The last market update by the TC was actually fairly balanced. But it's no surprise
that this piece, written by Andrew Duffy, contains no balance and through careful use of non-defined real estate marketing speak and edits, no doubt imposed by the vice president of advertising revenue, manages to paint a rosy picture of a condo market that appears to be on the brink of major change.
The thesis is "Condos drive housing numbers." Now, the piece is actually talking about housing unit starts in the downtown core. So a more accurate title would be "New condo construction dominates downtown" or something along those lines; but when your modus operandi is to convince first time home buyers that it's in their best interests to spend between $300,000 and $350,000 dollars on a 550 square foot 1 bedroom, 1 bathroom condo unit in the core when there
are several dozen 800+ SF 2 bed, 1 bath units within a 10 minute walk, you probably ought not to write about more affordable options eh? Regardless, the headline is as misleading as the rest of the article and the condo market is quietly shaping up to be ground zero in Victoria's sales volume decline.
Here's the basic fact: Since May of 2010, sales volumes in Victoria's downtown condo market have declined 52%. August 2010 sales volume was 1 unit less than December 2009 - typically the slowest month of a given year for unit sales.
Look, builders build, it's what they do. Planning to build downtown condo developments takes years. Market conditions change during those years. One need only look at that gawd awful gaping hole in the ground where Radius should be occupied by now to see evidence of building plans going sideways. Speaking of which, we haven't seen a story about Radius in a long time have we? Why is a story about developers very likely overbuilding again, much like they did in 2007/08, in 2010/11 presented as a "boom buying opportunity" to potential buyers?
"As long as there's housing starts there's construction and employment being generated in the community," he said, noting that with 1,531 total starts in Greater Victoria so far this year -- there were just 488 over the first eight months of last year -- the housing market has to be considered quite healthy."
Unemployment in Victoria has nearly doubled in the past two years. That's a significant increase, despite the "healthy" housing market. Sales volumes have dropped almost 50% from this time last year and 2010 will very likely be the worst housing market for sales in a decade, despite the "healthy" housing market. I'm happy that new construction projects are still being planned and construction is still underway, don't get me wrong, it's necessary to keep people employed and keep the negative pressure up on housing prices so that Victoria may become more affordable in the future. There are many benefits that can be touted -- but market stability is a myth right now. And encouraging first time buyers to mortgage their futures away should be a sue-able offense -- imagine if buyers could launch class-actions against media and pundits for their inaccurate and misleading statements about the local market?
64 comments:
Hey, I bought 533 sq/ft condo at the834 for under 200k, yes to third floor facing Johnson! Ha Ha.
Hey guys, there is an open house tomorrow at 1407 Richardson, I think if you were able to negotiate a bit more on this one it would be a good deal for someone.
If anyone goes to the open house let me know what your opinion is...
Marko, seriously, u bought a studio at the 834?
Talking about condos...take a look at #4-630 Seaforth. Three bedroom 2 bath 1790 sq. Ft. Original Asking: $599K now asking $499K. It is assessed at $560K. Probably some remedial work on the horizon.
MARKO: Congratulations! Does this mean you will be moving out of Dad's basement?
Be careful about getting excited. Today's bargain is tomorrow's foreclosure. Tomorrow's foreclosure is next years bank auction and so on. Just look at all the knife catchers in the states and they are maybe halfway through their meltdown.
This thing inflated for 8 years, it won't pop overnight.
It is setup like a one bedroom, but yes, it is small. I haven't decided whether I want to live in it for 12 months to avoid the property transfer tax or just rent it out.
It was an investment to diversify my portfolio, I bought it 13 months ago, and it was a good deal at the time. It can be rented for about $1,000. This will cover a 25 year mortgage of $156,000 after I put 20% down.
Could I lose money on the condo? Absolutely. Was it stupid to buy RIM last month and lose $4,000 in a matter of weeks? Absolutely. I also bought 1000 shares of BMO last year for $27/share and still collecting a 11% book dividend. You win some, you lose some.
If this condo is finished next year and worth 150k I will be the first one to admit it, mind you at that point I would just rent it out and be in a better position to buy something to actually live in.
Canadian Press, Toronto
Google in: "New home prices drop in July for first time in 13 months. "
A real estate slowdown seen this summer in the market is beginning to bleed into the new home sector.
A lack of pent up demand should see the high priced housing market cook further this winter.
It can be rented for about $1,000. This will cover a 25 year mortgage of $156,000 after I put 20% down.
If you're talking about covering only a the mortgage (so $1000/month payment) then that would be assuming a rate of about 6% for 25 years. That's less than the historical average, but it seems reasonable that rates will stay depressed for quite some time.
Of course that means you have significant negative cashflow every month due to condo fees and maintenance. No way your rent will cover the mortgage and all that unless you can get <3% for 25 years.
Of course, for a small condo if there is a drop it won't be that big in real dollar terms.
If this condo is finished next year and worth 150k I will be the first one to admit it, mind you at that point I would just rent it out and be in a better position to buy something to actually live in.
How does carrying a mortgage on a rental property with negative cash flow put you in a better position to buy?
Lets say the condo is finished next fall and variable rate is 3.5% (could be higher, could be lower).
That puts the mortage at $780/month + $141/month strata + taxes $100/month = $1021. Okay, so I might have negative cash flow of $100 or so, no big deal. If I can rent it out for $1050 or $1,100 I am good.
If my condo is worth $150,000 theoretically the market has corrected 25%; therefore, the $500,000 condo or house myself and my g/f want to buy to live in is now $375,000, which we can easily afford given our incomes.
I know what everyone is thinking, why not buy the condo in the first place and wait for the market to drop, and then buy both.
I like to hedge, even if it means making a smaller profit or taking a larger lose.
Marko? When new condo prices dropped up to 50% from their suggested retail price such as some at the Bayview, the Ovation, various Bear Mountain projects etc.; the companies that built them took a huge loss. But just because someone bought one of these "deals" at 50% off, obviously the average house price in Victoria didn't drop by 50% as well.
What is your point? Suggested retail price means absolutely nothing. You can overpay even buying a condo at "50% off."
You can buy a condo in Miami for $25,000, or a house in Phoenix for $100,000. I can't even comprehend buying a condo in Victoria with negative cashflow as an 'investment'. This isn't 2003 anymore, we've already seen this thing play out south of the border. No one should be surprised when it happens here.
Lets say the condo is finished next fall and variable rate is 3.5% (could be higher, could be lower).
Yeah, at current rates it could work. I was thinking more longer term averages. That strata is also quite low. I wonder how long that will last.
A month ago I stayed for a few days at a friends place in Kelowna. While hanging out around the pool, I started chatting with other guests about real estate "situation" in Victoria. A friend of my wife's who I hadn't seen in 10+ years started disputing my ideas about the market beginning to burst.
As it turned out, she was working as a real estate agent in Vancouver and had just purchased herself her first home: a duplex with a basement suite in each unit. She was planning in living in one of the basement suites while continuing rent out both duplexes and the other suite. She figured that is would be a good investment even though she would have to contribute about $2000/month to cover the mortgage. In addition, she admitted that she would also have to cover the property taxes, repairs and possible vacancies (unrented units). She felt that it would be: "a great investment as the market will keep on growing".
I asked what would happen if - just if, the market would decline. She replied that: "sometimes you just have to have faith in the market", and that prices wouldn't fall. I didn't have the heart to continue the conversation ...
I agree with a couple of the posters here about buying condos. I have owned one in the past, and have known many who weathered the last condo downturn.
They never keep up with the housing market, and in fact drop faster when the market goes south.
Developers purposefully set the strata fees very low to attract buyers and they always go up significantly in the first year.
Is the going rate for rentals in that area $1000/month for 500 sq ft? I know it will be new, but that is pretty small. I would wonder about being able to find quality, longer term tenants.
This blog is brutal for using with a Blackberry internet browser.
"Yeah, at current rates it could work. I was thinking more longer term averages."
Do you think in 20 years the rent will still be $1000/month?
Part of buying this condo as an investment is a hedge against inflation, which may or may not happen with all the money they are printing in Europe and the states.
"You can buy a condo in Miami for $25,000, or a house in Phoenix for $100,000."
Have you seen these houses in Phoenix for $100,000? I was recently down there to pick up an S5 for a friend, and we took a look, I thought some of the homes were overpriced at $139,000.
US style meltdown is always possible, so is the possibility that every single upgrader Suncor has catches fire, stock goes down 50%, and I lose money.
Nothing is for certain.
"They never keep up with the housing market, and in fact drop faster when the market goes south."
I am well aware. Piece of dirt is always a better bet in Victoria; however, that dirt can be expensive and usually very cash negative unless you have a cash cow which is a job itself since most of them are in poor shape.
As for renting it, I am not concerned. I would rent it for $900 to a friend or something.
I am not fixated on this having to be cash positive.
Wow Marko, sounds like a great investment for those that like losing sleep.
Have you considered that you're breaking one of the simplest and oldest rules of investing? Diversification! How on earth do you feel that you've diversified your portfolio by buying a spec condo in your hometown when your livelihood is dependent on a healthy local real estate market? Realtors and developers that invest in real estate are usually tomorrows insolvents, lawyers love you guys.
BTW how leveraged are your Suncor holdings?
No way we will see inflation - not for quite a while anyways. All the money they are printing is only going to cover bank losses and bailouts. None of it is arriving free at peoples doorsteps. What you are about to see here is asset deflation on a massive scale.
Phil you nailed it, the only safe place for now is stay liquid. I sold my place in Pemberton last year and I am waiting for Vic to bottom in 2012 I predict. Its all age demographics, People buy a certain type of house at a certain age, in a way the boomers are the ones controlling all the markets. My research says that the real value of most places is the 1998 assesment. Sit back, take your 2 or 3 percent on a GIC or whatever and watch the market go down. Then take your pick.
So one more time, Marko has demonstrated how full of ... great ideas he is. Greenhorn in all fronts.
I loved it that is the same thinking of lot of people that got into RE all over USA and Canada when prices where artificially inflated, and that is why I'm sure the market is going to correct as it did in the USA, because you've got to have a lot of "dumb-ass with initiative" saying,
"I am not fixated on this having to be cash positive."
Basic Economics should be part of school curricula after 2012
So many dim-witted new contributors to the blog...so little time...
I didn't have the heart to continue the conversation ...
You are a sanctimonious twat.
You can buy a condo in Miami for $25,000, or a house in Phoenix for $100,000.
At those prices, make sure bars on the windows are included.
I sold my place in Pemberton last year and I am waiting for Vic to bottom in 2012.
I'm not convinced you'll be able to trade the double-wide in Pemberton for a shack in Victoria even if the market drops 30% (whiich it won't).
My research says that the real value of most places is the 1998 assesment.
Your research consists of looking at the bottom of a bottle of cheap wine.
Bubble 'n Fizz(le) said: You are a sanctimonious twat.
Kewl! I've never been called that before. Thanks for adding to the quality of the discourse on this blog.
>> Kewl! I've never been called that before. Thanks for adding to the quality of the discourse on this blog.
Don't be too impressed, he only learned that word from Garth Turner.
Just stumbled across this one. Marko you are familiar with these lots (overpriced and impossible to turn a buck on as a builder). Well this builder appears to be TRYING to turn one helluva buck.
http://www.usedvictoria.com/classified-ad/Suite-View-Royal-_12577437
800k are you kidding me? He must not watch the news or read the papers. That is so waaaaaaaaay overpriced it's an insult to people's intelligences.
Looks like a typical spec house that I would price at 125/sq ft on a lot that is not worth more than 200k. Brings that house in at about 575k. Add the 10% to pad the pockets of the builder and at best that is a $640k house and I am being very generous here. So this guy is about 150K over!
Either he is on crack, a bad business man or hasn't woken up from 2007 yet?
Personally I wouldn't touch that house for even close to 640k. Take a hundred K off and I might come look at it.
By the way it looks like nothing but spec houses in there Marko so obviously some builders think they can turn a buck even given the high price of this lots. Either stupid or they know something we don't. I don't think there are enough dum dums left out there to buy this kind of stuff.
When I say spec I mean cheaply built middle of the road quality and 125/sq ft is even high IMO.
I think those builders are going to be tripping over themselves as they lower their prices and try to get rid of these places. Carrying charges ar going to kill them!
So there is your "you have to be kidding property" of the day folks, enjoy!
Weren't these lots going for 276k? Correct me if I am wrong.
Add property transfer tax = 280k
Building fees = 10k
Construction costs = 350k
Operational overhead = 10k (warranty, warranty firm membership, HPO yearly fees, WCB, accountant, etc.)
= 650k
Sure, he is trying things out privately on usedvictoria. Most likely he will have to list on MLS.ca for $749,000, probably accept an offer of $730,000 HST included, and the Realtors commission alone at 6+3% + HST = 28k.
This is all pending the market is stable; otherwise you can easily lose money.
Being a builder is totally different then it was 10 years ago, a lot of fees, houses are a lot more complicated, code changes have increased construction costs, WCB is always on your case, etc.
Why would I spend a year building a home to make let’s say 60k, taking on a huge risk, and lots of hard work, when you can sell the same home as a Realtor and make 25k (pending you double end it at full commission).
If you can't see a 100k profit there is no point in touching it. You are just asking to get burned. The market corrects 10% and you suddenly have been working a year for free. Many other things can happen, you hit rock during excavating, construction problems, you fire up the heatpump and one of the ducts is making a lot of noise, now you have to open up dryway to fix the problem, list is like 10 pages long.
The only real way of making money is on the initial property purchase. I.E. you get a lot for a good price, or you find an attractive tear down, or you subdivide something. Buying a lot in a subdivision at market value and building is a waste of time
.
Not to mention when you sell a home you as the builder are responsible for the 2-5-10 warranty. So even if the plumber hooked up dishwasher poorly and it floods a house a year down the road, you as the builder is bearing the cost of the repairs.
Let me get this right, you think a builder should be able to turn a profit of 100k on spec house?
No wonder this market gas gone so stupid.
I doubt very much this house sells for anywhere near 700k as you alluded realtor involved or not. IF it does, the buyer will be sitting on a sizable loss in equity in 2 years time guaranteed.
BTW I don't know any builders that take a year to slap up a spec house.
Let me get this right, you think a builder should be able to turn a profit of 100k on spec house?
It's not profit, it's gross margin. Of course, you wouldn't know that because you are a basement armchair RE critic who is talking out of his rear-end. As Marko pinted out, you have to deduct selling costs from that as well as the cost of construction financing. At the end of all that I'd be surprised to see more than 5% profit which is about as good as running a supermarket.
I don't know any builders that take a year to slap up a spec house
You don't know any builders--admit it.
Yea, we do construction management on a home for about 40k depending on size. Limited risk.
However, building and selling is a whole different story. If you are running your margin calculations before you start at under 100k as a professional builder, good luck with that. Something like excavating can set you back an extra 20k right off the bat if you misjudge it.
If you are doing large volume, you can go lower, but most builders in Victoria are small operations.
Most houses take us about 12 months from purchase of property to sale of property. Construction time is probably about 9-10 months.
Marko - kudos for the courteous replies to other posters. Interesting to hear the other side of the story.
On the sales front - I am tracking 579 active listings on PCS. Only 12 sold last week! Areas covered include Sooke, Oak Bay, Colwood, Metchosin, Malahat, Saanich (East, West and Central). So much for a bounce in fall sales as some realtors have predicted.
On - the listings front. Lots of new ones this week. Owners look like they are scrambling to find a fool in a falling market. Lots of price corrections too.
Maybe Marko can comment on this, as he is active in the building business. Construction cost for standard quality homes on ready to build lots. Costs include builders profit, but not garages, carports or landscaping for:
A 1,500 square foot one-storey home built on a poured slab foundation
$185,000 +/- 10%
Same home but on a 3 foot crawl space
$200,000 +/- 10%
Basement entry home with 1000 square feet on the main and 1000 square feet of above grade finished basement.
$190,000 +/- 10%
Two storey 2,000 square foot home (ie living room on main floor with bedrooms on top level) on a poured slab foundation.
$250,000
Same two storey home but on a crawl space.
$270,000
Ooops, forgot the HST.
Prices include the HST with the rebate assigned back to the builder.
@JustJack
In my house insurance policy, the replacement (rebuild) cost for my split-level entry 2400 sq. ft. house on a concrete slab is $260K. This is on-par with your numbers.
Interestingly, four years ago the replacement cost was $230K and eight years ago it was $200K. The house replacement cost has not grown nearly as quickly as the (perceived) value of the land.
Hmmm ... over the past eight years, the annual increase in house replacement cost is about 3.5% - which matches the approximate inflation rate in Victoria. Seems reasonable to me ...
My PCS/Matrix shows a lot of big price reductions today - some sellers must be starting to get desperate.
Since prices are set on the margins by those who have to sell, look out below
Here's a good little article over at ZH answering the question of If the CMHC has been around since 1946, why hasn't it blown up earlier?
Also many of the user comments are somewhat educational, if you can excuse the tone.
Mr.4AM
What you can buy in Phoenix for $95,000 — A new BMW, or a house
Someone devastated Garth Turner's blog over the weekend - a serious cyber attack.
I take it as a sign he is on the right track.
Re: Garth Turner's blog:
Somebody decided to "shoot a messanger" hoping that it would change the message. I agree, it legitimizes Garth's point of view.
Incidentally, Garth Turner will be in town to lecture at the McPherson at 7 pm on Wednesday, October 13th. Tickets will soon be available.
Realtors didn't appreciate my comments over on Peter Pfann's blog.
If we agree that this is a Buyers Market, What is Stopping you?
Notable quotes:
"We are aware of the house hunt Victoria blog, which seems to thrive on doomsday thinking"
"t occured to me that if everyone waits until they can see real estate is picking up then they will have missed the Buyer's Market. "
"Real estate will always appreciate over time."
"The househunt Victoria folks are all in their glory as they have finally got a bear market to roll around in. Good for them."
I must have touched a nerve..
Mr 4am....Thanks for that article. Very enlightening indeed.
A Realtor that has left the business and is selling his lock box today. A sign of things to come?
@Skeptic: Thanks for the link to Peter Pfann's blog. The recent post there by "Reid" sums up the situation well:
In BC, borrowing capacities of the average folk have increased exponentially over the past few decades because of the following factors:
* Five year mortgage rates have decreased from over 10% to 3.5% today which allows a family with the same income to borrow almost twice as much money
* Mortgage amortizations have increased from 25 years to 35 years allowing an average family with say a $100,000 income to borrow an additional $100,000 when choosing the 35 year amortization
* The way rental income was treated prior to the April 2010 CMHC changes allowed a family generating $1,000 per month in rental income to borrow an additional $60,000 using today's five year rates and the 35 year amortization
So until the recent changes, a family earning the same $100,000 could borrow almost 250% today of what that same income would allow a family to borrow back in 1990. This is the primary driver behind the massive increase in housing prices in BC and Canada for that matter.
Ok, Would you buy a 533 sq/ft condo for $ 200K where you would put a $ 40K downpayment, have a
Mortgage of $ 160K at a fixable rate of 3.65% for 5 year, and an amortization period of 25 years, which would be around $ 812 Dlls per month, plus property taxes of around $ 140 per mont, plus insurance, another $ 100 a month, plus any other expenses that would come up if something needs to be fixed. let's say $ 50 a month ? That bring us to $ 1,102 a month, so you would need to rent the property for $ 1,102 a month just to break even.
or
Buy this property cash in Scottsdale, AZ, and then rent it out for $ 750 a month ( $ 9,000/year), paying property taxes ( $ 850/year) , and income taxes (30% after all expenses) , insurance ($ 950/year) , plus around $ 1000 dlls for any other expenses (just be be safe) . etc. at the end of the day you end up with around $ 4,200/year profit which is around 5% yield, plus whatever money you make when the market rebounds, which could take another 7-8 years ?.
So which one would you buy ?
>> So which one would you buy ?
I'd buy the condo. Unlike you guys I'm not fixated on making money.
neither - 533 sq ft is too small and I'm not interested in aninternational investment property.
Kudos for Marko for taking a risk. To me it seems that he is smart enough to learn when he makes a mistake. Too bad this one will mean a lot of capital locked away. Once experience allows him to apply judgment to being bold, he'll likely do very well for himself. Seen it with others.
David-L, you home may be under insured.
If your home is significantly damaged you will need a place to live while the home is being repaired. If the home is a write off, then you will have to rebuild while renting somewhere else. Which can be months.
Insurance value is NOT the same as new construction. There is no hard and fast rule, but the insurance companies would insure at least 1.5 times the cost of new construction.
So, you may want to have your insurance company take another look at your policy.
@JustJack: your home may be under insured
Thanks for the advice ... I'll look into it.
Question: Why do some properties have such a low assessment value while the seller is asking such a high price? I was looking at a listing today that was assessed in 2010 for 320,000 but the seller is asking 445,00. What is the purpose of the assessment? What is it based on?
TIA!
@ a simple man:
I have a new nomination for this weeks' "Weasel" award ... the envelope please ...
1115 JOLIVET CRES
$634,900 - April 24th - Original listing MLS® 277512
$629,900 - May 6th - Price drop
May 18th - Pulled off market
$639,900 - Sept. 12th - Relisted as MLS® 283609
$5K more than original listing, $10K more than when pulled off the market.
hammertown,
Some people (less than 5 or 10%) protest their BCAssessment property value estimates each year. Why? The ones that protest it to be lower is so that they can pay lower property taxes. Why else would you ask that your property be valued at less than it likely should be? These types of people likely tend to live in their house for a while, so the sooner they protest a lower assessed value the more they can 'save' long term.
On the flip side, some people make all kinds of renovations shortly after they buy and move into their new home which improves the value of the house substantially but never report this. BCAssessment can and does get permit info from City Hall and adjust values upwards accordingly each year, but if no permits are acquired, they have no way of knowing improvements were made and thus the new home owners get the double benefit of living with improvements but not seeing higher property taxes.
Further, BCAssessment only actually drives up to your house to perform a visual inspection aproximately every once in 10 years (!). And even if they go there, they only look from the outside and have no way of seeing/knowing about the internal (unpermitted) improvements. The other 9 years, your house value is based on the value of similar homes within X mile radius (much like how realtors determine the value of your home when you're ready to sell).
Now, after you've lived at your place for a while, eventually you may need/want to sell it, at which point some people actually do protest their assessment wanting it to show higher. This is so that people like you don't wonder what the heck is going on in the price difference between assessed value and asking price and in general make the selling process a bit smoother.
After they are successful in getting a higher assessed value, then they are ready to put the property up for sale. Note it may include having to go before a comittee to prove your point - i.e. show photos of the improvements, bills paid, etc.
The reason they can get away with this is that BCAssessment has no obligation, nor are they interested in reporting you to City Hall even if they do notice improvements for which they don't have permit info on... AND, best of all, BCAssessment likely still raises the assessed value of your house if you put up a good enough arguement.
So as you can see, this is just one more of those 'little' gray lies and scams of the Victoria Real Estate market.
Mr.4AM
When the market tanks, could we see this in canada to revive the market??? 105% financing. I remember this was happening in the U.S before the crash.
Dave#1
http://globaleconomicanalysis.blogspot.com/2010/09/australian-lenders-learn-nothing-from.html
DavidL;
That is certainly a fitting nominee for a "Weazy".
I went to the Pfann's website and read the comments. They have a different tone than they did when they posted here for that week a while back. It is almost like they are covering their ears and singing "lalalalalallalalala" when faced with data about the market. Of note, they really attempt to paint the bloggers that post here as doomsday radicals who stoop to personal attacks.
I really don't believe that - I think that the vast majority here provide valid, thoughtful insight into the reality of the market here - something that is really hard to glean elsewhere, and I am sincerely appreciative to everyone that posts here.
The topic of personal attacks is a valid one in that it has happened, although very rarely and less often than almost any other blog I have read. Because in this topic we represent the "fringe element", which we truly believe represents reality, we have to be very careful not to provide those who would have a contrary view ammunition to write off our valid arguments because of a personal attack. This happens so rarely here, but when it does it steals away from our well-formulated arguments. While I am sure the Pfanns do not like our positions in victoria real estate as it directly impacts their income, we give them an easy target to write us off when we attack the person and not the idea.
The simple answer to the question in the Pfanns' blog of why no-one is buying in a "buyers" market is that no-one wants to buy this month what will be cheaper next month (catching a falling knife).
Have a great week, everyone. And thanks for everything you have taught me.
Dave, in 2008 before the gov't killed the 0 down 40 year ams, lenders (including the big banks) were offering 107% mortgages as 7% cash-back options. They were typically locked-in at about 2% above the posted 5-year rate for 7 or 10 year terms.
Month-to-Date Market Statistics
Posted by
Sep 13 2010
Monday, September 13, 2010 8:30am:
MTD September
2010 2009
Net Unconditional Sales: 118 776
New Listings: 466 1,129
Active Listings: 4,181 3,419
SFD average this morning = $658,329
thanks Marko - almost half way through the month and only 118 sales...is 300 for the month a reality?
Good Monday morning everyone. I'm sure missing the sunshine, the warmth and all that comes with it.
Randi's "kick-back" of September hasn't materialized yet.
Here are the stats from my PCS from last week 6-12 Sept.
SFH: Victoria, Saanich East, Saanich West, Oak Bay and Esquimalt
Prices from $375-$775 minimum 2 beds & 2 baths.
NEW; 28
SOLD: 8
P/C: 36
O/M: 16
Some other numbers in there:
Out of the 8 sold, there were 2 with reported suites and one with "Excellent Potential:
Of the 28 new listings, there were 14 with reported suites and 3 with potential.
Out of the 36 price changes, there were 22 reported with suites and 4 with potential.
From the mere 8 houses that sold last week the average price was $585,625.
Condo's and Townhouses:
Asking between $260K - $625K, Min two beds and two baths.
Victoria: Most areas (not downtown)
Esquimalt: All areas
Oak Bay: All areas
Saanich East: Most areas
Saanich West: Gorge, Tillicum and Interurban.
New: Townhouses: 8
New: Apartments: 13
Sold: Townhouses: 1
Sold: Apartments: 5
PC:18
OM:7
The townhouse sold for $417K down from $424K
The average price of the apartments that sold was $325,800
Marko already posted the Monday stats and you can clearly see that sales are dismal so far this month. Last week there were only 62 sales! There were 85 in the previous week. Definitely off to a slow start but I expect a slight pickup next week. The reason is that last weeks sales were based on offers made around the Labour Day weekend that went unconditional last week.
Here are the weekly graphs:
Sales drop while new listings rise
Sales drop - Active listings high
Overall MOI surpasses 10
September sales worst in 10 years
An increase in average prices doesn't mean much when you have so few sales. In my opinion there are only a few first time buyers and this pushes the average up.
Globe and Mail article:
Did the Bank of Canada fuel the run-up in house prices?
The Bank of Canada may have fuelled the run-up in Canadian house prices with loose monetary policy over the course of the last decade, the Organization for Economic Development and Co-operation says.
"The price of an average home recently reached five times average household after-tax income, which is 35 per cent higher than the long-term average of 3.7," the OECD says.
The real estate sector has been softening but Ottawa may need to do more to cool the mortgage market, the OECD added. It added that it expects house prices to “come under downward pressure” soon as interest rates and income growth slows. “Like other OECD countries, Canada is probably entering a fairly long period of relatively slow household income growth,” the group said.
@ Mr.4AM
Thanks for answering my question.
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