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.

83 comments:

omc said...

Thanks again for the update Marko. So many listings.

Leo S said...

Avg SFH at 641k. What's interesting is that this didn't get pumped more in the press release. I was expecting "Sales and prices rise! The market is hot again!" but the press release is decidedly timid.

Continues to be interesting, but I am leaning more and more towards flat prices for a long time rather than a big decline.

Dave said...

Leo, I'm glad to see another person in the flat prices camp. Too bad we don't see eye to eye on the real vs. nominal issue.

I think sales are going to be below 'normal' for a while as well.

Jack said...

If anyone is interested that 6mil home pumped up the average by a little over 10k.

bullbear said...

Agree with you guys that prices will remain fairly stable in most Canadian cities until 2012, after this second wave down. Historically, housing corrections last 6 years and often include 3 larger waves (Stock market Elliot wavers understand these waves). I suspect the final and largest leg down won’t begin ‘til 2012 for the following reasons:
* interest rates won’t begin to pressure enough owners refinancing & new buyers ‘til 2012 when record levels of both residential and commercial refinancing occurs (demand for money will peak in late 2012/2013 = higher rates are a given)
* stock markets usually perform fairly well in the last half of the US presidential cycle (wealth effect)
* late 2012 will finally usher in US austerity as Republicans should regain all 3 levels of gov’t. Advanced nation austerity should then dominate until debt levels are brought back into balance. To catch a glimpse of our future look to the UK. 2013 and 2014 should see the highest levels of debt deleveraging. I also think these years will see the biggest shift in psychology towards real estate as the baby boomers (peak investing age of 54 in 2013) prepare for retirement.
* there is still a large pool of renters who missed last decade’s run willing to capitulate in 2011 after this current second leg down leaves property ‘seemingly cheap’
* many other reasons, but one final reason is commodity-rich Canada has at least another year of high prices. The chart on the following link hints at what I’m referring to (notice previous commodity peaks in 1920, 1951, 1980): http://goldsilver.com/blog/2006/06/the-commodities-cycle-by-brent-harmes/

Alexandrahere said...

Here are my stats for the week of 25 Oct to 31 Oct.

SFH: Priced from 375K-775K min two beds,2baths in Victoria,OakBay,Esquimalt,Saanich East & Saanich West.

NEW; 20
SOLD: 22
PC: 19

Avg Selling Price: $584,500
Median Selling Price: $582,000

Condo's

Priced from $260K to $625K, min two beds in:
Victoria: Most areas (not downtown)
Oak Bay: All areas
Esquimalt: All areas
Saanich East: Most areas
Saanich West: Gorge,Tillicum and Interurban

NEW: 14
SOLD: 8 APTS & 4 TOWNHOUSES
PC: 19

Avg selling price for apt style condo's: $324,250

Median selling price: $312,500

Average selling price to Townhouses was $426,500 and the Median selling price was $434,500.

DavidL said...

@bullbear wrote: ... late 2012 will finally usher in US austerity as Republicans should regain all 3 levels of gov’t. Advanced nation austerity should then dominate until debt levels are brought back into balance.

I have no recollection of the Republicans being so fiscally prudent! Don't get me wrong ... I have never favoured the bailouts of banks, auto manufacturers, etc. nor the quantitative easing that the current administration (i.e. Bernake) has been so fond of.

Marko said...

Units at the Essencia Verde are selling a lot better than I thought they would, already 10+ with offers in place.

happy renter said...

Marko- Do you happen to know if people are making full price offers on Essencia Verde? I'm very curious to see what those places actually go for. The location is amazing and the building is obviously nice, but I just wonder if people are angling for a deal because of the whole receivership thing or if there are really people lining up to pay full price for something new anymore. On that note, does anyone know how the 834 on Johnson is doing re:sales?

Alexandrahere said...

Marko: I am interested as well as to what the suites at Essencia Verde are going for. They seem to be advertising just one bedrooms; are there any two and three bedrooms available?

Sab said...

Any insight into the commercial real estate market?
I have a shop in Langford and the owner will sell the space for $319,000. Square footage is 1080.
Are commercial and residential usually tied together as far as value?

happy renter said...

On the EV website (http://www.essenciaverde.ca/), you can see that they're only selling one bedrooms and the "penthouse collection" right now. Bigger suites and townhouses are to follow soon.

happy renter said...

Just looked through the EV price list and they have a 559 sq.ft. 1 bed + den listed for $309,000. That is very, very steep!

Marko said...

Units still have not gone "pending" so I cannot see the sale price, meaning there are accepted offers but conditional.

Given the amount of units with offers already in place I would suspect they are going for full asking price.

the834 is about 75% sold, which isn't shocking - most of the units are under 350k.

The shocking part is The Sovereign is 35% + sold and they are going to break ground in the spring. I didn't think they would get to 10% with their pricing. We are talking 735k for 1098 sq/ft.....you can buy a same size unit at the bayview for 40% less!

They really know what they are doing at Chard Development.

happy renter said...

Yeah, I also find the Sovereign shocking. I'm surprised by the 35% sold info, but I'll be even more surprised if they can sell the rest of it when it's completed. I've been in the show suite in Trounce Alley and it looks amazing, but who on earth can afford those places?!

I guess Victoria buyers are just a mystery to me in general. I can't fathom who can pay over $300,000 for a place that's 559 sq.ft. (as at EV). And I would think that those who in the past maybe would have bought just to flip these places a year or two down the road are bright enough to see that even if the market doesn't drop, there's no way that they're going to make a quick profit now.

Marko said...

I think a lot of people like the Cook Street village area, myself included. I pretty much exclusively meet with friends at the Mocha house. A lot of buyers are probably young professionals buying to live in or non-professionals with wealthy parents ;)

You would be surprised how many nice condos come up for sale and on the title the owner is a student.

Leo S said...

In Victoria, real estate activity plops 37% from levels seen a year ago. If it hadn’t been for some goof paying $6 million for a place in Saanich, average prices would also have crunched.

Good ol Garth, making things up to suit the story again.

When the average price drops month to month, he extrapolates to a full year and raves about how it's on track to fall 30%. When the average price rises, he talks about sales instead.

Not that I don't agree with his overall point of real estate being a bad investment going forward, but that guy really has no respect for the true story. I guess it works on some people, but I would never trust a financial advisor that isn't honest about both sides of any equation.

happy renter said...

You're right, Marko - Cook St. village is pretty great. I'd love to live there myself. I guess I just don't know those wealthy students, but I believe you that they exist. Man, it must be nice to be able to buy a $300,000+ condo before you're even employed!

Just Jack said...

Hey, who wants to crash the party with me?

Victoria Housing Outlook Conference 2010

CMHC experts will examine the key factors that impact housing demand and supply, provide a forecast for the BC economy and Victoria CMA markets for 2011 and highlight the trends in new home, rental and resale markets that are influencing developers and consumers. Tony Gioventu, from the Condominium Home Owners' Association, will highlight how new and existing strata legislation impacts the housing industry as well as discuss the sustainability of condominiums. You will also find out about the tools and resources available from CMHC to help build affordable housing. This is important information to help you stay abreast of housing trends and make knowledgeable decisions for the upcoming year. November 22, 2010

S2

Just Jack said...

The above was taken off the Conferences and Events section of the CMHC website.

Come on. Who's in?

S2

DavidL said...

@Leo S wrote: Good ol Garth, making things up to suit the story again.

This got me thinking ... what would be the average selling price for a Single Family Home (SFH) in Greater Victoria during October 2010 if that $6 million home had not sold.

Based on the VREB stats:
Units: 220
Total Volume: $141,191,492
Average: $641,780
Median: $539,500

If we take away the single $6 million home:
Units: 219
Total Volume: $135,191,492
Average: $617,313
Median: not known

As the average SFH price in October 2009 was $619,936, the October 2010 average price of $617,313 would be a negligible 0.42% drop.

commuter12 said...

Well hey those Essencia Verde cat boxes are perfect for raising a family in! Ha ha ha. Yep everyone loves Cook Street village because god forbid you'd have to drive 30 minutes to get to work.

Leo S said...

@DavidL "As the average SFH price in October 2009 was $619,936"

It was actually $590,567
http://www.vreb.org/pdf/historical_statistics/MSS0910.pdf

Leo S said...

Yep everyone loves Cook Street village because god forbid you'd have to drive 30 minutes to get to work.

Yes we know, you love your car. Walkable neighbourhoods are becoming increasingly valued though. It goes beyond getting to work, it's a big thing for almost all the goods and services you need every day to be within a 5 minute walk of your house.

Many people are happy to give up the traditional white picket fence for that convenience and lower-impact lifestyle.

Al said...

"it's a big thing for almost all the goods and services you need every day to be within a 5 minute walk of your house."

For us, 15 minutes walk is an even better exercise, as long as the walk path is pleasant (say via neighbourhood streets)

commuter12 said...

That's funny because I have a giant mega box mall a mere 10 minute walk from my house. It's pretty convenient. No need to drive there and I shop there all week and leave it for the Victoria crowd on the weekends. No reason to go to Victoria and deal with the landless peasants, scuzz bags and losers.

happy renter said...

I am one of those who will absolutely pay a premium to live in the core in a nice, walkable neighbourhood. I'm unwilling, though, to buy anything in which I will be seriously cramped or which will stretch me beyond my financial limits. That's why I'm renting for a while and waiting it out. I've done the owning the small (and I mean teeny, teeny, tiny) condo thing and really wish that I hadn't. My advice to people now is not to buy a place unless you can see yourself there in the long term. It isn't worth the stress and costs of buying/selling or the potential financial hit you'll take when you move on if the market is bad.I sold my condo in the summer because I couldn't handle the idea of being stuck in it. I didn't lose any money on it, but I didn't make much either. People kept telling me that, in the worst case scenario, I could rent it out. But there's no way that I could rent it for what it cost me each year in mortgage, taxes, strata fees, etc.. Ugh. Sorry for the rant, but I'm just glad to not own a place I can't live forever in a wonky market.

DavidL said...

@Leo S wrote: It was actually $590,567 http://www.vreb.org/pdf/historical_statistics/MSS0910.pdf

My bad ... I took the number from HHV's original blog posting. This means that if the $6 million home is excluded, the average SFH price increased by 4.33% from October 2009 to October 2010.

I agree with your Garth comment ...

Just Jack said...

199 single family homes sold in the urban core municipalities in October last year and 121 sold this year.

October 2010 median is $560,000
October 2009 median was $580,000

On a year over year basis, volume for the core municipalities is down 39% and prices are down 3.5%.

Condominiums in the core saw 99 sales and a median price of $270,000. Which is down from October 2009 when 141 condos sold at a median price of $300,000.

Prices down 10%
Volume down 30%

And that's how I'm reading the market.

Leo S said...

My bad ... I took the number from HHV's original blog posting.

Oh yeah, good call. Hey HHV, it seems that the numbers you have for October 2009 are actually the September 2009 numbers, unless I'm reading the reports wrong.

Rhino said...

Why are we taking house sales out of the averages? Someone legitimately bought a 6 million dollar house so it should be part of the average. If you take that out what about the abnormal sales on the low end, like that house on mason that sold for 200 or whatever.

DavidL said...

@ Rhino wrote: Why are we taking house sales out of the averages?

Averages are probably the worst way to track movement in the housing market. The median price is only slightly better.

With access to the complete sales data set, the standard deviation could be calculated, T-tests performed, and confidence levels examined. But ... none of us have access to this information.

The internal VREB statistics (available to realtors, etc.) break down SFH sales numbers into residential, acreage and waterfront. These are combined together into the publicly released statistics. The $6 million waterfront home skews the statistics for the residential sales - which is the category that most readers of this blog are interested in.

HouseHuntVictoria said...

Average and median price reporting is a terrible way to track the market. Victoria is one of the only reporting boards that mixes residential properties with acreages, mansions and waterfront properties (which I don't believe act in the same manner market-wise). Teranet's index is the closest thing to a proper property type index available in Canada (HPI).

bullbear said...

Looks like the median home price Island-wide (based on board totals) has fallen from $351,000 in May to $308,500 last month. Eventhough median's not a perfect snapshot of the market, i was surprised to see how much the Island's median has already fallen in 5 months.

http://www.vireb.com/

Taigaa said...

I track market movement by averaging out percentage above or below assessed value that the sale prices are. By this measure prices have dropped about 10% this last year

Marko said...

Wow, TSX almost at 13,000 - who would have thought.

Just Jack said...

The Republicans majority will be good for the financial markets in the US, but bad for housing.

Canada, by extension, should follow the American lead with resources shifting from the housing market to the financial market. Now that there is a lucrative option other than parking dollars in houses.

DavidL said...

@ Marco wrote: Wow, TSX almost at 13,000 - who would have thought.

Expect investors to do some profit taking on Friday ...

Waiting said...

Sorry that this is unrelated to the thread but can someone explain to me where 'appraised' values come from. I recently looked at two homes which were essentially the same home (almost identical floor plan - one had an additional bathroom, same size lot, 1 block apart, both on quiet streets. The first listed at $749,000, dropped to $699,000 and sold for $645,000. The second home is listed at $879,000 which is about $250,000 over assessed value and when I asked the realtor about why it was at that price compared to similar homes in the area he replied that it was 'appraised' at $900,000. Who does appraisals?
Thanks!

Animal Spirit said...

Taigaa - do you have any data that you could share with us (or to me) - I've being looking at the same metric which would remove the effects of changing market mix on average and median prices - but don't have enough data to do a good long-term analysis.

Median is far better than average, but the difference between assessed value and sales price (normalized to reflect changes in assessed value over time) would likely be far better over time.

happy renter said...

This may seem like a naive question, but in "bad" markets, do houses typically sell for assessment value or under? And in "good" markets do they typically sell for over assessment? I mean, say we were in year 5 of a long housing slump and so year-to-year assessed values had gone way down and the market was very, very slow. Are assessed values in that kind of case usually a good indicator of price? I.e., are they "accurate"? I ask because just after I bought my condo 4 years ago it was assessed at about $20,000 under what I paid for it, and I just sold it for about $20,000 more than last year's assessment. Do assessed values and sale prices match up more closely in a down market?

DavidL said...

@ Waiting wrote: ... can someone explain to me where 'appraised' values come from

According to Wikipedia, a real estate appraisal: "is the practice of developing an opinion of the value of real property, usually its market value."

When the BC Assessment Authority completes an annual property assessment, they are determining the selling price of your property/house/condo would sell for, based on the market value effective July 1 of the preceding year.

By contrast, when a real estate agent does a property appraisal, they determine the asking price for a property/house/condo.

Current market conditions are showing that that the asking price is quite a bit higher than the selling price.

DavidL said...

As a property assessment is based on the market value on July 1st of the previous year, the evaluation is between 6 and 18 months "out of date". When real estate prices are increasing, the assessed value is lower than the selling price. Conversely, when real estate prices are decreasing, the assessed value is higher than the selling price.

Assessed values for a specific property can be a useful way of tracking market conditions. However, as many property owners do not get the required permits for improvements, the value of these improvements are not included in the assessment. Thus, when the house sells - it can sell for much more than the assessed value.

The opposite is possible too ... if the interior of a house is in much worse shape than expected (perhaps by "bad" tenants or a "grow-op" enterprise), then the selling price may be much lower than the assessed value.

Looking at a assessed value of a group of homes in a specific neighbourhood tends to average out the differences. Comparing these with current selling prices gives a good indication about current market conditions.

happy renter said...

Thanks, DavidL. That makes perfect sense.

Catherine said...

Appraisals theoretically allow the value of one house to be compared to another, for the purposes of property taxes. (If assessed value goes down in general , there's nothing stopping the govt from increasing the millrate in order to get the same $$ amount from the house).

Only sellers are convinced the assessment is the true value of the house - the house is actually worth what someone is willing to pay for it. When assessments are peaking (like now), agents will use that kind of thinking to throw sand in the eyes of potential buyers.

Alexandrahere said...

Property Assessments versus Selling Price of a property usually don't vary as much with condos than they do with single family houses.

It is much easier to do an assessment of a condo built in say the Fairfield area than it is to do an assessment of a SFH in the Fairfield area.

The reason? You have a multitude of condos built in the same 8 year span and in the same area that have very similar if not identical floor plans. Every month of the year many of these similar condos are sold.....so it is not difficult to more accurately assess their worth (or their market value).

Most condos in well established bldgs will sell within 20K of their assessed value.

SFH sell much of the time for $75K to $175K more than the assessed value.

omc said...

Watch out, assessment or appraisal does not always mean BC assessment in realtor talk. I have heard it mean that someone (the realtor or buddy) says it is worth that amount.

Taigaa said...

Yes, I have seen number of lstings lately where they will say "appraised at XXX" which is usually quite a bit higher than the bc assessment value they list, which seems suspicious. In a rising market, the selling price will be increasing compared to assessed vallue over the course of the year, and in a falling market it will be decreasing compared to assessed. Lately the selling prices in my area have been getting within about 8% above assessed, some evendropping below assessed already. Is there an easy way to post an excel table? If there is I can post a years worth of sales with assessed, asking, and sold prices and the averaged differences of assessed versus sold price by month.

DavidL said...

@ Taigga wrote: Is there an easy way to post an excel table?

If you have a GMail/Google account, you could upload the spreadsheet to Google Docs, then share it with us!

DavidL said...

@ Just Jack wrote:
...
Prices down 10%
Volume down 30%

And that's how I'm reading the market.


I'm constantly impressed with the "inside" information you have access to. My estimate would be that prices in my neighbourhood have dropped about 15% since they peaked in March 2010.

DavidL said...

@AlexandraHere wrote: SFH sell much of the time for $75K to $175K more than the assessed value.

Six months ago, I would have totally agreed with you. From what I can see now, prices are much closer to BC Assessment (July 2009) values. It should be interesting to see what the 2010 assessment values are when they are released in January.

Mindset said...

Hi All,

Any thoughts on the effect of the US's shocking 600B quantitative easing move? Could it really trigger 80's rapid inflation again like they are hoping?

For those not in the loop, it's supposed to trigger inflation increases which can then only be contained by raising interest rates (just like the 80's).

Interesting stuff. And it clearly signals that some really serious problems still exist in the worlds biggest economy.

Thoughts?

Mindset said...

Marco said: Wow, TSX almost at 13,000 - who would have thought.

Care to comment on why you think it is rising? Are company financials doing better? Is Canada doing better?

Articles I have read are saying that the government stimulus is being priced in ahead of time. Or that the incredible speed at which trades can happen is causing news to move the markets in ways it shouldn't.

Friends in the investment industry are telling me that the markets are completely detached from reality and it makes no sense to them anymore. (One even called it a form of gambling, because the price is more about who's sitting at the table driving up the pot than whats up for sale).

I'm unsure. But always like to hear peoples thoughts on why something is ocurring, because it's the why that allows good decisions to be made.

omc said...

eh tu realtor?

Mindset said...

Nice link OMC,

It's funny, these articles always talk about national averages, when there are some pretty big extremes in some locations (like Vancouver) that are hidden in these averages.

It would be like saying 'The TSX is holding steady'.... But one step beneath this generalization, forestry stocks are getting hammered while oil stocks are holding their own. Shouldn't the news be:

We expect are seing shocking decreases in the forestry industry, but oil markets are predicted to hold steady.

Vancouver is not Montreal. What a bunch of BS.

Marko said...

"Care to comment on why you think it is rising? Are company financials doing better? Is Canada doing better?"

I can read balance sheets, cash flows, etc. but I am not a financial expert so my comments are rather useless. There were a lot of people calling for a correction when we got to 12,000.

Personally, I would sell some of my portfolio if it was not for capital gains tax. For now I will just continue holding and collecting my Telus, BMO, and TRP dividends. My book dividend on Telus is over 6% and close to 9% for BMO plus I am on the reinvest dividend program with BMO. The extra income is nice.

Reid said...

"Any thoughts on the effect of the US's shocking 600B quantitative easing move? Could it really trigger 80's rapid inflation again like they are hoping?"

The reason this is happening is because the US is fighting deflation. The Fed's desire is to see some inflation and they are trying to create it with the QE. If inflation comes back into the economy they have a number of tools to control it. Initially thay can simply take $ back out of the system which will contol money supply and they can do this without having to raise interest rates.

Russ said...

Here's my take on TSX, inflation, etc. It's worth what you've paid for it; I have zero insider knowledge, don't work in the industry and have a very modest amount invested in the market.

The US fed is 100% trying to weaken the US dollar and create inflation by printing unprecedented amounts of dollars.

A weaker US dollar makes american exports more attractive overseas (helping struggling manufacturers) and makes it easier to repay the HUGE gov't debt. I believe that the only way the US can ever repay its debt is to print so many dollars that they are 'worth' far far less than today. Ie, the $4trillion they repay to the Chinese in 2020 couldn't buy as many items as that $4 trillion would buy today.

($4trillion being a number I made up out of thin air)

To Mindsets point about interest rates; I believe that the Fed wants massive inflation (for the above reasons) and therefore will be relatively slow in raising interest rates. Only doing so after a long bout of inflation.

Russ said...

I think the key to investing in the next while is to be in anything that isn't being printed out of thin air and which people will still need to buy. As dollars become worth less and less the price of things like oil, gold, agriculture etc will only go up (in US dollar terms).

Similarily the Canadian dollar, Aussie dollar etc aren't being printed at the same rate as the US and are therefore rising in value vs the US.

I know its off topic but I find this topic interesting, as it seems do others. Maybe HHV could create a post for economic / investing discussion so we don't high-jack his blog?

DavidL said...

Realtors cut home sales forecast

The Canadian Real Estate Association Friday cut its forecast for home sales for 2010 by five per cent. The association, which represents 96,000 realtors across the country, predicted sales nationally will fall to 442,200 in 2010 compared with the year earlier.

DavidL said...

Whoops ... omc, I see you beat me to the link!

a simple man said...

CREA's forecast for next year includes a 14.9% decrease in sales volume for 2011 (vs 2010) and a decrease in price of 2.3% from this year.

http://creanews.ca/

Wonder what the numbers are for Vancouver and Victoria?

When CREA starts giving media releases forecasting slower sales and decreases in prices, that is worth reading.

a simple man said...

sorry - the above stats parsed out for BC only.

Taigaa said...

Link to my sales stats sheet if anyone is interested
https://spreadsheets.google.com/ccc?key=0AmI5k_HT0D3kdExNdWJvWDNkZ3JyZk0xcDJtX21aM1E&hl=en&authkey=CKGq5NcB

DavidL said...

@Taigaa

Wow! Awesome ... thanks!

HouseHuntVictoria said...

I think this sums up the rental market in one sentence: "Owners live upstairs... very quiet and have references from previous tenants."

You know home owners with suites are getting desperate for tenants when they're offering up references for themselves.

HouseHuntVictoria said...

Here's the listing.

Deanna said...

@ Taigaa


Thanks for posting your spreadsheet, but it doesn't look like you've allowed public access to your document. I got the URL out of the page source, but Google says I don't have permission to view it.

DavidL said...

@HHV wrote: You know home owners with suites are getting desperate for tenants when they're offering up references for themselves.

Just for fun, I looked up the property assessment ... it was assessed at $836,000 (July 1st, 2009). I sold for $775,000 on March 20th, 2009. Assuming that it was a typical purchase, the $1250 rent might cover 30% or the mortgage (not including property tax, insurance, etc.)

happy renter said...

That ad is so, so telling, HHV! As someone who was recently trolling housing ads for somewhere to live, I can attest to the fact that many landlords are getting pretty desperate for tenants who will pay the high rents that they're asking (or essentially, who will pay their high mortgage payments). I had several people call me back multiple times after I viewed their places offering me better and better deals each time. It was kind of sad, actually.

Mindset said...

I know its off topic but I find this topic interesting (Quantitive Easing in the US), as it seems do others. Maybe HHV could create a post for economic / investing discussion so we don't high-jack his blog?


I'm not sure it's off topic. The housing market by itself is dependent on the broader markets. I think as long as we keep the discussion about interest rates and the economy, it's entirely relevent to local RE asset prices.

I also think that for those with money to invest, knowing if there are better places than housing to put it should be very valuable to everyone reading and contributing to this subject.

Mindset said...

I still think that the rentals listed on Craigs list / used Victoria are a great indicator of the general market. Not only are there a lot more houses for sale these days, but there are a lot more for rent too.

Quick 3 bedroom search: 18 listings today alone (not sure how many are re-lists to get to the top of the pile)

http://victoria.en.craigslist.ca/search/apa?query=&srchType=A&minAsk=1400&maxAsk=3000&bedrooms=3

Al said...

From Garth's post tonight:

"The interesting thing about real estate is that, like ice cream on a scorching day, it melts from the edges. First the farms, cottages and recreational properties. Then small towns were buyers are thin at the best of times. After that, the village and semi-rural enclaves on the edges of urban areas. Then the burbs, where now live the majority of equityless people. Finally the cities, and lastly the demand neighbourhoods where arrogance and exclusivity often ward off sanity."

It is pretty match with here as well ...

Animal Spirit said...

awesome data Taigaa - thanks

Just Jack said...

WOW! Landlords having to sell themselves and their rental to get tenants. WOW!

Hey, will it now get where I can ask a landlord for a credit report so I can find out if they are on the edge and I might end up having to move out of my rental if they get foreclosed on?

S2

S2

Mr.4AM said...

Can somebody re-post Taigaa's link such that it is clickable? As it is, it seems to be an incomplete URL.
Thanks,
Mr.4AM

Just Jack said...

Last week saw 73 properties of all kinds sell in the Victoria, Westshore and Peninsula areas of Greater Victoria. 64 of those properties sold below their assessed value.

The month before in the first week of September, 17 out of 65 properties sold below their assessed value.

I noticed that a significant amount of people place considerable weight on the BC assessments, so this may have some interest to them.

When prices were going up, the banks would refinance homes using the assessed value. As the lenders believed that the property was always worth more than the assessment, so they were "safe" using the assessed value as the baseline market value for the property.

Now, that properties are selling below assessments, are they still using the assessments?

Now, most properties in Canada are not valued by human beings. Most are valued by computer programs. The key component of these programs is the assessed value and that their is a high probability that the property is worth more than the assessed value. Now if the key component of the program is wrong or suspect, how effective can these programs be? The programs worked well when prices were going up, because any over valuations were covered up by rising prices in the marketplace.

Now the best these programs can say is at least it's worth LESS than the assessed value. How do you lend on that! The USA was heavily into these programs and when the market slumped, the banks no longer knew what their real estate portfolio were worth. They got scared and restricted lending.

I think the real ride is about to start.

Deanna said...

This is Taigaa's link:

Click here

DavidL said...

@ Just Jack wrote: Now the best these programs can say is at least it's worth LESS than the assessed value. ... They got scared and restricted lending.

When I transferred my mortgage to ING in 2005, they paid for income verification (my wife and I had to visit a notary and submit current paycheques and other documentation) and for a "drive by" property assessment. They don't rely on the customer's word for either income or property worth. (They also require a beacon score of 720.)

I suspect that one of the reasons that ING offers one of the best rates around is that they don't engage in higher risk mortgages. Most lending agencies are not nearly as prudent ...

happy renter said...

CBC article on mortgage debt

Marko said...

"the average amount of equity is about $146,000, or 50 per cent of the average value of their homes."

Read more: http://www.cbc.ca/money/story/2010/11/08/mortgage-debt-2010.html#ixzz14hvEGTZb

I wish we could get some stats for Victoria, but I believe % of equity is significantly higher than 50% of average value of home.

Marko said...

Month-to-Date Market Statistics
Posted by
Nov 08 2010
Monday, November 8, 2010 8:00:

MTD November
2010 2009
Net Unconditional Sales: 131 604
New Listings: 192
796
Active Listings: 3,749 2,973

Please Note

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

Just Jack said...

As for the CBC article on debt that stated the average equity withdrawal was $46,000 last year.

Most of those people tapping into the home ATM machine would be paying off credit card and home depot debts. Debt consolidation, like this, was at one time considered a bad thing. The banker would take your credit cards and cut them up in front of you. Today, they give you a higher limit on your cards.

From that article, nationally, 72 percent of Canadians "own" their homes. Or one could say, that nationally 28 percent of the population are renters. That 28 percent is too low, to sustain both the housing market and the rental market. A small increase in the interest rate would cut most of these people out of the market and reduce first time sales enormously. But the rental market would still remain weak.

That 72 percent rate will be significantly higher in cities like Victoria and Vancouver because of the ease of buying pre-construction condos. And that the rise in prices have let mom and pop put make the down payment for junior.

That's one reason why you find line ups to buy into complexes that are not built, but 6 or more months of inventory of existing condominiums.

Anyone can buy a home, but only some will ever own one. I can see the next generation looking at real estate as what brought mommy and daddy down and being extremely reluctant to buy.

Of course that means that the bed time stories will have to change to reflect the new times.

Where you have Cinderella having a credit check to find out if Prince Charming's castle has a high ratio mortgage before she lets him fondle her glass slipper. And the three evil step sisters replaced with a realtor, broker and banker. Of course Shrek's swamp will have to have an archaeological assessment for Fairy bones along with an environmental audit for swamp gas.