Monday, May 2, 2011

So just how bad was April?

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.

April 2011 (percent change from 2010 in brackets)
Net Unconditional Sales: 574 (-24%)
New Listings: 1,577 (-12%)
Active Listings: 4,561 (+8%)
Sales to new listings ratio: 36%
Sales to active listings ratio: 12.5% or 7.9 MOI

April 2010 totals
Net Unconditional Sales: 756
New Listings: 1,783
Active Listings: 4,229
Sales to new listings ratio: 42%
Sales to active listings ratio: 21% or 5.6 MOI

Is it bad out there? Shoe-betcha! If you're trying to sell a home in Victoria right now, there are less buyers active than there were a month ago. And you should have sold last year because there were more buyers active then.

Buying today? Or trying to buy today? Rest assured you won't be involved in thick competition for crappy offerings anyway. Sure, you still see action on East Saanich properties in good shape or under-priced, but for every one of those you'll see a hundred or more other VREB area homes languishing on the market.

I wonder what will happen to prices this month? And the rest of the year?


Phil said...

Let's see how the TC spins this one... I'll bet it's something to do with the weather!

EagerBuyer said...

I bet the official VREB press release will talk about a "stable and balanced market". Oh wait... They say that every month no matter what happens.

omc said...

Last year we peaked in Feb/March and April was already showing a marked decline. Some things that stick out to me on the sales #s are the over 4500 listings (already!) and the almost 8 months of inventory. This shows that we are indeed in a buyers market. I would expect a further drop of 5% by August.

Before introvert pipes up about always saying things are going to happen; THINGS ARE HAPPENING, AND HAVE HAPPENED!

JustWaiting said...

Talk about low sales in April!! Total MLS Sales have not been this low in April since 2000 according to my source of real estate stats.

Marko or Just Jack - Can you confirm this?

a simple man said...

and in 2000 how many fewer total houses were there in Greater Victoria? The market now is much larger, which also magnifies the small numbers of sales. Perhaps a percentage would be a better metric - houses sold in a month/total number of homes.

Its happening.

EagerBuyer said...

Some of you think that the April sales slowdown is due to high prices, rising mortgage rates and new CMHC rules.

Nope - Remax anticipated this brief pause in sales because of THIS

What will they say next month?

happy renter said...


Has there been any change in prices since last month?

Robert Reynolds - HMR Insurance said...


I know all those election signs on the lawns make it so hard to spot the for sale signs.

JustWaiting said...

Must be taking the VREB spinmeister more time than usual to prepare today's news release.

The agent that gives me stat updates just said that the median price for homes dropped 2.3% in April.

Will 2011 be like 2008 when prices dropped about 2% a month starting in the spring?

Introvert said...

Before introvert pipes up about always saying things are going to happen; THINGS ARE HAPPENING, AND HAVE HAPPENED!

This made me smile. And, yes, I do agree with you: things are happening, and have happened.

a simple man said...

Median price dropped from $568,500 to $556,000.

April's savings will pay rent for half a year!

Just Jack said...

Stagging and recent renovations

Do you pay a premium for them? And will they retain their value?

Simple answers - Yes and No.

You will pay more than market value for a staged home or one with recently completed renovations.

Just to clarify what we all know. What you pay for a property is "Market Price" what properties like yours are selling for is "Market Value". Almost all of the time Market Value is equivalent to Market Price. Hence the misunderstanding by so many people.

There are exceptions, and that would include staging and recently renovated homes. For these properties you are paying a premium above market value. So when it comes to re-sale, the property will not have appreciated along with market conditions.

Case in point. The recent sale of a home on Thurlow for $560,000. Two years ago the home was renovated and sold for $620,000. Market values did not fall by $60,000 in Fairfield. What happened was the premium of a recently staged and renovated home was lost.

The previous owners walked into the sale with a bulls eye painted on their foreheads. The smell of fresh paint and gleaming floors cost them a BMW (with Montana leather interior, heated seats, and a kick ass sound system).

When they bought the home, they used the banks money, so they really didn't pay much attention to the price, it was only a few bucks more a month. But when it came time to sell - the cost of overbuying a property became real to them.

Just Jack said...

With half of Victoria City's real estate market made up of condominiums, you really have to consider the health of this type of property when looking at the whole market place.

Victoria has an over supply of condominiums. Yup, I said it, we built too many skyboxes. Too many boring little sky caves. So while single family home prices in the core are mostly stable. Condo prices are going down. Like the recent sale on Quadra for $260,500 after being bought way back in 2008 for $275,000.

The poor sodds, spent three years of their lives with monthly mortgage payments at 1.5 times rent, plus taxes and strata fees just so that they could sell at a loss.

Luckily it was a ground floor condo, otherwise they could have gotten hurt when they jumped off the balcony.

JustWaiting said...

Full VREB press release and stats click here

The April sales were the worst in 10 years but VREB doesn't reveal that and only focuses on last year. SFH average and median prices are down but VREB says prices are stable.

What will local MSM report? VREB is hoping it all gets buried by election and Osama coverage.

Waiting said...

I'm starting to see some more significant drops in prices. 25-35,000 at a time rather than 5,000. Of course these are hugely overpriced homes to begin with but at least it is something.

Waiting said...

I'm also noticing an increasing number of vacant homes.

Just Jack said...

Looking back at the month of April for each year. The number of sales of single family homes in the core municipalities and the median price.

2011 - 150 - 592,500
2010 - 228 - 613,350
2009 - 217 - 530,000
2008 - 211 - 625,000
2007 - 248 - 535,000
2006 - 214 - 496,000
2005 - 276 - 425,700
2004 - 255 - 345,000
2003 - 257 - 297,000
2002 - 276 - 250,000
2001 - 235 - 240,000
2000 - 173 - 237,000
1999 - 193 - 235,000
1998 - 177 - 234,900
1997 - 242 - 216,000
1996 - 180 - 232,000
1995 - 135 - 236,000

There are not enough sales to support the price of real estate in Victoria. Not since 1995 have we had such a low volume of April sales.

In my opinion, the only way to stimulate the economy (increase sales) is to lower prices to about 2001 levels.

Mark said...


As much as I'd like to agree you're going to have to add 30% or so to any 2001 value. Simply put, 10 years is long enough for general inflation to make significant difference.

So you're looking closer to $312,000 in today's dollars. Not quite as appealing ;)

Waiting said...

$312,000 is still pretty appealing. Not sure that I believe it will drop that much but boy it would be nice!

Leo S said...

My target is 2006 levels. Half a million dollars seems plenty for the average wartime shack in Victoria.

Waiting said...

I'd be happy with 2006. That's still a 20% drop.

jesse said...

The weakness continues. 8 MOI. For this time of year... not too good at all.

I would expect to see more strength in May and June; the body of evidence suggests sales were "brought forward" for the March 18th CMHC rule change deadline. I expect that effect to wane somewhat though realistically it has reduced buyers' ability to pay by about 8%.

Victoria is definitely turning into THE series to watch this year! I have to say I'm a bit envious...

dave said...

I thought I’d check the compounded 10 year inflation rate, comes to 22.06% (Feb ‘01 to Feb ‘11)

Feb year-over-year CPI
11 2.1626
10 1.5817
09 1.4260
08 1.8149
07 2.0370
06 2.1760
05 2.1256
04 0.6809
03 4.6843
02 1.4463

So $240,000 in 2001, would be $292,944. Anyway $312,000 was close enough.

Just Jack said...

Markets always over correct.

While adjusting for inflation is text book correct, it doesn't mean the marketplace has read that same textbook.

You may want to look at how wages have increased in the last decade or how monthly mortgage payments have increased as a percentage of income. Rather than how a basket of computer parts and other goods have changed.

The number of persons per household will have to rise, vacancy rates will have to drop and the percentage of Canadians that own their homes will also have to drop as well. And a lot of construction workers need to be retrained. That's a lot of blood in the streets to spill before the market can return to peak levels again - if ever.

No one can tell you where bottom will be. Just as a decade ago, no one could tell you were the top would be.

I'm just saying that it would take a big drop in house prices to stimulate the economy through housing again. Housing is a write-off, the government is going to have to find some other way to stimulate the economy.

Just Jack said...

I think most on this blog are waiting for home prices to correct to a level where they are comfortable to buy.

Most of us would also be considered the dead cat bounce.

Home prices in Vancouver in the early 80's fell so much, because every guy and his dog were buying real estate. And then when interest rates nearly doubled from 13% to 20%, none of those buyers were able to take advantage of the lower prices. Home owners were over extended in real estate and could barely hang onto their principle residence.

There still are people who can capitalize on lower prices in Victoria, but once they've bought....It can be a long way to the bottom.

Because after the dead cat bounce and then the bust, the only other person that might be in position to buy your home tomorrow is probably going to high school dances today. That's right your entire financial freedom relies on that pimple faced kid that works part time at the gas station on weekends.

So be kind, leave a TIP and send him a Xmas card.

dave said...

Well said JJ. There's many a knife-catching American, European & Japanese that would agree with you. Now it's China, Ausi & our turn to donate some plasma. Myself, I think i'll wait until that knife stops bouncing around. My guess is sometime 2020’s.

EagerBuyer said...

Garth Turner comments on the Victoria real estate market. Greater Fool

omc said...

I guess the TC is just going to ignore the poor sales figures and just not do an article.

HouseHuntVictoria said...


It's there, they called it a washout.

DavidL said...

I find it hard to believe how much town houses sell for. From the TC article: The average price of townhouses rose to $480,621 in April, up from $434,626 in March. The median price was $460,000..

With the median price of $460K for a townhouse as $556K for a single family house, the $96K difference works out to just over $500/month (at 5% interest, 30-year amortization). Insurance costs are virtually the same and property taxes would only differ by a about $300/year.

With a monthly maintenance of ~$200 for the townhouse, the net difference between a median townhouse and a median SFD is just $300/month. So what's the advantage of the townhouse, other than having the communal lawn area regularly cut for you?

dave said...
This comment has been removed by the author.
dave said...

The meagre few townhouse (& condo) sales leads to incredible swings in the average & median. If we had a better metric, the true townhouse price, like single family, went down last month. Who knows a builder could have taken a bath blowing out some luxury units in saanich east skewing the average & median up.

a simple man said...

Price reductions becoming common - even behind the tweed curtain.

This is the tipping point. Not a good time to buy. Todays deal is next spring's headache.

DavidL said...

Using historical data from the VREB site, the median prices for Saanich West townhouses and SFD have been:

       Townhouse   SFD   Difference
2010  $395K       $530K   $135K
2009  $414K       $490K   $76K
2008  $395K       $489K   $104K
2007  $379K       $465K   $86K
2006  $315K       $419K   $104K

Over the past five years, the difference between a Saaich West townhouse and single family dwelling (SFD) has averaged about $100K.

In my mind, the townhouses are too expensive compared with their SFD counterparts.

Just Jack said...

Tough to compare town homes to detached houses, as each appeals to a distinct market segment.

Right now, someone's focus may be towards a detached home, but will it be that way in 20 years from now?

The demographics of a city, play an important part in demand. Townhomes, in Victoria, could be more expensive in relation to other cities - just because we have more old farts.

For example which business has a more likely chance of succeeding in Oak Bay?

One that sells diapers or one that sells depends undergarments?

dave said...

Agreed on the townhouse subject.

Well, the free money days are over as of last night. For the first time in 7 years the Conservatives finally get to be, you guessed it, conservative. One thing’s for sure, there won’t be any blue goodies making there way to this orange & green island.

Introvert said...

One thing’s for sure, there won’t be any blue goodies making there [sic] way to this orange & green island.

The mid and north island are blue, mind you. So no goodies for the south island/population centres.

Maybe Port Hardy will get an overpass built near its airport.

DavidL said...


LOL. How about a four-lane highway to Tofino and Ucluelet?!

EagerBuyer said...

This guy made a big mistake and is now looking for a "greater fool"

Craigslist ad

omc said...

I like how that guy claims a near zero vacancy rate for Victoria.

backinVictoria said...

828 Hampshire has removed the price from their website after reducing it from 739 to 729. They don't seem to have it posted on Used Victoria, Kijiji etc anymore either.

Sudden Valley said...

House sales in Tasmania have slumped to a 20-year low. Have the tides turned in Australia?

Sudden Valley said...

Douglas Magazine puts in their twice cents.

Leo S said...

Getting nervous, silversurfer?

Just Jack said...

The good thing about increasing inventory is that sellers have choices in what to purchase.

For the last half dozen years, few sellers have listed their homes for sale, simply because there wasn't enough of a difference between homes to stimulate a move "why should I sell there's nothing to buy". The lack of choices to buy restricted both supply and demand for housing.

Which is contrary to basic economics that supply and demand are independent of each other - they're not.

As inventory grows, more homes will sell - but at lower prices. The greater inventory creates opportunity for sellers to buy and sell. Sellers will have motivation to get on with their lives and we see a downward spiral in prices.

Because in the world of real estate the same buyer can also be a seller and a seller can also be a buyer. Try to find a stock analogy for that one.

So now there is something to buy so why should you not sell! And you can sell your home for a lower price, because the home you just bought a home at a lower price.

Anyone understanding the above logic should immediately apply for a position of lead economist for the World Bank.

Introvert said...

Max Fawcett--the blogger who lived in Vancouver but then moved to Edmonton and didn't mind sharing that with his readers--wrote a short piece on CMHC and Canadian real estate.

The blog post is called "Silence of the Lambs" and can be found at:

a simple man said...

thanks for the link, Introvert. An interesting read that may be familiar to many readers here, but required reading for all nonetheless as it puts a lot into perspective in terms of CMHC susceptibility.

DavidL said...

Thanks, Introvert. Yeah, I read the article in Macleans in early April.

Based on the HHV blog postings over the past 6 months or so, I think that most readers would agree that the the role of the CHMC needs to be redefined!

themoose said...

Well, we've had enough. After about 6 years of living in Victoria, we're moving back east. Basically it came down to the fact we have lost all our friends to the boomers. We had about 6 close friends that lived close by all replaced with boomers. Kinda got sick of waiting for the grandkids to visit to have someone for our son to play with in the neighbourhood. Anyhooo we sold our house and basically bought a house out east mortgage free from the money we made. Love this site. It allowed me to make the proper decision for my family .