Friday, October 1, 2010

September sales continue falling trend

Month-End Market Statistics courtesy of the VREB via Marko Juras. Now updated with prices.

September 2010
Net Unconditional Sales: 395
New Listings: 1,211
Active Listings: 4,323
Average SFH Price: $599,825
Median SFH Price: $531,000

September 2009 
Net Unconditional Sales: 776
New Listings: 1,129 
Active Listings: 3,419
Average Price: $619,936
Median Price: $550,000


Month over month changes
Net Unconditional Sales: -8%
New Listings: +21% 
Active Listings: -1%
Average Price: + 2%
Median Price: - 3.2%


Year over year changes
Net Unconditional Sales: -49%
New Listings: +7%
Active Listings: +21%
Average Price: -3.3%
Median Price: -3.5%


There was a definite surge in sales in the final two weeks of the month. Will the surge continue? There's also been a consistent surge of new listings keeping inventory stubbornly high.

Current market-wide months of inventory stands at 10.9%.

115 comments:

omc said...

My PCS shows that a lot of homes have been taken off the market, only to be replaced by even more listings. The people who are thinking they can re list in the spring at their silly prices are in for a shock. This could be a blood bath as some of the listings return to market.

The question is now; will the listings pulled from the market return this winter and wreak havoc, or will the listings return in the spring adding to the unsold inventory from the winter PLUS plus the listings that will be new in the spring.

A blood bath.

Just Jack said...

Probably what is happening is the profile of the typical seller is changing. Those that have de-listed their property were not fully convinced of selling.

Those that remain and those that are now listing are more motivated to make a deal. For the last decade, it has been to the seller's advantage to re-list in the spring as the number of active listings drops in the winter. If listings remain high during the winter, this may prove to be a disadvantage, especially if a demand-driven downturn in prices has been firmly established.

Market prices are weakening, as shown by several anomalies that have occurred. To have that property on Mason sell for $210,000 when for the last five years there has not been a property sell for under $300,000 in Victoria, certainly signals a change in the marketplace. Acreage, waterfront and other high prices real estate are stalled markets. The volume of sales, in the Westshore and Saanich Peninsula have
cratered.

Only the urban core municipalities are left, but the hounds are at the doors.

Marko said...

average prices are out on VREB website...

Marko

Leo S said...

High listings is promising, but traditionally the really stepp decline in listings doesn't kick in until Nov and Dec, and sometimes Oct, so this could still happen.

Alexandrahere said...

Although I have had quite a few (17) sales so far this week, I am seeing the average sales price down considerably.

My criteria: Vic,Esq,OB,SE&SW, min 2 beds, 2 baths priced between $375K and $775K.

Average price of sales so far this week within this criteria is $540,1176.

Also, so far this week I have had two more new listings than sales and 30 price changes.

In the previous 10 weeks (not including this week) the average price using this criteria was $563,800.

Perhaps this new low average is a sobering indicator. We will see.

Jack said...

I was finally able to do the simulations concerning averages. What I did is took the numbers 1-4200 and picked between 1-4200 of them (picked numbers = sales). I meant to do 4300 but 4200 will have to do.

According to the latest sales stats of around 400, this means that around 90% of the time the average would be +/-5% of the real average.

Of course housing prices are a lot different than the numbers 1-4200, as they dont feature uniform incrementation and the highest priced house isn't 4200x the lowest priced one.

I think it needs some tweaking but it is interesting nonetheless.

Simulations

Jack said...

..within +/-5%

DavidL said...

Greater Victoria real estate sales hit 20-year low in September
Greater Victoria real estate sales numbers continued sliding downwards in September, hitting a 20-year-low for that month.

Robert Reynolds - GBA said...

Just Jack, I dun get it...?

/derp

omc said...

I dunno, I have had very few sales on my pcs for the last 4-5 days now. LOTS of new listings and corrections though.

Jack said...

Robert,

For example, if you see 1000 in the "numbers picked" axis, this means that 1000 of the 4200 numbers are selected at a certain number of trials (I set it to 1000) and the average of each trial is computed to see if it is within 5% of the actual average (2100.5)

Just imagine the numbers being $1-$4200

Just Jack said...

Robert Reynolds - GBA said...
Just Jack, I dun get it...?

/derp

Don't mistake Jack for Just Jack. They aren't the same people. :-)

S2

Marko said...

A-Channel news story if you guys missed it tonight ->

http://www.youtube.com/watch?v=DpTMV1IMRfw

billy said...

I just found this great website for no fee apartments called www.SkipBrokers.com No fee apartments....

Leo S said...

Hey you're turning into A-channel's goto bear realtor!

Most nonsensical quote of the month comes from realtor Jason Binab:

"When people kind of look at stats and they forget that victoria is its own niche market, and it's a destination place"

Also that blog they were talking about is here: http://www.victoria-mortgages.com/blog

Phil said...

Wow, that's 2 balanced RE stories in a row from A-Channel. Good job Marko!

a simple man said...

Wow - Binab really did not shine in that interview.

He basically said it is different here and said sales are really picking up. Ummm...did you look at the VREB stats - it was the worst Sept in over 20 yrs?

omc said...

Yup, I`d say Marko was fairly balanced in his opinion. I noticed you got more air time than Binab. You gave them some good sound bites; the inventory creeping and buyers needing to lower their prices.

Good for you, getting your name out there.

Gotta work on th the wardrobe though.

omc said...

We really don`t know how far back is worse for sales, as VREB says they don`t have the stats. Probably 1984

Marko said...

"Gotta work on th the wardrobe though."

I spend a lot of time on construction sites, Slegg Lumber, with tradespersons. It is difficult to find attaire where one minute I can be on a site and the next showing a home.

I just sold a home a few days ago where I was crawling around the crawl space for 10 minutes during the showing.

I was able to give my client a lot more information doing this, what kind of joists the builder used, sheeting quality, furnace/heatpump system. Etc.

You know..... like actually doing something for my 30% commission versus just filling in numbers on a pre-made contract.

Marko said...

With 30% commission I am refering to my 70% cash back program....I am not actually taking 30% commission on the price of the home. Just to be clear.

Marko

Just Jack said...

I assume that the head of the banks rear newspapers and watch or listen to the news. Now that they have been informed that prices are declining do they stop giving out new mortgages because a year or three from now the buyer will owe more than the house is worth?

No, they don't stop lending. They continue to lend on new mortgages, but they make qualifying more difficult. Which means fewer prospective buyers qualify, which means lower sale volume, which means lower prices, which means stronger qualification of new buyers is needed.

How about CMHC. In order for CMHC to cover operating expenses and losses it needed continuously new insurance premiums from mortgages. With the low sales volume, that income stream has dropped. And we all know what happened to Freddie Mac and Fannie Mae in the USA when these insurance companies lost most of their income stream.

Mark said...

Marco...you made Garth Turner's Blog, well done!

That Binab dude is a joke LOL! Typical realtard!

Bring on the 40% correction....get it done quick and let's "heal" IMO.

Rhino said...

Frank Simon is my new hero! To bad his employer shut him down, he would have given the best interview

Marko said...

I wouldn't call Binab a joke. Extremely successful local Realtor.

itoka said...
This comment has been removed by the author.
Leo S said...

I wouldn't call Binab a joke. Extremely successful local Realtor.

Goes to show it certainly doesn't take logical thinking to get there.

Stats don't show how victoria is a destination market? So outside buyers aren't counted or what? The mind boggles how you can say things like that with a straight face.

kabloona said...

Yeah, Marko...thanks for the link to A-Channel report....good stuff.

Too bad they couldn't interview the "Langford Bear"....maybe he was hiding up on Bear Mountain?

;-)

itoka said...

Binab and Strasser have only made money during the four or so years of the boom. It will be interesting to see how they do in the lean times ahead and if Strasser heads back to law and Binab "acting"

Bubble 'n Fizz(le) said...

Hey you're turning into A-channel's goto bear realtor!

More likely the A-channel's goto bear buyers agent. If I was going to list my house for sale, would I choose a realtor who says the market is tanking and I should set my price expectation low, or would I choose a realtor who is optimistic and says push the price envelope and get all you can? I can always revise my asking price down if lack of interest indicates it's too high, but if I go to market too low, what then?

On a side note, I heard from a reliable source that a double lot in South Oak Bay went this week for the full $1.25M asking price on the day it was listed. These are minimum-sized lots and there is a very old and unrenovated house on one of them that is definately a tear-down. So that's $650K/lot. I'd say the owner is probably glad he had an agent who said "push the envelope" rather than one who said "you have to price agressively because the market is going down."

omc said...

The regular lot price in south oak bay is $5-550k. Lots backing onto Anderson hill park with unobstructed ocean views would be well priced at $650k. I would hardly say that property was pushing the envelope for price. That house is actually situated so you could renovate and still sell off the other lot.

Marko said...

"I can always revise my asking price down if lack of interest indicates it's too high, but if I go to market too low, what then?"


Or you can price too high for a month, the TSX can unexpectedly drop 500 in a week based on some GDP data, the real estate market further corrects due to lack of consumer confidence, and if you had realistically priced your home initially it would have sold, but now you are stuck chasing the market down.

Hmmmm.....anyone can set the price high initially and then bring it down. The key is to price the property so it sells quickly, but it isn't below market value.

Mark said...

Uh Ya Binab is a joke and a slime ball. AND aren't Binab and Strasser dating?

Those 2 clowns with the Cramer hair do's kill me man!

Just cuz a realtard has been successful in the boom makes you think he is good Marco? Damn dude not a day goes by that you don't show your age and lack of savvy.

HHV I ain't chucking shit here either....he makes a lot of dumbass remarks. Fancy stats or not.

Phil said...

Well said Marko. I prefer realism to optimism anyday.

Chasing the market down is about to become a national pastime.

kunwak said...

"HHV I ain't chucking shit here either....he makes a lot of dumbass remarks. Fancy stats or not."

Yes you are. And you know it. Your language is inappropriate and you know it. If you'd address people appropriately, you would have a much better chance to be taken serious. The way you address people here makes you appear ridiculous.
Grow up dude, otherwise no one will listen to you.

Bubble 'n Fizz(le) said...

The regular lot price in south oak bay is $5-550k. Lots backing onto Anderson hill park with unobstructed ocean views would be well priced at $650k.

These lots hardly have "unobstructed ocean views." The front lot has a peek-a-view, the back lot nothing. As well, the back lot is tiny (50 x 93) and the front lot is pretty unremarkable in size (75x121).

That house is actually situated so you could renovate and still sell off the other lot.

You're blowing smoke. The value of that house is zero $.

Hey, wait a second, I thought you guys were saying there's a real estate crash underway! Now you're saying $625K/lot is "well-priced?"

a simple man said...

BnF;

It isn't just us saying there is a RE crash - almost everyone but the majority of realtors is. Our chorus of a few is now drowned out by the masses.

Face it - you were wrong.

bob said...

I have a feeling that the large number of realtor/investors in this town with all their "holding" properties are about to take a bath. Those little Gorge shacks for $400K will be depreciating steadily for the next 6-10 years; about time for the speculators to eat some crow (but not on my dime thanks). And as the property churn slows, sit back and enjoy the carnage as realtors cannibalize one other. When will this happen, just after the next federal election when the rates get cranked to cover the national debt. After all, the property chute has been so well greased with cheap CMHC cash; watch out below.

a simple man said...

from the Garth Turner blog where the A-Channel News story was highlighted on the main page:

A grizzled vet from Sooke by the name of Dan from Victoria:

"Watched the real estate video, good to know that cartoons are still on tv.
Both those guys need to get a grip on whats going on.
They have zero experience in a real estate cycle. Zero.
Just because they have been involved in a bit of construction and sales in this run up does not mean they have the knowledge and experience.
“A News” should interview some guys that have been around the block, you know guys with gray hair and a finger or two missing. I can tell you the grizzled guys are battening down the hatches.
Its starting to rhyme.
But what ever, like I always say, you pay for your education how much is up to you.
Its also good to know its diffrent here in Victoria and we’re a destination spot.
Yeah Right. Try a round of the “Colwood Crawl”
Just keep repeating after me…theres no place like home….theres no place like home…"

Bubble 'n Fizz(le) said...

Both those guys need to get a grip on whats going on.
They have zero experience in a real estate cycle. Zero.


Can this be true? Marko getting dumped on by a blog dog? BTW simpleton can we assume you are "Dan from Victoria?" Sure sounds like it!

a simple man said...

Hi BnF;

I have never posted on Garth's blog so I am not Dan from Victoria. Sounds like a nice guy though.

Simpleton? - good one!

a simple man said...

and I am not dumping on Marko - I am just the messenger.

omc said...

You know you are doing good Marko, when the angry extremists on both sides hate you. B&F and "Dan"

Bubble 'n Fizz(le) said...

You know you are doing good Marko, when the angry extremists on both sides hate you. B&F and "Dan"

Typical "bear" hyperbole. I don't hate Marko--on the contrary, I think he makes an excellent "buyer's agent." If I were looking to buy, his proposition is pretty attractive--kicks back 70% of the buy-side commission and still does most (if not all) of the buyer's agent grunt work. All I'm saying is it won't work on the other side--he's establishing himself as someone who won't get much in the way of listings. I don't think people will see him as someone who will get the max for their property--he's on TV saying "your value is going down--get over it." Not exactly good sales 101 bedside manner. Kind of like the mortgage guy on the A-channel report--he didn't want to go on-camera after talking with his boss. Gee, I wonder why? Just because he said "don't buy houses right now." News flash, dude: you are in the mortgage business! Oh, well, just goes to show you don't have to be the brightest bullb on the tree to do that kind of stuff!

Phil said...

B & F - I'm not sure intelligence plays as much of a role with those two individuals as honesty. Perhaps they are in the wrong business? Can honesty and real estate ever go hand in hand?

Like Paul B or Double agent these guys are making a good name for themselves with the bears right now.

Perhaps they sense that the bears will be the only ones buying houses in a few years?

HammerTown said...

Even Hitler feels the crunch!

Real Estate Downfall (vid)

DavidL said...

-@Phil wrote: Can honesty and real estate ever go hand in hand?

Absolutely they can ... as long as the agent puts their clients needs ahead of their own. As there are lots of $$$ involved, some agents opt to make a quick buck - literally at their clients expense. It doesn't matter whether it is real estate, financial investments or car sales - there are always some reputable sales people in the business. I suspect that as the "lean times" continue, that the reputable agents will be amongst the survivors.

a simple man said...

I know that I never forget a saleperson who has given me information that I know is not completely with my best interest in mind. I make a note to avoid them in the future.

itoka said...

Who on earth came up with this bright idea: "Free Rent till October 1st" and the ad was posted on Sept 29. More brilliance from Bear Mountain.

jesse said...

"Absolutely they can ... as long as the agent puts their clients needs ahead of their own."

They can... but how do you know? The best way, in my opinion, is a fixed fee for a buyer agent, who gets paid regardless of whether or not a client buys. They get money and a good reputation. Anything earned on commission... just be aware there is an inherent conflict of interest.

Selling agents should be paid by commission in my books. How else do you "sell a refrigerator to an Eskimo"?

DavidL said...

I don't know where Garth Turner gets his numbers from, but according to his latest blog: "over 77% of all agents in Victoria sold nothing last month".

Can anyone confirm this? Comments from the realtors "out there"?

DavidL said...

Hmmm ... the link in my previous post is not working:
http://www.greaterfool.ca/2010/10/03/count-on-it/

Chickinvic said...

Well, he says there are 1,330 agents in Victoria and 395 sales last month. Those figures alone would give at least 70% not making any sales. Assuming that the busier agents may have sold more than one of the 395 (which seems highly likely to me), I could see the number easily climbing to over 77% of agents with no sales.

Marko said...

You are assuming every deal is double ended...more realistic assumption would be 395 x 1.90 = 750 agent transactions.

Mark said...

"And what of noises F will see the light, dump 5/35 and tell CMHC to require 10% downpayments? Is the federal government serious about clamping down on runaway household debt, knowing full well that as interest rates normalize we face a massive mortgage crisis in four more years – just as the Boomers are stampeding out of real estate?"

Well Garth admits this probably won't happen BUT it sure would be the responsible thing to do.

"Today in Ottawa officials meet to decide if mortgage rules are too loose and down payments too low. Odds are no changes are imminent, as the real estate market wobbles. But Mark Carney’s blunt words days ago are resonating off the cut stone walls".

Ya just never know though :)

Leo S said...

You are assuming every deal is double ended

Sales, not transactions.

Not that that is a very fair way to present the issue if you're talking about realtors going hungry, since, at least under the old commission model the buying agents would get equivalent commission.

Generally the top agents make the majority of the sales (80/20 rule applies pretty well), so 600 of those transactions were done by the top 266 agents in Victoria, leaving 150 transactions for 1064 agents. Some of those will have been involved in more than one, so more than 950 realtors did nothing last month.
950/1330 = 71%, so for once Garth has a pretty realistic estimate.

PainInThe said...

"AND aren't Binab and Strasser dating?" - Mark

Now now Mark, just because two guys happen to be gay doesn't make them sleazy liars.

Now, of course, if you are referring to the fact they are both realtors, than of course it's far more likely. Especially if one is caught on prominent video effetely making rather desperate sleazy outright lies.

But not all realtors are sleazy liars. Ours was quite honest and professional and telling us NOT to buy three YEARS ago.

Mark said...

"AND aren't Binab and Strasser dating?" - Mark

Now now Mark, just because two guys happen to be gay doesn't make them sleazy liars.

LOL....that interview was off the hook desperate! regarding the gay comment. Just to clarify, I have nothing against gay people. I rather like them.

The reference to sleazy, scummy, slimy etc was something completely separate. Realtards are not all dirtbags, true but when you see interviews like that or the likes of Tony Joe or Phantastic guy or a slew of other RE pimps it really makes you wonder, doesn't it?

There are a handful of decent realtors, I agree. Too bad they are outnumbered by the slimy ones.

Personally if and when I get back into the market, I will not use one....no need to. Soon everyone will figure that out and these guys will be back bar tending or selling used cars. The good ones will always have work true just now they are actually going to have to "work" a lot harder.

omc said...

Any weekly sales #s out there? My PCS (single family - all of saanich east, all of oak bay and Fairfield) is leading me to believe that the sales are slowing down. Was the fall sales season only 2 weeks this year?

Just Jack said...

Numbers, numbers and more numbers.

Market activity for detached homes during the month of September broken down by areas:

Westshore
537 current listings
52 Sales
184 new listings

Months of Inventory (MOI) = 10.3
Sales/New Listings Ratio (S/NL)= 0.28
Median Price =$470,750
Average Price $688,340
Average Days on Market (DOM)63

Victoria Core districts
Current Listings 578
Sales 118
New Listings 278

MOI= 4.9
S/NL = 0.42
Median 580,000
Average 635,377
DOM 45 days

Peninsula
Current Listings 233
Sales 25
New Listings 67

MOI = 9.32
S/NL = 0.37
Median = 530,000
Average 687,340
DOM 63

Market Overview Summary for detached homes during the month of September
MOI= 6.9
S/NL = 0.42
Median 533,500
Average 604,524
DOM 49

Obviously, certain areas of Greater Victoria are suffering more than others. If you're living in Sooke or North Saanich you know the market is weak. If you live in the inner core districts, everything is fine and you don't understand what all the fuss is about.

The opportunity of a market like this, is to sell in the urban core and buy in the outlying areas like Metchosin. A chance to leave that older inner city home and move out to a newer (less maintenance) home or a house on acreage and maybe puts some coin in the bank.

Because, it is in your favour to make a hard ass deal on a foreclosure in Metchosin or Sooke and still sell your inner city home at a premium price. Its not necessary for you to become a renter, unless you want to, as you can buy low and sell high in the same market.

Marko said...

Month-to-Date Market Statistics
Posted by
Oct 04 2010
Monday, October 4, 2010 8:00am:

MTD October
2010 2009
Net Unconditional Sales: 32 742
New Listings: 98 1,067
Active Listings: 3,986 3,219

Please Note

Left Column: stats so far this month
Right Column: stats for the entire month from last year

DavidL said...

@Just Jack wrote: A chance to leave that older inner city home and move out to a newer (less maintenance) home or a house on acreage and maybe puts some coin in the bank.

But is it worth $70K to add 1 hour to your daily commute for the next 30 years? This is why the Victoria core area continues to sell at a premium price.

fairfield said...

Why the hell would a realtor or mortgage borker want to get cozy with a bunch of forenters? Sounds like a good way to make no money.

Alexandrahere said...

Good Monday morning all.

Here are my stats for the week of 27 Sept - 3 Oct.

SFH: Min 2 beds, 2 baths, priced from 375K - 775K in the areas of Victoria, Oak Bay, Esquimalt, Saanich East and Saanich West.

SOLD: 22
NEW: 24
P/C: 36
OM: 25

The average house in these areas and within the price criteria sold for $550,772 with the average original asking price of $581,909. Homes sold for 94.6% of the original asking price.

CONDOS'

Min 2 beds & priced between $260K and $625K.
Victoria: Most areas (not downtown)
Esquimalt: All
Oak Bay: All
Saanich East: Most areas
Saanich West: Gorge, Tillicum & Interurban

SOLD: Apts: 4
Townhouses: 3
NEW: 25
P/C: 21
OM: 25

Average apt sold for $367K. Would have been much less except one condo in the Songhees went for almost 600K

Average Townhouse sold for $497K

Sweetrealtor said...

@Phil: "Can honesty and real estate ever go hand in hand?"

Very interesting question. I remember when I went into real estate and my friends asked me what qualities made me think I would be a good agent. Honesty was my answer. They told me you can't be honest and be an agent, you have to sell ice cream to an Eskimo. They were wrong, of course, as being honest in this industry is a huge reason my word of mouth referral network is doing so well.

But sellers don't really appreciate honesty when you are giving them an accurate market evaluation. I've lost out on countless listings over the years due to giving sellers a very honest evaluation of the property value. I know other agents are going to tell them it is worth 20-30K more to try and "buy the listing," knowing the price drops are inevitable after they have the contract. Sellers still fall for this - hook, line, and sinker. In the end, the price drops are quite ineffective during a slow market and they end up selling for less than they could have by listing reasonably at the start.

This blog likes to blame the agents for the overpricing of the properties but, most of the time, we are just following the seller's lead. Sellers don't want honesty. They want us to lie and tell them their property is a castle. Maybe the agents share the blame by padding the figures during the market evaluation but it is really just a response to how the sellers typically react. They will go with the agent that gives their property the highest evaluation, especially if the agent seems to actually believe in the price quoted.

While I may miss out on some listings by speaking the truth of the value of the property, it evens out when I get the listing and have a reasonable seller. At least I don't waste my advertising dollars for months while I wait for the market feedback to tell the seller what I've already told them.

Alexandrahere said...

As much as I love the Fairfield area; some of those asking house prices are incredible.

Looked at a one level with basement Arts & Crafts style 1912/13 home on the weekend.

They were asking $829K down from $849K. Absolutely nothing has been done to this small property since it was built. Well, except for the furnace and a coat of paint. The kitchen I guess was "updated" sometime in the 50's.

The house is assessed at $643K. What will they get for it Just Jack and others?

Alexandrahere said...

Oh sorry, MLS 283681 345 Linden

Sweetrealtor said...

@Alexandrahere, a very recent sale at 107 Bushby would be a good comparable, listed at 709K and sold in multiple bids for 735K. Assessed at 687K, 4 beds and 4 baths vs. 3 beds and 2 baths at Linden, the property you mentioned. So, it should sell for less than 735K unless there is some latent potential we are unaware of. "Pic-a-flic is only two blocks away!" What's that worth? :)

HouseHuntVictoria said...

Sweetrealtor, please don't confuse some comments by a few outlier individuals with "this blog." This blog doesn't lay blame to agents for prices: ultimately it blames buyers who agreed to the prices.

Leo S said...

Why the hell would a realtor or mortgage borker want to get cozy with a bunch of forenters? Sounds like a good way to make no money.

Easy. Everyone here is looking to buy a house and likely also has the means to. They might be renting now, but they are looking to buy and most eventually will. For example, even Prairieboy, the guy that ran the victoriastruth blog eventually bought a place.

So as a realtor you differentiate yourself by being realistic and honest about the market on a blog like this and you've just increased the chance of those bears picking you when it comes to buying.

Alexandrahere said...

Thanks Sweet Realtor. That was cute alright about the "pic-a-flic", as though the close proximity was a plus factor to buying the place. Do people still go to those places? Guess so. That "media" room is just a cement floored space in the basement.

I'll keep my eye on the subject property to see if indeed you are correct on the approximate selling price.

Thanks for the input.

Just Jack said...

The difference between two similar homes in Sooke and Gordon Head is $170,000 not $70,000. And that's not on a foreclosure that's normal market conditions.

If you live in Oak Bay the difference is closer to $350,000

So now you have to ask yourself is the difference worth $170,000 or $350,000 to you? Well if you don't have to commute or don't mind commuting or you're close to retirement and realize that you have no other investments but your paid off house. And you're wondering how you're going to live off your CPP?

Or your a smart bugger and have figured out that market prices are contracting from the outside locations to the city core and you don't want to rent. And its only a matter of time before the core is exposed to the meltdown. Or that you would rather live on an acre of land rather than near the Victoria drunk tank.

Some may want to max out on the difference, before the prices start falling in the core, and the difference between the areas shrinks.

Others will never move, even if it were a million dollar difference between the areas - they would not move. Even if they only go downtown once or twice a year. Its the status - not the money - not the commute.

The population of the core districts is 243,649. The Westshore is 67,676. So 3 out of 4 people chose to live in the city areas. I wonder how many would move for a $170,000 tax free cheque?

Sweetrealtor said...

@HHV. Point taken. "Comments made on this blog" would be a better way of stating this as it is not the blog itself. Love the forum here so keep it up. (But the people who make comments with "realtard" statements should be deleted, IMHO.)

Alexandrahere said...

Sweet Realtor:

I looked that house up on Bushby. Thanks for the info.

I mentioned to the realtor that the house should be priced (the one on Linden) at about $685K and after looking at the information on Bushby, it would appear that we are both right. The one on Bushby is a far nicer home. It has a better & brighter layout, two more baths and one more bedroom. The baths have been updated as has the kitchen. Probably because of this the wiring and plumbing has been updated as well.

Just Jack said...

The Linden property is a favorite style of mine - the California bungalow. Very nice location. Typical fairfield homes, similar in house and lot size sell for around $735,000. This one is better than most, so a bit of a premium for location squeezes it up and over $775,000 but on a nice day, with the wind to your back, a little blue bird of happiness singing on the window sill, an apple pie in the oven, professionally staged, burning candles, and all the playgirl magazines hidden away, a little less than $800K.

Asking price is a little high, as Canadians are polite people and generally don't want to insult the owner by offering less than 2 or 3 % from list price. {We are nicely conditioned cattle - aren't we} So if the listing agent gets a hot prospective purchaser a little nudge like, "they just dropped the list price to $799,000!!!!" - will make a bite on this one.

Looks like a nice place to live in, until the next mortgage renewal. If you're going to be buying a home like this, you are going to need a FAT reserve of near cash come renewal time. So a $160 down payment and 200K held in reserve may provide the protection of a shock increase in the interest rate.

At this time, I'm saying real estate is too risky.

If you have to buy, then protect yourself. When the interest rates rise, you have to make a heavy duty mortgage pay down to keep your monthly payments reasonable.

Otherwise, I would run the numbers to see if you could afford the property with a 15 year amortization and no less than a 5 year term. You gotta reduce your risk (exposure). And be prepared to renew before the term is up, if the interest rate gets close to your maximum affordable payment. Extend and blend until the house is paid off.

Enjoy.

omc said...

@Leo S

Don't let those guys bother you. fairfield and bubbleandfiz(zle) are what are known as internet trolls. They just try to get a rise out of you. Their comments are most often nonsensical and just meant to insult. I don't know what it is that makes them do what they do; some sort of physical insufficiency?

There was a theory for a while that at least one of these trolls was in fact another poster from the board just trying to spice things up. B&F is far too much of a negative caricature that embodies the irrationalities of some of the people involved in real estate to be a real person. Just like Cletus the slack jawed yokel on the simpsons.

DavidL said...

@Just Jack wrote: ?So now you have to ask yourself is the difference worth $170,000 or $350,000 to you?

I don't disagree with your analysis ... I was just raising the "time versus money" question. In my case, I have no plans to move and a shorter commute means more time for my young family. I know that if I were closer to retirement - I would prefer to live further away from the core areas ... and so now could be a good time to move.

DavidL said...

@SweetRealtor wrote: But sellers don't really appreciate honesty when you are giving them an accurate market evaluation ... While I may miss out on some listings by speaking the truth of the value of the property, it evens out when I get the listing and have a reasonable seller.

Years ago, I worked in sales and totally relate to your perspective. Good on you for putting integrity ahead of personal gain! I seem to remember the phrase: "20% of the customers create 80% of the problems", so having a reasonable seller is ... priceless.

Mark said...

@HHV. Point taken. "Comments made on this blog" would be a better way of stating this as it is not the blog itself. Love the forum here so keep it up. (But the people who make comments with "realtard" statements should be deleted, IMHO.)

Well I think all realtors with obvious agendas should be deleted too!

Free country dude and you, sorry to say are guilty by association. Heck I don't know you, you could be every bit as devious and deceitful as the rest of your "profession"

My point is suck it up princess. I make some good valid points and just because I despise realtors shouldn't make a hill of beans difference to you or anyone else.

Read the content and disregard the Realtor shots and you will be just fine :)

DavidL said...

@Mark wrote: ... just because I despise realtors shouldn't make a hill of beans difference to you or anyone else

Just curious ... Why do you despise realtors?

Mark said...

@Mark wrote: ... just because I despise realtors shouldn't make a hill of beans difference to you or anyone else

Just curious ... Why do you despise realtors?

Because I have worked with and personally known many many of them over the years.....At one time before the internet, they had to work darn hard for their commissions. There were still a lot scammers among them but at least they worked hard and lied hard for their $$$$

Nowadays they are overpaid, uneducated posers who still lie to make a sale and pretend to represent their clients, when in fact they represent only their own interests... BUT provide very little "service" for their fat commission cheques.

I could go on but I think you get the drift.....personally i don't believe they serve much of a purpose at all anymore. IF they do continue to have any role, with the recent changes brought down recently, at least they will be paid accordingly (spelled a helluva lot less).

My biggest issue is the way they all claim to understand the market and provide such insightful advice as
Victoria is a niche market
Prices will never come down
They aren't making anymore land
Victoria is different
blah blah blah........

Bubble 'n Fizz(le) said...

The opportunity of a market like this, is to sell in the urban core and buy in the outlying areas like Metchosin. A chance to leave that older inner city home and move out to a newer (less maintenance) home or a house on acreage and maybe puts some coin in the bank.

After you, Just Jack, Oh, I forgot, you're a renter.

Assuming you will be at the revival meeting this month with the Rev. Garth Turner, high priest of real estate doom saying, why don't you ask him what he thinks of your advice? He'll probably be less abrasive than he is on his blog and not refer to you as a complete idiot. However, he will tell you in no uncertain terms that real estate in the far-flung suburbs and outlying areas is destined to become far, far less valuable than urban properties in high density city centers. Energy prices and green taxes will make that premium you pay on your higher mortgage for an urban property look pretty reasonable. The retiring baby boomers won't want to live in Metchosin any more than young families. It's isolated and anywhere you want to go is a drive. All the adults in the household will need their own car (ever tried walking somewhere or taking a bus out there?) Kids want to play with their friends? Hop in the car, and take them and pick them up later. Want gas heating and appliances? No problem, put an ugly propane tank in the back yard. If you work in Victoria, say hello to two hours or longer per day of commuting. I could go on, but you get the point. There are a lot of happy people living downtown and in Fairfield, Oak Bay etc. all the way from young singles, young families, middle aged families, empty nesters and old, retired people. If you asked them (perhaps while they were sitting in the sun outside their favourite coffee house which they walked to) if they would like to move to Metchosin to shave $200K off their mortgage (or even pocket the cash if they don't have big mortgages) I bet you wouldn't get even one taker.

Of course, that's the rub--property is cheaper in the outlying areas (and always has been) because it's a less attractive place to live, period. Your strategy of selling the property in the nice place and moving somewhere less nice (and hence cheaper) has always been available--no bursting bubbles required.

I realize you are thinking prices are dropping in the outlying areas first so sell in the core now and buy out there, but what if Garth (and Richard Florida, and a bunch of other pro-urban theorists) are right? Values in the outlying areas will continue to fall as the urban areas stabilize and recover. All you did was catch a great big falling knife.

B&F is far too much of a negative caricature that embodies the irrationalities of some of the people involved in real estate to be a real person.

You're right. I am, in fact, a computer at the VREB office, programmed to automatically rebut bears.

Bubble 'n Fizz(le) said...
This comment has been removed by the author.
Just Jack said...

Its all professions and trades, not just realtors. Accountability and responsibility are so old school.

And salesman are the most picked on, because their income is directly related to what they sell. They have to be "on" all the time, else there is no paycheque. So you hate them because they make a couple of grand of "easy money" for selling a house. Because face it, you can sell houses just as well as they do, there is no special skill set, it's not rocket science or canine labiaplasty.

Our society has now become one where we blame someone else for our failings.

"I'm a loser because my father is an alcoholic"

no, your father is an alcoholic because you're a loser.

That easy commission is going to be spent in the community and may be just the only thing keeping you employed. So, next time one of them drives up in their leased Lexus to buy a double double latte while speaking on their crackberry. Don't hate them because they are realtors

- hate them for talking on their crackberry while driving.

omc said...

I hate to admit it, but I actually agree with our board troll on this one. Buying in the outlying areas probably isn't the best idea, and many of us will pay a premium not to live there. With small kids, we wouldn't get to see them if we added 45min each way on for commuting.

Alexandrahere said...

Just Jack: I know you like to compare properties with those in Oak Bay. However, Oak Bay has so many different kinds of neighborhoods. Probably more than any other. You have the Uplands and Beach Drive with multi-million dollar homes. Then you have your "upper class" neighbourhoods with 900K to 1.5 M homes. Then there are other say "middle upper class" of $850K to 950K and then there are the "rest". One of these is 2082 Meadow Place. It was originally listed at $729K and is now at $619K. It is on a very "humble" street in Oak Bay. If that property was in one of the "better" parts of Gordon Head, or in some parts of Saxe Point or Rockheights in Esquimalt or on a good street in Fairfield or James Bay .... this house would sell for more.

DavidL said...

@BnF wrote: All the adults in the household will need their own car (ever tried walking somewhere or taking a bus out there?) Kids want to play with their friends? Hop in the car, and take them and pick them up later.

My niece grew up in the Highlands and by high school, she had to spend at least an hour each day commuting to/from school. When she was younger, play dates with friends were a significant challenge. I wouldn't want the same for my kids. I wouldn't mind retiring in the Highlands, though ...

You're right. I am, in fact, a computer at the VREB office, programmed to automatically rebut bears.

LOL. Very funny!

Just Jack said...

Good point that you brought up there Bubble and Fizzle. The Baby Boomers retiring here.

That wave crested in 2007, we are now on the down side of the curve. Fewer retires are moving to Victoria. The back end boomers (45 to 55) are still working in Calgary, Toronto, New York, Vanderhoof and Burns Lake making the big money after being promoted to fill the spots, the front end boomers left. And they are staying for the money.

Since 2007, the volume of sales has been steadily dropping in Greater Victoria. Our population growth has now dropped to 0.7 percent per year.

Traditional neighborhoods that appeal to the mature resident, like Oak Bay and Sidney have had almost ZERO population growth. Unlike neighborhoods filling up with young families like Langford and Colwood.

Source: Capital Regional District Planning and Protective Services

Victoria has always had booms of retires, this one lasted longer (8 years) than the ones in the 70's 80's and 90's (about 4 years each) but it was also the biggest group.

As for property always being cheaper in the Westshore than town, yeah you're right. But the spread has never been larger. And for those who refuse to rent, that's an opportunity. And besides its not forever. When the market flatens out you can move back into the City.

Downsizing in an overvalued asset class that's decelerating and soon to go into year over year declines is the next best thing to getting out altogether.

Just Jack said...

Meadow Place is the least expensive neighborhood of Oak Bay. Just like the neighourhood across Foul Bay road from Meadow place gets higher prices than some other areas of Victoria City.

And there are better prices for homes in the North part of Gordon Head, Arbutus or Saxe Point.

Areas like the Uplands are BIG lots, South Oak Bay have water views and the same with other properties along Beach drive. Prices, on average, are higher in Oak Bay than other areas, because Oak Bay has very few starter family areas, that tends to bring down the average in other districts. Then there are the unusual areas, like Maplewood, good prices there mostly because the winding tree lined streets make you feel like you are in the country. Maplewood is a favorite of mine.

Interesting thing about driving and the car. House prices will be the lowest if your living within walking distance to the downtown core. Prices go up when you need to use a car or bus to get home, but the trip has to be short like 30 minutes, then prices start to drop again. We love our cars and we have to feel that we have left work behind, and the short commute does that. So you will find some of the more expensive neighborhoods being not less than a ten minute drive but not more than a 30 minute drive from downtown.

As for having to drive your kids everywhere. My sister raised her kids in the city, she drove them everywhere because there was no way she would let them walk alone in the city. And their schools was only a 15 minute walk from home. And even though we love our neighborhood and know everyone on our street and most of the ones on the next street over, my wife feels that our kid should be escorted to and from school until grade 5.

Personally, I feel that a small hand gun sewn into a Dora stuffy will do the same thing - but vetoed again.

Alexandrahere said...

Just Jack: As always your sense of humour on this blog makes us all laugh (and think).

I agree with you for the most part about the drive/walk ratio to downtown from home.

However things do change. In the 50's, 60's and even in the 70's, the "poor people" lived in James Bay....especially the "outer wharf" section or in Vic West.

Well now those old houses in James Bay are fetching a fortune. Most of the outer wharf section are now high-end condos and townhouses. Many of the heritage homes in Vic West are being fixed up and getting a fairly good price. Also, within "walking distance" to town are all of the newer Songhees and Vic West condos.

The downtown area is filling up with them as well.

A good percentage of the houses in the Fairfield and Rockland (this used to be called Fairfield too) areas are a 10-20 minute walk to town.

Of course, I know you are REALLY meaning Fernwood. Who knows what will happen there.

Just Jack said...

Just for fun, I thought to myself.

Self, is there any real estate that has not gone up in value. In other words, real estate that has not been subject to speculation?

Ah yeah, manufactured homes and leasehold condominiums. Want to stay in the market and sell that Oak Bay McMansion on the beach, but still not be a lowly renter. Then the manufactured home is for you, with prices starting at $34,900 in the Florence Lake neighborhood of Langford. Originally purchased in 1991 for $37,560. This property has nowhere to go but up. Note: the complex does have an age restriction of 55 and over, so consider your investment safe from hoards of pre-schoolers with Dora stuffies.

Too far out, trailer trash not your style, and want that address that says WOW to those single nonagenarians that are looking to rock your world. No worries how about a nice leasehold condominium in James Bay. Asking 159,900 after being bought back in 2006 for $155,000. Work your way to financial freedom. On the "freedom 555 plan". That's right in five hundred years you will be able to retire in the style you deserve - we guarantee it.**

**some restrictions do apply, assumes that green house gases are a myth and that the earth warming up is just God given the world a hug.

Maureen Hann said...
This comment has been removed by the author.
Waiting said...

I noticed that today the house on Meadow went up in price. UP???? It didn't sell at 619,000 why raise it to 629,000? Crazy. I particularly like the write up that advertises - Price adjustment, act fast!

Just Jack said...

Oh, I was speaking of homes, sorry condos are a different story. When it comes to speculation and fleecing the sheep, you have the condo. There are over 11,000 condomiminums just in Victoria City. Each providing an almost identical floor plan and close to the same square footage. With prices ranging from a low of $170,000 to a high of 3.2 million in the space of a few city blocks and a dozen floor levels. In the total capital area there are nearly 25,000 sky boxes of which 1,000 or more are up for sale at any time. A truly unique purchase. One that should allow you to snooze away the night knowing that a total of 134 suites sold last month. And September is usually a good month for sales.

In the last 365 days, 5,000 properties of all types have sold in the Greater Victoria area. And at the same time some 2,600 people moved here. That's a property for every man woman and child times two.

The total stock of residential properties in Greater Victoria is around 115,000. That's roughly 4 percent of our total housing stock over an increase of 0.7 percent of our total population.

Obviously, this market in Victoria is home grown. The question remains - is there anyone left who hasn't bought a home? A mounting vacancy rate attests to suites going vacant and not being filled. This is not good for anyone relying on suite income.

But, don't dispair you're home down payment is only a swift scan of one of your two dozen mastercards away. Still a little cautious, bring mom and dad in on the deal. After all isn't a good feeling to know that the whole family is now in the same boat. Besides they're in their fifties, how long can they live and besides don't they owe you for those tap dancing lessons that creepy Uncle Bob took you to.

HammerTown said...

There seems to be an obvious downward trend in the RE market so who's buying?

Record high listings, record low sales and lots of talk in the media but some sales still happening. Who are these people? Can someone profile them for me?

My guess is that the majority have caught on but perhaps some don't know or don't want to know.

Thoughts?

HouseHuntVictoria said...

Hammertown,

people are always going to be buying. Some will buy because they can't find a place they'd feel comfortable renting, some will buy because they have plenty of money and are unconcerned about the market and others will buy because they can't possibly go back to renting. i know a recent divorcee who bought a condo despite previously living in a house because she couldn't see herself renting again - despite knowing the market is falling and watching over $60K "disappear" in her home sell. It's emotion. Not reason.

HouseHuntVictoria said...

FYI, I will be deleting comments left on this blog that use derogatory statements towards individuals, professions, sexual orientations and/or intellectual development. Please keep the debate clean, I'd really rather not have to be a censor. All viewpoints are welcome here.

Marko said...

Just looking at some statistic that go back to 1988. In the last 22 years only 4 times have year over year SFH prices dropped.

1994-1995: -5.47%
1995-1996: -0.04%
1998-1999: -1.17%
2008-2009: -0.51%

So far 2009-2010 we are +8.01%

"so who's buying?"

People moving sideways across Victoria, people being transferred, first time buyers, etc. A lot of people are aware that the market is volatile, but when you have two or three kids and busy careers options like renting a shitty house for $2,000/month or having to move twice instead of once are not as appealing.

A lot of people tend to look at real estate as a pure investment, which it isn't. My old man just sunk $20,000 into a high-end kitchen in an old Fernwood home. Value of home probably increased $10,000. From an investment standpoint, stupid move; however, you can't ignore quality of life and coming home to something that doesn't look like crap.

HammerTown said...

In some situations no one wants to see logic rear it's ugly head.

Anyone else going to see Garth Turner? I know, I know, doom and gloom and 100% bias but I want to hear what he has to say about Victoria and I'm hoping naysayers come out to pepper some tough questions.

Marko said...

Secondly, I think the majority of people are too focused on the broad market. Seems like too much of the discussion revolves around the market going down, remaining flat, or going up.

That is only part of the equation; I think a bigger part of the equation is being able to spot value in any market whether it is up or down.

For example, 702-860 View Street Penthouse right now is listed for $499,900 - this home sold for $519,900 in 2005. Has the market really dropped since 2005? Nope...just a really bad deal.

2223 Woodhampton (bought this at Juras Construction last year) for $270,000. 8000 sq/ft, ocean views, step-down lot, assessed at $413,000.

1172 Natures Gate sold last week for $345,000. 6100 sq/ft lot, worse views, Worse Street, assessed at $378,000...

So we paid $75,000 less for a lot assessed at $35,000 more.

Did the market really recover 30%+ in one year? Nope....we negotiated a very good deal given last year’s market, and current buyer negotiated a very bad deal given the current market.

My point....not everything is in the broad market. The individual transaction can be just as important. If you can buy a house, subdivide it into two lots, you are still making money if the market corrects 30%.

Marko

DavidL said...

@Marko wrote: Just looking at some statistic that go back to 1988. In the last 22 years only 4 times have year over year SFH prices dropped.

I don't contest the historical VREB sales numbers, however you need to go back a little further to find a comparable trend to what is happening now in 2010. Quoting myself from 3 weeks ago ...

[There was] a significant drop in the SFD selling price between 1981 at $126K and 1982 at $105K (17% drop in one year). The SFD prices in Victoria kept on sliding down until 1985 (26% total drop):

1978 $63,733
1979 $67,165
1980 $92,033
1981 $126,776
1980 $92,033
1981 $126,776
1982 $105,023
1983 $101,652
1984 $95,568
1985 $93,865

Data source: http://vreb.org/pdf/historical_statistics/YE782009.pdf

Note the dramatic increase in prices during the late 1970's before the peak in 1981 - similar to what has been happening in Victoria since 2002.

patriotz said...

options like renting a shitty house for $2,000/month

Beats buying that shitty house for $3,000 or $4,000/month.

Or you can rent this "shitty" house for $2000/month:

$2000 / 4br - Oak Bay Character

Phil said...

I think today's buyer as Patriotz points out is:

A) Really bad at math

B) Such a firm believer that "Real estate always goes up" they don't care about rents, interest rates etc.

Either way they are in trouble unless Flaherty can cook up a $50,000 buyers credit or some other nonsense.

Marko said...

Once again as I noted, when you have two kids or a busy career not everything is based on math.

Chris said...

We bought a house yesterday.

I hold a PhD in applied microeconometrics. I am not innumerate, and I do not think that house prices always go up.

Purchasing a house now just makes sense for me and my family. I wish you all the best of luck in your search.

Just Jack said...

Thank you Chris for sharing that with us. It underscores the fact that buying a home is a personal decision. What one does for a living or how much education one has is of little or no importance. What matters is your personal circumstances. To tell someone that they would be better off in the future by not buying a home today is parochial. That person has weighed the issue and is willing to forego future gains for immediate self satisfaction.

DavidL said...

@Chris wrote: We bought a house yesterday.

Congrats on the house ... I hope that it works out well for you and your family.

HouseHuntVictoria said...

The common meme that I've always maintained here is:

If you can afford it today, can afford it in the future, can see yourself living in it for the long term, then today can be a good day to buy a house.

Congrats Chris. Hope you feel good about the decision and that you enjoy your new home. Correct me if I'm wrong, but you're moving here from elsewhere right?

Alexandrahere said...

David L...just to add to your stats..that same house in Gordon Head would have been purchased in 1975 for $36,000; 1976 for $42,000 and in 1977 for $56,000. So of course the time to sell was in the fall of 1980.

Chris said...

Thanks. Yes, we are moving from Calgary. (I grew up in Victoria and can't even begin to express how thrilled I am to finally be making my way back.)

Just Jack said...

Here's a story.

My wife's cousin works in a seasonal trade, has two children and is going to school to become an economist. His debts are amassing, but he has a game plan to get him out of the spiraling debt obligation.

He wants to buy a house. When the house price goes up, he will roll his debt into the home mortgage thereby having a lower payment.

To many of us, using a debt to finance another debt seems ludicrous. To him, its the only way out. Knowing him quite well, I am sure he has brought this up with his economics professor and fellow economic students.

While his professor may indicate that this is a questionable action, the problem is that for most of the last decade - it has worked. The individual has attained his goal of affordable payments.

That goal was not to assure himself of a retirement income, it was just to survive. When I pressed him on the retirement issue, he said the home would be sold to fund his retirement. RRSP's, TFSA's a balanced portfolio is all "old school". Now I understand a young man in his nonage. But, I had the same discussion, with the same answers but this time it was a husband and wife team that have been accountants for the last 10 years wanting to buy an "investment home" with a negative cash flow.

Real Estate has made many Victorians millionaires over the last decade, such as my neighbor who has been on disability for 35 years, but had bought two homes, two decades ago. The hot water tank in his house broke years ago, but he will not replace it, he has no telephone and goes through a tank of heating oil every two years. He fractured a bone in his ankle, but because he doesn't have medical insurance he duct taped his Dayton boot around his foot. But he's a millionaire.

Perhaps my wife's cousin will be lucky not to have to duct tape his own ankle in 30 years. But most people are basing their decision on past performance and in hind sight the risk to them is zero.

Not until risk is reassessed in the marketplace will people understand that the choice made today has an outcome in 30 years. The only way to reduce risk is to reduce your exposure to the inundations and conflagrations of home ownership.
You should use 15 years to determine your mortgage payments. And make the payments at that level. When you do that, you'll see that the property matches the income. An upper income home needs an upper income household income.

okay, let the darts fly

DavidL said...

@Just Jack wrote: You should use 15 years to determine your mortgage payments. And make the payments at that level.

Eight years ago when we purchased our house, I estimated that my wife and I could comfortably pay off our house in 17 years. With increased income and corresponding increases in mortgage payments, we now expect to have our mortgage paid off in about 11½ years.

But here's the problem ... The house has increased in (resale) value by more than 2 times. If we were to buy the same kind of modest house in todays' market - we could pay it off in 15 years, but with no money left over for RSPs, RESPs, TFSAs, etc. With the current low interest rates, we would likely extend our payments to 25+ years so that we could build some kind of "rainy day" savings, modest investments, etc. My wife and I are well paid professionals, and our combined income is much more than the average family income in Victoria.

Even with our above average income, in today's real estate market we would have a hard time matching your prescribed mortgage payment terms.

Alexandrahere said...

David L...a bird in the hand is worth two (maybe 5?) in the bush. From what you are saying you only have 3.5 yrs left to pay on your mortgage.

Pay it off. There is nothing like peace of mind and a good nights sleep. You have been wise so far...keep being so. Don't let any CFP tell you differently.

Put as much as you can of course now in your RRSP's and TFSA. In three years the interest rates will probably be much higher than now. So you will be able to top-up both those other accounts in no time once the mortgage has been paid off.

One could take the risk of course of borrowing more right now on the house as interest rates are low and buying gold or something else with the hopes of huge capital gains. But I wouldn't. Take the risk in three years.

DavidL said...

@Alexnadrahere wrote: Pay it off. There is nothing like peace of mind and a good nights sleep. You have been wise so far...keep being so. Don't let any CFP tell you differently.

Thanks. As far as my wife and I are concerned - it is a financial "rush to the finish line" to be mortgage free. We are forgoing redoing the basement, replacing all the windows, upgrading the bathrooms and kitchen until we are mortgage free. After modest savings for funding contingencies and RESP for the kids, all extra monies go into paying off the mortgage.

Twenty years ago I got myself into a financial mess, so I learned to be contrarian and live off savings rather than credit ...

michael said...

The reason why sales continue to decline is because many would-be first-time buyers still lack either the confidence to buy or the finance to enter the sales market. As a result, the total supply on the market still remains very high.

Victoria real estate