Monday, February 7, 2011

Monday market update: slow start to February?

MLS numbers courtesy of the VREB via Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.

Month to date February 2011
Net Unconditional Sales: 78 
New Listings: 334 
Active Listings: 3,312
Sales to new listings ratio: 23%
Sales to active listings ratio:  10.6 MOI

February 2010 totals 
Net Unconditional Sales: 621
New Listings: 1,460
Active Listings: 3,280
Sales to new listings ratio: 42.5%
Sales to active listings ratio:  5.3 MOI

It's still early. But the first week of February has given us a glimpse at the state of the market for the first week of February. It's been almost two weeks since the CMHC mortgage amortization rule changes were announced. Are we seeing any sign of a rush to buy? It's still early to make any kind of assumptions, but given that the rule changes effect every mortgage on a property bought after March 18, 2011, the pressure to buy is high if you are wanting to use a 35 year amortization (why you would want to is a whole other discussion that typically ends with  don't do it), we're not seeing the start of any kind of buying frenzy yet. Rising interest rates, who knows how long or far these rates will go, may also add to any other mortgage pressures.

There's four weeks in February. We've got numbers for the first week. And they're not looking stellar. Real estate is a 24/7 business, and as such, sales are rarely uniform, so it's highly unlikely the next 4 weeks play out like the first, but at this rate (extrapolated out to 312 total) we're going to be hard pressed to hit 400 sales. Victorians have drunk deep from the Kool-Aid though so I think we'll get close to that number. Which is a whopping 35% drop from last year.

February 2011 is starting to look an awful lot like February 2009, except sales are slowing down, not picking up:

What are you seeing out there?


omc said...

The rising rates is the icing on the cake. Combined with the new mortgage rule, the financially ridiculous can now qualify for 10% less of a mortgage.

Deanna said...

Thanks, HHV!

Leo S said...

I'll guess 500 because I think there will be some picking up due to the mortgage changes and spring getting started.

a simple man said...

On my PCS there seemed to be a real spurt of sales just before Christmas and for the first few weeks in January, but less so now. I am not sure what to expect in Feb, but I am pretty sure that listings are going to far outpace sales, which is what will really have an impact.

Leo S said...

ReMax gives out sunshine and lollypops for everyone!

a simple man said...

Our finance minister is telling Canadians to "brace for higher mortgage rates in the future." news feed

Leo S said...

The market is on track to a similar realignment this year as the number of available homes trends downward, suggesting that the market is closer to seller's territory, in which prices spike said Christine Martysiewicz, a spokeswoman for ReMax.

Get ready everyone. Prices are set to spike.

"To say that there might be another real estate bubble is really not a responsible comment."

Another real estate bubble? What happened to the first one?

Robert Reynolds - HMR Insurance said...

I see a property I like.
It is too expensive and far more than equivalent rent.
But I *could* afford it, if I stop eating...

Help me HHV'kanobi your my only hope!

Mark said...

Went and looked at a property....noticed it had been removed then relisted. (FSBO)

So I ask the guy why he removed it....says it' because they had an accepted offer. So why are you still trying to sell I ask? "Offer fell through"

Hmmm, ok so let me ask you this then I said "Why are you asking more the second time around?"

"Oh because I just received my 2011 assessment and I was obviously too low on my price" "I guess we were lucky that offer fell through"

Are you kidding me! I'm pretty sure this clown will be wishing the original offer went through in the coming months.

People basing their asking price on 2011 assessments now! The delusion continues.

dub said...

B.C. most vulnerable to economic downturn: TD report

Not much news to most people around here I suspect, except (maybe) for the following quote:

B.C. is also the only province where the average savings rate is negative.

I didn't know this; I was worried for a moment until I reassured myself that Canadians are very prudent with their money and thus, there's nothing to fret about.

Does anyone know where one might find info on savings rates by province?

omc said...

There is a house on MacDonald drive in Queenswood. They have had it on the market for over a year now asking in the low $880 k range. They got their 2011 assesment, which showed a sharp increase in value. They took it off MLS and are now trying to sell it for $900k privately.

The reality is that there are so few sales in that area, and values vary street to street, heck even lot to lot. There is no way to accuratly assess the value, except for this one. He had it on the market during the time that assessments were made. He couldn't get $825k for it then, and this part of the market has dropped since. I think the value is realistically in the $750k range as the lot is far from prime and the house is in need of much work and has an extremely unusable floor plan.

omc said...

Oops, The guy in Queenswood was asking $825, not $880

a simple man said...

How different his Feb is compared to last.

Last Feb we were seeing a lot of multiple offers and sales above asking.

This Feb a lot of price reductions and sales below asking. And the real inventory glut is yet to hit.

Closed mortgage rates increasing via the bond market, BoC set to increase the prime, Minister of finance telling Canadians to brace themselves for mortgage rate increases, Mark Carney scolding us repeatedly for our irresponsible borrowing habits, banks saying we are in trouble.

before the signs were more subtle, but now they are screaming. If you buy a house now, prepare for the value of it to fall.

But ReMax says no better time to buy!

Leo S said...

People basing their asking price on 2011 assessments now! The delusion continues.

Definitely it seems to have an effect. While there are more places going for under assessment, it seems that people are using the new assessment to base their selling price on. So many places seem to be listing for higher than they would have at the 2010 assessment.

Does anyone know where one might find info on savings rates by province?

Yes. In the actual report. (last page)

omc said...

The thing to also remember is that those who need to use CMHC will be at a great disadvantage coming up. The bond rates are heading up, and I don't see it easing off because inflation is starting. You either have to use a 5 yr fixed rate, or qualify at the posted fixed rate if you use CMHC. Either way you will be able to afford a smaller mortgage.

Catherine said...

This question may have already been asked and answered, if so, my apologies, but here goes. When a mortgage is being renewed, are the same rules applied as for a new mortgage. For ex, the person originally had a 35 yr mortg and did not pay CMHC insur, but when the renewal is processed, the person does not have enough equity (because values had declined) to forego insurance and also would have trouble qualifying for a 30-yr mortgage. In other words, in a few years when those 35-yr mortgages come up for renewal, could there be a spate of "sorry, we won't renew" from the banks?

Leo S said...

Whoever was looking at that place on Redfern.... Sold for a nice haircut.
Assessed for $514,000, listed 20 days ago for $489,000 and sold today for $425,000.

Heck of a concession for only 20 days on market... Dunno what the condition was though.