MLS numbers courtesy of the VREB via Marko Juras.
Month to date November 2010 (last week's month-to-date totals in brackets)
Net Unconditional Sales: 435 (333)
New Listings: 665 (552)
Active Listings: 3,658 (3,737)
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
SFH average price currently stands at $659,336. Doubtful we'll see sales volume numbers matching November 2009 totals, however, it's a given that November's volumes aligned with the October improvement from the terrible numbers reported in August and September. Average prices remain skewed by low sales volumes, however, SFH with suites priced under $500K continue to sell quickly with even a few competitive offering situations for the ones tucked off the busy streets. This appears to be a market that doesn't know where it's going into 2011.
Update: Let's play a little game
Mark linked to a story where TD Bank's Ed Clarke mused about lowering the maximum amortization length from 35 years to 25 years (effectively taking us back 10 years or so in the mortgage insurance industry). He thinks this will prevent a bubble from forming. For the sake of arguments, let's not get into the bubble talk (it's either here or it ain't) but let's assume that for the good of everyone, something needs to be done to put out the fire under the real estate market (there really isn't one, but you could be forgiven for thinking there might be). What to do? I say if you really want to end the era of "free cash" get rid of the CMHC. There should be no more mortgage insurance for banks in Canada. If you want to end the endless cycle of people taking on debilitating debt loads: STOP PROTECTING THE BANKS FROM THEMSELVES.
Add your suggestions in comments.
Monday, November 29, 2010
Monday, November 22, 2010
Snowy Monday Market Update
MLS numbers courtesy of the VREB via Marko Juras.
Month to date November 2010 (last week's month-to-date totals in brackets)
Net Unconditional Sales: 333 (228)
New Listings: 552 (359)
Active Listings: 3,737 (3,750)
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
The market appears to be in a holding pattern. Sales have improved from a terrible September but there is little to indicate November will be a good month relative to previous years nor is there any sign of increasing market activity from October. The current SFH average price is reading as $675,041. If this stays the same Victoria will set a new record for Victoria average prices - unfortunately this number is meaningless as prices are not increasing across the market, rather this is purely a number indicative of the types of homes selling in the Victoria market. There are a fair number of "good deals" in the upper end of the market where buyers are perceiving better value in higher priced homes. While the number points to increasing prices the reality is many homes are still selling for five to seven percent less than when originally listed.
Month to date November 2010 (last week's month-to-date totals in brackets)
Net Unconditional Sales: 333 (228)
New Listings: 552 (359)
Active Listings: 3,737 (3,750)
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
The market appears to be in a holding pattern. Sales have improved from a terrible September but there is little to indicate November will be a good month relative to previous years nor is there any sign of increasing market activity from October. The current SFH average price is reading as $675,041. If this stays the same Victoria will set a new record for Victoria average prices - unfortunately this number is meaningless as prices are not increasing across the market, rather this is purely a number indicative of the types of homes selling in the Victoria market. There are a fair number of "good deals" in the upper end of the market where buyers are perceiving better value in higher priced homes. While the number points to increasing prices the reality is many homes are still selling for five to seven percent less than when originally listed.
Thursday, November 18, 2010
Demand?
This whole brouhaha with the CREA and the Competition Bureau has had me thinking for a long time about what I (we) would like to see happen in the real estate industry.
Personally, I'd like to see open and transparent property related data, freely available (not to be confused with free as in no money exchange for data) and accessible to the general public. The sales industry protects this information with an invisible pay wall - want to see sales price history and other deemed important information about a property? Hire a REALTOR®.
It's true that you can get some of this data by popping round to your local land titles office and paying to see it, but this exercise becomes very cost intense if you're like me and you're wanting it not for the exercise of purchasing one property but for the exercise of trying to better understand how a segment of the market has performed or is performing. Sure Landcorp can get you data series too, but if you're not going to make money off of purchasing it from them then it's a pretty bad investment right?
There's been a transition of reality regarding the housing market in the past 30 years. Previously owning a home provided a family with a stable foundation - owners worked for the same company their whole careers and their home's market value mattered little because buying and selling was never in their medium term plans. The 1980s, 1990s and especially the 2000s ingrained the "property ladder" construct into the boomer generation and their children so much so that the five year plan is considered long term planning by most, both in their career and home ownership dreams. Because of these phenomena, the market is so much more important today, yet the information needed to accurately apply macro data to individual properties and neighbourhoods remains behind an obstructive pay wall. The agreement between the CREA and the Competition Bureau did little to change this.
I think the TSX model would be a great example for the real estate industry to follow. If I'm interested in buying a stock or ETF, I can Google the existing data and make an informed decision. I can track market segments, I can track preferred shares of GM too if that's my prerogative. I don't have to pay the TSX a dime to do so either. Until I pull the trigger and put some skin in the game. Then they get theirs. And who pays 'em? The companies that charge me money to conduct the transaction and the companies that use them to get their investment dollars. Sounds eerily similar to the way the real estate industry already works doesn't it? And that's my point.
The members of the CREA protect data because it makes their phones ring. When their phones ring they have the opportunity to convince you to use them to conduct your transaction. They charge a fee for this service, as they should. Many Canadians believe they charge too much. Some don't, and are happy to pay full commission believing it's in their best interests. Choices existed before the agreement was made, new choices will exist moving forward, perhaps catering to consumer demand, perhaps not.
So what do you want to see? If a real estate brokerage wanted to be forward thinking, driven by the belief that if they treat their customer with openness, transparency and respect, they can build a profitable and sustainable business model, what would you expect them to offer you and how much is a reasonable charge for these services?
Personally, I'd like to see open and transparent property related data, freely available (not to be confused with free as in no money exchange for data) and accessible to the general public. The sales industry protects this information with an invisible pay wall - want to see sales price history and other deemed important information about a property? Hire a REALTOR®.
It's true that you can get some of this data by popping round to your local land titles office and paying to see it, but this exercise becomes very cost intense if you're like me and you're wanting it not for the exercise of purchasing one property but for the exercise of trying to better understand how a segment of the market has performed or is performing. Sure Landcorp can get you data series too, but if you're not going to make money off of purchasing it from them then it's a pretty bad investment right?
There's been a transition of reality regarding the housing market in the past 30 years. Previously owning a home provided a family with a stable foundation - owners worked for the same company their whole careers and their home's market value mattered little because buying and selling was never in their medium term plans. The 1980s, 1990s and especially the 2000s ingrained the "property ladder" construct into the boomer generation and their children so much so that the five year plan is considered long term planning by most, both in their career and home ownership dreams. Because of these phenomena, the market is so much more important today, yet the information needed to accurately apply macro data to individual properties and neighbourhoods remains behind an obstructive pay wall. The agreement between the CREA and the Competition Bureau did little to change this.
I think the TSX model would be a great example for the real estate industry to follow. If I'm interested in buying a stock or ETF, I can Google the existing data and make an informed decision. I can track market segments, I can track preferred shares of GM too if that's my prerogative. I don't have to pay the TSX a dime to do so either. Until I pull the trigger and put some skin in the game. Then they get theirs. And who pays 'em? The companies that charge me money to conduct the transaction and the companies that use them to get their investment dollars. Sounds eerily similar to the way the real estate industry already works doesn't it? And that's my point.
The members of the CREA protect data because it makes their phones ring. When their phones ring they have the opportunity to convince you to use them to conduct your transaction. They charge a fee for this service, as they should. Many Canadians believe they charge too much. Some don't, and are happy to pay full commission believing it's in their best interests. Choices existed before the agreement was made, new choices will exist moving forward, perhaps catering to consumer demand, perhaps not.
So what do you want to see? If a real estate brokerage wanted to be forward thinking, driven by the belief that if they treat their customer with openness, transparency and respect, they can build a profitable and sustainable business model, what would you expect them to offer you and how much is a reasonable charge for these services?
Monday, November 15, 2010
Sales slowdown again? Monday market update
MLS numbers courtesy of the VREB via Marko Juras.
Month to date November 2010 (last week's month-to-date totals in brackets)
Net Unconditional Sales: 228 (131)
New Listings: 359 (192)
Active Listings: 3,750 (3,749)
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
Current average SFH price is $613,649 with original list price of $651,200. Many homes selling are first dropping their prices. Home sellers, on average are getting about 94% of what they originally thought. In other words, buyers are negotiating deals around 6% below original asking prices. Condo average currently is $323,708.
The biggest change I'm seeing is a decline, perhaps significant, in the sales volume again. Between November 8th and November 15th, only 97 units sold, down from 131 in the first 7 days of the month. If this trend continues, we'll see sales around 450 for the month. This is down slightly from November 2009, but almost double the 268 sales recorded in November 2008, which is why we're not seeing prices tumbling faster throughout the fall as we did in 2008.
Month to date November 2010 (last week's month-to-date totals in brackets)
Net Unconditional Sales: 228 (131)
New Listings: 359 (192)
Active Listings: 3,750 (3,749)
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
Current average SFH price is $613,649 with original list price of $651,200. Many homes selling are first dropping their prices. Home sellers, on average are getting about 94% of what they originally thought. In other words, buyers are negotiating deals around 6% below original asking prices. Condo average currently is $323,708.
The biggest change I'm seeing is a decline, perhaps significant, in the sales volume again. Between November 8th and November 15th, only 97 units sold, down from 131 in the first 7 days of the month. If this trend continues, we'll see sales around 450 for the month. This is down slightly from November 2009, but almost double the 268 sales recorded in November 2008, which is why we're not seeing prices tumbling faster throughout the fall as we did in 2008.
Monday, November 8, 2010
Monday market update
MLS numbers courtesy of the VREB via Marko Juras.
Month to date November 2010
Net Unconditional Sales: 131
New Listings: 192
Active Listings: 3,749
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
Looks like sales activity has kept up thus far with October 2010. While it's definitely up from August and September ultra-lows, a little perspective is necessary: we're still talking about volume that doesn't even come close to matching most of the last 10 years. Listings are high, sales are low, average reported prices are flat, although the homes that are selling are selling for prices not seen since 2007, that is, they're down.
Meanwhile CAAMP released a rather rosy glimpse at a massive debt problem in Canada, as total outstanding mortgage debt leaped over $1 trillion, yes, that's right.
Month to date November 2010
Net Unconditional Sales: 131
New Listings: 192
Active Listings: 3,749
November 2009 totals
Net Unconditional Sales: 604
New Listings: 796
Active Listings: 2,973
Looks like sales activity has kept up thus far with October 2010. While it's definitely up from August and September ultra-lows, a little perspective is necessary: we're still talking about volume that doesn't even come close to matching most of the last 10 years. Listings are high, sales are low, average reported prices are flat, although the homes that are selling are selling for prices not seen since 2007, that is, they're down.
Meanwhile CAAMP released a rather rosy glimpse at a massive debt problem in Canada, as total outstanding mortgage debt leaped over $1 trillion, yes, that's right.
Its sixth annual report on residential mortages found the vast majority of mortgage-holding Canadians (84%) could afford an extra $300 or more a monthly in payments.
This certainly bodes well for Canadian solvency levels, as the total level of outstanding residential mortgages in Canada crossed the $1-trillion mark in August, a 7.6% increase from last year.
Over the past 15 years, the volume of residential mortgages has expanded 194%, or about 7.5% a year. Growth was especially rampant between 2004 to 2008, exceeding 10% each year, the report said.
Eighty-nine per cent of Canadian homeowners have at least 10% equity in their homes, while 80% have more than 20% equity, the report found.
Of the 18% of Canadian homeowners who removed some equity from their homes at an average of $46,000 over the past year, the most common use for the extra cash was to pay down debt.
Although variable-rate mortgages are becoming less costly than fixed-rate mortgages, 66% of Canadians taking out new mortgages chose a fixed rate, the five-year term remaining the most popular in Canada.
Monday, November 1, 2010
October 2010 sales stats
Month-End Market Statistics courtesy of the VREB via Marko Juras.
October 2010
Net Unconditional Sales: 467
New Listings: 976
Active Listings: 4,046
Average SFH Price: $641,780
Median SFH Price: $539,500
October 2009
Net Unconditional Sales: 742
New Listings: 1,067
Active Listings: 3,219
Average Price: $590,567
Median Price: $536,000
Month over month changes
Net Unconditional Sales: +15%
New Listings: +21%
Active Listings: -7%
Average Price: +7%
Median Price: +2%
Year over year changes
Net Unconditional Sales: -37%
New Listings: -9%
Active Listings: +20%
Average Price: +9%
Median Price: +1%
Total market-wide months of inventory stands at 8.7. Average prices are skewed by 12 million dollar plus home sales including one at over $6 million. Use median prices to better understand this market - which is flat YOY and MOM. There is good and bad in the October sales data - for people on both sides of the debate on which way this market may be headed. Now more than ever, potential buyers should exercise caution and patience as they wade into the market. There is no rush to act quickly.
Update: price numbers from October 2009 fixed.
October 2010
Net Unconditional Sales: 467
New Listings: 976
Active Listings: 4,046
Average SFH Price: $641,780
Median SFH Price: $539,500
October 2009
Net Unconditional Sales: 742
New Listings: 1,067
Active Listings: 3,219
Average Price: $590,567
Median Price: $536,000
Month over month changes
Net Unconditional Sales: +15%
New Listings: +21%
Active Listings: -7%
Average Price: +7%
Median Price: +2%
Year over year changes
Net Unconditional Sales: -37%
New Listings: -9%
Active Listings: +20%
Average Price: +9%
Median Price: +1%
Total market-wide months of inventory stands at 8.7. Average prices are skewed by 12 million dollar plus home sales including one at over $6 million. Use median prices to better understand this market - which is flat YOY and MOM. There is good and bad in the October sales data - for people on both sides of the debate on which way this market may be headed. Now more than ever, potential buyers should exercise caution and patience as they wade into the market. There is no rush to act quickly.
Update: price numbers from October 2009 fixed.
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