Friday, April 1, 2011

Sales fall 21%, inventory up significantly in March

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.

March 2011 (percent change from 2010 in brackets)
Net Unconditional Sales: 622 (-21%)
New Listings: 1,501 (-13%)
Active Listings: 4,100 (+9.5%)
Sales to new listings ratio: 41%
Sales to active listings ratio: 15% or 6.6 MOI

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

Prepare for revised BCREA sales volumes forecasts soon. I have no idea how they think that sales volumes will increase from 2010 when the first three months of 2011 have shown a 20% declining trend.

If the mortgage rule changes indeed brought buyers forward (and it looks likethey may have slightly given the front-loaded sales volume in March) it didn't bring many. Are buyers exhausted, priced out or have Victorians finally figured out that paying $400K for a 2-bedroom crack shack on Burnside isn't a prudent financial decision? 

How does March 2011 stack up against the previous decade?


So why aren't prices falling yet? The trend is towards an over hang of inventory and a lack of sales volume. We're not into the trend long enough to see price pressure yet.

68 comments:

a simple man said...

Is this ***the start***, or just a normal monthly variation?

Just Jack said...

Say you're living in Port Renfrew and you notice that a large portion of the town has for sale signs. The chances are excellent that you will be the only bidder for a home.

So what do you bid?


Well here is a story of a house on Tsonquoa that was bought 5 years ago in February 2006 for $250,000.

The home had some updating done to the wiring, roof, fence and plumbing and was put back up on the market (2.5 years ago) in August 2008 for $330,000

The price was reduced 1.5 years ago to $299,900

And this week the home sold for around $175,000. Probably because it was cheaper to buy the house than it was to rent the home.

But you laugh, and say that's Port Renfrew not Victoria.

But when it happens in Victoria, people in Vancouver will laugh and say that's Victoria not Vancouver.

Meanwhile, the fella in Port Renfrew will make a couple of extra payments and pay off his mortgage 10 to 20 years sooner than people in Victoria and Vancouver. Who's laughing now.

omc said...

My PCS shows the biggest price corrector to be the Gordon Head box with a basemaent suite. These are, IMO, among the most overpriced homes on the market. They were supported by those who cannot afford to buy a home and pushed it to the max, but could make ends meet with the suite income. They can afford 7% less now.


Do I get a free realtors licence again? If you look it up you will see I predicted 620 sales early in the month.

April will be a hard one to call as there were alot of listings last year and moderated sales already. Also, as Marko also said, there is garbage on the market. What makes it garbage though is that it is so overpriced.

I will make one prediction; simple man will buy his dream house on St Anne this month ;)

a simple man said...

omc - I just spit my coffee on my keyboard - there is a better chance you will see me on the meridian of Blanshard by Mayfair Mall with a Northface Backpack on my back that I just rolled in mud begging for change.

The big difference being that at the end of the year I may be $1000 ahead for begging on the meridian compared to about $200,000 down if I bought the St Anne greater fool trap.

Leo S said...

So what will be the headline for this month's VREB stats? Maybe they will stay the course and write "Real estate sales increase in March" :)

Waiting said...

@leo Probably!
I've seen 5 new listings this morning (all ridiculous prices) and no sales in 3 days on my pcs.

Just Jack said...

So what can we learn from Port Renfrew.


Quite a bit, especially if you live in Bear Mountain where there are close to 60 homes for sale and only 4 sold last month.

So could we see prices roll back to the year 2000 or 2001 levels, like Port Renfrew? Well to be fair, Port Renfrew is a special case as only one or two houses a year sell as opposed to Bear Mountain that had 84 sales in the last year.

But back in 2006, the seller of the Port Renfrew home may have thought the same thing. Because car dealers were buying up acreage and the talk in the town was how H.A.M. (hot american market) was buying up all the properties as Port Renfrew was going to become Victoria's Tofino with storm watching, surfing, fishing. And how the locals were priced out of the market forever.

And the pendulum swings.

a simple man said...

VREB release:

"The number of property sales throughout Greater Victoria rose in March for the second consecutive month while prices for all major property types registered modest increases. A total of 622 homes and other properties sold in March through the Victoria Real Estate Board’s Multiple listing Service® (MLS®), up from the 488 sales in February. There were 789 sales in March of last year.

Victoria Real Estate Board President, Dennis Fimrite, commented that the increase in sales last month, coupled with stable prices, shows continued consumer confidence in the market. "The latest figures offer further evidence of the return to balanced market conditions. There will always be month-to-month fluctuations in both sales and prices but barring any unforeseen developments we anticipate continued stability in the market in the coming months." Fimrite added that the number of properties available for sale rose at the end of last month, "It is usual for more people to consider putting their homes up for sale as we head into spring and summer." There were 4,100 properties available for sale at the end of March - up from 3,714 properties available at the end of February. Inventory levels are currently ten per cent higher than a year ago."

Just Jack said...

Lucky for Sooke, a 1,000,000 dollar waterfront property has recently sold in Whiffen Spit, that should help some of the monthly totals.

Of course this property has been listed for a long time, since it was bought 10 years ago in 2001 for $835,000. At one time the property was listed as high as $1,925,000. With few buyers, its seems the best the property could return is the rate of inflation.

Just Jack said...

Are prospective buyers smarter and better informed?

The tale of two cities.
Esquimalt and Victoria

Two recent sales, both listed for the same amount of time, sold at the same time and sold within $30,000 of each other.

MLS 290311 and 289850

Maybe its the water in Esquimalt.

Just Jack said...

And then there's Rockland. A very pretty, prestigious neighborhood of amiable people who know what kind of wine to serve with Russian Sturgeon eggs.

The blinders are on thick here. A home on Regents that sold 12 years ago for $325,000, re-sales today for $860,000. Ooops, there goes the kid's inheritance. From riches to rags in two generations.

....Colona Red - gallon size

Waiting said...

I saw that house on Regents sold too. Huge price and who wants to live at the base of the biggest cellular tower in Victoria? I might choose to reside under powerline before a cell tower!

Just Jack said...

13 sales last month in Gordon at a median price of $610,000. There were also 13 sales last year in March with a median price of $633,000.

In the Core municipalities there were 178 house sales at a median price of $602,250 last month and in March of 2010 it was 214 sales at $613,500.

The Western communities languished with only 80 sales last month with the typical home selling for $480,000. Last year 111 houses sold at a mid-point of $513,000.

That leaves the Saanich Peninsula with 40 sales at a median of $698,750 in comparison to last year with 58 sales at $598,500. This years numbers being skewed by a half dozen million plus sales over a small sample size.

And that's the first quarter of the year.

The second quarter typically brings more sales but lower prices. And if the recent sales of the fringe properties are any indication of where the market is going, it will be a whopper of a second quarter.

Leo S said...

April will be a telling month. Have the mortgage changes triggered a slide, or is the current slowdown just a brief collective breather by buyers?

The average prices have been flat almost a year and a half now.. Teetering back and forth on the fence but still standing. On the one hand tightening credit is nudging it in the downward direction, while rising incomes are nudging it in the other direction.

And then there are the wrecking balls of consumer sentiment that could smash it into the next county. Will we be infected by Vancouver mania, or depressed by those chumps in Seattle?

omc said...

Carla is back at her crap again. Great "work" Carla!

bubonik said...

Long time lurker, First time poster

I really like reading this site, and the comments from you guys
could i have your honest opinion ?

we are going to look at some places tomorrow
288219
288218

besides the commute (sp?)
what else should we watch out for ?
if we even decide this is for us
if we do decide we like them
what's your thought on what we should bid ?

no saying i'll listen to you :)
but i would like to hear your thoughts

Cycle said...

Quote of the day:

“It’s going to be a fabulous year,” Sue Daniels, a managing broker at Pemberton Holmes real estate office said Friday.

Waiting said...

Unfortunately, a lot of people take the Times Colonist articles at face value and never do any more research. Unless this sort of misleading reporting ends I think the market will stay relatively stable.

Leo S said...

@omc
“It’s going to be a fabulous year”

“I don’t think we are going to see dramatic increases.”


Haha. Do they hear themselves speak?

more out-of-town buyers are showing up, particularly from Alberta, Ontario and China

Uh oh, those helicopters full of Chinese mainlanders overshot Vancouver and are now hovering over Victoria waiting to strike!

“We just saw a steady increase.”

Weekly sales of 119, 147, 172, 106. Which number does not fit the theory of steady increases?

omc said...

Don't forget the staggering 78 sales from first thing monday until Thursday night. This is almost an entire week.

omc said...

bubonik,

Not all of us are bears, in fact many of us are just waiting a bit for things to settle before buying. What you will find is that none of us would suggest you buy in Sooke or the western communities. If you do some research you will find that the outlying areas are far more susceptible to falling prices in the event of a downturn.

a simple man said...

unless your work is out there, don't move out there. Further, when there is a decline, these places will be hit first and hit hard (already seeing decreases, I believe).

Introvert said...

April will be a telling month.

Yes, and that's what lots of commenters here said about March, and February, and January, and December... Did anything really notable happen in those "telling" months?

It's always the next month that is going to be so interesting, isn't it?

At the end of April, I look forward to reading how important May is going to be!

Leo S said...

Yes, and that's what lots of commenters here said about March, and February, and January, and December

Lots of commenters? For example?

If they said it about March they were right. The sales drop after the 18th has been quite surprisingly sharp. Whether it sticks around is another thing.

I don't recall anyone saying that about Feb or Jan.

a simple man said...

This month will be telling.

Glad you are still around, Introvert.

Watching and waiting said...

is it me or is this a re-list from last summer and for more?

http://victoria.en.craigslist.ca/reb/2299812478.html

Be interesting to see what it sells for given the recent sales in this area ... if they keep it the market that is ...

Marko said...

Was at Esquimalt Municipal Hall doing some business today and found out that with any new permits on homes built before 1990 Esquimalt will be requiring an environmental report, courtesy of WCB, before issuing the permit.

$6,000 to reno a bathroom just became $10,000.

Great! I also think if you want to reno a bathroom your 1955 home needs to be brought up to 2006 building code, the entire house that is..........*sarcasm.*

I have a gut feeling more and more renos will be being done on Saturdays and Sundays.

Animal Spirit said...

we're running around 30 sales a day for the first couple of weeks of the month, and then the last two weeks has been 20.

Only a drop of 33% and on fairly small numbers, so perhaps the change isn't significant. Then again, if the inventory trend continues with a compounded drop YOY in sales, some quite significant MOI could be seen.

April has 21 sales days. I'll go for 550 sales (slightly bigger drop than March to April last year), with an inventory of 25% higher than current, or 5125 homes on the market. This would be 9.3 months of inventory.

Isn't speculation fun! Yipee!

omc said...

Yup, watching and waiting that is a relist. They increased the price by $2k, and it has been on the market for a long time. Flippers, and a very bad value for the area.

Funny thing about real estate is that value can be set by one very uninformed/stupid person. that is not a $900k area, and that is house is lipstick on a pig.

omc said...

Intovert,

March was a very telling month. What did you miss? Sales fell of a cliff after the new rules came in. What else could we have asked for? Prices will probably start getting a bit of pressure in the next month. That will also be telling.

Animal Spirit said...

There's an error on the VREB stats - condos for other areas: upisland and waterfront are duplicated, with prices of 28.5 for everything. The sales stats for houses - other areas also look really suspect numerically.

Hopefully the VREB stats report doesn't contain more bugs - likely is from a code error.

Introvert said...

Prices will probably start getting a bit of pressure in the next month.

OK, omc, let's just keep looking ahead! April sure is going to be an important month!

Leo S said...

@Introvert

Where else is there to look aside from ahead? Better than your "it's different here" navel gazing that's for sure.

Leo S said...

Also, it's April. Double Agent should be returning from the sunshine soon. Come back, we miss the graphs!

Leo S said...

I mean, we also love you for you, not just your data :)

omc said...

ok introvert, lets start looking back. March sure was an important month!

a simple man said...

Introvert - what is your take on the current RE market and where do you see it going in the next year?

Nancy said...

Nothing over $1 million is selling. They are coming on the market at least 2 per day. I have the private client listing service from $500,000 to whatever.

a simple man said...

I like to think that is because people that can afford a $1M property usually know a thing or two about financial matters and know now is the time to sell and reap the rewards at the top...they now to buy low, sell high and are acting in it.

Marko said...

Talk about crazy busy at a couple of open houses in Gordon Head I checked out today.

a simple man said...

One thing I learned from selling our homes - the number of people at an open house rarely means anything other than it was a nice day. If I am a serious buyer, I never go to an open house to form an opinion.

I heard form a few realtor friends that open houses are more about recruiting new clients.

I am going to see the Plymouth house tomorrow, but have absolutely no intention of buying it at $900K.

Waiting said...

@ a simple man Enjoy the Plymouth house. It is a disaster IMO. One of the door frames (into the family room area I believe) is so low my husband couldn't get through it with out ducking, the upstairs hallway is like a roller coaster and the finishing up basically consists of a coat of paint over old trim, etc. I found it to be very poorly finished. At about $300k less I might be interested.

a simple man said...

thanks waiting - I like going to open houses as they provide me a free education as to what to expect for housing here. Its like studying for an exam.

I look forward to the viewing with your tips in mind.

PS - no good rentals that I have heard of, but I am still watching for you.

Animal Spirit said...

Five open houses today:
1 - Chaucer - good well maintained house that will likely sell over asking in a bidding war. A few people looking
2 - Haultain - weird front suite put in, excellent kitchen but for some reason the place freaked me out. Tons of people viewing. Obnoxious Remax agent wasn't letting people go to the backyard - sellers should fire her on the spot.
3 - Scott (yellow one). Nice on the top, well decorated. Horrendous mold and water problem in the basement. Feel sorry for whoever buys it. A few people looking through.
4 - Cedar Hill. Very lonely agent in a tired 60's box that could use a good family to update it. Very steep lot behind.
5 - Somerset. Another very lonely agent in a 1920's character house that has been illegally suited below an hardly touched above. An inspection could be a nightmare. Sitting empty as well.

Anyone else look at Chaucer?

Introvert said...

Introvert - what is your take on the current RE market and where do you see it going in the next year?

a simple man, I think the current real estate market is fine right now. Prices are declining slowly, but I don't predict a snowball effect culminating in a market crash. I think the market is in the midst of a correction, which is healthy for us. Not sure how much it will correct or how fast, but I doubt either will be drastic.

That's my analysis because you asked for it. For me, day to day, I don't really care what happens to the market. I'll start caring 25 or 30 years from now, when I go to sell my house. Until then, the market can fluctuate all it wants.

omc said...

How about Uplands Waiting?

a simple man said...

Introvert - thanks for your take - I appreciate your willingness to share your position. One thing I do agree with you is that if you are happy with your home and intend to sell it in 25-30 years it matter little what is going on right now.

Some would say sell high (now?) and buy low (later?), but there is something also to be said for being stable in a home and neighbourhood you enjoy - especially if you have kids.

If you have that, with reasonable payments and good equity in the home, this is a understandable position.

have a great Sunday, Introvert - and everyone else.

I started with a walk along Willows beach this morning just after sunrise - we live an a beautiful place.

Al said...

You are right a simple man, Victoria is truly a beautiful place.

We had two long driving trips to south USA last year, one time along coastal hwy 101. Scenery wise, nothing compare to here until you get into CA, and we do feel really fortunate.

So the house price should drop, slowly or fast, but unless a big earthquake happens here, the housing/land cost would always be above the national average level.

a simple man said...

@ Al - I agree that housing cost here should be above the national average - not because of any form of industry or job prospects here, but simply because of the climate and scenery. Opposite of Fort Mac.

Bob Loblaw said...

A friendly mathematical example for everyone..

If your $600,000 Victoria house were to luckily only correct 10% to $540,000 by 2015..

Meanwhile your bowl of oatmeal rises from $1 to $2 per bowl..

You 'real'ly lost over half your homes value by 2015 (..not 10% like many will believe).

In other words, be nice to your next door neighbour who sells for $600,000 this month and buys oat futures. For they may well be twice as wealthy as you in 2015 based on their present decision.

omc said...

I'd say you are right Al, about the house prices being higher than national averages. I have, however, found some pretty spectacular places in Oregon and Washington state.

a simple man said...

Plymouth house update: You were right on all your points, Waiting. I felt off balance walking upstairs - it was like a carnival house.

Once I heard that the "agents" were flippers, I knew everything I needed to know.

Note - do not buy a flipped house - do the renos you want yourself and get exactly what you want for far cheaper.

Marko said...

I don't think renos will be for the faint hearted going forward. A lot of people will be facing $10,000 - $20,000 unexpected abatement bills before the reno even starts.

My old man is a builder and it was a huge pain to reno his own personal house. I can't even imagen the fun for the lay person.

a simple man said...

Hey Marko - I do not condone most people doing their own renos - rather, them hiring true professional trades to work with them to design and then implement their needs. You will likely pay less than the flip house, get exactly what you want and know that there is quality in the things you can't see.

a simple man said...

I suspect you are referring to mostly asbestos abatement? The end consumer will end up paying for it anyway, just not with the 50% upcharge from the flippers.

Renoing is a pain in the butt, and getting pros to manage and conduct the work is worth the money. My point is to cut out the middle man (or woman, as it was on Plymouth Dr). A great general contractor will save you money and make sure the job is done right.

omc said...

I used to work in construction and have 3 separate trades tickets. NEVER BUY FROM A FLIPPER!!!! The stuff is done as cheaply as possible and major work is usually not done. You pay for a fully redone house, but mostly end up paying big money for a a paint job, cheap kitchen and some staging. Lipstick on a pig.

There are no houses of any level of quality in simple man`s, waiting`s and my own price level and area. All flippers or garbage. It would be nice to see a few decent homes out there.

Waiting said...

@OMC We did look at the uplands house actually. It is HUGE. Way bigger than we need and isn't in great condition. The rental agent said it sold last year to a couple in Alberta who are moving here in 3-5 years and intend to reno it then so they wouldn't give it so much as a coat of paint. At $2600 I think I can find something I like better or would just suck it up and stay where I am as it is way less than that!

@a simple man Glad to hear you agreed with my take on Plymouth. I actually like that area well enough, but that house is terrible value in my opinion.

There was an interesting article that came out a few months back which predicted that if OB legalized suites that the upper Henderson area would become the 'university ghetto'. Just something to think about...

We've almost come back around to thinking about Broadmead/Cordova. Any thoughts on the area? Know anyone who likes it? Doesn't like it?

Just Jack said...

I could never live in Broadmead. Too restrictive and I'm too friendly to live in a neighbourhood where you leave your house from your garage/driveway and enter back the same way never seeing or talking to any neighbours. Also, big 90s homes are not my style. I have some friends who love it there though.

S2

omc said...

waiting - go by that area in the morning. It is already the university ghetto, and should be way cheaper than other areas. Already LOTS of suites, students sitting on couches out front drinking beer etc.

Deanna said...

Huh. I have friends who moved to Broadmead last year. They love their neighbours. The neighbours all dropped by shortly after moving there to say welcome, some will come and help with yard work if they see you out there, have helped with reno dump runs, and have been known to bear gifts of beer. My friends couldn't be happier with their neighbours, especially after out of the Mayfair area.

omc said...

Waiting, I would be glad to move to those areas. It is no further for me for work, and some of those 60s and 70s architecturally designed homes are amazing. They just need some updating, but are far better homes to start with. Schools are decent.

Wife won't consider it though.

a simple man said...

Waiting - we nixed those areas as we felt we would be driving all of the time. Broadmead can be very dark as well. In this climate I try to choose housing, lots and furniture that all bring in light - we find it makes a huge difference.

Waiting said...

Thanks! We wouldn't consider any of the dark streets as I know that Saanich has really strict regulations around cutting douglas firs. There are some pockets that are quite bright though. There are some heavily treed areas in OB too that we would avoid as OB won't let you so much as limb an oak. Driving is a concern....but we do like some of the homes out there. Maybe I'll look for a rental out there and see if we mind the driving.

Marko said...

Monday, April 4, 2011 8:00am:

MTD April
2011 2010
Net Unconditional Sales: 47 756
New Listings: 135 1,783
Active Listings: 3,925 4,229

Please Note

•Left Column: stats so far this month
•Right Column: stats for the entire month from last year

a simple man said...

@ Waiting - that is a good philosophy and exactly what we have done - try out a neighbourhood renting - it is far, far easier and cheaper than when owning and it allows you to "try before you buy".

I know exactly what you mean about some streets on OB - the Estevan block between Caddy Bay and Musgrave always seems dark to me, even on the sunniest days. To us, a south facing yard is essential, and my wife being a prairie girls, feels twitchy when she can't see a lot of open sky - she pushed very, very hard for a home on the Henderson Slope facing the Olympic Mountains.

a simple man said...

waiting - if you act quick you can get 986 Gloria Pl for $86,300 before the agent notices his/her mistake in the price change.

Nampa said...

Hey Everyone:

What are your thoughts on South Oak Bay? Will we see prices drop there? Everyone wants to live there right?

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