Wednesday, December 29, 2010

A year's worth of change = nothing

December 2009 was a particularly robust sales month - compared to most Decembers that is:

December 2009
Net Unconditional Sales: 453
New Listings: 480
Active Listings: 2,557 

December 2010 is what I'd call a perfectly average sales month - again, when we compare it to other December year data we have access to.

Marko Juras, by way of his access to up to the minute VREB MLS sales data provides us with a slightly premature look at December 2010.

December 2010 (as on December 29)
Net Unconditional Sales: 322
New Listings: 491
Active Listings: 3,228

The average reported price for December 2010 is almost $640,000. The average reported price in December 2009 was $651,316. 

A year's worth of change brought Victorians diddly squat. We watched this market tug back and forth between seller's and buyer's market conditions, with two horrific months creating industry panic in August and September, but otherwise flat territory until a rather difficult to explain/understand fall recovery. Listings fell as sales climbed in October, November and December bucking trends established in previous falls' sales data.

It's prediction time again soon. The industry champions will toss press release after press release written to build confidence in real estate buying. We'll continue to debunk their bunk. I'm going to repeat something I wrote this time last year as a prediction:

Until we see a significant economic event, like an interest rate rise of 1% or greater in the fixed products, this market will keep doing what it did this year: bouncing around up and down each month all the while losing value to the effects of inflation.

Friday, December 24, 2010

Merry Ho Ho

Whatever you're doing to celebrate this time of year, raise a glass and hear my toast:

May you have peace and financial security in your world in this year and next.
May your life be happy and influential on the people around you.
May your contributions here and elsewhere be recognized and rewarded.


Thanks to everyone here, for your reader loyalty, your insightful commentary and your continued participation whether it be daily, weekly, monthly or rarely.

Happy Christmas,

The HHV's

Monday, December 20, 2010

December month to date stats

MLS numbers courtesy of the VREB via Marko Juras.

Month to date December 2010 (last week's month-to-date totals in brackets)
Net Unconditional Sales: 243 (163)
New Listings: 408 (305)
Active Listings: 3,308 (305)

December 2009 totals
Net Unconditional Sales: 453
New Listings: 480
Active Listings: 2,557

It's a particularly slow time of year, in an untypically slow year for Victoria's real estate market. Not really a good time to be selling, but for those buying, there's a higher chance that what's on the market is in the need-to-sell category versus the want-to-sell, which may mean you can drive a harder bargain.

This early-winter's market has been tough to sort out. There's a bit of a tug of war going on, so far with sellers pulling just that little bit harder. The sales to new listings ratio has been between 4 and 6 for the past couple of months; which is why prices aren't falling as fast as they did in August and September when the market had the bears salivating.

Wednesday, December 15, 2010

Mortgage smackdown

Ben, over at Financial Insights takes on the McListers over at Canadian Mortgage Trends for their thoughts around CMHC regulation.

In one corner, CMT says changes to CMHC amortization policies
"handicap hundreds of thousands of well-qualified homeowners and lessors. These people may have very legitimate needs for the cash-flow flexibility that extended amortizations provide. Forcing strong borrowers to make less-optimal budgeting decisions serves few interests, and is not what government was intended for."
But the knockout punch is delivered in one swift motion by Ben:
"I’m curious how these well-qualified borrowers overcame that ‘handicap’ and the ‘legitimate need for flexibility’ for the 60 plus years prior to the rule changes in 2005.  And as for the last sentence, exactly what should the role of government be when it comes to insuring the profits of private, profit-seeking financial institutions using taxpayer money?"
If you're not already reading Financial Insights every day, add it to your list. I generally appreciate the insights offered at CMT, so this post isn't a poke at them, only on their offside argument that all-but-claims the taxpayer funded insurance schemes of the CMHC are "free market."

Monday, December 13, 2010

Debt bomb goes off in the media

In case you've been under a rock for the past several years (or perhaps you've been following the greater fool's advice and have been building yourself a shelter in the woods, stocking it with gasoline, gold and hunting equipment so you can survive the coming "suburbageddon") you'll find it no surprise that the state of Canadians' debt levels have surpassed those of our neighbours to the south.

You can Google it for yourself, or you can let me do it for you, but either way you'll see some whopper stories in the media about how, jeez, who woulda thunk it?, the stimulus effect of hyper-low interest rates did exactly what it was intended to do but never said it would: caused spenders to spend too much and savers to look elsewhere for other opportunities.

Check this out:

That's right, in a country with less than 30 major urban centres, 248 news articles were generated about Canadians spending 150% more than they can actually afford if the taps to easy money weren't more open than the local convenience store. But that's not all, even those pesky Americans, hardly the bastions of prudent finance, have sat up and taken notice:

PMSH must just be tickled to be getting more airplay for the snowbirds down south, who out-flock to Florida in more significant numbers than they in-flock to BC. But there's more, with economic gloom clouding over over-spent Europe and hyper-inflated China, there must be some consequences for Canadian households, right?

Now before you all start crowing with "it's different here, we have prudent banks, Canadians are more conservative, yada, yadda, yaddda..." let me show you this:

At least we're better than the Greeks  spending more than we earn at a higher level than even the Greeks who must be the collective people within a nation state who's sense of personal responsibility when it comes to life and money is the lowest - these folks manage money believing holding a general strike can make them more of it.

Meanwhile, closer to home, December sales are on pace to come close to September's. Think about that.

Wednesday, December 1, 2010

November MLS stats

No surprises.

November 2010
Net Unconditional Sales: 479
New Listings: 722
Active Listings: 3,723
Average SFH Price: $636,634
Median SFH Price: $530,000

November 2009
Net Unconditional Sales: 604
New Listings:  796
Active Listings: 2,973
Average Price: $617,987
Median Price: $555,000

Month over month changes
Net Unconditional Sales: +2.5%
New Listings: -26%
Active Listings: -8%
Average Price: -1%
Median Price: -1.9%

Year over year changes
Net Unconditional Sales: -21%
New Listings: -9.8%
Active Listings: +21%
Average Price: +3%
Median Price: -5%

More of the same. There are active buyers, many seeking the same property types: homes with suites, near the core, priced around $500K. There are still far more delusional sellers though: people who think the days of double digit year over year price increases are still upon us pricing their fixer-upper properties as though they were better than new. This market is in a holding pattern. Sales volumes have increased since the August and September 20-year-lows, but they still remain dismal when compared to the majority of the past decade.

In case you were wondering why prices haven't dropped more substantially than they have? Let's compare volumes to 2008.

October 2008 
Net Unconditional Sales: 294

November 2008
Net Unconditional Sales: 257

Sales are almost double what they were in the early winter months of 2008. And that's why prices aren't plummeting.