small part of the equation with the biggest factor being consumer confidence.
David L... won't take ANY luck at all. Just time and inevitability.
You can count on it.
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