D-day passed us by unceremoniously on March 18th. You can be forgiven for not having noticed, what with sales so low regardless in 2011. What's happening out there now?
Here's the most active category of home sales in pictures (Single Family Homes under $550,000 near the core):
Nothing but new listings and price drops today and yesterday.
Other Matrix and PCS accounts show little activity as well. Like the VREB, BCREA and CREA will be doing later this spring, I might have to revise down my anticipated monthly sales volume total soon.
Eerie ain't it? These are beautiful days to be shopping for a home. Lots of listings, few buyers, great weather, low interest rates. Maybe people have finally woken up to the truth about Victoria's over-priced market? Or maybe they're finally all tapped out? Or maybe this is just one isolated segment of the market that isn't representative of the rest?
Here's the most active category of home sales in pictures (Single Family Homes under $550,000 near the core):
Big bunch of price reductions on the 22nd. I guess these sellers got the message that the buyer pool shriveled drastically after the mortgage rule changes took effect.
One sale on March 19.
Other Matrix and PCS accounts show little activity as well. Like the VREB, BCREA and CREA will be doing later this spring, I might have to revise down my anticipated monthly sales volume total soon.
Eerie ain't it? These are beautiful days to be shopping for a home. Lots of listings, few buyers, great weather, low interest rates. Maybe people have finally woken up to the truth about Victoria's over-priced market? Or maybe they're finally all tapped out? Or maybe this is just one isolated segment of the market that isn't representative of the rest?
55 comments:
290 Obed also sold today for $415,000..
It's only been a couple days though..
All quiet on the Western front.
Until all he11 breaks loose.
S2
Calm before the storm, perhaps. I am noticing a similar trend in Oak Bay.
Here's someone glad for an offer.. 410 Boleskine, assessed at $407k, listed at $419k.. After 41 days without a reduction it sells for $345. I'm sure it's a dump since there are no inside pictures, but that's quite the lowball.
No lowball there, it was a package sale along with 400 Boleskine which went for 620k. Some paid close to $1,000,000 for two city size lots (6,260 sq/ft and 6,416 sq/ft).
We're getting ready to put our condo, which is our first home, on the market and look for a house because I can't stand to live without a garden any longer.
Condo-wise, we've got a good product to sell. We have a bunch of equity and some cash.
Given that we are searching for our home for the next 40 years and we'd like to be in core so I can keep cycling to work and parents, any advice or insight? Don't say rent.
Or, say rent with some darn good justification.
Kate and Josh;
If you are sure you are going to be in the same house and not move for 40 years then it likely won't matter too much when you buy - you have to be ok with your house being less than you paid for it for perhaps the next ten years
But...you may be able to buy far less of a house right now than in 2-3 years with the same money.
What more justification do you need than losing money? You have likely made a nice gain on the condo, why not keep that gain and purchase when the market is lower?
Nobody but you can make the decision, but I know that if I were sitting on the easiest money I will ever make in my life, I wouldn't want to piss it away on something that is sure to go down in value (this market isn't sustainable at current prices, and has been quite stupidly overpriced for several years now).
Thanks, but I'm not going to get into circular arguments with bears. Too many variables: rent, mortgage rates, the market, my two dogs and a cat.
I'm clear eyed about the risks and rewards of entering the market now. Besides, we're buying a home, not making an investment.
I was hoping for some insights on things like making offers on stale listings or some other sage advice about the actual process of selling and buying a home.
why do we have to be categorized as bears? Why not just prudent consumers?
Anyway, all "bear" talk aside, I am sure that people here can provide you many valuable tips.
No lowball there, it was a package sale along with 400 Boleskine which went for 620k.
Interesting. I don't see how that changes things though. Still far under ask regardless of who sold it and for what purpose.
Given that we are searching for our home for the next 40 years
That's not always predictable, lots of things can force a move. However I'm not here to argue about that. Getting out and renting is a gamble, and if you rode the gravy train up it won't hurt as much to ride it down for a bit.
Can't hurt to wait a bit though. Better to start the ride down in your lower-priced condo than bear the full brunt in a $700k home.
Condo market is slow anyway, so unless you price aggressively it's going to take a while to sell.
Sorry simple man I was referring to being told that I was about "to piss it away on something that is sure to go down in value"
KateandJosh,
to be honest the buying or renting of a new house is probably the least of your worries, since you know the market, what you can afford and where you want to buy.
Selling your condo could be challenging in this relativity soft market. My advice is use a discount broker, do extensive research of comparable SALES and price it very sharply. Don't fall into the trap a pricing it a bit high then dropping it 10 grand a month for eternity.
Kate and Josh,
There is no sage advice wrt offering on stale listings. Each listing will be different and sometimes you just can't get the seller to see the actual market value. That's often why they are on the market for so long, trying one realtor after the next. But your agent should be able to provide comparable sales and may even be able to present these, in person, to the seller. Sometimes the buying agent has more success getting through to the seller than the listing agent.
People with animals do have difficulty finding suitable rentals. It is perfectly understandable that you would prefer to buy instead of moving into a rental.
List at a reasonable price is the most sage advice for selling. Insist on professional photography for your listing (crappy point and shoot camera photos on mls will decrease your viewings).
Interview several agents (if you are using any) and don't go with the one who suggests the highest price. Look at the data/comparables provided and make your own logical decisions. Don't make price comparisons based on current listings as this data is worthless. Look at sales data instead.
Good luck!
K&J;
No offense taken at all. Buy the house that you can be in for a long time within your price range. Buy for the future so you are not upgrading in a few years again. try to buy location - it is worth a premium. I would rather be in a lesser home in a better location than the inverse.
I guess the whole "we're buying a home, not making an investment" still doesn't make sense to me. I agree that people should think of their house as a home and not an investment, but I just refuse to pay more than I think something's worth. I wouldn't pay $12 for a 2 litre of ice cream when I feel it should be $6, no matter how much I like ice cream. Housing in Victoria is priced WAY more than it is worth. Renting is so much cheaper right now. When interest rates go up I'd hate to be anyone who bought recently.
PS - My rental is my home. It really doesn't matter to me whether I own it (rent it from the bank).
Thanks all for the good advice. Any other tidbits are welcome. Can you recommend a professional photographer for the listing pictures?
photo@celestemagnusson.com Celeste does a very good job and is quite inexpensive.
If your selling the property yourself, you should get the property appraised by a professional Real Estate Appraiser. The appraisal can be used as a marketing tool and aid the buyer in getting financing.
It also helps a prospective buyer understand how you came to your asking price. Adding a layer of trust from an unbiased third party.
Appraisals are cheap and can save you a law suit, if you accidentally or intentionally misrepresent the property in your listing.
I think the appraisal is a waste of money but each to his or her own.
Email a realtor and just get them to send you all the listings in your building in the last two years including ones that are current, sold, expired, or got cancelled. It should give you a good idea of what your place worth.
Price is what you pay, value is what you get - Warren Buffet
The ratio of Price/Value is very high for Victoria real estate right now. Just because there are suckers buying it doesn't mean you should. Conversely, it may be a wonderful time to get the hell out of dodge and watch the market implode from the sidelines. Enjoy the show!
Marko or Alexandra_here - any idea of total sales this week? SFH <575 in the core I have two, but no stats outside the core, higher prices, or condos.
laughing at the drops on the nightmare on flipper street specials on Scott and Tulip.
Problem with buying a house for the next 40 years.... besides "famous last words", is that you may have a very hard time affording one that will last you 40 years in an area you like.
If you're hell-bent on buying now, I don't think anyone here will try to dissuade you, we know it's pointless.
Find a realtor that is good for you, who will produce a listing that will stand out, and work to sell your condo. Price it right. Don't price according to listings, listings just show you what hasn't sold. Your competition is recent comparable sales, that is what buyers look at. They narrow down the field based on listings, but when it comes to making an offer, now that there is no rush to beat a deadline, they'll certainly be taking their time.
Here is a good alternative to hiring an appraiser:
https://www.mylandcor.com/
For $30, you can obtain all the comparables for a property and it will generate a current value estimate.
I have used this and think the product is well worth the price.
@KateandJosh
If you truly want to buy a home to last for the next 40 years, you should likely consider the following points:
[1] Buy a new or recently built home. From what I've seen, a lot of homes require substantial maintenance and repairs after 30 or 40 years. Newer homes are much better insulated, and you will save substantially on heating costs.
[2] Consider a rancher or a house that has kitchen, living room, bathroom and at least one large bedroom on the main floor. Eventually, we all get old and stairs can be a challenge. I have relatives who have been obliged to install chair lifts to get upstairs.
[3] Buy a house that you can pay off within the next 15 to 20 years. You don't want to find yourself nearing retirement and still paying off a mortgage.
@KateandJosh
Rather than try to convince you not to buy in the current market ... I'll tell you about my situation (there are some parallels).
I purchased my home nine years ago. If I were to sell now, after closing costs I could profit with a 100% increase over the original purchase price. I could invest the money, rent for a while, then purchase a nicer house in a few years.
However, I don't plan on doing this. Within a few years, I will be mortgage-free. At that point, I will be able to put all the money that is currently going towards the mortgage into investments (RESP, RRSP, TFSA, etc.)*. I can also save $$$ to put towards a retirement property, bigger house, etc.
Over the next few years, I expect my house to devalue. The value of more expensive homes will also devalue. So in this comparison of apples-to-apples - let's say that house prices reduce by 30%: a modest $500K home devalues to $350K while a luxury $800K home devalues to $560K. Note that before devaluing difference between the modest and luxury home was $300K. After devaluing, the difference is just $210K.
So, by waiting a few years - I can gain more equity (pay off my remaining mortgage), save more (investments, etc.) and potentially save $90K if/when I choose to "upgrade".
* Just to be clear - I am already saving $$$ in RESP's, RRSP's and TFSA's - I could just save more after my mortgage is paid off.
Ahh, but remember they are in the condo market, not houses. Condos are much more sensitive to any down turns in market. Selling out now isn't the worst idea. Buying may not be the best, but they are better off in a well bought house than any condo.
I have sold a condo before. Do price it well (lower) and be ready to put it on market. Make that turkey shine, go all the way on prepping for sale. Don't fool yourself by thinking you have a great product; you don't, the market is flooded. Don't even look until you have sold first.
Oops, forgot. Stay away from the western communities, if the market goes down they will flop. Location, location, location, even if you get less of a house.
Besides, we're buying a home, not making an investment.
What does that mean exactly? You don't care what value you get for your money?
Then why ask for advice? Go right ahead and buy.
Seems like listings are accelerating in my area, and a few more price reductions than before. This week may be the start of the slide.
Re Kate&Josh and appraiser. I agree that an appraisal is a complete waste of time. We did a private buy and the seller got an appraisal. The appraiser missed a lot of things - oh, such as the furnace had been decommissioned and was oil, not gas. He also priced the house way too high, based on "recent" sales in the hood. This was in the summer of 2008 - prices were down and nothing was selling: realtors knew this but appraisers don't.
If you go with a realtor, speak to a few realtors. Things to consider: does the realtor admit the market is soft? Ask how many open houses they will do. Will they give it a good pitch on their website. Can you vet the mls description. make sure you get lots of recent comparables.
ask them when the last downturn was (a blip in 2008 and a big one in 1990-2000) - if they don't answer this one they are either dishonest or incompetent. Ask what stopped the 2008 drop (the popular wisdom is that it was drop in interest rates).
Some realtors will be honest when trying to get a listing as opposed to when getting a sale, perhaps), so these questions are not unreasonable or fruitless.
Yup, things are picking up listings wise. Reality is starting to set in for many of those who had rose coloured glasses on when they listed. This is totally normal for this time of year though. Things will change if sales don't happen in the next few months.
Like choosing a real estate agent, accountant, lawyer, plumber or drug dealer, not all appraisers are the same or provide the same level of service.
There are just as many "bad" appraisers as there are "bad" computer programmers. The problem with the industry is that for so many years a "good" appraiser was one that hit the number, made the mortgage and rolled over for loose change. These are the appraisers that are in high demand by brokers and lenders when prices were rising - because they don't rock the boat.
But, times are changing and the herd of appraisers will be culled through law suits. Maybe then we can go back to when a "good" appraiser provided a report with more information than what is in a real estate agent's listing, provided more than a high school analysis of sales, discussed the property rather than filling the report with meaningless boiler plate filler, and were reliable in their opinions.
But I've found that this has been true in all trades and professions (real or imagined) for the last decade, accountability, responsibility, integrity and honesty have been just so old school.
So who do you trust?
I think that's one of the big problems in today's society we are relying less on people and more on computer applications to do the thinking for us. Landcor is a good system, not because its accurate but because its cheap and its estimates are reasonable. Thirty bucks for verification of what you may have already known. If you don't like the application's estimate - it was only 30 bucks. A list of sales in the complex from an agent is fine and even better its free - but meaningless unless you know how to interpret the raw data and don't want to have emails and calls from the agent from now on.
This blog is free, informative and entertaining. It's just very very public. I know that some of my posts are rabid, ranting and ridiculous attempts at failed humor. I don't know if I could be as free to do so if I did not hide behind a handle. So people like Marko who can hang their junk in public, I envy. Because I have seen so many other blogs destroyed by personal attacks.
I think people buying or selling real estate need something that has all of the good elements of the above - I just don't know where they can get it.
Anyway that's my Friday rant - so how about them Canucks?
OK - 40 years is optimistic. My point is that I'm the anti-flipper.
Re: investment vs. home. Of course I hope to get value for money in the net cost of selling and purchasing. But my definition of a financial investment is something that I expect to appreciate in value and that I expect to sell to realize that appreciation.
Even if the value of houses in Victoria continues to climb, I do not intend to sell my home in order to realize a gain. I do intend to do things to my home that might decrease its value as an investment such as dig up the front yard for a garden, cover the driveway with a greenhouse, put in a semi-legal grey water collection system. That's the intrinsic value of buying over renting. It's mine and within the bylaws I can do what I want with it.
Sure, my calculations show me mortgage free in 7 years and along the way a correction might yield a great deal. But that's seven years missed of farting around in the back yard trying out goofy projects. All that messy fun has value too!
I've maxed out my RRSPs and am close to maxing out my TFSA. That's investing.
I carry no other debt than my mortgage. That's prudent financial decision making.
I have job and wife I love and pretty soon am going to have a home and yard to tinker with.
Thanks again for the advice. I'll check out mylandcor and get strategic about staging and pricing.
Special shout out to DavidL. Great advice around accessibility, maintenance and getting mortgage free.
PS. wanna buy my condo?
mortgage free in 7 years ... maxed out my RRSPs and TFSA... no other debt.... prudent financial decision making... job and wife I love... a home and yard to tinker with.
And I have a huuuuuuge pe...
Wait, what are we talking about? :)
Good Luck, KateandJosh.
Seems you have it all planned out nicely.
At this point in my life, I enjoy the freedom of renting rather than the burden of home ownership.
Just had the bathroom renovated and new laminate floors are to be installed in the bedrooms, vinyl floors in the kitchen and the living room will be painted. We negotiated this with our landlord for another $50 a month in rent. Since we've lived here, the roof and hot water tank has been replaced.
I rent a home and this will be my second year of growing a garden. My daughter and I, put a bird house up in the tree this spring and are waiting for the Robins to have babies. Since, I run an office out of the house, I deduct a portion of the rent and housing costs from my taxes. Something I wouldn't do if I owned the home as the capital gains exemption can be clawed back by CRA. So, I'm paying after tax income for a home similar to what a large one bedroom condominium would rent for. I walk my daughter to school and walk her home every day, because I've been able to reduce my work load, something I could not do if we had a big mortgage where 30 or 40 percent of our salaries were needed for debt servicing.
I've been very lucky to spend so much time in these very precious beginning years of my daughters life, something my dad could not do with me as he owned a mortgage back then.
When she's a little older, I'll go back to 60 hour work weeks or maybe I'll just have my wife take on a second job. Maybe we will own a house someday - or maybe we won't. Today it just makes so much more economic and personal sense to rent.
A house is just a thing of brick and mortar, its the people that make it a home.
Re unrealistic sellers. One thing to try is writing a letter to the seller explaining in detail why the price is too high. The Realtor, frustrated as you, may show this to the buyer and it might kick them into moving the price. A brief but poignant letter.
Blue sky thought time...
@a simple man, when you say things are accelerating, just remember to state the direction. These days, in Vancouver, "accelerating" means rising, not falling, prices. Congrats Victoria, on hopefully keeping on the path returning to normalcy.
But my definition of a financial investment is something that I expect to appreciate in value and that I expect to sell to realize that appreciation
So does just about everyone else, and you're all wrong.
You don't understand the difference between investment and speculation, which is the #1 problem in economic literacy today.
A GIC is a financial investment. Start from there.
@ jesse - accelerating the number of listings, not decelerating. I agree that the populace here seems more in line with reality than Vancouver - not much more, but a little.
@ JJ - in your description of your life I feel like you are talking about mine (renting, home office, walk kids to and from school, massive quality of life, lots of rental freedom, etc) - we have a lot in common - I think I have few more kids, though.
My quality of life has never been higher, and I have owned three houses, one designed from the ground up as our "dream" house. When we left it we said we were trading our dream house for our dream life. So far its worked out. Renting can be blissful - if you rent the right place.
"I have all of life's treasures,
And they are fine and they are good
They remind me that houses,
Are just made of wood
What makes a house grand,
Ain't the roof or the doors
If there's love in a house,
It's a palace for sure."
- Tom Waits, House Where Nobody Lives
The dead zone in sales did seem to be more of a blip though. 4 sales thurs and 5 on Friday under 550k. That makes for a pretty normal week.
Wow, I was really surprised to see the Oak Bay house on Sunset sell, and for $950,000! Bought in Feb of last year for $825,000 - looks like a flip. Are people in Victoria still buying and flipping houses?? I can't believe they are still able to do that! To be honest, from the pictures, it didn't look like Sunset had a lot of curb appeal for that price.
SJ - I agree - the Sunset sale shocked me a bit as well. Didn't look like a million dollar house - but after fees and house cost, it will be that.
I don't think Sunset was a flip. I looked at it last year when it was listed for 799,000. It was very nice, small, but nice. All the new owners seem to have done is some work to the exterior. The images from inside look exactly as it was before. Definitely not a million dollar house in my mind. This market is crazy. And depressing.
Definitely a crazy cat lady price for that property. The typical home in that neighborhood has been $730,000 over the last year. But that's for just a well kept home with only some updating. At a shade under a million, I would have expected good water views at that price.
Probably at least a hundred grand to high, even in the current market. This may just truly be, the last home this person will ever own.
Monday, March 28, 2011 8:00am:
MTD March
2011 2010
Net Unconditional Sales: 544 789
New Listings: 1,262 1,719
Active Listings: 3,902 3,712
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
Looks like lower sales and higher inventory than last year at this time. A worse year than last year would be a RE disaster.
Well it appears that our perception is right, and wrong. Sales are showing a definite slow down with only 106 this week, but new listings are also slowing down with only 275 new this week.
Yet in my price range it does appear that I am seeing more listings....
Yet...a lot of properties matching my criteria are selling. And many of them are still selling over asking - even after sitting on the market for a long time.
Sidney, is a lovely little town, snuggled between Saanich peninsula and Haro Strait. While not quite a mecca for the rich retirement crowd, it did have its share of H.A.M. (Hot American Market) where you could have bought a condominium with an unobstructed easterly water view of the strait, and be within walker distance to the shops for $948,000 in the last week.
Which is far better than the previous owners who bought when the building was new in August 2007 for a little bit over $1,050,000.
Now, this property was bought for speculation because these savvy Beverly Hills investors quickly put the condo back on the market for $1,429,000.
And they waited to cash in on the property ladder. Four years in payments and taxes, and a rising Canuck buck later they have sold.
Just another chapter in the story of HAM or how arrive in Victoria with a $60,000 car and leave in a $400,000 bus.
omc and Waiting - I do agree that there seems to be a greater number of listings in Oak Bay than in the first part of the month. The sales have also puzzled me. But I think some of the sales were spurred on by the rule change - I guess we will wait and see.
I am comfortable renting until things change. I am ready for a bit of a wait.
A little trip back along memory lane. Back, back we go to 2003 to the complex, in my opininon, that was the first to push prices higher in Victoria.
SHOAL POINT at 21 Dallas Road. Stone Gargoyles and a concierge to keep the dregs of society out. An edifice built to HAM.
Today we have a re-sale for $430,000 that was purchase at the beginning of the run up in prices for $284,000. An increase of 51% over eight years of price increases. At a time when mainstream condos have doubled in value.
So, its not always a good idea to be the first in a new high end complex either it be Shoal Point or Bear Mountain.
Although its very early to tell. The March 18, mortgage rules do not appear to have had much of an impact on the overall median price, but the volume of sales appear to have significantly dropped off. The drop in sales being mostly felt in the Westshore and Saanich Peninsula districts.
Irrational as it seems, the detached home market appears to have far fewer sales at
slightly higher prices.
That's damn good marketing on the part of the agents.
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