MLS numbers courtesy of the VREB via Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.
Month-to-date June 2011 (last week's numbers in brackets)
Net Unconditional Sales: 511 (368)
New Listings: 1209 (912)
Active Listings: 4,845 (4,803)
Sales to new listings ratio: 42% (40%)
June 2010 totals
Net Unconditional Sales: 625
New Listings: 1,503
Active Listings: 4,730
Sales to new listings ratio: 41.5%
Sales to active listings ratio: 13% or 7.5 MOI
It's unlikely June 2011 sales volume numbers will match June 2010. That said, it looks like the early volume bleeding of 2011 has diminished, although that's not to say the days of low sales and high volumes are over, because they're not. There's no price pressure up right now, and the market is proving very resilient against the substantial downward pressure that exists right now. Status quo remains the norm in Victoria. Patience may well be tested for the remainder of 2011 if you're itching to buy this fall andbelieve desire prices will be attractively lower in a few short months.
Month-to-date June 2011 (last week's numbers in brackets)
Net Unconditional Sales: 511 (368)
New Listings: 1209 (912)
Active Listings: 4,845 (4,803)
Sales to new listings ratio: 42% (40%)
June 2010 totals
Net Unconditional Sales: 625
New Listings: 1,503
Active Listings: 4,730
Sales to new listings ratio: 41.5%
Sales to active listings ratio: 13% or 7.5 MOI
It's unlikely June 2011 sales volume numbers will match June 2010. That said, it looks like the early volume bleeding of 2011 has diminished, although that's not to say the days of low sales and high volumes are over, because they're not. There's no price pressure up right now, and the market is proving very resilient against the substantial downward pressure that exists right now. Status quo remains the norm in Victoria. Patience may well be tested for the remainder of 2011 if you're itching to buy this fall and
125 comments:
The market here, when taken as an average selling price, has been mostly flat for almost two years. Surely you can buy a better house today than you could last year with the same money. Aside from this fact, the market is taking a long time time to finally tip, and the longer it goes the seemingly worse off people are financially (as per all the consumer debt reports).
When this does tip, it could be swift and brutal for those highly leveraged.
However, can no longer say the populous has not been warned. The Canadian Minister of Finance and the BoC have been very vocal as of late as to how unhealthy all this is.
For those interested in stats here is the breakdown of last weeks activity.
Here are the stats for the period June 20-27
- 229 Price changes
- 143 Pending sales
- 76 Canceled listings
- 52 Expired listings
- 297 New listings
- 9 Back on Market
- 4845 Active Listings
For the period June 13 - June 20:
- 237 Price changes
- 143 Pending sales
- 66 Canceled listings
- 52 Expired listings
- 322 New listings
- 13 Back on Market
- 4803 Active Listings
For the period June 6 - June 13:
- 270 Price changes
- 128 Pending sales
- 63 Canceled listings
- 57 Expired listings
- 322 New listings
- 12 Back on Market
- 4,742 Active Listings
I do not share HHV's view of the market. My comments....
- Average and median sales prices do not reflect what is happening to the market value of individual properties. As simple man stated you get more house now for the money compared to last year at this time.
- Active listings continue to climb to near record levels. June sales are below the levels seen in recent years. More supply and less demand will slowly push prices down.
2010 - 625
2009 - 946
2008 - 723
2007 - 949
2006 - 762
- Price reductions and new listings are putting pressure on sellers. July is always slower than June for sales. Compare the sales below to the June sales above. When buyers leave town for holidays next month there will be even more price changes and lowball offers may start appearing
2010 - 527
2009 - 933
2008 - 616
2007 - 922
2006 - 677
Patience is key in the coming months. The market reacts slowly unless we have another 2008 credit crunch or Carney starts jacking up rates (both longshots)
Justwaiting, you need to be prepared to wait years (not months) for this market to fully correct. We likely are in year one of a 3-7 year correction. Based on what I have seen elsewhere it will correct very slowly (barring your two points which I agree with) as most sellers will try and wait it out not willing to accept lower pricing.
Unlike most of the US, the fact that BC has recourse mortgages will slow the decline. I know many house owners in the Interior that currently have their houses for sale at prices way above their market, but they will not drop their price because it will mean having to bring $ to the closing. Even though they know their prices are too high they are not prepared or able to cut a cheque, so they accept the fact it will take years to sell. In the US many of these same people would have walked away from their homes already.
Is it the land or is it the improvements?
A property just sold on Eric for $780,000 including the land and the building.
Way back in 1990, the home was built and sold for $260,000. With the lot purchased for $65,000. That left $195,000 for the home construction and builders profit.
Today, that 2,892 square feet home would cost around $500,000 to build. Factoring in 20 years of depreciation of roughly $100,000, in the current purchase. That would put the land at close to $380,000.
So over the last 20 years while construction cost have risen 2.5 times, land cost have risen close to 6 times.
That magnitude of an increase in the cost of land is astounding and historically unprecedented. Especially when there is no significant reason, such as immigration, wages, etc that have shown a matching parabolic increase.
That is except, for the increase in personal debt that has been facilitated by low interest rates and the misallocation of risk in lending policies and mortgage insurance.
Simply put, the reason why prices are so high is because never before have so many, been able to borrow so much, for so little.
In the past it was possible to get yourself out of short term debt, such as a car, boat, student loan, credit cards by taking on an enormous long term debt in the form of a mortgage. Debt built wealth and the more debt you took on by more property, the more wealthy you became.
Or, you could finance yourself in a higher lifestyle with a new home, BMW, boat etc. using your home equity line of credit.
The party was going strong up until 2007. The more you owed, the more your paper worth grew. However, the wealth ship has been wallowing in the doldrums of debt for the last several years. There is not enough economic growth to fill the sails. And the weight of the debt has been growing and weighing down any economic recovery.
It will take more stimulus than Flaherty farting into the sails to get us out of these unchartered waters.
The market is a funny one. Compared to last year, this time, I would say you actually get less for your money in Oak Bay. There were much more listings last year in this area and though I don't have the stats to prove it, less sales. Prices seemed to climb quite a bit in Jan/Feb and have eased a little since. Take a look at sales in the Henderson and Landsdowne areas. Again, I don't have the stats but houses have gone up quite a bit this year in these areas.
One thing is for sure, lot prices (or tear downs) are up a good 10%this year. A very livable 2bd house sold for $550k on Plumer last year vs a fire damaged house only 2 blocks a way on Zela sold recently for $595k. Same lot size, exposure and area. This is an example of a trend I have noticed.
Other areas such as Fairfield and just the other side of the University from our Oak Bay bubbles are down and still dropping.
Vancouver money? interst rates?
Reid,
I agree with you that it will be a long, multi-year decline. Even at 1% a month it will seem like the market is not changing to those that are impatient. But that adds up to 12% a year or around 50K for a typical house in Victoria.
There are many sellers that can't hold out for their price and these are the ones that will set market value. Divorces, court ordered sales, boomer downsizing (out of cash), estate sales, ill health, moving to assisted living and job transfers.
As you have pointed out in the past, interest rate changes will have a big affect on the FTB's ability to finance a home purchase. Carney and Flaherty are warning now and when the BOC squeezes the trigger the 35% with variable rate mortgages will be in a bad place with some forced to sell because they can't afford switching to a fixed mortage and the VRM is too stressful.
I think the slow erosion in people's purchasing power has really been at force over the past two years - the only reason we are seeing a relative maintenance of prices is because of the historically low interest rates - money is cheap. With the two changes to mortgage rules in the past 14 months there has been a slow drain of the fool's pool, yet consumer debt continues to accelerate.
I am different in that I think when the tip comes it will be a punctuated drop.
Good Morning all. Here are my stats for June 20-June 26.
SFH: Min 2 beds & 2 baths, priced between $375K & $775K in the areas of Victoria, Oak Bay, Esquimalt, Saanich East and Saanich West.
New: 43
Sold: 21
P/C: 44
OM: 10
Avg selling Price: $554K
Med selling Price: $555K
Avg price is down 47K from last week and within this criteria it is the lowest average since Oct 18th week.
874 Kindersley in Esquimalt sold for $475K. In early 2008 it would have went for approximately $575K.
7 of the 21 (33%) sales had disclosed 2ndary suites and 9 (43%) went for under assessment.
Condos and Townhouses: Min 2 beds & 2 baths in all areas of Esquimalt & Oak Bay, most areas of Victoria (not downtown) & Saanich East and Gorge, Tillicum & Interurban areas of Saanich West.
New: 13
Sold: 7 Condos & 5 townhomes
P/C: 15
OM: 3
Avg condo selling price: $371K
Med condo selling price: $367K
Avg t/h selling price: $391K
Med t/h selling price: $399K
3 (43%) of condos went for below assessment & all townhomes went for above assessment.
One huge difference in the past while is the average selling prices and the median selling prices are extremely close.
As for the median or average not reflecting what is happening in the market, we could always compare the median price per square foot rates or look at recent re-sales of the same properties.
Benchmarking or defining a typical house and comparing how that typical home performs is another way. This works well in Vancouver, with its standardized lots and homes built to the maximum allowable floor areas. But Victoria is a mixed bag of housing where you find 800 square feet homes in areas of Mcmansions. Plus the volume of sales here is just too low to get any consistency.
As for recourse or non recourse mortgages. The ones that have not dropped their prices are not missing mortgage payments. Once they start missing payments that option to not lower their price will no longer be their decision. It will be the banks.
But right now, I do feel the sense of hope. Like someone on death row, waiting for a reprieve. As long as the faint hope is there, no matter how improbable the chances of a reprieve, most will not bail on their homes. Unlike in the 80's when there was NO hope as mortgage rates doubled. You owned the home only until the next mortgage renewal. The only chance was to sell before you went upside down in the mortgage.
There are a lot more people holding a lot more debt this time around, so in my opinion, it won't take interest rates to double for our market to be in serious decline. Even in this time of low interest rates, personal debt is growing as people are paying for their lifestyle on their credit cards with no chance to roll that debt into the mortgage.
You might be able to do a short sale with the lender as long as your home is not insured. But no lender will let a home owner walk when their is an insurance policy. And it won't look good for CMHC to let the home owner off while shafting the tax payer.
CMHC should be spelt E.V.I.L.
justwaiting, I agreed that some sellers will have to sell and this will help get prices down, but in Victoria there always seems to be enough buyers to pick up this part of the market. For the market to really tank you need lots of motivated sellers and few buyers and I think this is still a few years off as many sellers will "wait" for a rebound that is not going to come.
I am looking to buy a second home in the Okanagan (need heat which never seems to come to Victoria) and that market is at least 6-12 months ahead of Victoria with way higher inventory (and nicer homes) and I still figure we will wait another 2-3 years before it is worth buying.
Alexandrahere,
You are tracking some of the hotter areas in Greater Victoria and your stats this week show the market may be turning.
I noticed for every sale there were 2 price changes and 2 new listings. The sales to new listings ratio is balanced but the price changes show sellers are trying to unload. The drop in average price is also interesting.
I wonder if the sales over 1M are down for June. They are the ones that push the average sales price up and give VREB and the TC a pumper stat.
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Reid,
When the tide turns and everyone knows prices are falling they drop even faster. The glow is gone from home ownership when buyers know they are catching a falling knife. Remember 2008 when prices were falling and Gordo froze the assessment values? The only thing that prevented a housing blowout was the low interest rates due to the credit crunch. It will be deja vu soon and no more tricks in the bag to prop up the market.
Well here is little canary in the coal mine to watch.
Shaw Cable is getting more disconnections as home owners tighten their belts.
A friend of mine has cancelled his cable and they were not to happy with him, and came to close to accusing him of pirating TV off the internet.
Maybe I should go into the TV Antenna business.
I see some sales that are eye poppers. Once that I would have bought as no brainers like the
townhouse in the Songhees at full asking price of $399K - but still took 14 days to sell?
Or the house on Boaz in North Saanich for $575,000 that sold back in February 2008 for $650,000.
Or a downtown loft condo for $356K that sold back in Q2 of 2006 for $339K.
I think there is enough inventory in certain market segments where you may be the only offer presented. Other areas, like Oak Bay, Fernwood or Fairfield you will have to wait a bit longer.
As for condominiums, I don't see any chance for appreciation ever in skyboxes. Especially as house prices begin their decline. About 125 condos sold in the last 30 days in the core districts. In past housing recessions that number has been as low as 40 condo sales a month. So it can get a lot worse in the condo market - and I think it will.
Many here have pointed out that if interest rates go up many homeowners will be in big trouble. True, except that all signs point to interest rates staying quite low for the next few years. The U.S. isn't going to jack rates anytime soon and suffocate an already anemic recovery. And the same goes for Canada.
Therefore, if the main ingredient for a significant housing correction in Victoria is an interest rate hike, we are not likely to see a significant correction for a period of years. Reid's guess that we're in the first year of a three to seven-year correction seems quite plausible to me.
Introvert,
The prime mandate of the Bank of Canada is to keep inflation in check. It is not to insure a stable housing market. Keeping the exchange rate low and the economy out of recession are secondary to the inflation mandate. Click here for details
"Inflation-control targeting has been a cornerstone of monetary policy in Canada since its introduction in 1991. At present the target range is 1 to 3 per cent, with the Bank's monetary policy aimed at keeping inflation at the 2 per cent target midpoint."
Total CPI is now 3.3% which is outside the range and the BOC feels this is a temporary anomaly and will drop soon. If it doesn't watch rates climb.
I also don't see interest rates going anywhere. The Bond market determines fixed rates, and they have been dropping lately. BoC won't change rates much for a while other than perhaps a symbolic 25bp bump this fall. The end of QE2 in the states is a big question mark at the moment. Depending on how the markets react will determine interest rate policy for probably the next 2-3 years. If markets tank over the summer, rates will stay low.
Eurozone is also not looking to hot, Germany is still bailing out the PIIGS but for how much longer?
To me, all signs still point to uncertainty, not chaos mind you but a lack of confidence. This means rates stay low, stimulus flows for fear of turning it off, debts grow. I think we have another year or two of economic stagnation, them maybe things start to get better again.
As for Victoria RE, my crystal ball sees a whole lot of not much changing over the next year or two.
Also, nuts to Shaw, I havent had Cable in 3 years, internet/Netflix FTW.
Robert,
Inflation has nowhere to go but up with oil staying high, food prices skyrocketing and workers demanding wage increases (think post office, Air Canada etc.)
So do you believe the Bank of Canada will just ignore their prime mandate and contract with the Canadian government and just ignore inflation?
Would they jack interest rates if food costs doubled? Would they jack interest rates if employees demanded substantial wage increases because of the higher cost of living? Which would cause the price of goods and services to increase, which would cause employees to demand more wage increases, which would ....
In a nutshell, the Feds don't give a poop about your mortgage. They have already warned, re-warned and re-re-warned Canadians about taking on to much debt as it is highly likely that interest will be going up. And that's from Carney and Flaherty. They are already beginning to pass the blame onto the banks for making bad loan decisions and distancing themselves for any rate increase.
Besides, interest rates aren't what killed the American market. It was the stagnating prices and inability to re-finance debt that broke the back of housing. The housing market was predicated on rising prices and a constant inflow of new buyers.
The one thing CMHC will do is cap the mortgage insurance, like they have done in the USA. And that will selectively smash Vancouver and Victoria with our mega mortgages.
With the American market, prices are already down and they are working through the mess. An increase in interest rates would not be as hard a hit like it will be in Canada with our high ratio mega mortgages and short term financing.
So, if the hot spots in Canada don't start cooling down then expect the insurance cap.
Why should my taxes support some mega millionaire or some foreigner buying three homes to get a passport, or someone speculating on a half dozen condos.
Inflation has nowhere to go but up with oil staying high, food prices skyrocketing and workers demanding wage increases
Workers can demand wage increases but what they get is another story (Air Canada, Post Office, etc).
You can add BC public sector employees to that. Even with static interest rates, rising consumer prices with flat wages are negative for RE prices.
Unlike most of the US, the fact that BC has recourse mortgages will slow the decline.
Most of the US - including Florida - has recourse mortgages like Canada. So does Ireland. So does Spain. So did BC in the 1980's.
The idea that recourse mortgages slow RE busts is a myth.
Its the tens of thousands of small companies that get hurt with spiraling inflation.
What keeps wages down in these companies is the ability of employers to replace the workers.
If you can't attract and retain workers, you lose your clients. If you raise your prices you lose your clients. The small company is caught between a rock and a hard place. The companies scream at the government - do something!
And they do.
They raise interest rates, freeze wages and prices (or try to).
Been there, done that, don't want to be there again. If inflation stays out of the government's target range, best to get the interest rate stick out and beat the crap out of inflation before it starts to spiral.
And that's far better than some losing their homes in Bear Mountain. These people just have to take one for the team.
I agree with Robert Reynolds, interest rates aren't going any where soon. Oil is floating at the top of it's game, real unemployment in still very high and the world economy as a whole is way too shaky. As the inflation is now measured, it is low also. I am certainly not saying that the way that inflation is measured is accurate when you ignore the biggest costs, but that is the way they play it.
I foresee a whole bunch of the same for this market until the interest rates change. So if you believe the report that says that the US housing market will not start to recover until 2014, we will have had a fairly stagnant market for 7 years. Just like the 90s.
I think house prices here can ONLY go down. Take a look at the baby boomers. Most of them are poised to sell. Their financial plan for the most part is not netting 8% as their Financial planners (promised). They are going to be living on less than 75% of their previous income and in some cases much, much less. From what I understand most personal portfolios are down about 28% from the peak in July of 2008. And that is only if these people left their money in. Many took much of it out of say mutuals and put them into GIC's. Because of increasing taxes, utilities and home maintenace, many of these boomers are going to be forced into selling their homes and will probably buy a retirement style condo. Here are what could be typical savings:
$700K house: in Saanich East
Taxes: $3,000
House Ins.: 800
Hydro: 1,800
Heat: (gas) 1,800
Water: 300
Gdn upkeep: 1,200
House upkeep: 1,800
Car gas:1 car 1,500
Total: $12,200
Condo: $335,000 (after taxes &reno) Condo in Fairfield/James Bay
Taxes: $1,320
Content Ins: 275
Condo fees: 3,420
Hydro: 540
Car gas: 540
Condo upkeep: 300
Total: $6,395
This equals a savings of $5805 and factor in the $345K that you cleared out of the house after buying the condo. Say netting a modest $7762 interest per year, this would be a total of $13,567 clear in annual savings.
I read a report a while back dealing with the baby boomers selling off. It appears that areas like ours will have a very delayed effect from the sell off due to retirees moving here. That will of course put pressure up in the mean time.
But in the US two of the hardest hit areas were Phoenix and Florida - retiree havens, much like our beloved capital city.
If we are comparing our market to the US we should use san diego or even Seattle. I have been to Arizona am not surprised at the level of drop.
Off course both of those are down.
It appears that areas like ours will have a very delayed effect from the sell off due to retirees moving here. That will of course put pressure up in the mean time.
I doubt it. Aside from Vancouver, where else could the retirees come from and afford the housing here?
The stats show Canada's retirees aren't exactly moneyed overall.
If we are comparing our market to the US we should use san diego or even Seattle. I have been to Arizona am not surprised at the level of drop.
Definitely. Seattle is down almost 35% and their economy is far more robust than ours. I'm fine with that comparison. :)
I would suspect interest rates will stay low for a couple years at least. Luckily it seems to have exactly zero effect on house prices once they tip. All the countries hit by big declines in the last few years experienced decreasing rates at the same time. Didn't save them.
Also, the retirees are not moving here in sufficient numbers to offset the ones dying.
The areas that are not seeing an increase in population are the retirement neighborhoods of Sidney, Brentwood Bay and Oak Bay. If the retiree myth was true these area would be expanding not the middle income areas of the Westshore.
Also, complexes that have age restrictions of 55 and older are much lower in price than complexes without age restrictions. Again if the retiree myth was true, then this would not be the case.
If you want a place to retire to, go to Qualicum Beach. That area has the highest average age on Vancouver Island and the air is cleaner.
So I wouldn't be betting the family fortune on a wave of Septagenarians storming the shores of Foul Bay.
It ain't gonna happen.
The poor ones can't afford Victoria and the rich are too busy traveling the world. Better to live in a part of the world where money can buy the best health care - and that's not here.
So, no HRM here, the numbers just don't work.
One thing I have learned as long time bear, is that each market acts as it's own. What we want means nothing. The strike out that HHV did on this post and then put desire says it the best. We can make all of the same old arguments, but all we do is start sounding like Garth. The best analogy I have heard is likening our market to the bond market. Low interest rates are making the market artificially affordable and they are not ging away any time soon.
I guess I am becoming like prarie boy and HHV, resigned to the market. I sure don't like it, but we aren't going to
change it.
I fail to see how Oak Bay could expand. There's no more land to develop and they have very tight development requirements. Instead of expansion, we would have ridiculous price increases. We already have that.
I fail to see how Oak Bay could expand.
Oak Bay will see much expansion of available homes as the old fogies move on. Supply and demand. Guess which one goes up and which one goes down for a long, long time?
The TC carried an in-depth real estate article in the Homes section of the Saturday edition.
Tips and tricks for singles and first-time homeowners
Tip 1 - Get the parents on the hook to help you. Use a little guilt if necessary.
One option may be to ask a co-signer, such as a parent, to help you qualify for the mortgage.
"By co-signing or guaranteeing the debt, the parent is obligated as much as their son or daughter with the payments," says Stan Falkowski, senior vicepresident, Mortgage Intelligence in Toronto. Helping with the down payment may make more sense.
Tip 2 - Use your retirement savings. Let your house be the nest egg.
"For those who are looking to buy in the next two or three years, it's a good point to max out on their RRSPs every year if they can," says Falkowski. "They can in turn use those funds for the down payment."
Suddaby says you may also borrow funds to put into an RRSP and then withdraw those after 90 days to generate a down payment.
Tip 3 - Save some cash and start a relationship to get that real estate dream
Falkowski says. " 'With what I can put away, I can buy a place in two, three years or whatever.' In the time frame that they're actually starting to save they could meet someone and they could start saving together."
Right now, things are going okay in real estate. Some people are taking losses, most are making profits because of when they bought and what they bought.
Those properties that tend to go into "foreclosure" are not recent purchases. They are people who have drawn from the well of their Home Equity. And that's spread out from Sooke to Gonzales. Your neighbor but hopefully not your neighbor's neighbor is just as likely to go belly up than a young family in a new home. The slowing economy is having an affect, talk to shop owners about their sales and the general mood of the people. A lot more construction vans and trucks are staying in their driveways rather than going to job sites.
The downturn has been going for at least three years now and that's about how long a person can revolve their credit before their credit is cancelled.
But the pendulum does swing and the lower sale volumes shows that one day people will have very little interest in buying real estate. Just like in the past. But, if you can afford it - go out and buy it just don't think of it as an investment. After all the car you bought last year, you never expected to go up in price. But you still bought it.
The reason why real estate has gone up at or slightly ahead of inflation is due to the biggest group of consumers flowing through the marketplace and they are retiring at an increasing rate which will probably peak in 10 to 15 years from now. What if there had never been a baby boom? Houses would be like every other commodity that ages. It would get cheaper. And why shouldn't it. Take a look out your window - like do you see a shortage of housing? Houses, like cars, are everywhere. There are more dwellings in Canada than their are households. There is no shortage. That people can buy real estate and leave it vacant or use it for vacation for only a few months of the year, shows how cheap credit can distort our reality of wealth.
You are what you owe.
Physically Oak Bay might not be able to expand but the will of the people could change allowing more high density development.
This should be good for the coffers of the city, unless it is wasted on over staffing. Which is Victoria's problem. Too much management, too much union.
I live on a oil based road that develops pot holes faster than a teenager pops pimples. A call to the city and they come out an fill the pot hole. But just that pot hole, there could be another one ten feet away, but they have no work order for it, so it doesn't get fixed. Same with the Plum trees they have been cutting down. Right beside the plum tree can be a hedge encroaching onto the sidewalk. Hey, they got the chainsaw and the tree shredder right there - why not clean it up.
Nope.
I figure they could give one person that lives on the street a bucket of asphalt and pay him or her $50 a hole to fill and it would work out cheaper and the streets would be fixed faster.
I like the idea of meeting someone and shacking up with them in order to buy a house.
Say you wanted a condo. Then you would hang out Spinakers. A duplex well then the Monkey Tree might be a good spot. A house in town close to good schools - your looking at the Bengal Tiger room a low cut top and lots of junk hanging out. And if you're looking at a manufactured home - then I would suggest a spot under the blue bridge and a case of Lucky.
Kinda takes the romance out of it. Did you see the indenture on that babe! The only wood she wants to see on her man is Garry Oak.
Better yet, why save any money at all. Just find someone who already has a house and shack up with them.
"sure I'll sleep with you, but first let's take a look at your mortgage terms"
"Hope you brought some protection, Earthquake protection, with you."
The best advice is to hit Ma and Pa up for a forgivable loan. If every one of the four kids did that mom and dad would have enough to finance their retirement well into Tuesday of next week. And if they ever wanted their money back, just offer to take it out in trade by fixing the brakes on their car.
As for the Baby Boomers kid's are they not starting to hit 40. Seems kinda old to have your mom sign your loan application. She could also write a nice letter to the banker asking that Johnny has a clean pair of undies.
I guess that leaves renters with a bottle of baby oil and the Sear's catalouge.
I don't know about Oak Bay but Fairfield IS expanding. Just walk around. Those 1910-1916 homes are being gutted by developers and made into 3-4-5-6 condos. These condos seem to go for more than the standard newly built ones.
well another 10k price drop at 1627 Hybury Pl down to $709,888 or about a $1000 per day price drop since listed on Jun 10. I'll go out on a limb here and say that by July 8 it will drop another 10k. Still too much for that area but a nice addition to that culdesac.
I have been following the real estate market, this blog, and prairie boy's blog, for years now, first as a hopeful bear, and for quite a while now as a less frequent, and purely academic, reader.
We are late boomers who opted out of the market years ago for a variety of reasons, thinking our decision to rent for awhile would be temporary. Perhaps it still will be temporary, but it's a long temporary, and has involved the rental of three (at least) houses. The thing is, now I'm kind of hooked on renting, as it gives us so much more freedom, less responsibility, and has enabled us to live in different, interesting neighborhoods. The rent we have paid on our homes has been a fraction of what we would have paid in mortgage, taxes and maintenance.
The big downside is having to move, sometimes not on our schedule, since good, big rentals are hard to find, and are often only rentals while the owners sort themselves out. But overall, I'd definitely take the inconvenience of moving to the financial stress I observe in friends, acquaintances, and, indeed, many of my landlords.
Will we ever buy again? Maybe, if and when the market really enters the world of rationality and affordability. But this long period of lunacy, some might say mania, in the real estate markets, has forced me to love my inner renter. What I often wonder is how many of us are out there? I find that the number of renters in my personal acquaintance has been growing the past several years. Ordinary families who ten years ago would NEVER have considered renting as a long-term housing strategy. Essentially, how many of us are there, and what would induce us to buy?
That's a soul searching question Frannie.
At this point, I could care less if prices went up sideways or down. I'm just enjoying the freedom of renting. I look at some of the places and prices and find myself saying I could live there, we could buy that, and then I re-think and say that we got it pretty good right now. The right neighborhood, the right schools, the right rent. Why do I want to throw that all away so that I can fix 60 year old plumbing on the weekends. Then watch as the mortgage surpasses the amount I bought the home for. If prices go up, fine and good for the landlord they're welcome to the profit. At this point its just not worth the problems for me to own.
Taxes are due on July 1 .. Ka Ching. And it looks like we're going to need a new fridge and dishwasher. Ka Ching, Ka Ching.
Even if interest rates stay low, there comes a point where a lack of additional income will prevent prices going higher. We may be reaching that point now.
If the expectation of rising prices subsides, first-time buyers will not be be in such a rush to buy, in which case prices at the lower end will weaken. Once it is clear that home ownership can cost, not pay, reluctance to buy will intensify
Furthermore, inflation unacompanied by pay raises reduces real incomes and thus reduces the cash available to pay a mortgage. If inflation is driven by stimulus programs, I doubt that the BOC would raise interest rates to check it, since increased rates would negate the stimulus. More likely, government would fiddle the consumer price index to conceal the inflation, as appears to be happening in the states.
Our position is very different from America's, however. A slump in commodity prices, due to a crash in China's economy perhaps, could drive down the loonie and raise food and other prices while increasing jobless rates. In the States, the effect would likely be the reverse.
Say you wanted a condo. Then you would hang out Spinakers. A duplex well then the Monkey Tree might be a good spot. A house in town close to good schools - your looking at the Bengal Tiger room a low cut top and lots of junk hanging out. And if you're looking at a manufactured home - then I would suggest a spot under the blue bridge and a case of Lucky.
ROTFLMAO
The longer we rent the less I see us buying.
When the hot water tank or the fridge or the stove goes the landlord pays for it and we take the money we didn't spend on a hot water tank and go on holiday or put our daughter in some fun activity or go on a spa weekend to Whistler.
The more I talk to owners about the cost of owning a house above and beyond the mortgage the less I want to own.
And we could just pick up and leave. A trailer and a trip across Canada and the US for a year is looking more appealing every day.
We don't have to try to rent out our house or try to sell it to get the money to travel. We just give notice and go.
Yep, I like renting.
S2
The spa weekend would be me and friends.
Just Jack would never go on a spa weekend. I don't want to tarnish his tough guy image. :-)
Does he even have a tough guy image? Ha, ha.
S2 (Just Jack's wife)
Just Jack I suppose that Soprano's gets you a one-night friend with a foreclosed recourse mortgage for a house along Burnside that will be with you for the rest of your life?
For the earlier discussion among our Oak Bay friends, I would put the Lansdowne frenzy to a group of hipsters who all decided to live in the same neighbourhood at the same time because they all wanted to live there - and then all tried to outbid each other. Most likely wrong, but it is the feeling that I get from walking around Estevan Village.
Speaking of Oak Bay, has anyone else had a look at Chaucer St? Is it a good value at 549, or is there something really wrong with it that we've missed?
Taxes are due on July 1 .. Ka Ching. And it looks like we're going to need a new fridge and dishwasher. Ka Ching, Ka Ching.
Couple buys house in Victoria in 1991 for $191,000. 20 enjoyable, relatively hassle-free years pass and the house is now worth $629,000. Ka Ching.
Not saying this type of appreciation will happen again, but the sound of this couple's Ka Ching is deafening.
Lastly, if hearing the Ka Ching of property taxes and the nominal cost of a fridge and dishwasher makes you sweat, then you really shouldn't be a landlord homeowner. That's just dumb.
Remember 2008, May was the peak for prices. What followed was historic. I doubt it will be as fast but from what I see, as an outside observer, Victoria prices are going to be weaker through the summer.
Prices are a lagging indicator. MOI is high. That's all you need to know.
^^^^^^^^
Ditto! Thanks for the laugh, Just Jack.
Animal spirit,
I haven't looked at chaucer, but I see it has been on the market for a LONG time. They started at a crazy price and have slowly been coming down. That house is very stale on the market; basically buyers will think there is some thing wrong with it and not look at it.
You of course know that it is very small at 789 sqft on the main with the bedrooms in a head basher attic. Looks like lots of DIY, nonconforming stuff in the bathroom and even the stairs. Location isn't bad in poets corner. IMO poets cove is a lot nicer than Landsdowne flats. Wonder why the hipsters haven't found it yet?
Couple buys house in Victoria in 1991 for $191,000. 20 enjoyable, relatively hassle-free years pass and the house is now worth $629,000. Ka Ching.
Not saying this type of appreciation will happen again
Then why did you bring it up?
"The investor of today does not profit from yesterday's growth"
-Buffett
And I will add to that - the investor of today pays for yesterday's growth.
omc - poet's corner not that nice - lots and lots of dump traffic. And, of course, lots and lots of rats.
any of you financial types know the conversion to make $191K in 1991 into 2011 dollars?
Hmmmm....from Twitter....
"The Hudson condos in #yyj are on SALE! The developer discounted prices up to $180,000 off. Prices start at $289,900! Message me for details"
"any of you financial types know the conversion to make $191K in 1991 into 2011 dollars?"
The inflation would turn this into $278k. To put this into perspective:
Investing that same amount of money for 20 yrs at 6% would have yielded $612k. The DJI increased by 364% since Jan 01 1991, translating to $695k (and dividends would have paid your rent). A balanced portfolio with some bond allocation (approx % of your age) and some international components would have likely done much better.
These kind of examples seem to sound so good to "housing investors" but in the grand scheme of things they are not. That house did not even beat the Dow.
thanks Kunwak - that's always what I wonder and you have confirmed it. And this was during a time of rapid price increases that we likely won't see again in our lifetime.
This, and the other factors we discuss here regularly, make me feel happy being a renter. As a previous owner of other homes I can agree with much of what Frannie said - being a homeowner is a lot of responsibility and takes up a lot of your free time. I have so much more time now to do the things that matter to me like spending lots time with my kids and my wife and making sure I get enough exercise.
There is still some stigma out there for those who rent. Soon we may have more of a social acceptance of this choice as they do in Europe.
Investing the same amount of money? 75% of buyer don't buy with cash.
Secondly, what if you bought a home in 1991 for 1991k with a suite? If you took the suite income every month and put it into the market you would be much better off than hypothetically throwing the 20% down (or about 40k) into the market and not buying a property.
No way a specific house in ‘91 bought for $191 could be sold today for $629. If you believe it, you probably also believe Vancouver prices went up 25% in the last year, when in truth many houses have remained flat and/or fallen.
Some of the reasons the average price has risen so much over the past twenty years are:
* Boomers entering and completing their move-up buying years - let‘s call it the age of the mansion and the reno.
* Bigger granite mcmansions skew average price up.
The person who bought for $191 in ‘91, and simply spent their money maintaining condition, would be lucky to get $429.
Add to the 1991 house twenty years of:
mortgage interest
house insurance
maintenance
taxes
and if with suite tenants - extra insurance, extra maintenance, etc.
Plus, some people simply do not want strangers living in their basement. I would never consider it.
That house did not even beat the Dow.
You are ignoring the rental value of the house, which is the same as ignoring dividends for stocks.
I would guess that the total return for the house and for the stock market from 1991 to date are about equivalent. The difference is that the RE market is at the top of a giant bubble today and the stock market isn't.
Also someone who invests in stocks can take profits by selling some of their holdings but you can't sell part of your house - it's all or nothing.
Marko is right.
In 1993 you could have easily bought a home for $240K and sold it in 2007/2008 for $640K. If you had an inlaw suite fetching $650 per month, i.e. $7,800 per year that amount would have paid for your taxes (then approximately 1500 per yr),Heat and Hydro (approx $1500 yr then); house insurance (approx $600 per yr); cable, phone & water, then about $1500 annually; upkeep $1800, car insurance then $600 and still had some left over. Mortgage payments on $200,000 (assuming a $40,000) down payment, at 6.5% over 20 yrs would have come to $1482 per month. So, in those days, if you had been lucky enough to have saved $40,000 for a down payment and bought that house, of course you would have been away ahead of the game. Hence, the rich baby boomers. Now they are going to get out and buy that retirement condo Just Jack. Things change.
@a simple man
http://www.bankofcanada.ca/rates/related/inflation-calculator/
For future reference ;)
but who really wants tenants in their home?
@ pod x - thanks - terrific calculator.
but who really wants tenants in their home?
A rhetorical question, yes, but having strangers living in your home is just another perk of ownership in Van/Vic/TO.
a simple man: was just adding to the debate from Kunwak's comments about what the yield would be for an investment versus buying a house. And Marko's comment about not everyone pays cash for a home. So the house I was giving as an example was backing up Marko's comments. i.e. what was the return on a $40,000 investment (the downpayment on the house) not a return on the $240,000 that the house was purchased for. So we are asking Kunwak to give us the "real return" on $40,000 in his investment compared to "our" return on $40,000 in real estate. And to show how a rental suite could even have furthered the return. And not wanting a rental suite? No pain; no gain.
Alexandrahere - I completely see your point and it is a valid one for the people that are accepting of having tenants in their home.
My point was that no-one actually wants to have strangers in their basement, sharing their yard - they only do it b/c many have to in order to buy a home here.
This discussion is completely moot unless you have a time machine to take you back to 1991.
What matters is what kind of return you can expect buying today at today's prices.
Hence, the rich baby boomers.
You mean boomers who think they're rich. The only ones who really are rich are the ones who've sold at the top.
Everyone south of the border has figured that out, but not here. Yet.
Good argument, Patriotz. You have not realized the gain unless you sold and did not reinvest everything.
I don't think the Baby Boomers are that rich. It has been too tempting for most of them to dip into the home equity for their children's education, a new car, 40 foot Contessa motor home and annual trips to Kenya, China and Australia.
And the boomer's kids are not hesitant to demand their share of the wealth from mom and dad too.
So, you can get part of the value of the home out to buy things and not have to sell the whole house. But, it seems ironic to me, that you have to pay someone else interest on your equity. Its like the equity really isn't yours at all.
So equity is not the same as cash, because you have to pay interest to someone else to use it. But people easily confuse the two, because money is so cheap. If money were more expensive at say 8 percent, far fewer people would use their equity to purchase easily consumable items like holidays and restored Volvo P1800's and Mark III Austin Healys. Then a person with a half million in cash would be considered wealthy not the person with a half million in home equity.
What has changed in our society is that home equity has been confused as being the same as money. When interest rates climb, then cash will be king once more. Twenty years ago, it was more difficult to tap into that equity. It required you to go to the bank and get approved for the loan, land registry, appraisal, legal fess, etc.
Today, you can buy a condominium in the Hudson, between cups of coffee.
It's just too easy to buy real estate today and that's why its too expensive.
And basement suites distort the market even further at these low interest rates. Allowing people to bid ever higher and higher.
It's time for a reality check.
"You are ignoring the rental value of the house, which is the same as ignoring dividends for stocks.
I would guess that the total return for the house and for the stock market from 1991 to date are about equivalent. The difference is that the RE market is at the top of a giant bubble today and the stock market isn't.
Also someone who invests in stocks can take profits by selling some of their holdings but you can't sell part of your house - it's all or nothing."
I agree, I oversimplified this. Dividends account for a large part of stock returns and so is rental value for houses.
My point was that real estate is often portrait as this magic investment but it's not. That bothers me. You need to make smart decisions with your money going forward and no one knows what the future brings. A house is nice but it has so many disadvantages (maintaining the structure, taxes, not liquid, one HUGE leveraged asset) that it's often not going to be a good "investment". In particular, if everyone does it, it usually not good for your money. So there better be some other reason why you'd get a house.
I don't think the Baby Boomers are that rich. It has been too tempting for most of them to dip into the home equity for their children's education, a new car, 40 foot Contessa motor home and annual trips to Kenya, China and Australia.
Just Jack, you've got to be kidding me. Nearly all boomers that I know--and I know a ton of them: they're my parents, my parents' friends, and half of all my relatives--are not using home equity lines of credit, are not taking annual trips overseas, and are not buying news cars that they cannot afford (in fact, they can afford them--well, new Toyota Camrys at least).
The boomers I know almost unanimously have a nice house that's completely paid off, have helped their kids pay for decent chunks of university tuition (not on credit), and have plenty of retirement savings and/or pension plans to last them for a good long time.
I don't know which boomers you're generalizing about, because the boomers I know are in great shape. I'm a bit jealous of them, because even if I play my cards right, circumstances will likely be such that I won't be able to prosper as easily or as much as they have.
I've found it really tough being a landlord so far:
Income accrued from rental suite: $18,000
Appliances, repairs: $0
Water & electricity costs from suite: $3150
Then I must also mention the (ridiculously helpful) tax deductions associated with having a suite in my house. I'm able to deduct a significant portion of my mortgage interest, home insurance, utility bills, etc.
Let me tell you, it's rough.
Introvert - but you paid for the suite, the appliances, the hookups, etc already and you have to claim that extra income with your taxes.
I agree that for some people, it works. My point is with all the landlords that don't really want to be landlords but want a house more.
@Introvert
I don't know which boomers you're generalizing about, because the boomers I know are in great shape. I'm a bit jealous of them, because even if I play my cards right, circumstances will likely be such that I won't be able to prosper as easily or as much as they have.
That's the problem with anecdotes and looking at self-selecting groups of people (ie "all the boomers I know").
There is a reason household debt is at historic high, and savings rate negative. Those numbers have to come from somewhere.
@Introvert
Why not learn to use Google to get some facts instead of making anecdotal comments. It would give you more credibility on this blog. Here are a few for you to read...
Stats Canada Pension/RRSP Data http://tinyurl.com/6l6eowq
Only 32% of Canadians contribute to an employer pension plan. only 34% contribute to an RRSP.
Home Ownership - 2010 TD Canada Trust Home Buyers Report http://tinyurl.com/4yrgcfm
Boomers in British Columbia are the least likely in the country to own a home and be mortgage-free. Though nearly three-quarters of Canadians say it is important that they pay off their mortgage fully in time for retirement, the TD Canada Trust Boomer Buyers Report found that only 24% of B.C. boomers own their home mortgage-free. Nearly one third of boomer homeowners have more than 60% of their mortgage left to pay off.
Boomers in B.C. are least likely to say they will continue to live in their current home during retirement (40% versus 49% nationally).
Reverse mortgage demand rising for cash-strapped boomers http://tinyurl.com/3t9vevc
Many Canadians, she said, have made paying off their mortgage a priority only to find themselves with no savings once they retire and in need of cash.
About 77% of the average seniors’ net worth is tied up in their home, according to Statistics Canada.
“That doesn’t leave a lot of liquidity to fund what can be some ambitious retirement plans,” Bandler said.
The average 55 to 65-year-old has just $125,000 in their Registered Retirement Savings Plan (to stretch over decades in some cases) and more than half of working adults aren’t contributing to an RRSP whatsoever.
There are people who rent suites like my parents - early 50s, paid off house years ago, builder & solid union job.
They rented the basement suite when they could barely qualify for the house as new immigrants and they rent it now that they are mortgage free with solid incomes.
Why wouldn't you? $1000/month - two Uvic PhD students - pretty much never see them.
I don't think every suite being rented is because the owners would suffocate without it.
I rather work less and rent a suite as homeowner. Just my 2 cents.
From the stats above^^^ one might predict that BC boomers are going to be unloading their houses over the next 20 years.
Seems like 65% will not have any pension other than CPP/OAS/GIS. Under half will have an RRSP and many of these will only have enough in it for a few years of withdrawals. Reverse mortgages might let them "borrow out" some equity but if they still have a mortgage that will be limited too.
However all the rich boomers coming from Alberta will snap up the houses and keep prices from falling :>)
My parents live in the Vancouver area. There is a pretty good chance they won't live out thier retirement in their present house, and it has nothing to do with lack of finances. Prices are obnoxious over there, and they can cash out while affording a nicer house else where. Heck they can move into a nicer neighborhood too. I would think that this is a pretty common scenario and would help explain why only 40% of BCers plan to live in their home after retirement.
I rather work less and rent a suite as homeowner. Just my 2 cents.
Your parents have been lucky with their renters then.
Friend of the family has lots of rental property and has many many horror stories about renters and damage to suites, nonpayment, etc. Once your renters are in it's a nightmare to get them out if they're no good. Plenty of stories from others where rentals went bad.
Sure, you can rent a suite, but don't kid yourself that it's free money. It's a burden you take to lighten the cost of homeownership, just like you might take a second job, do some consulting on the side, or any other activity to bring in extra money.
My folks have a home close to Camosun, Uvic, Jubilee....they pretty much pick who they want to rent to. I think they have only rented once to non-students.
Location is important.
Why not learn to use Google to get some facts instead of making anecdotal comments. It would give you more credibility on this blog.
JustWaiting,
Thanks, I'll learn to Google really soon so that I can find all kinds of information that you approve of.
And how about I just not post any anecdotal comments ever again? That would be helpful, right? Better yet, how about we just say that nobody on this blog should ever post an anecdotal comment ever again? That would make this blog so much better! OK, watch out: next person to post an anecdote is going to get nailed by JustWaiting, the chief of the Anecdote Police.
LeoS. You are more likely going to have problems with a rental if you do not live in the house yourself. We weren't talking being big-time landlords, we were talking about having a nice home to live in with a one bedroom/bachelor suite on the lower level taking up perhaps 1/2 to 2/3 of that level. Lots of people on here rent. Do you think of yourselves as responsible adults or as people that are going to destroy the place you live in? I have found it is when you have a rental home WITH a suite that you do not reside in, that problems often arise between the two renters. It is almost a territorial thing.
You are more likely going to have problems with a rental if you do not live in the house yourself.
Probably true. At least you'll have a chance to pick up on problems as early as possible.
We weren't talking being big-time landlords, we were talking about having a nice home to live in with a one bedroom/bachelor suite
Heard enough bad stories about those too. The average renter is neither the reader of this blog nor a PhD student. The stigma of renting does not come out of thin air.
Introvert said,
And how about I just not post any anecdotal comments ever again? That would be helpful, right? Better yet, how about we just say that nobody on this blog should ever post an anecdotal comment ever again? That would make this blog so much better!
Introvert - I recognize that you were astute enough to buy when you did and had the financial acumen to get a renter in your home and have made some easy money. All I have done is live in my landlord's basement apartment throwing my money away on rent. Hopefully I will own a place of my own someday.
After reading your last post I realized that I should not have criticized you. I want to offer my sincere apology for my inappropriate remarks. Your anecdotes and humorous comments have contributed a lot to this blog over the last few months. Please don't stop on my account.
My comments, on the other hand, have focused on boring stats which no one is really interested in reading. So I have decided that this will be my last post and I will just lurk from now on.
Who is buying all those homes in Vancouver? HAM? The Real Estate Board of Greater Vancouver publishes a monthly survey. A Van agent has published the result on his blog.
http://tinyurl.com/3e6vy28
@introvert
hahaha
From one landlord to another, it is so hard (wiping my sweaty brow)
keep them anecdotes coming..
Anecdote Alert: No facts whatsoever in this post.
I think there are people who’s personality suits being a landlord and those like me who would do anything to avoid that responsibility/relationship. I think for some elderly folks they enjoy the sense of security knowing they aren’t alone in the house. I do have respect for people who rent out suites or are landlords. I think there is some responsibility there and they are providing a needed service. Given the choice of investing in a balanced stock/bond portfolio versus a house and waiting 20 years the portfolio certainly has less ongoing maintenance and won’t be calling you up while you are on vacation asking for a new fridge.
Anecdote Alert: No facts whatsoever in this post.
Nor are there any anecdotes. Good work!
From now on all comments shall have neither facts nor anecdotes. Pure pontification only please!
Who the f*ck cares about the winners anyways? They don't make bear markets; never have, never will.
MOI is high. More to come.
But thanks for the anecdotes (pat pat pat)!
How long until Carney flinches - inflation rate at highest level in eight years.
Link to story on inflation for those that have not read it:
http://tinyurl.com/3shr778
House prices jump most in 5 months
Guess Victoria is not invited to the housing party anymore.
Money is tight - first Air Canada strikes, then Canada Post and now the BC teachers have voted 90% for a strike mandate.
Do we need an interest rate hike to see people sweat? No - the rapidly accelerating cost of living is eroding away the safety margin for a lot of people.
@JustWaiting
Frankly, I enjoy your stats posts. I think it would be a real loss to the community if you chose to only lurk in the future.
I would encourage both Introvert and JustWaiting to continue posting. We need all sides for a valid discussion.
I thought today’s comments by Paul Krugman (Nobel-winning economist) were noteworthy.
“Household debt has risen at rates comparable to those in the U.S., but housing prices have not plunged. Dot, dot, dot (yet),” he said, to laughter. “So there's a real question of whether Canada is actually just a delayed version of the same story.”
Mainstream truth on the bubble - it is close.
It seems our marketplace is narrowing to a specific home in a specific neighborhood.
Properties outside of these parameters are getting hit hard.
Owning acreage along Pat Bay Highway has never been a dream of mine and I suspect not for many others as well. Road noise, access problems, etc.
It's a property that is outside of the mainstream buyers wants and desires.
Such as the recent sale of an 1800 square foot home on 2.65 acres along the Pat Bay Highway. originally bought in November 2005 for $482,000. The home has since been updated and expanded by another 700 square feet and has just resold for $590,000.
Clearly not a money maker over the last 6.5 years. But then again, few people are speculating in this type of property today. Unlike in 2005 when it seems everything had multiple bids.
And how about investment properties, like the triplex on Vernon that has a gross potential rent of $45,000 per annum and just sold for $530,000 or a little less than 12 times annual rent. At one time these properties were on fire, less so today for this less than perfectly located investment property.
Which may be the reason why its recent purchase price is close to the price it was bought for 5.5 years ago in December 2004 at $519,000.
Of course, these are not the "main stream" properties that are in demand. But with fewer buyers and these buyers concentrating in select areas, these properties are getting hit hard.
What's next? How about homes on busy streets - like Bay, Shelbourne and Quadra. Right now these properties seem to be holding their prices well, but I would expect that they too will fall out of fashion.
One of the things that drove our prices up, was the competition between people buying a home to live in and speculators wanting to flip and hoard properties.
I think we may have far less of these kind of speculators today, which eases up the pressure for home owners.
Just Jack......wasn't that house on Pat Bay hwy for sale last year also??? I remember it, i think it may have been updated since last year also??
Marko....do you know what it was up for last year??
Dave#1
We all have seen that the vacancy rate for purpose built apartment buildings has increased steadily and rapidly since 2007 and is now the highest in any one's memory. Harper's economic stimulus plan had the desired affect of stabilizing home prices but at the undesired affect of rental properties and landlords.
But what about homes themselves. Do we have a lot of empty homes up for sale. Homes that are ready for immediate occupancy. Here is a quick breakdown by location and housing type.
Homes in the core districts.
There are 757 homes listed for sale and 99 can be moved into today. That's 13% in the core. I also included the months of inventory (MOI)for each.
13% Core cities (MOI -4.6)
11% Western Communities (MOI-8.6)
10% Saanich Peninsula (MOI - 7.4)
And Strata Properties
23% Core Cities (MOI -6.5)
27% Western Communities (MOI -6.0)
22% Saanich Peninsula (MOI -6.3)
Nothing new here really from what most of us already know. Detached homes in the core cities are performing the best of all types and all areas but the number of vacant homes is the highest. I don't think 10% or one in ten homes listed being vacant is unusual.
Condominiums sales have tipped in favor of buyers with inventory being over 6 months, but there appears to be a glut of empty ones with one in four listed for sale being vacant.
Some of my other observations are that the percentage listed and percentage sold over the last few months of vacant homes have been roughly equivalent. Slightly more people want to buy a vacant home in the Western Communities than are listed. But I suspect thats because if your going to buy in Langford you probably want a new built.
The percentage of vacant condos listed and sold are the farthest apart for the inner cities. Being the inverse of homes in the Western Communities. With one in every 4 condos listed being vacant, but one in every 5 vacant condos only being sold.
Hmmm, so say your a downtown condo developer. Do you break ground for the new tower - or do you sell the land to your competition?
By all means everyone keep posting! Both anecdotes, statistics, observations and interpretations. But it is necessary to recognize the inherent limitations of anecdotes and the things your circle of friends is doing (or not doing), and not draw the wrong conclusions based on them. Vast majority of people prefer to associate with other people who are like them; confirmation bias and group-think is strong.
Here's a surprise (to me). A recent on Oxford in Fairfield for $600,000 for almost 3,000 square feet on a 5,800 square feet lot within walker distance of Cook Street Village. The property sold 7 years ago for $495,000. A 21 percent increase over 7 years.
Most other properties have gone up 70 percent since then. Of course there is no suite, so maybe that's why it seems so low for that location. Has anyone looked at this one?
Meanwhile an 1,150 square foot, 1940's rancher on a 5,500 square foot lot in Fernwood sells for $420,000. A neighborhood that just a dozen years back it was hard to sell any home like this for $175,000.
dave: 6010 Pat Bay Hwy was up for sale a while back. They were initially asking $729K and reduced it to $657K before removing from the market. Recently it was listed at $585K and sold for $590K. Still it sold for above assessment.
Thanks Alexanda....It looks like they have done some improvements from last year.??? Dave#1
Weird thing about the assesment on 6010 Pat Bay, 2011(544,000) is only $2800 more than 2007($541,200).
Dave#1
Looks like listings have peaked and are starting the decent in my accounts.
Leo S. said "Looks like listings have peaked and are starting the decent in my accounts."
Good. Now the houses that have to sell will be on the market.
S2 (JJ's wife)
OK Marko and JustWaiting - please announce the June 2011 stats!
A primary employer in Victoria, the BC government is still in budget crunch mode. If the HST is punted, we are going to see an even heavier crunch. This led me to thinking, I wonder why there seems to be so little talk about local economic trends here when they are probably as important as debt levels and interest rates?
Although retirees, debt and interest rates are drivers of RE, our local economic vibrance seems quite important to these discussions.
Any comments on our current and/or future economy here in Victoria?
VREB is closed today so no stats until next week.
MArko
Any comments on our current and/or future economy here in Victoria?
Construction, tourism, FIRE and government are facing multi-year declines. Our 4 pillars are crumbling. "That's all I got to say about that."
I guess they posted them today.....
Friday July 1, 2011 1:00pm:
June June
2011 2010
Net Unconditional Sales: 618 625
New Listings: 1,465 1,503
Active Listings: 5,050 4,730
Please Note
•Left Column: stats for the entire month from this year
•Right Column: stats for the entire month from last year
Thanks Marko.
Broke 5000 for inventory, sales the same as last year, which was a bad, bad year for sales (last half). 8.17 MOI.
Swelling, swelling - how long can it last?
Swelling, swelling - how long can it last?
A long time.
I deserved that...
Swelling, swelling - how long can it last?
Over 4 months and you're supposed to call the doctor.
Last years listings and sales were both pretty much as they are now. It doesn't mean bargains are coming though; we actually saw a pretty good rise in prices in Jan/Feb as the cyclical inventory dropped.
I am also noticing that the market is continuing to split with Oak Bay commanding crazier and crazier prices, while other prime locations continue to correct. The sale of the house on Musgrave shows there is a continued strong demand for family type houses in this area; even those overpriced,in need of extensive renovation I no longer see my family buying a house in Oak Bay.
OMC - I agree that values in Oak Bay at out of hand. I saw that Musgrave house at the open house and it needed hundreds of thousands to update it with moderate quality materials. I am shocked it sold full asking price.
I have not resigned yet on Oak Bay, but this is certainly getting to be silly.
OMC - ever live in Kingston?
remember, the last phase of a bubble is irrational purchases and believing there is a new plateau -
see point #3 Mania.
We are close.
I see more reductions on the (new) condos and townhouses at 1035 Sutleg in the Cook Street Village. They have taken their time to sell for sure. Has anybody viewed them?
And the allenby house just sold for $811K - undeniably a nice home, but that price really makes me shudder.
Oak Bay is holding strong and seemingly getting more irrational by the day.
Hmmm....pretty significant price drops at 1035 Sutleg. Per sq/ft is still around $500 thought.
Pre-sale prices advertised in the times colonist for two buildings today....
Bayview Promontory - 21 Floors by Bosa Properties
Studios from $225,900
One Bedrooms $269,900
Two Bedrooms $369,900
ERA (726 Yates)- 15 Floors by Concrete Properties.
$198,900 - $398,900
Unless the Mondrain or Jukebox release something way better I think I will take a plunge on a unit at the Era (pending the studio is 500 sq/ft give or take) for investment purposes.
I am going to a realtors open house July 7th for the Promontory.
Will provide feedbacks on all the buildings in terms of price, floorplans, finish, appliances.
Marko
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