Sales volume is slumping faster than a binge-drinking alcoholic with a 2-4 of whiskey. But all over Canada, the bubble-meter is bubbling. Note the absolute disconnect from sanity that is Vancouver. Where's Victoria in all this mess? We'd be second, right about where the "What now?" question gets asked on the chart.
Read the analysis here, which includes this fine quote: "market risk is palpable." Ya think?
Full size chart here.
* no it's not
173 comments:
From previous:
Once again, it goes both ways. I bought a unit at the834 that is worth about 30-35k more now then what I paid for it 2 years ago with only $9,800 deposit (that is a pretty huge return).
Two things:
1. That's the reward you get for assuming the risk of a pre-construction condo. Good on you, but it's not so much a reflection on the resale condo market.
2. It's not a return until you sell. So far it's only a potential return.
The perception seems to be that Canada somehow avoided the "Global economic crisis" and is now invinceable in all matters of the FIRE (financial-real estate) economy. In actual fact, since we always seem to be a couple of years behind the rest of the world, the rock bottom rates that slowed the crash elsewhere only drove our market to new highs.
I contend that Canada, and especially the west, may well be in a more dangerous dangerous position than the US or Ireland ever were. The numbers sure back that up.
When I look at the graph, I see that the cities, for the most part, stay in roughly the same percentages of each other - except Vancouver.
Before the run up in prices Vancouver was within 10 percent of Toronto prices, say $350,000 to $375,000 . Today that margin has increased to 50 percent or $600,000 to $900,000.
You wonder why someone would move to Vancouver and spend so high a portion of their disposable income on housing that they have little money left over for the things that make life enjoyable.
I can understand paying 10 percent more for not shoveling snow, but before I'd pay $300,000 more I'd buy a snow blower or go to Miami for the winter.
Victoria prices have traditionally been around half the price of Toronto and now they are about the same, so I'm betting that HAM is not a significant cause of high prices in Vancouver.
All I know is that there are a lot of people who are financially tapped out and it won't take much to sink this market. I'm seeing a lot of cheap BMW's for sale as the need for cash increases.
I think its because our politicians are smarter.
Nahhh, its just greed.
The bigger the market the bigger the fall. People have been moving up the price ladder and committing more and more of their disposable income to housing. Subsidizing their life styles with their home equity lines. Accumulating massive amounts of debt.
And then the pendulum swings back.
For 2 years I lived in a 10' x 8' dorm at TRU even had a hotplate, sink, and bar fridge.
When I worked at BC Childrens for 6 months I lived in a 410 sq/ft condo in Yaletown.
Great. When I was a student I lived in a tiny bedroom (probably less than 10x8') with a single bed that was too short for me, and a shared kitchen and bathroom. I survived. I think we all have stories like that from student days.
The big difference is that I was paying less than $250 in rent, and we're discussing paying on the order of $300,000 for a condo of about equal dimensions.
I bought a 533 sq/ft place at the 834. Moving in with my girlfriend and we are pretty damn excited to buy some furniture and make it our own.
Great. Moving is exciting. Get back to us when you've lived there for a year and tell us you're not wishing for more space.
When your young and moving in with your girlfriend it's exciting.
When your old with a spouse there's not a house big enough for the two of you.
Just Jack said: If real estate is so good of an investment, why do developers have to resort to deceptive advertising?
Why is everyones work so interesting on TV?
Why does that chubby average guy get the hot girl on sitcoms?
Why are so many econo-car commercials a hypnotic cool-tune cool-people drive under reflections of multi-colored city lights?
Why do 4 out of 5 dentists prefer Crest?
Or a little closer to home, why is absolutely everyone so happy in their family photos?
We are perception-sensitive animals living in an unbelievable 'age of persuasion' and I don't see this changing anytime soon. But we also live in the information age, and the ability for anyone to get a boatload of bad press from virtually anywhere is also not likely changing anytime soon.
Where deception borders on lies, just deploy information vehicles like this blog to point them out.
Speaking of which, anyone notice that wikileak on Canada's secret willingness to participate in the US war on IRAQ while publicly saying 'No Way'? Wow, if that's true, talk about deceptive. I don't know about everyone else, but I would love to see a wikileak or two on the 2008-2010 CMHC directives.
On the topic of the post graph, I have to say it (even although it aligns with those broader CREA statements that make me throw up a little every time I read them), but looking at places like Ottawa and Montreal, I don't see that much of a bubble.
And when you take Calgary wages and their stable oil-based economy into consideration, they also don't appear in that bad of shape.
I know this graph isn't comprehensive and contains a blend of data (median and average), but maybe the correction threat is only substantial in a few areas (like Vancouver, Victoria, Toronto)?
Thoughts/Comments?
For all the talk about "deceptive advertising", I think you've all taken JustJack's word before even bothering to examine that floor plan?
http://www.novavictoria.com/pdf/202-302BW.pdf
Not bang on, but looks pretty close to scale to me. It also doesn't claim it's a queen bed. There would be no issue with a double and bedside table in bedroom #2 (9'x10'6), and a queen with 2 bedside tables in the master (10'x12'9).
My previous house had a 2nd bedroom that was 10x11 and we had no problem fitting a queen bed in it - it didn't allow a lot of extra space, but the floor plan doesn't show any other furniture except for a bedside table.
The living room and bathrooms look to scale as well. It only shows a love seat, not a 3 seater couch.
Again: I don't know what anyone has to complain about in regards to this developer. I think it's crazy that people are paying those prices, but the bottom line is that they are, and full credit to the developer for that.
The living room is 7 feet wide. A basketball play could extend their arms and touch both walls.
The bedroom measurements include the closets.
And the listing does not say queen size beds, there could just be single beds with two very small pillows.
I am surprised that they put two bathtubs in the bathrooms. All you really need for the second bath was a toilet and sink with a stacking washer and dryer. The balcony may be included in the total area too. The entry is a bit tight too.
These are just plan renderings. Any buyer should ask to see the approved building plans to get accurate measurements. They have them - ask for them.
^^ Keep making comments in the wrong gmail account.
"The living room is 7 feet wide. A basketball play could extend their arms and touch both walls"
No, from wall to wall it is 9'6''
From window to dining area is 7'0''
"I am surprised that they put two bathtubs in the bathrooms."
I am not. Appeals to young professional who may want to rent out the spare bedroom.
Let the flaming start about how two people can't live in 642 sq/ft.
I am not. Appeals to young professional who may want to rent out the spare bedroom.
This statement says it all. So it's gotten to the point where real estate is so wildly overpriced that a young professional buying a bonsai apartment would want/need to rent out the second bedroom so they can bump elbows in the kitchen with a stranger?
Living the home owning dream!
Okay so the basketball player can sit in the living room and grab his milk off the dining room table. And every time you lean back on the dining room chair you change TV channels.
"Young professional" is a statement that is meaningless. What its trying to do is invoke a picture of youth, wealth and sophistication. Its like the pamphlets you see for Alaska cruises. Pictures of young people holding hands, dancing and laughing. When you get on the cruise its totally made up of over weight seniors who gorge themselves at the buffets and wear really bad bermuda shorts.
At one time if you wore a tie, you were a professional. But few people wear ties anymore. Cocaine dealers are professionals these days, as are the cops that chase them. I met a lot of professional women when I lived in the West End of Vancouver -but they didn't wear ties.
Maybe, our Mothers were right - it all comes down to wearing clean underwear. So all young people entering the building will be subject to having their gonches pulled.
Hey, you need some kind of test to determine who is and who is not a professional these days. So give someone a wedgie today. Believe me - they'll thank you for it later.
lolz @JustJack . Good post.
"The TC won't report the truth until the Globe and Mail breaks the story."
Isn't the TC a PostMedia (as in the National Post) publication? I rarely look through the Post, but I wonder what it's been reporting about real estate lately?...
Oh I see, the party moved on!
If real estate is so good of an investment, why do developers have to resort to deceptive advertising?
If real estate is such a good investment, why does a developer need to sell 90% of the units 3 years before they're built? Wouldn't they just sell the minimum, and hold the rest for later for easy mega profits?
As for those tiny 2B2B units... wow, they are tight! Going by my current accomodations, those room dimensions are basically the bare minimum for space you'd want to live in for a few years. As a single person. That second bedroom is basically a storage room/office/guest bedroom. I couldn't imagine sharing that space with another person, especially a stranger/roommate. There's just no room to share any of the spaces whatsoever. You're always bumping elbows and butts. Which I guess "young professionals" are into these days.
I live in a 3200 sq. ft. 4 bdr house in Abby. Wife + 2 kids.
642 sq. ft. 2bd 2bth?
Don't even want to imagine it!
Good luck, Marko.
Victoria market sounds like it's getting interesting.
So is Abbotsford. Pretty slow out here. Lots of choice and mortivated sellers.
I have some friends who are trying to move up and they have seen a lot that they like but no one wants to buy their house.
Drop the price I tell them.
But we want "what it's worth" they say.
Nothing funnier than people.
oops, typo.
That should be mortified.
:)
Anyone had a look of 3520 Upper Terr (mls 292903)? A house with good bones, but not so good location?
Thanks.
When you're buying in a pre-construction complex that is to be completed in three years, you are not buying at today's market value, you're buying at what the developer thinks the prices will be in three years from now.
Buying a pre-construction for a quick profit is a gamble, but the odds are very much in favor of the developer. I don't know why the average Joe buyer thinks he is outwitting the developer and will reap big rewards at the end of the construction.
You can't con another con artist.
Al,
As you say, not a good location. The address may say upper terrace, but that house is mainly on caddy bay road. That is a very busy, noisy street and is extremely over priced for that location (I would say over $100k). I once looked at a house a few doors down from that one (on caddy bay road) and was shocked at the road noise. The hill made the car engines have to work harder, and many motorists were going 60Km/hr.
The house next door is being flipped after an asthetique reno for not a whole bunch more. The house next door is also in a much better location.
I am not really following uplands closely as it isn't a family location, but I have heard developer/flipper friends talk of very high levels of speculation in that area. Be careful, and make sure you get a very full history of the property. Stay away from flips as they are basically rip offs. If the house has been bought/sold in the last 3 years, ask yourself why.
Lots of listings, lots of significant prices drops already this week.
Don't buy any time soon. The market is tipping after a long, flat price period.
I LOVE renting.
Buying a pre-construction for a quick profit is a gamble, but the odds are very much in favor of the developer.
Not in the last ~10 years.
Can we please move on from the 'I don't like how the Nova is advertising their tiny condos' argument? It's old. Yes we're all frustrated that house prices are so high, but Marko and the Nova aren't responsible for that.
Here:
Did anyone listen to Planet Money yesterday? Interviewed a behavioural economist from Chicago who ran trading experiments trying to recreate bubbles.
1: Turns out when you tell people there's a bubble the price goes up.
2: The more novice investors the more likely a bubble develops. I'm sure I'm oversimplifying, but I have to wonder about the parallels between what they were talking about on the podcast and first time homebuyers in Canada due to increased ability to borrow.
Dave3
The comments about pre-construction are false and awesome scare tactics.
In recent years people have been reading a little too much of "couple buys 562 sq/ft $370,000 pre-construction condo at Bear Mountain, now worth $220,000."
There was the whole fiasco with Reflections and a couple of other buildings as well. Yes, if you pay $370,000 in a wood frame building for a 1 bed 1 bath you will get hosed.
During the same time period when people were paying $370,000 on BM people were buying 2 bed 2 bath 850-1000 sq/ft condos at 630 Speed Ave. for 265-275k and flipping them 4-5 month later for 50k more.
WITHIN the building it is also critical to buy the right unit. My client paid 265k for a 2 bed 2 bath 1062 sq.ft unit on Speed and just sold it for 332k. There is another unit in there at 299k that has not sold. It is 844 sq.ft 2 bed 2 bath and pre-construction it went for 260k BEFORE my client bought his. It is important to do some analysis before jumping in such as price per sq/ft, oreintation, story, proximity to elevators, etc etc etc.
You can't just go out and buy a random pre-construction unit and hope for the best.
This summer I am going to pick up another pre-construction unit in a concrete building pending I see value (Jukebox, Mondrian or new Bayview Tower). Will keep you posted.
PS. I am at a bit of an advantage as I get 3.0% 100k + 1.5% balance off the price and the average Joe is typically not smart enough to call me to write up the contract and get 70% of the commission back.
@a simple man I HATE renting. But I still likely won't be buying any time soon. I'm still not convinced that renting is cheaper than purchasing here. Rents are crazy right now. I've looked at several rentals this month and unless I'm prepared to pay $2700 or higher I can't get anything I'm prepared to move to. For $2700 I can buy a pretty nice house. Certainly nicer than what I'd be renting for the same price. Because we have a good downpayment I'm looking at paying more in rent then I would pay in mortgage (even allowing for an increase in interest rates) for something not as nice as I would purchase. I do believe prices are on the decline so I want to wait but sometimes I question the logic of it all.
Thanks omc.
The house is definitely not a flip, but a bad location agreed.
Stand corrected in my post above....my client actually paid 275k (GST inclusive) and the 299k unit that is on sale right now went for 269.9k (GST inclusive) during pre-construction sales.
I was looking at the non-gst included numbers.
Thanks, Marko
Waiting... I too hate renting and sat out this market after selling at a large profit in 2006. It's been painful and I hope you don't go through the same as you wait it out. Good luck timing this crazy market!
Anyone have any thoughts on 1800 Fairfield? 6600 corner lot...open house this weekend.
The bears knew back then we were heading for a crash... it just hasn't happened in the past 5 years despite all the facts indicating a crash was imminent. There was no doubt about the future, just like now.
@ waiting. I understand that sometimes it feels that way - I guess I should have said that I love renting in a falling market. When I did an analysis last week, I was saving money each month by renting while my downpayment was growing and remaining untouched.
Remember that when you buy, it is with you also trading in your downpayment. I have not been at all aggressive with our downpayment so it is not earning nearly what it could - I may change that in the future as I am sure I could largely cover my rent with that alone.
Add in the savings for maintenance ($200/m), cheaper insurance (~$50/m), no property tax (~$300/m), etc and it gets even better for renting.
I am sorry you have not been able to find a good home - they exist - ours is pretty close to where you saw me, but more towards Willows, is clean, has a huge yard, garage, 4 bedrooms and is for less than you have seen. I continue to watch.
A number of rentals around me seem to be going on the market in a hurry...Harlow St isn't selling at that price and was a rental until this offer for sale - perhaps inquire?
Also, I suspect with the large number of vacant properties around and the lack of sales, many more rentals will be coming up as people have to rent.
@ EatMe - I have only been a "bear" for a little over a year and owned three homes before this.
I hate the "bear" tag. I prefer wise consumer.
A simple man: Who cares what term we use? "A person with a negative view of real estate" then. So anyone can be a "wise consumer"? I guess you can always figure out who those "wise consumers" were in hindsight...it's just hard to identify them in the present.
@ EatMe - I agree that labels often hurt more than help. And I also agree that "wise" is a subjective measure.
I am a consumer trying to get the best value for my dollar in the largest purchase I will likely ever make. If I am going to make a purchase that will cause me to work for years to pay off the resultant debt that I already paid a large portion of my life savings into, I am not going to do so without a lot of thought.
I want to buy a home, don't get me wrong, but not now.
Marko,
I would say for the location the price is too high. 2595 Musgrave just sold for very close to that, and was in a far better location. It is a much better looking house too.
Mind you, you would have the ability to add a coach house to the fairfield road house wouldn't you?
@Waiting, I've discovered that I quite like renting actually. We sold a house in Sooke in April and moving to a rented SFH in Victoria. It's relaxing to not worry about the housing market and home repairs, at least for a while.
Renting is a bit more expensive than buying would be right now, just because mortgage rates are currently low and our proceeds from the sale aren't earning much when invested conservatively. But the difference is small, especially when I factor in the monthly landscaping costs we were paying to keep the old place ready to sell. A small drop in prices would cover the gap.
The Fairfield property seems to be nicely priced for a home that has not been updated. It may have been to the home owners advantage to have updated and suited the home before putting the property on the market. But perhaps personal circumstances made this not possible.
The house is a starter/exit home. I would have thought that even at the original price the sellers would have had offers presented.
It's a bit of a tough sell, as it falls between the cracks for some target markets. Just a little too expensive for the professional house flipper. Too small in finished floor area for a middle income family, too costly for a first time house owner without a suite.
Then there is the competition. Lots of homes for sale that are a bit more expensive but don't need very much in updating and are pretty much "turn key" for middle income families.
I think its priced right, it just needs to be exposed for a longer time to find that buyer in its limited market. This may have been a good one to list at $499,900 to spark an auction environment and create excitement.
The buyer will probably be a single guy who just sold his condo on Speed avenue. He will be 27.5 years old, shaved head and a celtic ring tattoo on his right arm. He will be employed in the tech business, drive a leased vehicle probably black in color and likes to watch reality TV shows. He recently broke up with the girl he has dated for the last two years as she needed "to find" herself and he hopes that by buying this house she will come back to him.
Glad that one on Musgrave sold - the sellers were STRESSED. They bought another home before theirs was sold. Saw the owner throwing something at the house about a month ago in frustration.
Help! I am being buried on my PCS!
What is going on? The new listings and price changes are just surging.
This is going to have to trickle down to the lower end of the market soon. I know fernwood and gordon head boxes were holding still, but if the rest of the market is moving....
I'm glad to see the Musgrave property sell too.
Why, why would you paint a living room red? Lots of money spent on the home and I hope he came out okay on the sale.
Again this is a home, like the one on Fairfield, that fell in the market doldrums of real estate.
Like Marko said, you have to be wise when buying real estate.
I would also add, that you should always be thinking of the re-sale market. Who will the property appeal to when it comes time for you to sell. And that includes - not painting living room walls blood red.
Keep it clean, keep it neutral in colors. If its in an area of families, renovate with families in mind. If its in an area of older people, think of their needs such as ease of access. If your in a hip hop happening place of young professionals put up posters of Lady Ga Ga.
Thoughts on rentals for sub $1500/mo? I'm seeing a lot of poorly suited boxes out there, then a gap in price, then whole house rentals. I don't want to rent in an apartment building where it seems like 2 bedrooms go for around $1k/mo, but the equivalent suites look dark, outdated, and / or poorly renovated.
I guess what I want is that sweet deal people like a simple man have seemed to have found, but in my price range.
^^Dave3
OMC,
I am tracking houses in Saanich (east,west,central) from 390 to 620K. Today there are 177 listings and 79 (45%) have had one or more price reductions.
To me this says a market correction is underway!
With over 6 months of inventory in Victoria, I'm noticing condominium prices coming down at about 2 percent a month.
While the months of inventory for houses in the city is more balanced than condominiums, home prices are sliding as well. Not as much as condos, but the trend is still downward.
Now with the largest inventory of unsold properties in a decade, there is a lot more selection out there to buy. The problem isn't finding a home to buy - the problem is selling the one you're in.
Simple Man Said: I hate the "bear" tag. I prefer wise consumer.
I'm with you Simple man, I've made some real money off of real estate over the past decade (only because I sold it). I also lost money in the late 80s'/90s, and have seen personally how markets can turn.
But unlike so many I talk to today, even when I owned properties whose value doubled, I knew the good times couldn't last forever and didn't make emotional double-down 'bets' like it would.
There's nothing wrong with being a realist and almost every successful person I know can change their mind when they get new information....
I'll admit I'm 'bearis'h on the Victoria Market, but only because the information I am seeing suggests it. But this information also leads me to believe a 20-30% correction is about all we will see here. An 'end-of-times' RE crash, or a return to 1999 pricing is just as unlikely as the unprecendented 'nothing-but-good-times' RE market continuing the way that it has.
Marko, 1800 Fairfield sure had some quick price decreases. Down from 580k to 549k in 20 days and they are getting a new roof installed. Motivated? Antique grandmother furniture putting people off? One of those rare occurences that I may have suggested staging. I don't really care for staging as it is incredibly expensive. And nicer furniture won't hide the wood panelling...
Side note: Sold a house in Sidney last year that had wallpaper that imitated wood panelling. It took tackiness to a whole new level. The bedroom had brick imitation wallpaper.
Yesterday, I listed a house in Fernwood, 1750 Albert Ave, small old house on a small lot at $399,900. Steady stream of agents/buyers going through. It never ceases to amaze me how busy a house priced under 400k can be. Had a similar listing on Graham last year - sold for 392k and it was revolving door there too. The "get my first house under the Property Transfer Tax threshold" is still very much alive.
I know they won't want to hear this here but it is actually picking up out there, for houses at least. I think the May sales will be close to May 2010. Picking up from slow does not mean it is racing out there but it is more active in the single family home market, IMHO.
My buyers for a suited house in Saanich East are repeatedly getting beat out of properties they are interested in. By the time they react, usually 3 days into the listing, it already has an accepted offer. These are the nicer suited houses with 3 bedroom up and a one or two bed suite below.
On the flip side, I have a condo buyer and every time I book a viewing, the desperation is almost dripping off of the listing agents. Bring me an offer, we're motivated, blah, blah, blah... Still tough to sell those condos so that may keep this May's numbers down - we'll see...
I guess you can always figure out who those "wise consumers" were in hindsight...it's just hard to identify them in the present.
Yes! I want to underscore this very good point. One cannot be proved to be a "wise consumer" until after the fact.
And studious, strategic-minded individuals have no monopoly on the "wise consumer" category. For example, today's Mom and Pop who just sold their modest house in Vancouver for $1.5 million are also admitted to the rank of "wise consumer."
White flag up.
I am a renter. I have no debts in the world. I am free.
The suited home is a necessity. You just can't make it into a home without one. Or you have to get the house for under 400K. Of course that means places without suites are bypassed by prospective purchasers.
If the market were healthier you would still have buyers for homes with the ability to build a suite sell. But, without a suite, its tough.
Maybe that's why Fernwood and Fairfield have been doing a flip flop in prices. An older home without an unfinished basement in Fairfield goes for $550,000. The same home but with a suite in Fernwood goes for $630,000.
You could build a suite for under $50,000 in the house in Fairfield. Its just you don't have the $50,000 extra.
Which is different from only two or three years ago. Another sign that the market has topped out.
The only way we are going to see any significant increase in house sales is if condominiums sales spring back to life. And I don't see that happening. The change in the CMHC rules kicked the condo market in the groin as half of all condo sales were to investors.
That' a big gap ($400,000 to $630,000) in the marketplace for buyers. Which also happens to be where most sellers have their homes listed.
Gaps are opportunities. There's a possibility that if you offer on a house without a suite - yours may be the only offer the seller gets.
All this in what should be the most busy months of the year.
sweet realtor,
I don't know about the sales #s getting higher. You have just pointed out the only 2 parts of the market that are still active. The basement suite ghettos of gordon head and the lower end in fernwood. If you move just a little bit up the affordability ladder the market is dead.
@omc,
Maybe... My two higher end listings are getting good action too. Depends on the neighborhood, mine are Cadboro Bay and Broadmead.
I don't think May will be as bad statistically as we've seen so far in 2011. But we'll have to wait and see.
I'm not usually the rosy optimist either. I'm just as negative as most of the followers here when the market is poor and tell my buyers not to rush when there is nothing but downward pressure on prices. I still tell my buyers this now - shop, look, but be patient. As a buyer, it's nice to know you're not missing the train by dragging your feet. It's like poker, 80% folding and 20% well timed aggression.
But as the one viewing properties daily, it does seem to be getting busier.
@Sweetrealtor
Interesting. No pickup in my PCS accounts, but I only see the sold houses, not pending sold, so I'm always a bit behind.
Leo S,
What you are seeing in your PCS account when it indicates a property is sold is actually a "pending sale". A "pending sale" occurs when all the conditions associated with the offer to purchase have been removed. The actual sale and title transfer of the property takes place when the money changes hands, which can be weeks or months later.
Pending sales is what VREB & VIREB report at the end of every month.
If you are using a Matrix account you will see that pending sales are marked with a P in the status column. When the money changes hands, the status is marked with an S. (Note: PCS does not have the S feature).
PCS and Matrix will not show a property as a "pending sale" until the agent updates the database. In Victoria the board requires that this be done within a few days of the conditions being lifted. But some agents are tardy, especially up island on the VIREB where they may not have the same rule.
As a side note in BC the title transfer may occur weeks after the money changes hands. This is due to several factors including: the time it takes the sellers bank to remove its mortgage from the title, lawyer delays and title office processing.
Thanks JustWaiting. That clears up a few things. I have a couple PCS accounts so I haven't seen the P and S distinction. So the delay I'm seeing is the time it takes the realtor to enter the sale.
I was telling Just Jack tonight that this market is like waiting for your rich uncle to die. You want to speed it up by giving him too much morphine or putting a pillow over his head.
S2
I still think we're headed for a Seattle-like correction. ~30% in nominal prices over 3 years or so.
Seattle bubble
Also doesn't it make you wish for a proper real estate index? How much do we have to bribe Mr. Shiller to move to Canada?
Leo - I agree - I can't see the 40%+ correction here, but have always maintained a 20-30%. In all of my analyses I use 20% off Dec 2009 (mean $650K) so then I expect houses to fall to a mean $520K. Last month was $615.5K, so we are already down 5.3%.
I suspect that we are really down more as much better houses are selling for less this year, but it is a guess.
My wife and I saw a few houses in the $800K region last summer that would have worked for our large family so those are our goalposts - we use the $800K * .80 = $640K as our guestimate of where things are going for us.
With knowing our growing downpayment we can pretty accurately estimate our mortgage, with a 2% increase in rates from today's.
Seattle fascinates me how it held until last summer then caved. I cropped an example from Lynnwood that shows public records (previous sale prices & dates)
http://i56.tinypic.com/2u73mg4.png
Well the contraction in market prices got a little closer to Oak Bay and Victoria today with a sale in the Stawberry Vale area of Saanich West for $623K. The property previously sold in Nov, 2009 for $645K and was listed for sale in 2006 for $610K.
That should start putting downward pressure on the values in Fernwood, Fairfield and Oak Bay.
I can see prices easily rolling back 5 years to 2006 levels when the median price in the core was 20 percent less than today.
A 20 percent drop in prices would make a lot of people, that have been waiting for prices to drop, buy.
20 percent - easy, peasy, lemon squeasy.
I think that I would watch the market dynamics in a fall and if 20% passed easily I would continue to wait.
Timing is everything, and no-one can get it 100% all the time. Jump in when it feel right for you. Jump out as well - we did.
Just Jack - you sure love to see your own posts huh? So one house sale in Strawberry Vale will influence Oak Bay and Victoria? What are you talking about now? These are random call outs based on next to nothing which makes for next to no value. I'm sure you will continue though...
I heard from a guy that knows another guy that's behind on his mortgage and having a hard time getting more work so I think this whole market is going down at least 30%!
I like seeing Jack's posts.
Keep up the good work Jack!
Just Jack rocks. He is constantly using evidence to back up his opinions. If EatMe thinks that Victoria real estate is not going to have a correction he should say so and give reasons. Eat me seems touchy. Maybe he's leveraged up to his eyeballs in this teetering market.
"Maybe he's leveraged up to his eyeballs in this teetering market."
Probably not. Just a guy with a massive insecurity in his "real world" life. Instead of dealing with it they bash others anonymously online. Exactly the same psychology as a school yard bully.
Eat me - point taken but surely you can express yourself less facetiously ...?
I see 2740 Thompson is taking another run at it, This time $699k.PCS shows they tried $719k back in January for 8 days and prior to that was it not $739k if I recall.Definitely not a sellers market these days.Good thing buddy on 2595 Musgrave down the road just sold when he did ...
sheesh... sensitive group here. Sorry for offending anyone or bruising your delicate feelings
Eat me - don't make me go all Rex Kwon do on you :)
Not feeling much love for 2740 over here; flippers. $700k is a lot of money for a 2 bed, tiny house on a busier road.
Watching and Waiting: re: 2740 Thompson.....Some time ago this property was listed at $779K they took if off the marked at $759K. Then they re-listed at $739K and again took it off the market when they couldn't sell at $724K.
Currently, in the areas I watch, out of the 18 listings that have sold since Monday, 7 have gone for under assessed value. Many of the others went for very close (within 25K) of the assessed value.
Things are changing.
EatMe - not that sensitive. Contrary views are important here. But please provide contrary evidence as well.
That 800 block of Hampshire is becoming a sellers stronghold.
"A 20 percent drop in prices would make a lot of people, that have been waiting for prices to drop, buy."
A few years ago, before 2008, I read similar attestations from real estate bulls in the US who stated that buyers put in a price floor and prevent massive price drops. Then lo prices were down 20% but the supposed pent-up demand couldn't contain the flux of properties being listed for sale and the price drops continued.
Sales will not drop to zero; the properties you do see selling will be to this "lot of people", just like in the US.
jesse - good point. I think once the flood starts, it will be difficult to stop - the few welcomed buyers will be swamped by the people having to sell.
Lack of buyers is not the cause for falling prices (just a symptom) and buyers will not reverse the trend. Only if conditions that precipitated the drop reverse will prices bottom out. All the way down, there will always be knife catchers, sales never go to zero.
But because this link is so "obvious" and "common sense", I expect federal, provincial and local levels of government to respond with measures to bring the buyers back. Which they will, but will have no effect on the long term trend. Worse, by artificially increasing the pool of marginal buyers, once the incentives are gone, so are the buyers who represent future demand brought forward, weakening the recovery process.
pod-X - as we are seeing now in the US after all the incentives there that did little we are now seeing a further fall.
Those who do not learn from history are condemned to repeat it.
Ok, so all this talk about Seattle drove me to go off and and have a look a some statistics. Sure enough, Seattle is now off 30% based on Case-Shiller indexing (which actually tracks sales on similar square foot homes over time to eliminate the price bias created by newer bigger houses or smaller cheaper housing being built and changing the market mix).
Interesting to note that Seattle is a place with no state income taxes and I believe is still sitting in the top 10 list of USA state incomes.
Also interesting is that house prices didn't even double there from 2001 to the peak. Does anyone happen to have case-shiller like stats for Victoria? What's our actual price increase been over the past decade as a percentage for the same type of homes?
Link for anyone interested: http://blog.redfin.com/seattle/2011/04/case-shiller_seattle_home_prices_hit_another_new_post-peak_low.html
Mark Carney's misstep last night made me chuckle.
http://www.google.com/hostednews/canadianpress/article/ALeqM5iT_IBEHpH75VKPoQFQEElyEKEWWw?docId=6897942
A glimpse of the central banker's gloomier view was offered in an email to clients from CIBC chief economist Avery Shenfeld after Carney gave a private assessment at a Toronto event Wednesday night.
The comments were supposed to be off the record, but Shenfeld admitted in a later email that he had been mistaken about the matter and asked clients to ignore his earlier comments.
According to Shenfeld's note, Carney said the global financial crisis is not over, painting a bleaker picture of the recovery in developed countries.
So one house sale in Strawberry Vale will influence Oak Bay and Victoria?
That sure is what it sounded like when I read Just Jack's post.
If we're going to start calling balls and strikes, we all have to agree that that was a ball.
The thing with this blog is that balls that accord with the prevailing sentiment rarely get called; balls that contravene it are never missed.
I would call it the reverse strawberry ripple effect - the rewind of the last 10 years. Next time you pick up some strawberry ripple, notice how the ripple goes right through the pale of ice cream. Yes, I'm giving Jack a single with an RBI.
"One sale does not a market make"
Seems like some people on the blog don't like the re-sale analysis that Case-Schiller uses. The problem is that while its the same property re-selling there is a fraction of sales available. High quality data but low sales.
So how about a couple more that happened this month.
Hannah Court in Gordon Head
bought four years ago in July 2007 for $629,000 and just sold for $670,000. 6.5% over 4 years.
Hampshire Road in Oak Bay
Bought five years ago in April 2006 for $645K just sold for $725K. 12.5% over 5 years
Amblewood Drive in Broadmeand.
Bought April 2008 for $645,000 and now re-sold three years later for $737,000. 14% over 3
Lampson in Esquimalt. Two years ago in July for $396,000 and today for $391,000. Slightly down in two years.
Another Broadmead on Houlihan. Bought October 2005 for $670K and now re-sold for $740K 10% over 5.5 years.
All of the above are in the "more" stable inner cities where the months of inventory is between 3 to 6. However, the hounds are at the door as the months of inventory in the western communities is rising close to 8.
Meanwhile, unsold inventory in Victoria and Oak Bay has been steadily increasing to historic levels.
Not a time to drop 600 hundred thousand and more, on a stick frame 1950's house in Victoria or Oak Bay.
An anecdotal story to share this beautiful morning>
Ran into a friend of mine who works as a realtor's assistant for a well known realtor in town (actually just heavily advertised) and was mentioning to me that presently the hardest part of her job is convincing the sellers to drop their prices now if they want their home sold. Guess it's like telling someone to sell their Nortel stock for $120 when the "value" is $140 and it's only going higher
The thing with this blog is that balls that accord with the prevailing sentiment rarely get called; balls that contravene it are never missed.
Not true at all. Just on the last post I mentioned that sales for two weeks ago in the higher end were strong. I post my charts regardless of what's happening in them.
Marko and Sweetrealtor sometimes post about when it's picking up out there, or multiple offer sales. You can't expect everyone to be perfectly balanced. The more bearish tend to mention bearish news, while the more bullish mention bullish news. And the Introverts and Eatmes heckle from the sidelines :) (kidding, kidding)
The Vancouver Sun published this article based on another pumper press release from Remax
Rising wealth drives improved demand for luxury homes across Canada
Demand for luxury homes across Canada – especially in Metro Vancouver – is rising, with the improved financial standing of wealthy Canadians the main reason, according to a report released Wednesday by Re/Max.
Re/Max examined 12 major centres and found that luxury sales have surged in close to two-thirds of housing markets between January 1 and April 30 of this year, compared to the same period in 2010.
But what about Victoria?
Victoria (with a $1-million price point), the only other B.C. market surveyed, saw a 14-per-cent drop in sales of luxury homes from 91 to 78.
Make you own conclusions - but I really like this chart that was posted at Garth Turner's GreaterFool.ca site:
http://www.greaterfool.ca/wp-content/uploads/2011/05/Bub-1.jpg
I can apply to stocks, gold, silver or housing ...
It can apply to stocks, gold, silver or housing ...
The Asian market comes and goes in Vancouver. Today people from mainland China want to get their money out of China as they don't trust their government. Because tomorrow the Chinese government can stop the bleed of western currency from their country. Of course if that were to happen that would devastate Vancouver's high end market.
Vancouver is an attractive place to put money, not because its the best place on earth, but because prices have been rising. They don't invest in falling markets, so lately Vancouver beats Seattle. Maybe next year it will be Tasmania.
Social status is extremely important. The oldest son gets a million dollar condo, while the youngest daughter gets very little. She is expected to find a husband who is an oldest son with a million dollar condo. So if you're a young Asian man with a condo you are in demand by a lot of ladies. To buy in any other area than Richmond or the West side would guarantee that a young Asian male would be a social outcast.
The Chinese also believe a lot in luck and like to highly leverage properties. So, its nice to have banks that give out jumbo mortgages at low interest rates because of CMHC insurance. Buy a million dollar property with the cash from China, then leverage the home and free up the money.
In my opinion, if we didn't insure jumbo mortgages in Canada, our prices would be far less today and the mainland Chinese would not be buying homes to the same extent.
Why is CMHC insuring these jumbo mortgages? It's not helping any person buy their first house?
I thought SweetRealtor was a little off the rocker when he said things were picking up a bit as the numbers did not support it at the time.
However, I've been looking at the numbers the last three days and we are averaging about 28-32 sales per day which is an increase from earlier in the month.
SFH average is about 618k as of right now and about 312k for condo.
Marko
Marko, you know I'm not off my rocker! I'm not the one to pitch it as a great market when it's not. Just stating what I'm seeing out there as I book appointments/chase properties for my buyers. 98 sales pending in the last 3 days. Still a TON of inventory but some of it is starting to move.
This week will be the strongest for sales so far this year in the 550 to $900k SFH segment. We're already at 29 for the week, which was the record set before the March 18th rule changes, so I expect about 5-8 more to be entered for the week.
Interestingly enough, at the same time the price/assessment in that segment is now bouncing around 100, after averaging 103-105 all year, while the Sale price/last advertised price (a crappy measure, I know) is also at the lowest point this year). Perhaps more people finally decided to accept some lower offers to make the sale.
It would make sense that as people stop holding rigid to their prices the sales could increase. Or this could all be a blip.
The under $550ks are dead as usual.
Except for condos... Listing agents/sellers are still dripping with desperation every time I book a viewing.
I've been poking around a bit - overall nothing too impressive in Oak Bay Fairfield. Looked at a large (4500 sq. Ft) house on St. David for $800... Just guessing but one would probably have to dump about $450000 into the place (Marko - what does a gut and Reno typically cost)? Also saw a house on Wildwood for $800k and one on Oliver for $750k.... Of the three The Oliver one was probably the 'best buy'....plan on looking at a 1950s in esquimalt overlooking Maccauley point park tomorrow....
I don't think sales will be as high this week as some are predicting. This is a long weekend and you can already see the new listings slowing down on PCS. I suspect many agents have taken today and the long weekend off and will not be updating the database with pending sales even though the conditions have been removed.
Many prospective buyers and looky loos will be enjoying the long weekend festivities instead of visiting open houses. Next week is a short week so I still predict around 525 sales for the month which is down from last month and way down from last year.
Hi Just Janice,
What was the house on Wildwood like? It looks like perfect condition from the pictures - but we all know pictures are just pictures...
They need to can the capital gains tax exemption on real estate gains and make interest on mortgage payments tax deductible.
That will save the housing market.
Wildwood was in good shape and at 650k would be a decent buy, but the kitchen left much to be desired and the principle rooms were small and bathrooms could use updating. Most of my motivation right now is to understand what fair value for our current abode is...more than happy to rent for another year...
Several sales at high prices today on my pcs. Only 1 new listing. I don't get this market.
Carla at the TC decided to publish a copy of the Remax press release.
High-end home sales slow
Re/Max's report said 78 capital region homes, priced at $1-million and more, sold in the first four months of this year. That's a 14 per cent drop from 2010 when a high of 91 high-end homes were sold.
Greater Victoria is one of the most expensive real estate markets in the country. More than 300 residential properties priced at more than $1 million are posted on the board's multiple listing service.
With 300 listings and about 20 sales a month we have 15 months of inventory. No wonder they say prices are softening in the article.
But folks more hot asian money (HAM) is bound for Victoria!
Another factor is foreign investment. Kerr and Mark Imhoff are each working with potential buyers from China. He said that those newcomers are attracted to the quieter pace of Victoria, compared with Vancouver, and anticipates Asian investment to increase in the next few years.
After a day of enjoying the sand and sun I come home to see Sandowne sold for list. I am speechless.
Marko - I think I need contractor lessons, because with people buying houses like that there will be a lot of work for a long, long time.
Sandowne pretty much left me speechless too. It is in rough shape, has water damage in the basement, illegal wiring running all across the back of the house, etc etc etc.
I was surprised at the sale on Kendal too. It is a nice enough house but 790,000 is a pretty steep price for what it is IMO. It's very dated and would be expensive to heat as the entire lower floor is concrete brick and not insulated.
There were a few other sales that boggled my mind today too.
from the Garth Turner Blog tonight - it is about Vancouver, but remember we are number two behind only them for lack of affordability of housing - and they have jobs, we don't have many.
"Granted, the numbers now are beyond comprehension. No, I don’t mean real estate valuations – the fact the average SFH in 416 is $775,000, and $1 million in Vancouver – but rather what it takes for an average family to get one. Even RBC has a kitten when it does the math. To own a lousy little bung in Vancouver requires 72.1% of the average family’s pre-tax income.
What does that mean, exactly?
Well, the average household income in that city is $83,130 – that’s gross, or pre-tax. So, 72.1% of that is $59,917. This average family would have a federal and provincial income tax bill of $18,992, leaving an after-tax disposable income of $64,138. Yeah, that means for the average family to buy the average bung, they’d have $4,221 left to pay for food, clothes, gas, cable and ammo. Uh-huh. Three hundred and fifty bucks a month."
nice house just listed at 2741 Dewdney Ave nice quiet street listed for 899,900
That's 150K over assesment. I wouldn't hold your breath on that one.
1227 sq ft above ground for $900K? Overpriced, even in this inflated market. Architecturally the house is also nothing to write home about. Start at assessment and go from there. Looks like a pretty solid home - but after closing costs you will be 75K away from a million. This is just too much money for this home.
2380 Musgrave - in Estevan as well - is a much larger house on a 50% bigger lot with overall better finishing for $880K and it is not moving.
Ans with the frantic buyer out of the picture (Sandowne), there may only be rational, informed buyers left out there.
Including below ground sq ft in the house sizing bugs me - they did not do it in my previous city because it is just not the same as above-ground sq ft.
They do it here so it can somewhat begin to justify prices.
It doesn't.
Dewdney is way over my price range. I thought it was nice though. I think it will sit on the market for a long time
@ coolicat - welcome - it is a great location, but the owners are reaching - which is absolutely their choice. but they should not be surprised if they do not get a solid offer after all the curious folks will look through as they look at everything.
I try and look at everything in our area, but will only do so if it is an open house and if we do not know the family.
"from the Garth Turner Blog tonight - it is about Vancouver, but remember we are number two behind only them for lack of affordability of housing - and they have jobs, we don't have many"
Has he ever been right about anything?
Youtube interview - April 2nd, 2009
"If you need to sell your home and you are depressed that the markets are low you will be a lot more depressed 2 years from now"
"If you want to buy, wait"
"Great time for renters, rents are going down"
Question for Garth: "Would you if you were an investor be putting money down on a condo in West Vancouver to be completed in 2012"
Response from Garth: "Is this a joke?"
He makes reference to overpriced homes in West Vancouver. Hmmmm. I bet anyone who sold in West Van is now kicking themselves.
"When your mortgage comes up for renewal next time in 5 years it will be at 7, 8, 9, and 11%"
- Okay, Garth, less than three years to go to the renewal.
How does this guy have any sort of creditability?
Marko -
You're the man who plans on living in a 600 and some odd square foot two bed two bath box in the sky for which you will have paid nearly $300k and you think you will be happy paying 50% more per month than what it would have cost to rent the same box in the sky. You're also the man who suffered from multiple personality disorder on this blog not that long ago. And you question Garth's credibility ???- I'll give Garth one thing he's always been consistent in his message, just the timing has been off, just because a housing correction hasn't happens yet doesn't mean that it won't happen.
Just to put things into perspective - the video is dated April 2nd, 2009.....well
March 2009 - VREB - SFH
Median: 504k
Average:535k
April 2010
Median: 556k
Average: 615k
Last time I checked I paid 195k...so if you can find me a 533 sq/ft unit in a brand new concrete building that is cheaper to rent....let me know.
Typo - April 2010, should be April 2011
I live in an almost new, 650 sq ft, ocean view, underground park, for $925. I'm sure with all the strata, tax, transaction costs, opportunity costs, and interest on 200k is way over $1000 per month. Does it have an ocean view?
My apologies Marko - you plan on living in 533 sq. Feet with your girl and when you look at what that costs pls. Include property tax, condo fees, transaction costs and interest fees as all of those things are the same as rent (money not building equity)....
Even at $199k at 4% you will be paying more than $1000 a month and you could find a nicer rental at $1000 a month.
Dave, let see some pictures of this place? Is it your parents or something with that low rent?
Just Janice, examples of the cheap rentals please!
I hear rising taxes, condo fees, utilities, blah, blah...will be hardest on owners.
I think it’s the price drop per month on their equity. Owners should now be budgeting at least a 5% price drop per year. So for every 100g’s your property is worth, an extra $400 per month to your monthly costs.
lol Eatme, I believe it, we've been looking for a new place lately and i have never seen so much to choose from in the 1000 range
25 years @ $160,000 @ 2.1% variable = $685/month + $148 strata fees + $100 taxes = $933/month.
If the variable is at 5% in 5 years the mortgage goes up to $930/month...
I don't believe in factoring in the "opportunity cost" of the 20% down. If you are renting that 20% could go up or down in your investments and if you buy that 20% can also go up and down depending on the real estate market.
I think Garth has been consistent in his message, and yes, his timing may have been off, but this is understandable given the govt intervention and BOC intervention.
Regardless, the market is falling now. It may take a year or more to unravel, but it will.
Sweetrealtor has been pretty clear that the condo market here is not well. This will be reflected in rents going forward and decreasing valuations.
Once all the speculators get wind that the condos are dropping in Victoria quickly, we may see a spike in condo sales and we will really see changes then.
Taking the condo market out of the picture will further take the wind out of the sails of the lower SFH market and then will trickle up to the $500-$1M properties.
Marko - you need to consider what happens to the 20% downpayment - true if put into an investment it can lose, but we have to realize that it can also lose in the condo scenario, which is seeming evermore likely.
Once all the speculators get wind that the condos are dropping in Victoria quickly, we may see a spike in condo sales and we will really see changes then.
I've been hearing the same sort of sentiment for at least 5 years. At this point in time it does appear that all stars are aligned for a drop but it seemed that way years ago too! Then the introduction of the 40 year,rates near zero, etc. Is there something out there that could impact the bear view for a few more years? I can't imagine how prices could rise from here but I thought that in 2006 too!
Eatme - I agree - it seems like a sure thing that there will be a drop, but in 2008 (I wan not a resident here) it seemed that way as well before the govt introduced significant changes to change that.
I am sure they can introduce something again to stabilize the market, but I am not so sure they will. Some thoughts are that they will try and do some serious belt-tightening during the first 2 years of the majority mandate and then try to do wonderful things in the last two.
But who really knows? I don't.
But who really knows? I don't.
Most expressing opinions here!
(I have no idea as I've been wrong for so long! I do question every point of view bull or bear.)
How does this guy have any sort of creditability?
LOL. HHV's king of bullshit stories is concerned about someone else's credibility. When you started you were talking big about how Victoria realtors were incompetent for only negotiating a couple percent off the listing price. Care to post stats about how you are so much better at this?
I don't believe in factoring in the "opportunity cost" of the 20% down.
I like how you put opportunity cost in quotes as if it was some sort of questionable theory. It's not up for debate, if you don't believe in it you're wrong, simple as that. The only debatable part is what percentage return you want to assume.
As for Garth, he's in the business of selling books and attracting business for his investment advisor services. He does it in an entertaining way and lots of people don't take it with the necessary grain of salt. He plays fast and loose with the numbers, but his advice that housing is an overpriced asset has been consistent and correct.
Of course the market has stayed irrational longer than he thought, but his primary argument is diversification, not getting out of real estate wholesale. Can't argue about the wisdom of diversification.
Marko is a realtor people!! He just wants you to think pries will be stable and increasing and there will always be people wanting to pay more and more to live in Victoria. He does not care about valuations and affordability metrics so of course he will have nothing in common with Garth. He is a salesman and his sole purpose on this blog is to feed us #'s and to try to convince the odd bear that maybe they are wrong.
Direct from VCI, article on TO condo owners sweating over maintenance fees:
http://www.theglobeandmail.com/news/national/toronto/globe-to/the-hidden-cost-of-low-condo-maintenance-fees/article2030464/
Coming soon to any condo which does not already charge $500+ for an average unit.
And Garth would have probably been bang on, even with the timing, were it not for extreme government intervention. That's the trouble with making predictions: predict the event OR the timing, never both. I predict bubble will pop.
Marko does have a point, Garth has had a pretty long run at making very public 'sky is falling' predictions that haven't come to fruition yet, and although you have to love Garths funny pictures and headlines, his timing has been way off.
In his defense, the world housing market did fall just as he predicted outside of Canada, and when curveballs like the CMHC intervention propped us up, he has always been one of the first inform us about them.
Puppetmaster Harper and his suite of supporting half-truth puppetshows (by groups like CREA/VREB) are purposely telling only one side of a story, and thats why we need guys like Garth around.
Timed well with this discussion, I just read Garths latest article, and he said now that the bubble is becoming a mainstream story he's says he's going to have to find something else more shocking to say to keep our attention....
2082 Meadow went for $671,000.
I saw that Meadow sale and was surprised as well - especially since they had it for $649K earlier in the year. I guess the buyers agent didn't earn their commission on that one.
If we know those sort of details, a person earning thousands for guidance on the property had better tip me off that my offer is $21K higher than a previous list price.
by the way, Marko - when is the Master's degree winding up? I'll bet you will be glad to have that out of the way to focus more time on other pursuits.
2082 Meadow actually expired last year at 629k after 118 days on market (649k was what it started at).
Just writing the final research paper (aka thesis) as we speak. If it wasn't for this blog I would already be done. I have to hand it in to my UBC supervisor by July 30th so I guess that is when I will be finished.
I am planning on devoting 100% of my time to construction and real estate going forward.
629k? You are correct - I had forgotten that. So, $42K over their previous list price.
Good luck on your research paper, Marko. I know what it is like to be finishing up - fantastic time once you hand it in.
I would think a fitting topic for your backgrounds would be asbestosis?
Okay.... I'll bite. What's your thesis topic, Marco?
DavidL said...
Okay.... I'll bite. What's your thesis topic, Marco
Um, I'm guessing us. :-)
Heck, I would write a thesis paper on this market and what role social media and blogs have had in it.
S2 (JJ's wife)
This blog may be a meeting place for cautious and thoughtful people discussing Victoria real estate but I suspect it has no impact on the actual market. I do not think that blog readers and contributors are typical of people moving this market. The Victoria core area market is starting to stall all on its own. When it does the herd will do an about face and after a while real estate will again be thought of as a bad investment. Of course when that happens we all know that is when the excellent buying opportunities appear.
Okay.... I'll bite. What's your thesis topic, Marco
Maybe 'Why the RE market is different here', or the 'profitability correlation between lowering RE sales comissions in tightening markets?'
I know I'd read both....
;)
Here is the Sunday stat preview from an agent source....
May 16-22
- 315 New listings
- 213 Price changes
- 156 Pending sales
May 8-15
- 391 New listings
- 231 Price changes
- 124 Pending sales
This confirms what Marko and Sweetrealtor posted - sales are picking up. Sales so far this month around 410. With 6 business days left in the month we could hit close to 600. This is slightly higher than last months 574 but below the 622 in March. In May 2010 there were 695.
@ Just waiting: I think what you mean in that sales picked up for one week. Extrapolation into the future is what got us in this mess in the first place...
687 Oliver sold for $710,000. Not bad - it originally listed for $799,000.
Hi, for all those tenants out there thinking they're saving huge amounts of money every month by not paying property tax, general maintenance, strata fee's, or whatever.
You are WRONG...You guys just don't get the actuall bills, but you ARE paying, EVERY single month you are PAYING...Why do you think your rent is so high?
You may think, wheeeee i got this guy comes by and mow's my lawn every week and I don't have to pay...WRONG, you're paying, you just can't see it.
Anyone thinking a landlord is going to just EAT all these cost's is a complete nutjob.
HELLO....They ARE in it for the MONEY!
For those thinking they'll Rent and use the "would be" down payment to invest...invest in what? the stock market! (please)...gonna buy some gold and build a bunker too?
People who rent, pay just as much as people who own!
If you didn't buy 10 yrs ago...to bad so sad.
Get over it!
Keep paying your rent...pays for my comfort!
Oh good, another troll comes to visit HHV. Welcome mrmike.
^^^Please note, the above rant was referring to a real house on a real lot.
If you bought a condo in the past 10 yrs...may God be with you.
Troll? I have no vested interest in real estate.
Just saying,renter's pay the same as owners, they just don't know it...simple logic.
You a basement dweller?
@mr mike: the condo I rent for 1350 would list today for 400k. Pile strata and property tax on there and my consumption of the property is being subsidized by half. 1350 does not equal $2500. There are many widely publicized studies available about how bad the current crop of Canadian house buyers are at math. You might want to refresh a little...
Just saying,renter's pay the same as owners, they just don't know it
Rents are set in the market. Whether your maintenance costs are $500 or $5000 a year has zero impact on what rent you can charge (well maybe you can charge more if it's $500, since that is a building in better shape).
You're a troll because you're ranting against strawmen. No one here is claiming renters don't pay a share of the maintenance (duh), or that it was a bad idea to buy 10 years ago.
If it made more financial sense for me to buy right now I would as the money is just sitting there gaining interest. But it doesn't, especially when taken with the possibility of a substantial downside of losing a couple hundred thousand over a couple of years in the near future. Best case scenario is that the market is flat over that time. Still far cheaper for me to rent.
Its also financial freedom - going to start a new business or two in the near future because I can take the risk. I have at least a 10 year buffer of living costs before I have to be concerned about income. Freedom.
@nan
Start looking for another condo before your landlord is forced to send your keys to the bank.
@Leo S
You need to chill, pick some of your dandelions...I hear it makes some good wine, might just drown away some of your sorrows.
@ mrmike - dandelion wine - I remember my dad making that when I was a kid. We got paid a quarter for picking a garbage bag full of them. Cheap labour for a cheap buzz.
Seam's right up his ally.
He started it.
Mr. Mike LMAO.
Wow. Please do the actual math for me using your "logic."
Mr Mike, for a know it all your spelling is terrible.
It is Seem not Seam (unless you are talking about sewing)
and it is Alley no Ally (unless you are talking about WWII)
I can honestly say that I have never seen a 5 word sentence with two words spelled wrong!
@mr mike: If financial candles get burnt to the point where apartements keys start to be delivered back to the bank because of negative rental yield, the market will have already well on its way down and the CMHC will probably be under pressure as well. Credit conditions will probably tighten up at that point, limiting the buyer pool to those who can actually pay for the house with a traditional mortgage (25/25). I hope my landlord does have to take the keys to the bank: it will mean that it is almost time for my wife and I to move into a house! (that we buy mostly with the cash we've saved renting;)
Good morning all these are my stats for the week of 16-22May. More listings sold this week than they have in my areas of interest since I started tracking about a year ago.
SFH: Min 2 beds & 2 baths priced between 375K and 775K. In the core municipalities of Victoria, Oak Bay, Esquimalt, Saanich East & Saanich West.
New: 50
Sold: 28
P/C: 51
OM: 10
Out of the 28 sold listings, 9 went for under assessed value and & 7 reported having 2ndary suites.
Avg selling Price: $609K
Med selling Price: $556
Condos & Townhouses
Min 2 beds & 2 baths, priced between $250K and $580K in all areas of Esquimalt & Oak Bay, Most areas of Victoria (not downtown) & Saanich East and Gorge, Tillicum and Interurban areas of Saanich West.
New: 19
Sold: 14 Apt's and 5 townhouses
P/C: 13
OM: 8
5 of the 14 Apts went for under Assessment and 2 of the five townhouses were below.
Avg selling price Apt349K Med:345K
Ave selling price T/H381K Med:396K
Sorry: SFH: Avg selling price $556K
Med selling price $609K. They were in reverse.
Quick check of Craigslist - 3 bedroom units for rent (my target) - shows 470 available!
Yes totally unscientific, and University is out for summer freeing up more units. However, if you are a landlord with a 3 bed unit I would say you have some competition.
Note: In 2006 you were lucky to find 30 available 3-bed units on Craigslist. And just a few short months ago that number was around 300 listings. Again - totally unscientific.
A and J: thanks for that info. I think it is a good stat as long as the search terms say consistent. Gives us a deeper understanding of the market as a whole.
You can't expect everyone to be perfectly balanced. The more bearish tend to mention bearish news, while the more bullish mention bullish news.
Leo S, I don't think you understood my balls and strikes metaphor. What I meant to express was that when someone makes a bearish statement that happens to be silly, rarely does one point out its silliness; however, when someone makes a bullish statement that happens to be silly, someone always points it out. JJ's bearish silly statement was:
Well the contraction in market prices got a little closer to Oak Bay and Victoria today with a sale in the Stawberry Vale area of Saanich West for $623K. The property previously sold in Nov, 2009 for $645K and was listed for sale in 2006 for $610K.
That should start putting downward pressure on the values in Fernwood, Fairfield and Oak Bay.
^^^^ Another enlightening comment by Introvert. He adds so much to this blog...
Looks like Marko isn't around so here are the VREB numbers for those interested...
Month-to-date May 2011 (last week's numbers in brackets)
Net Unconditional Sales: 415 (254) +161
New Listings: 1107 (771) +336
Active Listings: 4,599 (4,543) +56
Another enlightening comment by Introvert. He adds so much to this blog...
JustWaiting, let me say your comments on this blog are treasures, nuggets of pure gold. Where would we be without you?
OK - so lets all call a truce. Introvert, please call out all the bear balls you see - hold them up to the standard that we expect.
OK - so lets all call a truce. Introvert, please call out all the bear balls you see - hold them up to the standard that we expect.
a simple man, sounds good. Truce.
Interesting study of first time buyers over at Mortgage Trends:
http://tinyurl.com/3bfp96h
Excerpts:
first-time home buyers accounted for about half of all homes sold in Canada in the last two years.
Of all the government's recent changes, the reduction in maximum amortization carries the biggest impact. 41% of home buyers in the last 16 months have chosen extended amortizations (> 25 years)
As a rough ballpark, dropping from 35 to 30-year amortizations cuts the average buyer's maximum purchase price by 6-7%
Shorter amortizations are bound to push many buyers into cheaper properties (until prices adjust) or defer people's home buying to some degree.
So.. How will this affect Victoria?
Great chart you have shared in here. You guys really doing a great job!
real estate ph
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