Wednesday, February 23, 2011

Raindrops and roses

It's snowing Victoria, in February, after Ground Hog Day, when the daffodils are just set to bloom. Twitter is all abuzz with the #YYJ #Snowpocalypse. And Cameron Muir "forecasts" home sales will rise in Victoria this year by 7% over 2010 sales volumes.

What a leap of logic that is!

Let's see:
  • Harder to get a mortgage? For some folks this is true. More accurately though is the mortgage you can get in March will be more expensive than the one you can get today (although I'm hearing that some banks aren't doing 35 year amortizations on new approvals already, just honouring pre-approvals at 35 year ams).
  • Interest rates a-rising? Most certainly they're trending that way, albeit only slightly right now.
  • Sales volumes a-slumping already? Most definitely: January sales volume was down 19% YOY and February looks like it'll be down anywhere from 20% to 30% YOY. Remember sales were supposed to be pulled forward into the first two months of this year because of mortgage rule changes. If they're not jumping now, how does anyone see them jumping later? 
I bet you dollars to donuts the local rag gives old Cameron a free pass on his economic forecast wishful thinking. UPDATE (Bet won, H/T to LeoS for link, please don't click it, you'll regret visiting that dirty rag). It must be nice to live in a world where you can make sh&t up and never get called on it by the folks whose job is to weed through the bullsh$t (I'm looking at you news media).

Prediction: Cameron Muir and the BCREA will revise their forecast in April, down, and the media will give them another pass.  


Robert Reynolds - HMR Insurance said...

VREB/TC When the sales volume is down at the end of the month

Snowpocalypse keeps buyers at home! But Victoria has the best weather

In The World! /Jeremy Clarkson

and everyone wants to live here!

Just Jack said...

My neighbor is from Ontario, this morning he tiraded that Victorians can't drive in the snow - as he drove off spinning his "all season" radials.

Good luck.

Leo S said...

Victoria: when it snows it is the most hilarious city... in the world! (lol @ Robert)

This is getting more and more interesting to watch. I'm going to peg gas at 1.40 this summer, possibly more if the revolutions spread.

a simple man said...

I am sure glad that I am able to walk and bicycle just about everywhere I need to. We only use the vehicle to get major grocery runs and the odd soccer practice/game for the kids.

Definitely going to be growing some foods int he greenhouse this summer. Partially economic, mostly health/environmental reasons.

SilverSurfer said...

Am enjoying this winter wonderland, so much for Victoria being the Florida of Canada. LOL

Oil has skyrocketed 16% in 7 trading days. WTI Crude is at $98 right now and probably still has several more weeks (months?) of an up trend. Libya halted 50% of its production yesterday and Gadahfi vows to kill protestors.

If you made it out of the snow today, you may consider filling up the tank, it won't be long now until prices go up at the pump. You can check
Victoria pump prices here.

PS. Aside from oil, guess what else went up in price today? hehe (and no I don't mean Victoria real estate)

Leo S said...

Well that's not surprising.

jhamilton1987 said...

For you people who walk and bike around victoria, if the price of icbc insurance was included in the price of gas you could save while you help the planet. Also there would be no uninsured vehicles on the road.

Marko said...

I don't think 7% is crazy. Let's not forget that August to December of 2010 we had month after month of 20 year sales lows. What are the odds this August to December is worse?

Leo S said...

>> What are the odds this August to December is worse?

Too early to say, but we do have a very similar situation to last year. All the predictions are for a similar sales pattern, with more sales in the first part of the year, and a slump later. So far we're off to an even worse start. It's going to have to be a strong summer to increase sales by 7%.

Marko said...

The forecast is calling for 7000 sales this year, it is possibly on the high side but nothing crazy..

2002 - 7,725
2003 - 8,128
2004 - 8,195
2005 - 8,532
2006 - 7,958
2007 - 8,931
2008 - 6,519
2009 - 8,096
2010 - 6,546
2011 - Forecast 7,000

HouseHuntVictoria said...

Marko, if I recall correctly, it was really only three bad months last year: July, August and September. October wasn't drastically bad like August, November was down right fantastic comparatively and Decemeber 2010 had more than January 2011.

We all know that the spring market usually sets the trend for the rest of the year, and this spring market doesn't look to be shaping into anything indicative of a "rise" against last year.

I could be wrong, but Muir's not doing anything other than throwing grass in the air and saying the wind is from the west not the east even though the grass is blowing slowly to the left not the right.

But the media, well they just continue to sicken me with their lazy reporting. They even have access to the numbers, they're just too busy trying to save the last dollar of ad revenue they've got.

Animal Spirit said...

Marko - congrats on the Ryan sale.

Any comments on the massive number of PCS listings and price changes today?

omc said...

If Muir is aiming that low with rose colored glasses, maybe we are in trouble. That guy is as slippery as an eel; he talks about the listings being down 14%, but that is comparing to the peak of the selling season. apples and oranges

Marko said...

Seeing 25 total listings for today - not too crazy - nothing stands out other than 209 - 623 Treanor Ave which is listed lower than the purchase price in August 2009.

Seeing 20 price changes - nothing too crazy either - nothing stands out other than 1102-760 Johnson St which is now below purchase price in Feb 2009. Remainder of price changes are pretty much on properties that were overpriced to start.

After 371 days on market, 912 Cobblestone Lane (building lot) sold for the full asking price $838,000. Reforces my theory that vacant lot prices are at all time record highs.

If you bought a condo in 2009, doesn't look good, if you bought a house it depends what month you bought it in, and if you bought a vacant lot looks very good.

Animal Spirit said...

omc - 817 SFH listings in core areas yesterday. A year ago on March 1 there were around 620. We are running at least 30% higher in listings than this time last year.

Carla - perhaps a printed correction to Cameron's misleading numbers is in order to ensure journalistic integrity.

omc said...

Perhaps Carla could try spell check also. Just a pet peeve of mine.

HouseHuntVictoria said...

The author of the article was "staff" so we should be careful not to peg the crappy writing on one of the named authors. Who knows?, from the quality of the journalism that could have been the result of this:

Editor: Intern, take the BCREA press release and cut/paste all the relevant Victoria blurbs into an article. No colour, no comments.

Intern: That's how I got my journalism degree!

a simple man said...

I imagine this little storm will put a bit of a chill on the sales numbers for this week to finish the month out.

We will see.

Zidane said...

You know we've moved to a new level when we start quoting Jeremy Clarkson

Just Jack said...

So how are those Bare Mountain Mcmansions doing today?

Not so good, if you live on Nicklaus Drive.

A 4,000 square footer originally listed back in 2006 for $1,159,000 and sold in September 2007 for $883,000 has just sold this week for $854,000 or about $215 per finished square foot, after being listed for some 245 non consecutive days.

That's a three and a half year roll back in prices and an illiquid 8 months to sell. That certainly isn't the real estate picture Cameron Muir is painting.

People in Oak Bay may still be getting high values, but prices are continuing to contract quickly from the outside districts to the inner core.

Buying location, location, location may only mean that you are the last to see a price drop. It certainly is no guarantee that your home will not fall in value.