Wednesday, September 1, 2010

"This is bad, very bad"

Another great graph produced by Double-Agent! (check links below for more)

August 2010 numbers are out, courtesy of Marko Juras.

August 2010 
Net Unconditional Sales: 425
New Listings: 956
Active Listings: 4,356

August 2009 
Net Unconditional Sales: 764
New Listings: 1,094
Active Listings: 3,509

Year over year changes
Net Unconditional Sales: -44%
New Listings: -13%
Active Listings: +20%

Month over month changes
Net Unconditional Sales: -19%
New Listings: -15%
Active Listings: -3%

The average price for single-family homes sold in Greater Victoria last month was $586,676 down from $615,004 in July. (VREB)

July 2010 median price was $557,250. Average price declined 5% while median price dropped 2%. Single family home prices are falling faster than many of us bears would have thought.

Double-Agent's graph links:

August sales by year (2001-2010)
3 month total sales (June to August) by year (2001-2010)
August sales, active listings and months of inventory (2005-2010)
August sales and active listings (sales to active listings ratio, by year, 2005-2010)
Sales to new listings ratio, by year (2005-2010)


nan said...

Swap those "b"'s with "r"'s!!!! Suck it speculators - the day of the saver is upon you all.

kabloona said...

Very Bad...? I say it's very good!

Bring it on.....


jesse said...

I'd go even further. It's not good at all.

Alexandrahere said...

A nice little house at 4067 Hodgson just sold for $491K down from $575K. Built in 1985 and on a nice street in Lakehill. It is assessed at $544K.

A boatload of OM's on my PCS. Will they be re-listed or will they stay off the market? We'll see.

a simple man said...

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."

Anonymous said...

VREB only told part of the sales story in this months press release. Sales in August were worse than 2009 but what was not stated was that they were the worst in over 10 years. Here is a set of updated graphs using the latest VREB numbers.

Worst August sales 2001-2010

Worst June to August sales 2001-2010

Months of Inventory jumps over 10!

Sales to active listings ratio below 10%

Sales to new listings ratio not good

Anonymous said...

Now for the rest of the story. Lets take a look at single family home prices in Greater Victoria.

Month Avg. Median
May - 646 - 595K
June - 649K - 561K
July - 615K - 560K
August - 587K - 549K

Click here to see the VREB price graphs. One can clearly see the trends...

- The average house price peaked in December, is dropping fast and is down YOY.
- Condo prices have stayed flat over the last year. No easy money here for investors or owners.
- Townhouses also peaked in December and are also down YOY.

Buyers need to know they are purchasing in a falling market with lots of inventory and lots of price reductions. If they buy now with 5% down they will be underwater (negative equity) in a few months after accounting for PTT, legal fees and further price erosion.

reasonfirst said...

An interesting thing to note on the stats...maybe. I've been tracking VREB SFH average and median prices for Victoria proper. This month the average came in lower (by $25,000) than the median. This is only the 3rd time this has happened since I've been tracking - Jan/06. the other 2 time were Dec/08 and Mar/09. The average difference has been in the neighbourhood of $42,000. Anyone with thoughts about this - I understand the math just wondering if anyone had an insight into the market dynamics that might lead to this. Just curious....

DavidL said...

What a difference four months makes ... from the May 4th, 2010 Times-Colonist:

"I'd say it's good, and I think what's happening now is we're balancing out. It's becoming a balanced market -- we're still getting multiples [offers], but not as fast and furious as it was a few months ago," said VREB past-president Chris Markham. "We haven't switched to a buyer's market, but it has come off being a seller's market."

Read more from Google's cache.

Anonymous said...

Times Colonist reports on VREB press release.

Average price of Victoria home drops below $600,000 first time this year

Nice headline - Comments anyone ??

a simple man said...


Thanks for the great graphs, as usual. The MOI really tells the tale, as does the average price graph off the vreb website.

I was disappointed in the article from the TC as they stated what they had to, but really glossed over the true picture. No mention was made to MOI or to the worst sales in at least the past ten years for Aug or summer months.

I expect that in two months we will start to really see prices slide.

good day to all.

DavidL said...

@ reasonfirst said: I've been tracking VREB SFH average and median prices for Victoria proper. This month the average came in lower (by $25,000) than the median. ... I understand the math just wondering if anyone had an insight into the market dynamics that might lead to this. Just curious....

I'm sure that other bloggers can comment on this further, but I gather that there is a growing inventory of high-end homes that are not selling. In the past, sales of the expensive homes were disproportionately boosting the average SFH selling price.

The median price is the value at which half the SFH are selling at a lower price than the median and half are selling at a higher price. As the median price was higher in August than the average price, this suggests that that half the SFH sold were selling well below the mean price ... another indication of falling house prices.

DavidL said...

And now, the PR battle ...

Randi Masters, president of the Victoria Real Estate Board, agreed prices will stabilize.
August is typically slow, Masters said, adding "it will be interesting to see how September kicks back." Even with declining sales numbers, Masters said good-quality homes priced reasonably will move quickly.

Read more:

HouseHuntVictoria said...

It's amazing that TC has buried the monthly VREB article already behind a much more favourable real estate headline. Un-f'n-believable. In a year where the average price of a single family home has dropped 10% from its December 2009 peak, these clowns are still reporting that prices are "stable."

DavidL said...

Based on DoubleAgent's data from VREB, the average single family home price in Victoria has dropped from $646K in May to $587K in August (9.13% drop) while the median has dropped from $595K to $549K (7.73% drop).

Leo S said...

From that article:
"The average price for a Greater Victoria home is predicted to be $510,000 this year"

Where'd they get this number?? That would be an impossible drop, since so far the average in 2010 is ~$627k (eyeballed from the graph).
To get down to 510 for the year the average for the last 4 months would have to be $276k.

I guess they meant 610 for the year.

DavidL said...

Do the banks just want your money or are they trying to avoid mortgage defaults? ...

Bank of Montreal has chopped its benchmark five-year mortgage rate, aggressively throwing its weight behind what many are calling an increasingly wobbly housing market.

“It’s a great time to buy a home,” Martin Nel, a senior BMO official, said in news release announcing the change. He added that people who take advantage of the offer will benefit.

“If ever there was a time to buy, it is now,” Mr. Nel said.

The move which takes effect Thursday brings the bank’s key five-year rate to 3.59%, down from 3.79%, making it one of the lowest five-year rates ever offered by a Canadian bank, says industry newsletter Canadian Mortgage Trends.

Read more:

HouseHuntVictoria said...

BMO is trying to pour the last gas on the fire.

DavidL said...

@HHV: BMO is trying to pour the last gas on the fire.

I have two theories:

[1] The zero-down, 40-year amortization customer who purchased between June 2006 and June 2008 is coming up for renewal. Lock them in with an attractive early renewal offer [a] before they notice their negative equity, and [b] that will avoid them defaulting of their mortgage.

[2] Pre-approving mortgage customers is getting much more difficult, particularly as they must qualify for the non-discounted 5-year fixed rate. Lower the rate = more qualified customers. Not too surprisingly, the 5-year fixed rate has been slipping since April 19th when the mortgage qualification rules were changed. (I know, I know - bond rates have been dropping too.)

Animal Spirit said...

Comments are open on the two TC stories.

Since the second story came out immediately after the one showing signficant price drops, we can assume that it was planted by VREB to try to hide the negative news.

There should be a law against manipulation of statistics by those with vested interests.

Dave said...

I was sent this link from a guy at work. Tony Robbins talking on the economy.
I thought itbwas pretty good, he speaks very well. This is the first I have heard of him in a few years(since late night commercials)
Dave #1

Bubble 'n Fizz(le) said...

Food for thought:
It seems as if a dark cloud is heading towards our cities ..

Oddly, Garth didn't add his usual snide retort to this post.

Mark said...

US Housing has another 10% to Fall...

So if their already decimated housing market has another - 10% I would think we could easily see - 40 % +

It ain't that different here!

Anonymous said...

You have been able to get 5 year rates around 3.5% for at least a week from National Bank and others. Bond yields are way way down as people are snapping up bonds again for some stupid reason. There is no conspiracy here it's just banks competing for mortgages. I don't know about you guys but I've sold all my bond funds and moved the money into equities.

KateandJosh said...

I'm new to this blog - but glad to have found it! I'm interested in Double Agent's comment about house prices declining while condo prices stay flat and I'd love to combine that analysis with reasonfirst's analysis of the difference between average and median prices.

In my head, I balance the shift in demand from SFD to condos as folks retire and condos become more acceptable against the increasing supply of condos as more are built than SFDs.

If condo prices are flat while house prices decline - I take this to indicate that demand for condos is much stronger than that for houses? Comments?

a simple man said...

I think condos will be in a freefall soon as a large proportion of the owners are investors. Significant prices discounts (40-50%) from last fall in the new developments will have a huge impact once the "older" condos try and re-sell - particular those condos held by investors that see the light and are trying to get out fast. The prices are sticky right now as expected, but soon I think we will see condos hit hard.

tricky thing about condos is that many of the new ones never make it onto the mls system as they are sold direct from we are not getting the real picture yet, but it will trickle down.

Why would you pay $400,000 for a 10 year old condo when you could get a brand new one for $400,000 that sold for $700,000 six months ago?

itoka said...

In the TC this morning, a Michael Soderberg, managing broker with Coldwell Banker First Victoria Realty, expects a "balanced market" in the future. What's more he tells readers that all is well because summers are typically slow. That's all very well, but this is the slowest summer in 20 years!!

a simple man said...

Interesting...if you look at the number of SFHs sold in the Greater Victoria Region (including Western communities) last month it is only 197. The remaining properties are out of the region or a different type of home (condo, townhouse, etc).

How many realtors are registered in the Capital region? I am guessing at least 1000?

Lean times for some.

a simple man said...

Lowest in 20 yrs? Wow. That RE agent is out to lunch - volumes always decline from the spring/early summer peak through the year...he is either misguided or?

Perhaps we should invite Carla from the TC to stop by here for discussion? I am sure we can all engage her with respectful discussion?

Anonymous said...
This comment has been removed by a blog administrator.
a simple man said...

Thanks Double-Agent. I agree that Carla did a pretty good job on that article, actually bringing both sides to the table.

I can't say enough how much I appreciate your candidness and willingness to share the real data.

Anonymous said...

I applaud Carla Wilson at the TC for writing a factual article about the Victoria real estate market in today's paper. Looks like she did some investigative journalism and discovered that August sales were the lowest in 20 years! The discussion of falling average and median prices was also informative for readers. The printed version of the paper had this table of prices and sales for 2009-2010. click here You can see we are back to August 2009 median and average price levels.

As far as real estate agents hoping for a big surge in sales who can blame them? Commissions are way down and I can tell you that some are very concerned for their livelihood. The old hands can make money in any market but those who have only known the boom years will have trouble.

Victoria doesn't get a big fall bounce like they do back East where folks start buying again before the freezing cold of winter. I have published this cobbled together VREB graph before but here it is again for new visitors to this blog.

VREB sales by month

Readers will note that sales peak around May/June and slide down until Christmas. There are sometimes plateau months like September which can be slightly higher than August but they are much lower than the May/June peak. Any agent who wants to see this clearly for themselves need only look at VREB sales graphs.

Anonymous said...

Simple Man,


I updated my post (deleted original) to include a scanned copy of the price and sales table that was in the printed version of the article. I don't know why they didn't include this in the online version.

Just Jack said...

The problem with average prices of condominiums is that we have had a big chunk of proposed condominiums yet to be built and the reporting standards are, in my opinion, questionable. At the root of the problem is that you have one seller of 20 or 30 condominiums which, in my opinion, may not be "fair" market value as opposed to 20 or 30 sellers competing with each other. Sellers do not have to be approved for the loan, they just have to have a small deposit which can be put on most peoples credit card.

Some agents buy a block of 3 or more suites in order to get the exclusive right to sell the developer's complex. All of which are reported as full price offers. These agent's condos are sold after the complex's unit are sold and before the title is registered. This is like "salting" the gold mine - in my opinion.

A practice, if not disclosed to the prospective purchaser is deliberately misleading the buyer through omission - in my opinion.

Because of this and other questionable widespread practices, the inclusion of proposed buildings, skews the market data for condominiums.

Alexandrahere said...

Double Agent:

Yes I think Carla has been reading this Blog and has been enlightened by your charts. Her investigative tools have been sharpened!! Good pay for free information.

Here is a cute one:

3954 Helen in Strawberry Vale. Originally listed last March at $739,000. Stayed on the market with no price reductions til July. Now in September has been re-listed at $749,000. Note from realtor: "House is priced to sell and won't last long"

DavidL said...

@ Alexandrahere: "House is priced to sell and won't last long"

I'm sure the listing agent made a typo and meant to say: "House is to sell and price won't last long". ;-)

Leo S said...

713/715 Stancombe place. Listed at 499, assessed at 456. Sold after 76 days on market for 425. Seeing more and more of these lowballs going through.

DavidL said...

- The asking price has dropped 9.4% in 4 months -

3971 Columbine Way (MLS® 279611)

Its a nice looking house and the agent has an open house most weekends. The 2010 assessment was $509,000.

April 28th - listed for $564,900
May 16th - lowered to $554,900
May 20th - lowered to $549,900
May 27th - taken off market
June 4th - re-listed for $539,000
July 5th - lowered to $524,900
July 23rd - lowered to $514,900
August 20th - lowered to $513,900
August 26th - lowered to $512,900
September 2nd - lowered to $511,900

* It looks like $1000 reduction a week until it sells.

Sweetrealtor said...


I don't think the demand for condos is above the demand for single family homes.

Average price graphs are difficult to trend as the figures can be quite volatile due to number of sales, amount of the sales (a few high end sales >$1M can skew the results), etc. Statistically speaking, the median is a more stable number to follow and the median price of condos did decline in August.

223 single family homes and 113 condominiums sold in August.


Don't hold your breath for a 40% drop. We will never have a foreclosure rate like the States.

a simple man said...


Bear Mountain is closing its real estate office.

Citing current real estate market conditions, Gary Cowan CEO of Bear Mountain Resort has announced the office is closed effective immediately and the marketing department has been reorganized.

The sales and marketing of the resort will now be handled by Victoria real estate agent Peter Gaby of DFH Real Estate.

In a letter to staff, Cowan wrote: “Change is never easy. Change is also fundamental to the future success of Bear Mountain. The changes I share with you today represent a new beginning and an infusion of positive energy and expertise to strengthen the position of Bear Mountain in today’s competitive global market.”

Read more:

Chris said...

Are the raw data on sales readily available somewhere, or just mean/median/number of sales?

With the raw data it is straightforward to statistically adjust for some important characteristics of houses sold, mitigating the problem that changes in average prices partially reflect changes in average quality.

kunwak said...

"With the raw data it is straightforward to statistically adjust for some important characteristics of houses sold, mitigating the problem that changes in average prices partially reflect changes in average quality."

Yes, I have been wondering about this also. With raw data, it would be straightforward to do a regression that is less sensitive to outliers such as a few >1m dollar sales (e.g., regression assuming heavier tails in the distribution of prices). This would also be better than just excluding those sales that are above an arbitrary cut-off price.

Sweetrealtor said...

3954 Helen is now listed with an agent at my brokerage. The price was adjusted up $10K as the seller is now offering $10K cash back to the buyer for painting upgrades. Essentially the same price as the previous listing but a different marketing strategy.
(But I agree that, in a market like this one, we shouldn't be making statements like "this one won't last.")

HouseHuntVictoria said...

This fall and winter looks to be the worst market for sales in close to a generation, at the same time the number of units on the market is not far off record levels.

A great read from Bernard over at Victoria Vision. If he's right, I'll likely start shopping for a home seriously in the fall of 2012.

Mark said...

Sweetrealtor we don't need comparable foreclosures to the states to drop 40%. All we needs is a shift in supply and demand, bag holders slipping into negative equity, and people plain and simple coming to their senses and recognizing the 8 x income for a shack is a joke......guess what dude, all those things are happening!!!!!!

The bonus and what will make this drop come sooner than later is the change in sentiment thanks to the MSM finally reporting the facts and not fluff to keep the bubble going.

I will go out on a limb and say that prices within 2 years will be back to pre 2003 levels.....this party is over! BTW 2003 prices were ridiculous too!

DavidL said...

If everyone else is volunteering their predictions ... here are my "bold" predictions (note the caveats at the bottom of this post):

[1] I expect that prices will continue dropping quickly through the Spring of 2011.
[2] The rate of decrease will then taper off due to: [a] tinkering with CHMC and other government policies, and [b] speculators thinking that "now is the time" to get back into the real estate market, but then [c] overwhelmed homeowners selling because they are mired in debt.
[3] The market will continue to slowly slide through the remainder of 2011 through 2012 as more owners sell than buy. Inventory will continue to climb.
[4] The "rock bottom" will be sometime in 2013 and 2014 when a balance is achieved by people bailing out of their mortgages by selling (when faces with higher rates at mortgage renewal time) and buyers wanting to get back in the market. The total drop will be about 30% for houses - more for apartments.
[5] The real estate market will be stagnant through 2018 as the North American economy continues be depressed by an over-expansion of consumer credit/debt during 2000-2009 combined with pan-global security and environmental issues.

[1] My predictions are likely incorrect. I'm not a financial guru or a real estate wizard. These predictions are based some number crunching over the past 5 years and gut-feelings gleaned from 40+ years living in Victoria.
[2] See #1.

DavidL said...

@Mark wrote: BTW 2003 prices were ridiculous too!

In 2003, the average SFH in Victoria was selling for about 4 times the average family income. Although a bit higher than the 1960's through 1990's average of 2½ to 3 times, the low interest rates at that time resulted in a similar monthly payment.

a simple man said...
This comment has been removed by the author.
a simple man said...

Hi Sweetrealtor: Good to see you here again!

Now that marketing strategy is wonky - "I am going to give you a $10,000 painting rebate, but I am going to charge you $10,000 more for the house...."

I could understand if the house price was unchanged and the rebate offered, these days with PCS accounts realtors that do this really get labelled as the ones not to trust. It catches up.

As far as the sellers, I guess they do not need to sell that badly.

Just Jack said...

It sounds more like a $10,000 "kick back" which if not disclosed to the lending institution could be fraud. You can do the same thing with a new home. The builder would leave the home with a rough graded yard which you would finish at your cost. The landscaping would be considered the 5% down on the home. The offer is written up at 100 percent of the value. Since appraisals on new homes are almost never done, you have yourself a house with no money down. The problem with 5% down is that it is so low, that it encourages fraud. Most if not all lenders look the other way, as it is more important to get the mortgage than protect the depositors and shareholders of the bank.

I wonder if someone would have a legal case not to pay any loss of the difference between the amount of the mortgage and the sale price of the home given that the bank knowingly committed fraud to get the mortgage in the first place.

mmmmmm any lawyers out there mmmmm

a simple man said...

Just Jack, I agree, but they are charging $10,000 above the last price and then kicking back $10,000...not much of a kickback. More like a simple kick.

Alexandrahere said...


Am I confused? When the price on Helen was $739,000 included was "Bonus: Sellers offering to paint the entire interior of main floor with buyers choice of colours"

Now they are asking $749,00 but can have it for $739,000 if they paint the house themselves?

WiseInvestor70 said...

As I have said before, we are following the same pattern that the USA RE did, but with a 2 year span

Their RE started to have problems in 2006 and recover somehow in 2007 to finally crashed in 2008, and bottomed in 2010 (hopefully).

In Canada we got problems in 2008, then recover somehow in 2009 and we will crash in 2010, we might touch bottom by 2012 (some areas will keep going down further after 2012).

"Sweetrealtor", and any other realtor in this forum or elsewhere that says this will not end as the USA market, is just lying as their income depends on selling a death horse to whoever is willing to pay for it.

Marko said...

"I will go out on a limb and say that prices within 2 years will be back to pre 2003 levels.....this party is over! BTW 2003 prices were ridiculous too!"

So we are going to go back to prices where a 22 year old nurse (at current wages) straight out of school can afford a 2500 sq/ft home on a 10,000 sq/ft lot in Gordon Head.

Two young professionals in their early twenties would be able to afford a 4000 to 5000 sq/ft home.

This would not be good for the environment nor society.

Animal Spirit said...

Marko - I think that the definition of 'afford' that you use may be skewed by how much people have stretched themselves to buy recently. Perhaps look at afford in context of 20% downpayment and 6% interest rates.

bullbear said...

fixed RATES (& variable) are soon on their way UP again ladies and gentlemen, most likely until early to mid-2011 ...before we take a hard right turn toward Japan's rate environment again.

I know i don't need to point out the implications of rising rates this winter to this blog.

Mark said...

Marko, Marko just when I think you might have some common sense left in you......

I said:

"I will go out on a limb and say that prices within 2 years will be back to pre 2003 levels.....this party is over! BTW 2003 prices were ridiculous too!"

Your reply is retarded dude! Come on do you honestly believe rates will stay this low for 2 more years??? Damn that was a simplistic, uneducated reply. You sure all those degrees came from a real University???

Wages are stuck, employment sucks, economy in the shitter and rates are going up. Your example takes into account none of these 250k @ 6% or higher with a decent down payment really something a young couple right out of school can AFFORD?

Animal Spirit nailed it, your definition of affordable is messed up and the reason stupid young people continue to sell their futures to buy breeder boxes that they could rent for half! You a just showing your age and lack of maturity again, sorry.

Mindsets are changing and I doubt kids will be wiling to pile in as irresponsibly as they have been.

By the way a nurse at current starting wage couldn't "afford" that house either. AND there aren't a whole lot of jobs for those nurses anymore either. Damn your arguments have gotten even lamer since you became a realtard!

Inglishmagor said...

Oddly Marko I think your example alludes to the macro picture. That clip of Tony Robbins that Dave posted says it far better than I can.

The gist of it is that the baby boomers have passed through the western world like a pig swallowed by a snake. They are at a point now where their money and bulging demand will move from homes and into the medical system. So I see health care and anyone making their living from it being the next big bubble.

Anonymous said...

I thought bears don't make predictions? What's going on here. Oh right if your predictions turn out wrong then you say you never make predictions now I get it. ha ha.

HouseHuntVictoria said...


I'm not convinced interest rates are heading up in any significant way (2% or more) in any near-future time frame (next 12-24 months). What are you seeing that I'm not?

Please don't go after someone on a personal level. Marko, despite his non-bearish views at times, adds a lot of timely market data to this blog. I think we should appreciate that, no?

a simple man said...

I agree - personal attacks have no place here, even if you really disagree with what a person has said.

I encourage vigorous debate and the challenge of differing views, but it must be done respectfully.

Attack to idea, not the person.

a simple man said...

that is,

attack the idea, not the person.

**must use preview more**

a simple man said...

Chinks in the Oak Bay Armour... something to discuss over afternoon tea.

2360 Windsor Rd sold yesterday:
Initial asking price: $900K
Selling price: $750K
Assessment: $832K

$82K below assessment.

the mass media has struck fear into sellers behind the tweed curtain.

Marko said...

You can spin affordability any way you want. Should a 2000 sq/ft home with a "kids play room," two cars, and two vacations a year be affordable to the average family given the situation in the rest of the world?

As far as jobs, Canada is one of the few countries in the world where you can still work hard and get somewhere. Employment situation is still much better than in was in the 1990s.

My motto is if I can't afford a house working 40 hours a week, I will work 50 hours. If the market corrects, great, if it doesn't, I will still be in a position to buy.

Anything is possible, but pre-2003? I guess we have to wait and see, if prices start dropping I am certainly buying way before it gets to that level.

DavidL said...

@ a simple man said:attack the idea, not the person

I totally agree.

@Marko said: Should a 2000 sq/ft home with a "kids play room," two cars, and two vacations a year be affordable to the average family given the situation in the rest of the world?

Using your own definition of affordability, how many years should it take the average family who makes an average down-payment and average payments on such a home to pay off their mortgage?

omc said...

Wow, things are really starting to slow down out there. My PCS is practically dead. That house on Windsor is setting the pace and it is far nicer than most of the houses listed in the $800s around here. BTW it started at $950k and was relisted. It would have got it at the peak.

It isn't the only one; look at the house on Woodlawn. It is now listed at $80k below appraisal, mind you I think the appraisal is a bit high.

a simple man said...

Thanks for the clarification, omc - my PCS account only lets me look back to one price adjustment, not multiple. That is even more stunning - sold for $200,000 below initial list.

The house on Woodlawan - I agree - the recent $80,000 reduction made a statement (was priced at appraisal).

and we are just getting started.

a simple man said...

and the most read article online at the TC in the past day:

"Bear Mountain closes real estate office effective immediately."

Marko, Just Jack - I agree with your previous comments that Bear Mountain will be ground zero.

Just Jack said...

My thoughts on Bear Mountain is that the ultra low sales and over 7 months of inventory is due to sellers not wanting to take a loss on their home and buyers who are not ready or willing to move up on their price.

Call it real estate brinkmanship. So, I'm seeing houses that sell for $2,500 more today than when the house was bought in March 2009. Which I am assuming is just to save face after all, would you like to be known as one of the first persons to have lost money on Bear Mountain real estate. I mean what kind of tattoo would you get to celebrate that one? How about a celtic ring around your bicep. Nope that's already taken.

One seller, on Bear Mountain road has taken a hit this month. They bought in August 2008 and just sold this month for $16,000 less. This one is worthy of tattooed wings on your backside.

And then there is the buyer who just purchased a home for $23,500 more than the previous owner paid for the home in August 2009.
He gets a tattoo of Goofy makin love to Minnie Mouse inked on his butt.

HouseHuntVictoria said...

I can hear crickets chirping in the low-end of my SFH PCS - these are houses with suites or suite potential priced under $425K - the dregs of the local SFH market. For the past 3 years, this segment of the market sold faster than a dime bag in Vegas when Paris Hilton is in town.

Nothing. No action this week. Just price changes and a couple of OMs.

DavidL said...


You don't have to go to the bottom of the listings to see no sales. On my PCS there have been no SFH sales during the last two weeks!

A total of twelve houses sold on the following days in August: 3, 4, 5 (x 2), 6, 9, 10, 12, 14, 15, 17, and 18
-> The sales have simply disappeared.

Past three days: 6 new listings, 9 price changes
-> Sellers are reacting to the news.

My PCS criteria:
* District: 'Victoria, Victoria West, Esquimalt, Saanich East, Saanich West'
* Listing Status: 'Active'
* Current Price: Minimum '$400,000'
* Current Price: Maximum '$650,000'
* Bedrooms: Minimum '3'
* Bathrooms: Minimum '2'
* SqFt Finished: Minimum '1900'

Animal Spirit said...

Four points:

1 - Buyer's strike?
2 - HHV, stop upsetting the true believers over at vibrant victoria
3 - Phillip's could brew a speciality Housing Bubble Bear Bear
4 - %_listing_price_to_assesed=-0.126(assessed_price(0-525K))+163.9 (R2=0.3516))

HouseHuntVictoria said...

I'd drink that bear, oops, beer

Alexandrahere said...

hmmm , so far this week: SFH min 2 beds 2 baths Victoria,OakBay,Esquimalt,Saanich East & Saanich West:

SOLD; 15
PC: 21
NEW: 25

Alexandrahere said...

Sorry: Price range is $375K-775K

HouseHuntVictoria said...

Our PCS accounts won't match each others AlexandraHere. I'm not saying no houses in that range have sold, just none of the ones in my PCS.

Alexandrahere said...

HHV...Just responding to davidl's comments as he hasn't had any sales on his PCs and his criteria is similar. But 15 sales in 5 days sure isn't a huge amount. Doesn't look as though September is going to be as "good" as August. hehe so the President of the VREB is going to soon see "how September kicks back"

hammertown said...

I LOVE to get my hands on a PCS account. I tried to request one from a real estate agent but as soon as I said "I was just looking" I never heard from him again...

Any recommendations would be greatly appreciated.

Skeptic said...

I am currently tracking 570 active listings on several PCS accounts. There were 12 pending sales reported this week (Mon-Fri). With all the bad real estate press in the last few days I expect sales will be even lower in the coming weeks.

This market is so over...

Animal Spirit said...

If a bear had a beer while sitting on a boar while the boar sat on a board,
and if the beer bubbled,
into the bear
and the beer bubbled through the bear onto the boar,
would the boar drink the beer and,
would the beer then bubble through the boar on to the board?

or would the bears having beer burst into bubbling ballads outside the board while Randi and Carla bubbled and fizzled?

Marko said...

hammertown - email me at, I can set you up with an account - no obligations.


Marko said...

1295 Eston, Bear Mountain went for $869,000 back in 2006 and sold yesterday for $740,000.....that hurts.

Anonymous said...

The public report that VREB issues every month mixes all types of single family homes together to get average and median prices. VREB does have a non-public report that breaks out typical residential properties from acreage and waterfront. This is an excerpt from the August report click here

You can see that typical SFH active listings are up 40% YOY. Here is the the average sales price of typical homes over the past few months. In () is the SFH mixed average reported by VREB in their monthly news release to the public.

May - 609K - (646K)
June - 586K - (649K)
July - 582K - (615K)
August - 546K - (587K)

It is clear that the average price of a typical home has been falling for three months and there was a big drop in August.

Look at the months-of-inventory (MOI) for the three categories (active listings divided by sales)

Typical SFH residential - 6.9
Waterfront residential - 20.9
Acreage residential - 19.1

What about condos & townhouses? click here Here are the MOIs.

Condos - 8.9
Townhouses - 8.3

Look out below!!!

DavidL said...

@ Alexadrahere: Just responding to DavidL's comments as he hasn't had any sales on his PCs and his criteria is similar.

Wow ... It looks like my 3 bedrooms instead of 2 (on your PCS) and my 1900 sq.foot minimum is filtering out any sales.

@ Animal Spirit: Or would the bears having beer burst into bubbling ballads outside the board while Randi and Carla bubbled and fizzled?

I'm going to try having a few "bear beers" and repeating your prose, but I expect that I'll get my mirds wixed due to trouth mubbles and everything will come out bass ackwards.

HouseHuntVictoria said...


Given that SFH MOI is still fairly low all things considered, I'm very surprised that prices have fallen as far and as fast as they have. If that number hits 8 or 10, then REALLY look out below.

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...


While SFH MOI is still just over the 6 month buyers market level for typical SFH it has been increasing rapidly. I believe this has had a big effect on prices.

May - 4.4
June - 5.7
July - 5.3
August - 6.9

The second factor which affects prices is days-on-market. Sellers and agents are used to selling much faster than in a "normal" market. When a house doesn't sell in a few weeks they lower the price. Here is what has happened to DOM in the last few months.

May - 33
June - 46
July - 57
August - 61

Here are the detailed stats for those interested.

Detailed May Sales
Detailed June Sales
Detailed July Sales
Detailed August Sales

Mark said...

Olympic Village Ghost Town

Oh my :o(

Mark said...

Bob Rennie is such a scumbag!
Hey wasn't he behind the Bayview? Uh ya, how's that going for him? LOL!

I think I told you guys we walked through those about a month back. (after the 50% advertised drop) Pretty basic given the price point and eeeewww weeee the strata fees were through the roof!

Morbid curiosity is all it was....

Skeptic said...

In today's TC VREB ran this ad in the Homes section.

Click here for screenshot

This shows you what happens when you spin too hard - you get dizzy. Printing a denial of a US style housing crash along with stats that show a big decline in Victoria sales and prices is a PR disaster.

However, this is good news for bears. Even more people will stop buying after seeing this ad.

a simple man said...

hi Mark - out of curiosity, what were the strata fees like at Bayview?

Thanks for the detailed stats, DA - always informative. I would hate to be selling an acreage right now - I sold one once and was thankful I got out without taking a bath as many around me did.

Mark said...

I've since thrown out the brochure but the townhouse (just as an example) was around $600 or 700/month.

Very poor quality workmanship in the units....I guess people aren't being sucked in by granite and stainless steel anymore because these units don't seem to be moving.

Alexandrahere said...

A Simple Man.....Re: Bayview Strata fees.

I see one condo strata fee is $608 per month and another is at $540 per months. A listed townhouse pays $674 per month.

Mark....when you were there at the Bayview did you notice if they had hot water heat?

I'm asking because the fees include: Bldg Ins, Caretaker, Garbage, P/U, Gas, Heat, Management, Water, and Recreation Facility.

Also when I viewed some of the suites, I found the hallways to be very "hot and humid". Did you notice this?

As usual the condo fees seem to be based on the actual sq. footage of each unit and not the "value" of each unit.

Mark said...

Hot water heat....I don't think so. I believe it was electric baseboard and natural gas fireplaces.

The hallways were very hot and humid as I recall.

The strata fees are over the top high but the building does have a lot of amenities and those cost $$$$. Funny thing is most people never use those amenities.

My guess is that the fees will be going up in short order so maybe 700/month will seem cheap. I know when I had a condo, the fees went up considerably from the time I bought brand new and say 2 years later.

I was not impressed with the Bayview at all. But then aside from the Aquattro I haven't seen too many new developments that impress me. The worst is by far the Ovation in E Town....they can't give those away I hear.

600 - 700/month in starta fees is a lot to hand over every month to live in what just a fancy apartment building.

Alexandrahere said...

Mark: re the heating at the Bayview. They say in each of the listings that the strata fees include gas and heat. The heat part doesn't make sense. Usually when heat and hot water is included, they have a boiler. So I wonder, is it true that the heat is really part of the condo fee?

Marko said...

As I remember when I toured the Bayview each unit had an individual heat pump - I was very impressed. Total waste of money on the developers part. They put a lot of luxury features into the Bayview that are a waste unfortunately. A heat pump runs about an extra 20 to 25k for each unit versus baseboards, but who needs A/C in Victoria?

They should have used plywood instead of melamine for the interior of the kitchen cabinets and a few other things, but overall quality if very good.

HouseHuntVictoria said...

Marko, a geo-thermal heat pump system usually runs under $10,000, and for the typical heat pump you see under the porches of half a dozen homes in a given neighbourhood that are little more than glorified fans/air conditioning units, prices run around $5,000 or less. If Bayview is costing out condo-sized heat pumps at $20k-$25k, then I'd hate to know what they're costing out shower heads at.

Marko said...

I've have solid experience with HVAC in new construction. You won't see many builders that offer three different heat pump systems. Classic electric furnace/Lennox heat pump is one of our options; however, now we are using a ductless inverter Airlux heat pump. You won't see many of these systems around. Way more efficent then the classic setup.

What most people do is gone online, type in Airlux heat pumps, find the Airlux website and see that you can buy a 4 Zone inverter air conditioner and heat pump x 18000 BTU for $3,999.00 and they think that is the cost of the heat pump. The actual cost ends up being around 15k when it is all said and done on a new home.

The equipment is dirt cheap compared the actual cost of the install, especially in a concrete building.

The $5,800 you see displayed on a Lennox heatpump at Costco is a small part of the equation in a HVAC system.
these days.

Marko said...

The duct work in a concrete building needs to be engineered to death. If you fire up a heat pump and there is turbulence in the ducting you are screwed. There are so many huge expenses and intangibles people tend to overlook.

we were looking at doing a potential 6 town home development in Langford, cheap units, $350,000 to $399,000 and you need like more than 10 non-trades professionals involved at least. City planner, inspector, and engineer. Civil engineer, rain screen envelope consultant, architect, geotech engineer, lawyer (disclosure statements, etc), electrical consultant (anything over 4 units needs an electrical room), surveyor (expensive $) etc, etc.

The city alone wanted $17,000 in development fees for each unit and 110 feet of new sidewalk.

At the end of the day when you plug in all the numbers it just didn't make sense to make an offer on the property.

DavidL said...


Just out of curiosity ... do development fees vary much between different municipalities?

a simple man said...

Mark & Alexandrahere;

thanks for the information in strata fees - good things to know.

One house that I have been watching for some time is 3152 Wessex has been bought and sold a number of times in past 5 yr, most recently bought this spring for $790K on Feb 2, 2010.

The new owners now already have is back up for sale at $815K (originally $828K, listed June 22, PC Sept 3). I don't think they made any upgrades, although it says new windows/carpet (but the pics don't show differently than the spring).

I love the "SELLER SAYS SELL" at the start of the writeup. Usually when I see all caps, I ignore the ad altogether. And I am sure the seller wants to sell as he hired to agent to do so. Kind of like the sign outside of the Hillside liquor store that says "Hillside Liquor store. Liquor store prices". Even my kids laugh at that one.

Makes me wonder - what is wrong with this place as there just has to be something up - the last owners had it for less than 5 months, mostly in spring/summer, before pulling the plug.

The quick flipping of this house and the initial $60K premium over the Feb price really makes me scratch my head.

omc said...

The new owner of that place on wessex place probably can't stand the road noise; it backs directly on to a very busy road. Camosun Kindergarten's parking lot is directly across the road from it also, and I know what kind of noise the boom cars of the kids hanging out make. I think that arrangement is worse than facing on to a busy road because you can't use your back yard for the noise (they have a fence up in the back yard), and people tend not to use a front yard much because of lack of privacy.

The guy is probably panicking by now as he is going to lose a fortune on that turkey.

a simple man said...
This comment has been removed by the author.
a simple man said...

Hi omc;

I agree that the road noise on that lot would be substantial, but I have to believe that the new owner would have been aware of the placement next to the major artery to the University from the south. While I do think it would be a contributing factor, I sense it may be something deeper.

I agree with you that he or she may need to take a bath on this place to get it sold. If they were wise they would take the fair market value and price 5% below that. I am guessing at least 100K below their price now, which would leave them close to 100K in the hole, which is painful. But to wait longer - the losses will mount. there for a decade and try to sell them. Buy earplugs.

itoka said...

Macleans magazine yesterday speculating on further government intervention to keep the housing market inflated. Nothing would surprise me before the next election.

kabloona said...


So 1295 Eston Place (on Bear Mountain) not only sold for $129k less than it went for in 2006, it also sold for $35k under asking.

Wow, somebody must've been desperate to sell....the pictures in the listing indicate it's an empty property....

Bear Mountain - down we go!


Marko said...
1295 Eston, Bear Mountain went for $869,000 back in 2006 and sold yesterday for $740,000.....that hurts.

September 3, 2010 10:12 PM


Bubble 'n Fizz(le) said...

HHV's getting seriously beaten up over at Vibrant Victoria.

Just Jack said...


I say he is holding his own.


Alexandrahere said...

Some good pre-weekly stat news from my pcs:

So far this week i.e. 30 Aug - 5 Sept, there have been 17 sales this week within my criteria.

Average prices have fallen:

Aug 2-8 $534K
Aug 9-15 $551K
Aug 16-22 $576K
Aug 23-29 $599K

AUG 29 - 5 SEPT $530k !!

So Randi, so much for the "Kick-Back of September" so far.

Marko said...

SFH average is actually sitting at$649,345 to start the month. 1.3 million sale in Oak Bay is skewing the numbers.

think said...

The odd thing about that house on Wessex close is that the pictures of the inside now are the exact same as the pictures from before the Feb sale - same furniture etc. So are they reusing old pictures or did the house not actually sell in Feb? Very strange...

itoka said...

On Vibrant Victoria:

"My own anecdotal observations include several young couples who earn no more than $80,000 between them, yet were able to qualify for $550,000-$650,000 first time mortgages with little to nothing down and amortizations of 35 and one from 2008 with 40 years. Their jobs are far from stable, they make do with suite income and even the slightest increase in interest rates will have them in trouble. No doubt they are not alone."

The young couples will sell and downsize and all will be well.

Bubble or no bubble, this is what home buyers do when they find themselves over extended for a variety of reasons (kids, medical, lifestyle, etc, etc).

Dave said...

The young couples will sell and downsize and all will be well.

thats what they thought in the USA, until prices drop and you are under water.....DOH

Thats why foreclosures are low when prices are climbing, you can always sell.

Teenagers should not be allowed to be moderators.


Just Jack said...

The young couples will sell and downsize and all will be well.

Bubble or no bubble, this is what home buyers do when they find themselves over extended for a variety of reasons (kids, medical, lifestyle, etc, etc)."

But people don't do this. Most people will hold onto their house and won't sell to downsize to something they deem less than what they just left. They will hold on until they get the phone call "hello, I'm with the bank".


omc said...

When the rates move and the overextended end up in trouble this is the 2nd shoe falling. Already they cannot sell those homes for what they bought them for, as the new rules don't allow such big mortgages. There are no new buyers to fill their place if they leave.

Phil said...

"Vibrant Victoria"

It's too bad I couldn't get the great advice of some on that site during the desperation of 1982.

Despite the best efforts of man history will repeat itself over and over.

a simple man said...

wow..that vibrant Victoria thread is like chasing your tail.

I like data, and facts. There was a real scarcity of both there. That is why I like it here - mostly data and discussion on it.

Thanks HHV.

Animal Spirit said...

Anyone know if there is discussion on a housing bubble on KIV? And what the discussion is like?

Alexandrahere said...

Good morning all....on this gloomy and rainy Labour Day.

Here are my weeks stats for what they are worth: Aug 30 - Sept 5

SFH min 2beds; 2baths. Asking between $375K and $775K in the areas of Victoria, Oak Bay, Esquimalt, Saanich East and Saanich West.

NEW: 29
SOLD: 17
P/C: 22
OM: 35

Average asking price within this criteria was $562,529 and average selling price was $530,470.


Min 2 beds between $260K and $625K

Victoria: Most areas (not downtown)
Oak Bay: All areas
Esquimalt: All areas
Saanich East: Most areas
Saanich West: Gorge,Tillicum and Interurban.

NEW: 11
P/C: 13
OM: 14

Five of the sales were apartment style condo's and four were townhouses.

a simple man said...

thank alexandrahere for the stats - always appreciated - and thanks to you and Mark for more info on the condo fees.

In Oak Bay not much is selling (watching SFH <$1M), but there seems to be more new listings in the past week than in previous weeks. Summer is over, time to list. Especially with the feeling that things will drop further - get out now.

itoka said...

Not to pick on you Marko, but why not clean the counter space before taking that bottom kitchen shot?

I know it's a rental suite, but wow what a mess!

Marko said...

I kid you not, out of the 7 beds, not one was neat; therefore, no bedroom pictures.

It is kind of weird, what I am suppose to do, start moving peoples crap of their bed to make the bed? Tenants have rights, I can't start cleaning their kitchen when three of them are right there starring at me.

This is a revenue property at the end of the day. Pictures for the townhome I have listed are obviously much better.

If anyone has suggestions late me know.

Marko said...


Just out of curiosity ... do development fees vary much between different municipalities?"

To be honest, only familair with Langord. Fees vary on the situation and municipality, but basically if the municipality thinks you are going to make money in any kind of rezoning or development, they are going to price their fees accordingly.

Animal Spirit said...

All - There is something fishy with ChrisA's figure over on Vibrant Victoria? It doesn't match anything that I have seen from other sources (e.g. calculated risk and case-schiller). Anyone care to dissasemble it?

It is obvious that ChrisA knows what he is talking about. But is interesting that he has emerged just when the market is going down with a good figure that seems to show the opposite.

Bubble 'n Fizz(le) said...

Anyone know if there is discussion on a housing bubble on KIV? And what the discussion is like?

Why don't you slip over there and have a look for yourself? Report back to us, but remember, don't tell the women you're from HHV--they'll scratch your eyes out!

Bubble 'n Fizz(le) said...

It is obvious that ChrisA knows what he is talking about. But is interesting that he has emerged just when the market is going down with a good figure that seems to show the opposite.

Are those beads of sweat forming on your brow? Perhaps you're thinking "maybe I'm wrong and the price of housing really is a random walk." Ouch!

DavidL said...

Thanks for the info about development fees, Marko.

a simple man said...

No beads of sweat...if the market does not correct to a reasonable level, then continue to rent and use the downpayment for other means, such as earning income to offset rent and go on vacations. We can afford to buy the house we want, but choose to wait.

Right now it is far, far cheaper for me to rent than to own. Until that changes, I enjoy life and rent nice houses in the neighbourhood I want to live in to try out which type works best for me and my family.

Now owners...right now I am sure there are more than a few with beads of sweat on their brow. My landlord assumes the financial risk in an asset that has devalued by more than $50,000 in a few months if sold today.

Obviously, we will keep a close pulse on the market in the coming months to see if the price decreases we expect to see materialize. If and when prices drop 25-30% or so from peak, we will contemplate being homeowners again.

By the way, is it officially the Fall yet?

Bubble 'n Fizz(le) said...

My landlord assumes the financial risk in an asset that has devalued by more than $50,000 in a few months if sold today.

And why would he throw his arms up and sell his house just because the market softens over a few months? After all, you are paying his mortgage for him.

Obviously, we will keep a close pulse on the market in the coming months to see if the price decreases we expect to see materialize. If and when prices drop 25-30% or so from peak, we will contemplate being homeowners again.

You will be a renter forever.

Bubble 'n Fizz(le) said...

Move data from ChrisA. Looks like Victoria is ambling along like a largely normal market!

HouseHuntVictoria said...

Animal Spirit,

I think what Chris has done is employ too many variables into a situation with too few examples: in other words, he's using complex formulas to answer questions that could easily be understood in other ways.

He's also not arguing a point from what I can tell. He's like a data source, rather than a data interpreter. For me at least, that's refreshing to see on a board primarily used by people with a vested interested in development and real estate in Victoria.

HouseHuntVictoria said...


Most markets will look normal when you use a flat subset of 4 years of no growth to graph.

DavidL said...

@ B'nF said: Move data from ChrisA. Looks like Victoria is ambling along like a largely normal market!

Interesting stuff ... but the linked chart of "Median SFD prices by region" is misleading as the number of sales used to derive the median value is not factored in. For example, the trend line for View Royal does not represent the same sample as Saanich East - where many more houses are sold. Essentially, only half the data is being looked at - which can be highly misleading.

My wife works works as a data analyst - she just LOVES statistics. Maybe I should ask her for her 2¢ ...

kunwak said...

HHV, it's not clear to me that ChrisA is fitting a model with too many parameters. He is removing seasonal effects and separates by area which makes sense for what he wants to do. Once could go ahead and test his hypothesis (i.e., the number of parameters he uses in his model) against alternative parameters.

A running average as a smoothing filter would not get rid of the effects he wants to get rid of.

I think that many people underestimate the degree of complexness in the housing marked and jump to conclusions to quickly. If it was easy to forecast, banks et al sure would take full advantage of it. It is my impression that there is no big conspiracy about house price forecasts but rather it's just a real tough problem. Hence, pretty much everybody on this blog has been wrong about their predictions. And so have many economists, realtors and their dogs.

a simple man said...


And I really do not mind to be a renter forever if the market remains this way - I would be foolish to buy when I an rent for far, far less. Many people, particularity in Europe, have very happy lives renting their whole lifespan.

I have owned a number of homes before and know both sides of the drill well.

I have a great job, extensive education, a small business and a large family, and as a relatively new resident to Victoria I choose to rent until things normalize as they should have after the recession - I was lucky that I was out of the market and was able to make the smartest choice with my family.

I choose to live in Victoria because of lifestyle and I can get that renting or buying. Many well-educated friends of mine from back home would love to come here, but everyone always claims the insane prices here and the lack of real work and wholly discounts the move.

The prices will moderate sometime, and then I will invest in my family home for the long-term. I will then finally build a woodfired pizza oven and will invite may here to enjoy the pies with me - including you BnF.

Chris said...

Thanks for the comments, but please level criticism on VV if you'd like me to comment. I will note here that the only vested interest I have in the Victoria real estate market is that I'm about to move to Victoria: if I were cooking the numbers, I assure you they'd show that the SKY IS FALLING, SELL YOUR HOUSE TO ME NOW, CHEAP!

a simple man said...

and is 25% drop too much to expect when we have seen 10% in two months?

Time will tell.

Animal Spirit said...

Chris - fair enough - I was not criticising but instead wanting more info to be able to repeat the analysis.

The unfortunate thing with a lot of what we have seen in Real Estate hear is that quite often 'informed' views have turned out to be no more than new talking points. Therefore my scepticism.

Animal Spirit said...

BnF. No sweat here. I would prefer to rent for less than $1200 / month instead of buying a 500K house that needs $100K of fix ups to be livable - that would easily cost me more than double per month.

I'm more than happy to wait.

Just Jack said...

A lot of work went into those graphs and there are a lots of things that I find interesting.

Firstly, the vertical axis with prices at either end show the locational price differences between say Oak Bay and Esquimalt.

And the majority of the core municipalities are very tight in the price range. Oak Bay clearly the exception.

And we can also start to see that prices in these districts are converging.

Now what is that in plain speak. Leaving Oak Bay out of this, we can see that each district has starter, middle income and upper income neighborhoods which help to explain why these districts work in unison with each other.

The prices are converging because as prices rise they hit a point where the typical income can no longer support a higher price in that location. So prices stagnate in these areas as prospective purchasers move on to the next neighborhood of choice. This overflow is most noticeable in Fernwood. As Oak Bay prices climaxed, more prospective purchasers moved to the alternative neighborhood of Fernwood and drove those prices higher. Using these two areas as an example shows why the prices are converging. It also shows that price convergence is a slow process.

So why is Oak Bay so different. Mostly because the starter home areas in Oak Bay are tiny while the upper income neighborhoods are many. A similar reason why Saanich East homes, on average, are slightly more costly than homes in Victoria. Because Victoria city has more "dodgy" neighborhoods than Saanich East which has a lot more middle income homes.

A lot of the noise in the graphs is because of the small sample size and it might be helpful to show a base line that combines all of the medians of these districts.

Or, perhaps start over but not use districts but group areas or neighborhoods together by starter, middle and upper income groups. Because Fernwood has more in common with Quadra than it does with Rockland. And Uplands has more in Common with Ten Mile point than it does with Oak Bay area around Safeway.

I would also think that you would have to expand your time periods. Real Estate is not as liquid as the stock market. So you can see how silly it would be to quote Real Estate prices on a daily basis. A moving three month median would be more reflective of the real estate market as most listing contracts are 90 days. But, I personally would look at the days on market. So, if the average days on market was 30, I would use a month. If it were 60, I would use two months. Because, homes have to be "exposed" to buyers and that takes time.

Really cool graphs, they do what they are suppose to do - make you think.

Phil said...

B&F said: "After all, you are paying his mortgage for him."

Not if he (the owner) bought in the last 5 or 6 years he ain't. Not even close. And if rates go up the the shortfall will get even worse, despite what bulls say - "Rents will just have to go up too". Dream on.

HouseHuntVictoria said...

Here's what I'm reading tonight: Canadian bubble?

Marko said...

Month-to-Date Market Statistics
Posted by
Sep 07 2010
Tuesday, September 7, 2010 8:00am:

MTD September
2010 2009
Net Unconditional Sales: 56 776
New Listings: 197 1,129
Active Listings: 4,100 3,419

omc said...

Much appreciated Marko. The #s match what I am seeing in my PCS, very slow sales and increasing new listings.

Simple math gives us projected 392 sales and 1379 new listings, based upon only 3 bus days of 21 for the month.

Sweetrealtor said...

Weathermen can't even predict an accurate 5 day forecast so don't expect to forecast September sales by the first week tally. Today, the day after Labour Day, is when we expect the market to start to recover (if it is going to). The rain will certainly give people less entertaining things to do.

Also, there are many, many subject to sale offer out there now, usual in a slow market. I had a buyer remove conditions on a condo this weekend and the trickle down sold three other properties due to subject to sale offers.

Will have to see how this month plays out. Will we sink further or plateau? And when will this rain end?

DavidL said...


You are correct that a linear progression does not make a good forecast. For example, in August many were predicting 475 homes and properties to be sold rather than the 425 actually sold. I admire your optimism regarding the market, however!

As for the weather ... the forecast call for clearing this evening, but the rain will return either on Friday or Saturday. ;-)

Mark said...

Grim choice: Save housing market by letting it crash?

Interesting.....I think let it crash and I think that's all any the Governments can do at this time.

a simple man said...

don't sales generally decrease form spring/summer peak through the rest of the calendar year (look for Double Agent's past sales by month in this thread)? Would it not then be unusual to expect a real increase (>10% sales numbers) in Sept from Aug? I am not saying that it is impossible, but not usual as evidenced from the graph noted above.

Dropped the kids off at school this morning and many parents were talking about the "real estate bubble". The general public has just begun, in the last week or so, to see what we have been talking about here for a long time.

I think once the pending sales and conditions outstanding clear the only sound you will hear in houses listed will be the whistling wind and the pitter-patter of rain.

And Obama? Don't get me started - another bailout package. What?

Bubble 'n Fizz(le) said...

HHV over at Vibrant Victoria:


I say he is holding his own.


Er, doesn't really look like it. I'd say he's been called out big time.

Anonymous said...

It's Monday and time for the latest stat graphs.

Sales continued to drop in the last week (August 30-Sept. 5) but new lstings surged. click here

There have been quite a few discouraged sellers go off market since the end of August but they were replaced by lots of new listings. Active listings remain stubbornly high at 4100. click here

Overall Months-of-Inventory (MOI) dropped slightly last week but is still well over 9. click here

Will sales pick up this week now that the kids are back in school and holidays are over? My optimistic guess is around 400 sales this month. (Sept. 09 - 776 and Sept. 08 - 512)

DavidL said...

Marko and Double-Agent: Thanks for the data and charts.

HouseHuntVictoria said...

"I'd say he's been called out big time."

Where? And this is assuming that ChrisA's analysis is correct, which hasn't been proven nor asserted as to what it means to the local market.

a simple man said...

Double-agent and Marko - thanks for the stats. These numbers, especially the further fall in sales and the spike in listings mirror what i was seeing on the PCS.

Public emotion in Victoria is quickly changing towards real estate; you can do all the cubic spline regressions and random walk analyses you want, but there is a tangible sense of panic in the air.

Further, in terms of using historical data to model future trends in Victoria, it is an interesting mind exercise but there has never been such a confluence of factors hit the market as they are now, so the past can give us some ideas, but it was not observed under today's market conditions. Many of the best economists in the world were wrong when the US crashed, despite their multi-million dollar grants to model and create analyses as to market trends. Simple answer is that we can't predict the future.

Analyses need to spend less time in mathematics and more time in psychology to better understand what is coming.

DavidL said...

I know that ChrisA would prefer comments in VibrantVictoria but I don't have to time to double-post.

In any case, I talked with my wife (who is a stats guru) about the data and analysis being used. She said that without looking at the distribution (and thus standard deviation) of house sale values, that you cannot derive much from just the mean or median. Aggregating the data into ranges then examining the median and mode ranges might be a bit more useful. If you identify the trend lines, extend them into the near future, then you could use regression analysis in order to determine the validity of the trend.

By the time that this kind of analysis is complete, the future has become the present and the present has become the past!

Skeptic said...
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Skeptic said...
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Skeptic said...

I have been reading the discussion over on Vibrant Victoria. Seems like HHV has been sucked into a discussion which is leading nowhere.

Sometimes people can't see the forest for the trees!! Lets take a look at some basic facts:

- Real estate sales in August were at a 20 year low according to a recent TC article (based on VREB stats). 2010 summer sales (see DA) are at the lowest level in 10 years.
- Price reductions are rampant. Everyone using PCS has been observing this for months.
- Average and median prices have been falling for months. This is a poor proxy for a housing price index. However this is not what happened when the market was hot.
- Active listings are over 4000 and this is very high compared to other years.
- Sales will trend down until the end of the year. (See VREB sales graphs for the last 5 years.)
- CMHC has changed the mortgage qualification rules for under 20% down buyers, investors and the self-employed.
- House affordability is at a very high level, Canadians are carrying record debt and there is talk of a double dip recession in the US.
- HST has everyone feeling more tax pressure. New homes cost more and legal/realtor fees have increased. The uninformed think HST applies to resale housing (had this conversation yesterday with a friend)
- VREB is telling everyone not to worry which makes everyone nervous. They smell the smoke but there is no fire :>)
- Papers and TV have been talking about a bubble and high Vancouver/Victoria prices for months. Even the last TC article talked about the market slowdown.
- The man on the street is talking about a bubble. Some believe it, some deny it but they are talking none the less.

So... It seems pretty obvious to me that this is not positive for real estate in Victoria. Remember anything is only worth what people will pay for it. When many potential buyers move to the sidelines and those left are aggressive with their offers where do sale prices go? Those that need to sell will take less and this is what sets market value in a given area.

Alexandrahere said...

wow people...check these LEED's condo's out...

A501-373 Tyee Rd $530K down to $439K

A806-373 Tyee Rd $681K down to $569K

Quite the drops in these new "green" condos

kunwak said...

HHV said: "what it means to the local market."

My 2 cents... This is the key point I think. His caution with regard to rolling averages and so on is valid and often poorly understood.

As HHV has said in the past, he does not intend to do predictions (even though sometimes certain statements may appear to some as predictions - nobody is perfect).

Interpreting statistical results is not trivial. For example, many statistical methods assume certain things about the underlying left over (or residual) errors that are not explained by a certain model. If the residual error is not explained sufficiently by the assumptions, misleading conclusions can be drawn.

Another big issue are competing models to explain certain data. Model choice is subjective and cannot be explored exhaustively. Even worse, in many studies, model choice may not be motivated sufficiently by quantitative measures.

Hence, forecasting is a very difficult problem which is often not appreciated by the public. The uncertainty of the prediction is also very important and is often not well understood. For example, when trying to forecast the return numbers of Sockeye Salmon in the Fraser River, uncertainties are so large that the prediction is almost useless. The same is true for many many market predictions based on statistical analysis of historical data.

One reason that it's so difficult is that psychology plays into the prediction in a complicated way that causes all kinds of feedbacks that are intrinsically not predictable.

Hence, take forecasting with a grain of salt. Ultimately, we will only know if we have a bubble here once it popped. Otherwise bubbles would not be such a big deal. Time will tell.

omc said...

I know all too well that you can't make a trend from a couple of data points, but I also don't think a sales # of around 400 is out of the question. It actually would fit the trend the market has shown this summer.

It wouldn't have been such a big deal either if VREB wasn't beating the drum so loudly about a sept turn about. That is what you should be pointing towards as BS sweetreator, as it is a complete unsupported fabrication.

think said...

I strongly think we are in a bubble and we are in the process of popping right now, I base my opinion on logic and 3 key points (I find those that think there is no bubble and think this nonsense can continue cannot back their opinions up with logic or fact - instead say random things like "Victoria is the best place to live so everyone will come here" - sure sure...), anyway 3 key points of logic:

1. Fundamentals (a bubble is defiined by prices that do not align with core intrinsic values - every stat and piece of evidence points to the fact we are completely out of line with true value - rents vs. ownership costs, alignment with wages, etc. No one can argue that we are in line with fundamentals because we simply are NOT and this is a key point showing we are in a bubble.
2. Debt loads (when debt becomes too much - pop - we as Canadians have the highest debt price tag per person in the world - we cannot afford to continue this...almost everyone I know has huge credit card debt and second the debt grows it eventually reaches a point where it is unmanageable and...POP)
3. Statistical evidence (thank-you again double agent for all the excellent graphs and interpretations) that the bubble is already popping (prices are dropping right now and will continue, sales are record lows, inventory is high... hey if it walks like a duck... most logical path is that the crash will continue)

So in conclusion... POP!!! The market is done, I think we all know that and those that are having a hard time with this are facing denial right now but should move through the stages of grief to acceptance in time. Can anyone out there give me one logical fact-based reason why this crash won't continue? Nope, I didn't think so.

Just Jack said...

The psychology of the market, in my opinion, is the key to how this market will evolve.

A couple of years back, when an interest rate increase was announced people rushed into buy. Today, an increase in the interest rate makes people pull back from buying.

The same stimulus - but different result. Uncertainty has gripped the market and this is worrisome for any real estate economist. Fear is a double edged sword, it drove the market up and it will drive the market down. The only thing worse than fear is boredom. And if people become bored with real estate, its teats up for prices because no one can tell where the bottom lays.

The MSM has turned on Real Estate and buying a property is now becoming part of a comedy routine. So, how do you own a million dollar home in Vancouver. Buy a two million dollar home - and wait.

People do not buy things that people make jokes about.

a simple man said...

Examples of people that have to sell (I sense they both bought another house in the spring thinking theirs would quickly sell for asking, if not above as a month before we were into multiple offer above asking).

Both listed in the spring for $750,000 and yesterday both did their most recent price reductions:

2082 Meadow to $630K
2438 Lincoln to $680K.

I really feel for these folks (honestly).

Skeptic said...

It is with deep sadness that I announce that Mr. Housing Boom passed away in Victoria last spring. As a newcomer to Victoria in 2002 he quickly made good friends with many realtors and homeowners. His untiring energy and willingness to help owners make a profit on their humble home will not be forgotten. He will be sorely missed by his many Realtor® friends in Victoria who depended on him for their easy incomes. The real estate believers who used increased equity to get loans for essential items like new cars, granite countertops and stainless steel appliances deeply regret his passing.

Mr. Boom leaves behind a legacy of high debt and recent buyer regret. He is survived by his twin brother, collapsing bubble, and many vulture buyer cousins. At the request of the local real estate board a memorial service will not be held. In lieu of flowers donations may be made to the banks holding the mortgages in Victoria.

DavidL said...

@Skeptic: Thanks for the laugh!

Adding to the obituary comments:

Although I met "Mr. Boom Sr." in the late 1980's and early 1990's, my financial circumstances didn't allow me more than just a passing acquaintance. So it was with some pleasure that I met his son "Mr. Boom" during his youth in 2002. At that time, I was unable to directly help any of his Realtor® friends as I was involved in a private real-estate transaction.

However, Realtors® friends assure me that all who knew Mr. Boom had the highest regard for him. For some, the shock of Mr. Boom's sudden passing is too much to bear (market?), and thus remain in denial.

I will duly acknowledge the passing by paying an extra lump-sum payment on my mortgage. RIP.

DavidL said...

Today's Raeside editorial cartoon sums up the market:

Just Jack said...

The boom is dead.
All hail the bust.


Rhino said...

I'm not ready to celebrate yet. I was singing the same song in 08 and look what happened (once bitten twice scared). We still aren't close to those lows 2 years later. The powers that be have a lot of tools at there disposal and I don't underestimate what they will do to keep this bubble a float. But for now I am happy doing the bear dance.

Anonymous said...

In my post earlier today the graphs showed that sales have been dropping recently. Last week there were only 85 sales. I suspect a pickup in sales this week and optimistically predict about 400 sales this month.

Here is how this would stack up against previous years.

2000-2010 September Sales

Not looking good folks!!

a simple man said...

Thanks DA. At 400 sales it would be the worst sept in at least the past ten years. Even at 500 it would still be the worst in at least 10 years.

sit. watch. wait.

Sweetrealtor said...

Skeptic says "He will be sorely missed by his many Realtor® friends in Victoria who depended on him for their easy incomes."
Easy incomes, really? Have you previously worked as a real estate agent to make this statement?
You should talk to some wives and husbands of agents and ask them how hard their spouses work. My wife refers to herself as a "realty widow" as I work long hours every day and rarely have time for anything else - quite common in my industry. I wouldn't call this easy money.

a simple man said...

@ sweetrealtor:

I agree with you - I know a number of realtors that work seemingly non-stop. And they are called at all times of the day and no day is sacred. It can be a tough job, for certain, with regards to the hours some realtors put in.

Mark said...

Well I know a whack of realtors that got into the Biz in the last 5 years that have done very well, doing very little. They are personal friends and openly BRAG about how easy it is and what little they do to collect their commission cheques!

Both sides to this story...oh and by the way, not one has a degree or any concept of basic economics, market psychology etc.

They will, I'm sure return to their previous jobs as bartenders and car salesmen in short order.

The party is over!

I will agree that when times are tough or even "normal" a realtor can work hard BUT I also feel that they are overpaid given that the majority of folks now due their own due diligence (thanks to the internet) and realtors merely facilitate a transaction that could easily be handled by a lawyer and individual buying/selling the home.

Most of the realtors I know get thrown a bone by their pals because they don't feel confident negotiating their own deals. This in itself is comical because I don't know too many deals that have been "negotiated" in the last 5 years LOL! Paying over asking price and getting caught up in bidding wars is not "negotiating"

a simple man said...

@ Mark - this is also true. I think it is true in many professions, that you get all sorts. I, too, know that type of realtor that brags how easy it is. They usually have the flashiest cars and the nicest suits.

Mark said...

LOL...hey maybe we know the same guys!

Mark said...

OTTAWA (Reuters) - The Bank of Canada raised its benchmark interest rate for a third consecutive time on Wednesday and sounded surprisingly hawkish despite predicting a more gradual than expected economic recovery.

The central bank nudged its overnight rate target up 25 basis points to 1 percent and, contrary to most economists' expectations, did not signal a pause for its next decision in October. It said rates remained "exceptionally stimulative" but kept all options open due to doubts about the U.S. and global recoveries.

More increases to come IMO.....Oh my those low low int rate mortgages are gonna be a lot higher when they mature in the next couple years. OUCH!

Mark said...

Garth Turner on the Interest Rate Increase + Don't look for the Govt to save this sinking ship!

So why did the Bank of Canada raise interest rates again this week if families are so indebted and this will just make their lives worse? When it will likely slow down an economy which is moribund and drive another spike through housing’s zombie heart?

Because Mark Carney, along with Derek & me, know we’re now well and truly on the path which leads to the suburbs of Houston. Or Chicago. Tuscon. Miami, Seattle or Stockton. As in middle America, real estate excesses in Canada have led to debt excess, which has the potential to gut economic activity. And it continues. As stated, credit is still exploding higher. Only by sending out a message that rates are rising and the party is over can Carney try to corral the beast he created.

But, it’s too late.

I’m more convinced each day that none of this ends well for millions of families. They gambled on real estate, and most will lose. Not only will equity vanish, but they’ll be left with unrepayable debts which only get harder to service. Sadly when the economy does turn, it’ll mean surging financial markets they can’t afford to capture and higher debt rates on houses worth less.

The groups most at risk are recent young buyers who thought 5% down was smart and riskless, and house-rich Boomers who couldn’t let go.