Monday, March 21, 2011

Monday market update: it's a stalemate

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 March 2011 (last week's numbers in brackets)
Net Unconditional Sales: 438 (266) +172
New Listings: 987 (647) +340
Active Listings: 3,855 (3,638) +217
Weekly sales to new listings ratio: (51%)
Month-to-date sales to new listings ratio: 44% (41%)

March 2010 totals 
Net Unconditional Sales: 789
New Listings: 1,719
Active Listings: 3,712
Sales to new listings ratio: 46%
Sales to active listings ratio: 21% or 4.7 MOI 

Listings should be piling on this time of year. They're not. At the current rate, with only 10 days left in the month, we'll be lucky to see 1400 new listings on the month. That's a 15% decline from March 2010. If you're thinking that means prices will rise, think again. Buyers are even less active in the market than sellers, with March 2011 sales on pace to decline some 20% from March 2010.

One thing's for sure: the VREB is well off the pace necessary to support their rising sales volume thesis for Victoria's market in 2011 when compared to a "dismal" 2010. Lucky for those who can't fathom falling prices, the sellers are on strike too.

It will be interesting to see if sales volume can keep pace with the first 18 days of March for the last 13. I'm willing to wager they won't. I think this market will be hard pressed to see 620 sales by month end. Prices will be flat, which equals plus or minus 3% in current sales volumes.

Unless there's a rush for the exits, likely caused by a black swan event, 2011 looks like a whole lot of no-change for the Victoria market. Now more than anytime in the past 5 years, if you're buying, you'd better be buying the home you're buying for the long term. If you think you can live in a condo for the next two years and trade up to a house.... good luck, you'll need it.

38 comments:

Leo S said...

@KateandJosh

SFH 550k to 900k

Not quite the same level of charts, but the basic data is all there. Average Price/Assessment in chart 1.

omc said...

It was my impression that last year we had a rush to list before the spring, as many predicted price drops. This year seems more normal to me with the listings coming on later. My PCS was very busy today.

Animal Spirit said...

perhaps the issue is that people haven't felt that spring will arrive yet.

once the warm days arrive, the flowers blossom, the maple sap runs and people are bright and cheery, look for the annual sprouting of signs on the lawns of oak bay, followed by protests that the signs ruin the neigbourhood and that t-ball should only be played in Langford, but not in Fairfield where the gentrified masses live.

a simple man said...

come on listings - time to pick up the pace! I have been noticing more this past week or so. Still insane pricing, though, on a lot of them.

Mindset said...

Wonder whats happening with rental units during all of this stalemate. I was having a chat with a lady from a rental company in town, and she said it is crazy how much there is to rent right now.

If there are a lot more rentals all of the sudden, then that is probably where the inventory is going, and although it takes the immediate pain of having to sell away, the pain comes back pretty quick with a couple of months of no rent, or a bad renter or two.

Sudden Valley said...

We've been looking for many months now. We are trying to get a nice upper suite but most seem to be asking too much.

Some friends of ours just bought a place with a lower suite so they put it on craig's for $760 then raised it to $850 due to all the attention it got. The next day someone offered them $900 on the spot to secure it. It's a small place (1 bedroom).

We are paying $1100 for:
- 1000 sq/feet
- 1990's house
- excellent neighbourhood
- all included
- Excellent landlords
- zero maintenance

It's a lower suite so not amazing but it works for now. We are soooo tempted to buy something new that we can call our own but I feel this market can't sustain itself for much longer. Just watching the signs.

a simple man said...

Sudden Valley - wait, be patient. Owning is not all it is cracked up to be. Your rental is still your own place to live.

Focus on your quality of life while you rent - you will find that you actually can! Honestly, we are far happier as a family than we have ever been and we had previously built and lived in our "dream house". Renting is really a lot of freedom - it has been stigmatized a lot if North America, but it really shouldn't be.

Al said...

Oak Bay: Best-dressd protesters

Marko said...

Density is slowly coming.

Chickinvic said...

You should see the thread on KIV "Fairfield 3 houses on my street for sale". Wow, talk about some deluded people. According to some $850K would be a great deal for a young family - because it's already renovated you seea:) The person posting is hoping for young families to move in. Awww - isn't that sweet. I forsee many bankruptcies in Victoria's future.

Chickinvic said...

Sorry about the spelling errors in my prior post. Wish I could edit them out!

Leo S said...

That's a great picture of the protesters. I wonder what she's saying... What do you think, first ever HHV caption contest?

Just Jack said...

That area in Fairfield, Warren Garden, is a strange one.

When I hear the name Fairfield, I think of tree lined streets, character homes, retirees with motor walkers and little old ladies with too many cats.

I don't think of 1960's basement homes that could as well be in Glanford, Saxe Point or Gordon Head. This small subgroup of Fairfield is in architectural contrast with the surrounding areas. And in my view - a bit of a disappointment. And a definite no-no if your buying a home for future appreciation. Because it will under perform the surrounding neighborhoods of character homes.

Because the house screams middle income, but the location say upper income. And it's more important for upper income people to "look" upper income - and that's a character home not a basement home that was built for economy and not style.

That's why you find the recent sale at the upper end of middle income families at $665K. But down the street is a character style 1.5 story home that sold $950,000. After all, its more important to look rich - than be rich.

a simple man said...

a lot of people on that site are deluded. When I looked at the house for $850K I was stunned - I expected a Fairfield character mansion and saw a small anywhere-in-BC bungalow. I agree with JJ.

Chickinvic said...

You are right. I just looked at the listing for one of them. Meh. Not very "Fairfield" looking to me either. It was the bargain one for $739K, lol.

a simple man said...

PS - I feel the same way about the Estevan area and its prices for small bungalows - insanity. Yesterday $790K for a 1100 sq ft (upstairs) bungalow that needs updating - also a controversial suite, that if a neighborer complains, is gone...and so is your supplemental income.

wally said...

BC retailers see biggest decline

I guess when 2/3rds of the average income goes to shelter, somethings got to give. The article claims it was unexpected, *sigh*

Just Jack said...

The one that sold for $739K had a 1,000 square foot garage.

Garages can be expensive to build if you use a builder. Something like $30,000 in materials and $70,000 in labor.

So good for a mechanic or a partsman restoring cars. But again, a property that appeals to a limited buyer. And in a falling market the contributory value of the garage to the property as a whole could go to zero. A property that would get slaughtered if it went into foreclosure.

wally said...

I enjoyed this American’s line of reasoning

never again

Some of you were mentioning vacancy rates. I don’t think I’ve seen vacancies this high in at least the last 10 years, but it’s hard to know for sure since Craigslist, et al didn’t exist back then. I don't find the CMHC surveys very accurate.

Just Jack said...

High vacancy rates can crash a market. A lot of people have ridden the real estate roller coaster using suite income to leverage their purchase. And the banks, brokers and high ratio underwriters have been more than willing to make it a heck of a lot easier - until recently.

I think most of the vacancies are due to people getting into the market. This would have the affect of raising the long term vacancy rate. It used to be half a percent in Victoria and has probably quadrupled since then.

The wild card is short term fluctuations. Like when all those Alberta or rural town BC constructions workers who are renting now go back home to find work.

My thoughts have always been that you should buy rental properties when the vacancy rate is dropping not rising.

Just Jack said...

Having said that vacancy rates can hurt a market, I thought I would look at how many homes are available for immediate occupancy (ie vacant) to the total stock of detached homes and condominiums

113 homes vacant out of 1,288 for sale or 8.8 percent.

239 condos vacant out of 971 for sale or 25%

In the overall market for all types of ownership, there are 361 homes out of 2,203 vacant or 16 percent. In Florida, I believe they are 20 vacant out of every 100 listed.

So, you can add that to CMHC's numbers - and it will get you a cup of luke warm coffee.

a simple man said...

Lunacy...the hose on Musgrave that has been for sale off and on for a year just sold for $675K.

Needed a LOT of work - work I would do with an excavator. It was priced at $669K for quite some time and then mysteriously sold in the past few days for above asking.

See what little changes to mortgage rule can do to cause panic buying. Scary to think that little of a change can cause people to panic - if you are that close to the margin, don't go all in.

I hope they have enough left over for the snorkel.

Chickinvic said...

Trying to suggest that current house prices are ridiculous and set to fall is like poking a stick around in a beehive on the KIV site. The lunacy is unbelievable.

A&J said...

Wonder whats happening with rental units during all of this stalemate. I was having a chat with a lady from a rental company in town, and she said it is crazy how much there is to rent right now.

My totally unscientific method of measurement is Craigslist. For the last 5 years we have been renting 3 bed houses/condo's. The listings have jumped from less than 75 available 3 bed units to over 450 today!

There is more selection now than ever and renters should be driving a hard bargain. Unless you LOVE the place try not to lease. Bargain down the monthly rent if you do lease. Ask for extra's (i.e. lawn care, heat, hydro, water, garbage etc) or bargain down the rent some more. And BTW watch out for those old drafty houses -- they will eat you in heating costs : )

Happy renting! You'll sleep easy and wake up with money in your pocket.

A&J said...

Oh -- and it hasn't been unusual to see the numbers of 3 bed units increase a bit in the spring as the students move out of town for the summer.

But availability hasn't really been dropping in the fall that much if at all.

I really wished I had taken the time over the last five years to chart the Cragslist units available. It would have made for a nice graph.

reasonfirst said...

I was tracking 2 br rentals on Craigslist in "Fairfield" for a while but stopped about a year ago. Last March, average listings were just over thirty - today: 57.

Watching and waiting said...

Is this ad an anomaly or the first of many to come; a seller willing to finance a buyer.

http://www.usedvictoria.com/classified-ad/Character-home-for-sale_12178128

A simpleman: 2 months or so back, I attended the open house on that house on Musgrave. Agreed lunacy. A lot of homemade work-arounds and shoddy workmanship.The first thing I noticed was the paint job on the house with yellow as the main colour and the original white in between all the stucco texture.What really got me is the house had one shower for it's size with no bathroom on the lower floor unless you want to put in an Oak Bay special toilet ;raised one foot above the basement floor.

Sudden Valley said...

@Watching and Waiting..

"Upper Penthouse suite" lolz

Watching and waiting said...

sudden valley: gotta give the credit for wordsmithing ..lol ... like a house that overlooks panama flats: "seasonal waterviews"

yeah this house is a familiar sight at the NE corner of Bay and Cook. It's been up for sale off and on for the past year or two.

a simple man said...

Are we going here?

How can we not, perhaps is a better question.

---stirring nest---

KateandJosh said...

Thanks Leo S!!

Just Jack said...

Well, the City of Victoria hit the 100 detached home listing mark today.

So, in this quiet little hamlet of 83,000 soles, prices range from $355,000 to $3,000,000 over only 100 listings. But only about a third of those listings fall into what would be considered a typical Canadian home having between 1,500 to 2,500 square feet on a 4,000 to 8,000 square foot lot.

Most of those sales of typical homes happen in the Fernwood neighborhood at a median price of around $570,000 for the double income Victoria family that's making $90,000 a year

It takes generations for neighborhoods to change and millions of dollars of infrastructure improvements. A half dozen years of price increases has not made Fernwood anything more or any better than what it was before. A blue collar neighborhood with a lot of road pot holes.

The only things that has changed are the prices and how much people are indebted.

Just Jack said...

Chickinvic said...
Trying to suggest that current house prices are ridiculous and set to fall is like poking a stick around in a beehive on the KIV site. The lunacy is unbelievable


Well, since 2007 I have been on KIV saying prices are crazy and are going to fall and fall bad and they have only really gone up in that time so I look like the lunatic and they don't listen anymore. I mean, I wouldn't listen to me. :-) I appear to be so very wrong even though I know that only government intervention and skirting the rules has got us here today. Think about it this way, if it got nasty on the way up and it did imagine how nasty it is going to get on the way down. Especially, if you point out that it is on the way down. :-)

S2 (JJ's better half)

Sudden Valley said...

Dubai company abandons plan for $40 million downtown condo next to Capital 6 theatre. Site now back on the block.

I guess even the bottomless pockets of Dubai have holes. Canary in the coal mine?

http://www.timescolonist.com/entertainment/stage/Downtown+condo+site+block/4480189/story.html'>Full TC Article

Leo S said...

Could just be a blip but it is awful quiet so far this week...

SilverSurfer said...

Leo S,
Quiet? Maybe here, but not around the world:

1) US bombs Lybia
2) New Oil Spill in the gulf (100 miles x 10 miles), near BP site
3) Israel bombs Palistine
4) Palistine Bomb explodes in Israel bus
5) Portugal's minority government fails to pass the 4th Austerity budget (blocked by opposition party), so Prime minister will resign 2 years early (aka. government collapses).
6) Fukushima reactors are getting worse and worse by the day (despite MSM hope)
7) Tokyo radation levels increase significantly and water supply affected (over 9 Million people live in Tokyo).
8) Irish 10 year bonds spike above 10% (!!)
9) Egypt stock market cliff dives to the tune of -10% twice in a couple of days, triggering exchange circuit breakers.
10) Euribor rates jump after ECB rate warnings
11) Gold back to $1438 as Silver breaks $37.20... oh wait, that's good news for my future Victoria home downpayment :P

SilverSurfer

MC said...

Not to mention non-confidence in our gov't and upcoming election

a simple man said...

kate&josh...

Perhaps a question that needs to be asked - have you owned a house before?