I got a phone call from a number I didn't recognize the other day. I answered it anyway. When I said hello, I expected to hear a response, but I didn't get one. Strange. But then I realized two people were talking. I should have hung-up, but something I sensed led me not to. Instead I grabbed a paper and pen and jotted down a couple of notes. I figured I had meant to be in on that call and I was meant to share it's contents with you readers.
It's not word for word, but I'll do my best to transcribe it for you:
Market owner: I've got a great story for you.
Reporter: We usually don't let business people pitch stories directly to us. Let me put you through to our advertising department.
Market owner: No. Wait. Please. This isn't advertising. It's a true story. It's a great story too. It's about Victoria and how we're insulated from the economic terrorism taking place in the rest of the world.
Reporter: Did you really just say economic terrorism? OK. You've got a great angle. Pitch me. Let's do this thing.
Market owner: Awesome. Well, you see, I sell things in my store and business has been pretty stable these last few months. Typically, I order in about 100 oranges a week. I usually sell 80 of them in the first 5 days. But by the sixth and seventh day, the remaining oranges start to look a little stale in my market.
Reporter: Makes sense. So I guess you throw them out then right?
Market owner: Heck no. If I did that I'd be out of business. Here's my secret. For the first five days of the week, I price the oranges a little higher because they're fresh and most people want fresh oranges. But there's also a small group of people out there who look for a good deal. I call these folks my weekend shoppers. So I discount the stale-looking oranges on days six and seven. I run an ad in your paper on Friday to let all those deal hunters know what I've got for them.
Reporter: I can see why you have the most successful market in town. That's brilliant.
Market owner: I'll say. And here's the best part: I still make a great profit on those stale oranges. So much so that I've decided to stock more of them.
Reporter: You can order stale oranges? What will they think of next? Marketing is amazing!
Market owner: Well, I guess you could order stale oranges if you really wanted to. But I don't need to. I know I'll consistently sell 80 oranges over the first 5 days I have them on the market. So instead of ordering 100 oranges next week, I'm going to order 120. That way I'll have 40 stale oranges instead of 20 with which to increase my profits.
Reporter: What happened to the economic terrorism angle? I thought I was getting a juicy story here? Sounds more like a business-as-usual, the-market-is-stable piece to me.
Market owner: Here's the thing. We live in a Navy town right? So people are in-tune with all things military and seaman right? They know what nautical terms mean. We can weave some into the story and people will go "Ahah! I know what they're getting at here..." We're also in a time where people are fighting mad... see the connection? There's likely a new tax on the horizon, or even a regression to an old tax that's going to cost us all a lot of money over the years... so people may be feeling uncertain, like they're having a hard time keeping their heads above water, but they're looking for certainty. All we need to do is conjure up some images to connect with their natural emotions: fight, floating, stability... They will then come to my market and buy my 40 extra oranges because they'll believe they're getting a great buying opportunity and they'll know my market is stable.
Reporter: I'm not sure I follow. How does the Navy and boats equal economic terrorism?
Market owner: Our submarines, if they weren't stuck in dry dock, would be out using things like bouys to signal and look for terrorists wouldn't they? All Victorians know this. They'll make the connection. It's a great metaphor and you can tag your story on your website with words like economic and terrorism and all those people, and more than just the local readers, will use Google to search those terms and find your story. You may even attract some foreigners, maybe even mainland Chinese... think of the possibilities!
Reporter: F'n brilliant! Do you have this story written down? Do me a favour, I want to make sure I get your quotes right, so send it to me electronically and I'll get it online as soon as possible. We may even do a follow-up in tomorrow's print run. Now I'll transfer you over to the advertising folks and they'll get you set up for Friday's ad to sell those 40 stale oranges.
H/T to the TC-Parrot for the link to the inspiration for this post in the previous comments section.
*not really true, but almost believable eh?
It's not word for word, but I'll do my best to transcribe it for you:
Market owner: I've got a great story for you.
Reporter: We usually don't let business people pitch stories directly to us. Let me put you through to our advertising department.
Market owner: No. Wait. Please. This isn't advertising. It's a true story. It's a great story too. It's about Victoria and how we're insulated from the economic terrorism taking place in the rest of the world.
Reporter: Did you really just say economic terrorism? OK. You've got a great angle. Pitch me. Let's do this thing.
Market owner: Awesome. Well, you see, I sell things in my store and business has been pretty stable these last few months. Typically, I order in about 100 oranges a week. I usually sell 80 of them in the first 5 days. But by the sixth and seventh day, the remaining oranges start to look a little stale in my market.
Reporter: Makes sense. So I guess you throw them out then right?
Market owner: Heck no. If I did that I'd be out of business. Here's my secret. For the first five days of the week, I price the oranges a little higher because they're fresh and most people want fresh oranges. But there's also a small group of people out there who look for a good deal. I call these folks my weekend shoppers. So I discount the stale-looking oranges on days six and seven. I run an ad in your paper on Friday to let all those deal hunters know what I've got for them.
Reporter: I can see why you have the most successful market in town. That's brilliant.
Market owner: I'll say. And here's the best part: I still make a great profit on those stale oranges. So much so that I've decided to stock more of them.
Reporter: You can order stale oranges? What will they think of next? Marketing is amazing!
Market owner: Well, I guess you could order stale oranges if you really wanted to. But I don't need to. I know I'll consistently sell 80 oranges over the first 5 days I have them on the market. So instead of ordering 100 oranges next week, I'm going to order 120. That way I'll have 40 stale oranges instead of 20 with which to increase my profits.
Reporter: What happened to the economic terrorism angle? I thought I was getting a juicy story here? Sounds more like a business-as-usual, the-market-is-stable piece to me.
Market owner: Here's the thing. We live in a Navy town right? So people are in-tune with all things military and seaman right? They know what nautical terms mean. We can weave some into the story and people will go "Ahah! I know what they're getting at here..." We're also in a time where people are fighting mad... see the connection? There's likely a new tax on the horizon, or even a regression to an old tax that's going to cost us all a lot of money over the years... so people may be feeling uncertain, like they're having a hard time keeping their heads above water, but they're looking for certainty. All we need to do is conjure up some images to connect with their natural emotions: fight, floating, stability... They will then come to my market and buy my 40 extra oranges because they'll believe they're getting a great buying opportunity and they'll know my market is stable.
Reporter: I'm not sure I follow. How does the Navy and boats equal economic terrorism?
Market owner: Our submarines, if they weren't stuck in dry dock, would be out using things like bouys to signal and look for terrorists wouldn't they? All Victorians know this. They'll make the connection. It's a great metaphor and you can tag your story on your website with words like economic and terrorism and all those people, and more than just the local readers, will use Google to search those terms and find your story. You may even attract some foreigners, maybe even mainland Chinese... think of the possibilities!
Reporter: F'n brilliant! Do you have this story written down? Do me a favour, I want to make sure I get your quotes right, so send it to me electronically and I'll get it online as soon as possible. We may even do a follow-up in tomorrow's print run. Now I'll transfer you over to the advertising folks and they'll get you set up for Friday's ad to sell those 40 stale oranges.
H/T to the TC-Parrot for the link to the inspiration for this post in the previous comments section.
*not really true, but almost believable eh?
80 comments:
LOL That was funny*
* Yeah it was funny.
Then we must counter as the voices of reason with clean, clear facts and viewpoints. Let's be the truth serum to their spin.
We are already back to 2008 prices for homes. Such as today's sale on Degoutier for $665,000 which was bought in September 2008 for $643,000 plus GST.
I wonder if our prices can roll back to 2006 prices? That was the BIG year in price increases brought to you by 40 year amortizations and 0 downs. That jumped prices for homes in the city about a hundred grand that year.
HHV: that's brilliant.
Some more humour
http://www.thedailymash.co.uk/news/business/housing-market-affected-by-houses-being-on-fire-201108104178/
You can now get a 5 year fixed at 3.09% from some 2nd tier banks. Majors will probably follow soon.
As I posted earlier the lemmings may not be able to resist signing up.
Recently I have heard several media commentators say the recent low mortgage rates are almost "free money". This whips up the lemmings...
Dangerous talk, IMHO. Even if the rate was 0% you still have to pay back the loan - hardly free by any measure. When the loan is 7 times your pre-tax income you eventually find out how much of a ball and chain this "free money" will be over the next 30 years of your life.
Sales have slowed down this week. Here are the sales stats for yesterday (Tuesday).
Pending sales - 12
New listings - 65
Price reductions - 50
Back on market - 4
Canceled - 17
Expired - 9
Further clarification. The stats I posted are for a 24 hour period ending Tuesday night at 7 PM.
With the volume of unsold condos in the Victoria market, I find it hard to conceive why in two months time, League Assets plans to demolish existing stores at Colwood Corners and start contruction of the first 76 condominium units of a total of 2,200 that are planned to be built over the next 15 years.
Builder to break ground on Colwood City Centre development
because some fool of a bank is giving them a loan to do it?
Marko has indicated that pre-sales of Promontory have been quite high - perhaps others are seeing an opportunity? I can't figure out how Victoria or Westshore needs more commercial space (i.e. Uptown will be huge) or condos (resales are super-low).
That development has been ongoing for several years now, so its better to push though on phased construction than call it quits. Lots of money spent to date out of the developers pocket.
If they can bring the two bedroom suites in for around $300 per square foot, that should stir up some excitement with pre-construction sales.
It sure would be nice if developers built large 3 bedroom suites - but those days are over. How about special zoning to allow 1,500 square feet and larger 3-bedroom units where one of the bedrooms can be made into a bachelor suite for rental?
SFH <57K5 in the last 7 days have had 15 sales in everything east of Westshore and from Central Saanich west.
The sales have come in at the following price to assessed percents: 78,81,87,87,90,91,93,93,96,98,98,101,103,108 and 121 (the 121 outlier is 611 Lampson which claims 150K reno in one year and a 2 BR suite).
Median is 93% of assessed. Average is 95% (or 93% without Lampson). I'll second Leo S from the last thread on the drop in what houses are selling for compared to assessed.
Will re-run my listing price distribution stats and see if they reflect a similar change. Could be just that mainly lowball offers are getting presented.
Certainly is enough product out there, to low ball an offer. With the volume of listings in the outlying areas of the Westshore, you're likely the only offer the sellers will get during the listing contract.
My opinion, is that you should wait until the listing is between 60 to 90 days old, that way the listing agent may pressure the sellers to accept the offer or the agent will risk losing the listing and money spent on advertising.
Remember you're negotiating with the agent NOT the home owner.
Anyone - in relation to Just Jack's last post - is there a way to determine how many sales an agent has had recently? If an agent is desperate, then one could use that to their negotiating advantage in a down market...
(or would that be mean?)
I am familiar with league assets, they get investments from people, not banks. and thus far they are making a killing. i wouldn't count them out.
also recently i was looking at a property , inlaw suite, looked like a good deal, then i realized i made a $100,000 dollar rounding error. suddenly not such a good deal ... #S&P
Anyone - in relation to Just Jack's last post - is there a way to determine how many sales an agent has had recently?
Hmmm... the James Bond route would be show some flippant interest in an open house, and if the sellers agent follows you out to the road, ask him/her to take you to lunch to discuss a potential offer... if their SUV gas light is on the whole trip, and they buy you a subway sandwich on a credit card, I'd say you have a green light to throw in a lowball....
.. in the real world, I would simply mention that I am looking to save some money with all of the market risk these days and see how the agent reacts. Although most of us end up negotiating with the sellers agent, the sellers themselves may have a hard line in the sand that the agent has little control over.
I agree with Just Jack though, it's probably better to wait a bit if the price is way off what you are willing to pay.
On the lowball note, I think someone should throw an offer of $619K at St Anne. I'm betting there are some pretty big crickets chirping over there.
"League offers opportunities to invest* in large commercial and residential real estate properties through group ownership, or syndication."
In other words the suits make money whether or not the properties do.
just take a look at the website
Note that their investment vehicles don't trade on the TSX like the real REIT's which means it's harder to get your money out and there is less oversight.
I didn't buy St Ann when I could have pre-flip for $540K, so the most I would pay for that place is $640K now.
The Sooke market seems to be rolling back in prices faster than other areas.
Like the recent sale on Townsend of an 8 year old 2,600 square foot home with a suite. Which would be a high demand property in Victoria sold in April 2005 for $365,000.
Now, 6 years later, the property has re-sold for $418,000. An increase over 6 years of 15%. Or roughly what properties were selling for a year later in 2006.
Compare that with a similar sized home on Lily in Saanich East, but 40 years older selling in April 2004 for $350,000 reselling today for $585,000. A 67 percent increase over the last 7 years.
And lastly a century old home in need of updating on Oscar Street in Fairfield that sold in December of 2008 for $640,500 and just re-sold for $640,000.
As people flee the outlying areas in the search of a neighborhood to buy into and protect their bubble wealth. But, all they are doing is running to the stern of the Titanic as it sinks.
And the band played on...
@Just Jack, these examples are ones where people can still exit with their heads (and wallets) held high. They're also the ones that put a giant pit into the stomachs of neighbours who bought at much higher prices. Bastards.
"Marko has indicated that pre-sales of Promontory have been quite high - perhaps others are seeing an opportunity?"
They are up to 57 sales now at the Promontory so they should have no problem reaching 80 to get this thing off the ground.
The prices are attractive - in my opinion. I thought the sales would be slow because of 20% down requirement...
5% upon writing contract
5% upon 60 days
5% upon 6 months
5% upon 1 year
and then you wait until it is finished.
I wanted to buy a unit but couldn't get around the 20% down.
I have no problem putting 20% down on completion but to have that kind of cash locked up for three years is a bit much.
When I bought my unit at the834 it was 5% down or less than 10k....
Lenders financing these projects have really tightened up...
@patriotz wrote: Note that their investment vehicles don't trade on the TSX like the real REIT's which means it's harder to get your money out and there is less oversight.
Good point about liquidity.
A friend told me about League Assets Corp. a few years ago, so I read their "Blue Book" and other publications. I couldn't see how some of their investment products could return such a high rate of return (particularly during the depressed economy in 2008/09). It seemed "too good to be true", so I was wary. Has anyone invested with them? Experiences?
Bank of Canada faces interest rate dilemma
"The announcement in the U.S. that interest rates won't go up any time soon is public policy makers saying to consumers, there is no reward in saving your money, so don't think about saving for your retirement or a rainy day, you might as well spend it now in the hope that this consumer spending will stimulate the economy and lead to job creation."
"To raise interest rates would drive up the Canadian dollar, making our exports that much less competitive. Now it seems almost inevitable that the next move for our benchmark interest rates will be down."
But that could push the country into a deep and prolonged recession with record levels of private debt ...
these are adding up:
"BC Hydro is cutting its proposed rate hikes by 50 per cent and eliminating 1,000 jobs, the Crown corporation announced Thursday."
cbc.ca
BCREA just issued a news release on MLS stats for BC. There will be a delay before the TC can post an article. This is due to a problem on Carla's computer. Seems like the Ctl-C & Ctl-V keys are not working and they are waiting for IT to replace the keyboard. Won't be long - these keys are a critical function in the newsroom.
In the meantime here are some of the stats for Victoria.
Average residential price was 467K down from 497K in July 2010. Active listings up to 4178 from 3587 last July. Year-to-date sales are 3577 compared to 4169 last year.
** Note that BCREA combines SFH, condo and townhouse stats together and does not breakdown by category.
Cameron Muir continues to pump this month....
“The silver lining in the recent global economic uncertainty is that mortgage rates have the potential to reach record lows in the coming weeks as investors flock into bond markets,” added Muir. “The increased affordability and added purchasing power from lower mortgage rates will help bolster housing demand.”
Complete news release available at:
http://www.bcrea.bc.ca/news_room/2011-07.pdf
HHV - you will really like to read this. Matches the theme of your post to a T.
As you know everybody at the TC is part of a big family. The good folks in the advertising department noticed that one of their clients was taking out quite a few ads and thought it might be of interest to the business editor.
He said sure and presto we get this revealing article.
http://tinyurl.com/TC-is-great
Condos hot again on Songhees - Bosa to start 177-unit tower in fall as right-priced market stays hot
If the Victoria condominium market was getting a little congested, someone forgot to tell Bosa Properties.
The Vancouver-based company, which in March bought the rights to build the second residential tower on the 8.09-hectare Bayview property in Songhees as well as an option for a third, is steaming ahead with its first foray into the Victoria market with the 177-unit Promontory tower
"We actually think it's pretty good, some people told us the condo market here was quiet, but we've found it all right," said Bosa Properties senior vice-president Daryl Simpson.
Promontory, which went on sale at the end of July, now boasts 57 sales and a suite-map that is quickly filling with "sold" stickers.
"A lot of people were saying there's a lot of supply and units sitting on the market, but our sales may be an indication that we priced the homes right, an indication that they are sized right and maybe it's an indication people like what they see," said Simpson, during a tour of their newly built sales centre which features two full display kitchens and bathrooms to give prospective buyers a sense of what they're getting.
So, there is a glut of condos and low sales. A new project like this will certainly attract the buyers, who are a finite bunch. Does the new sexy building steal buyers from other potential condos?
So how many suites do I have to buy in order to get exclusive rights to sell the Promontory in Vancouver, Toronto, Peiking?
If your a real estate company and you want exclusive rights to sell my units, then you're going to have to buy 5% of the project as suites. After mine are all sold, then you can sell yours.
Most of the pre-builts will go to real estate agents and people working on the project.
There are still people willing to gamble on 5% down in the hope that prices will be higher a year or two from now. These people are not interest in existing condomininums, they want speculative builds. And if you really want to spark demand, just hire a chopper and fly a group of Asian real estate agents over Victoria.
Although, I think Bre-x had a better solution with their helicoptor.
I think one of the decent buys of the day is at 584 Judah. It went for $415K...3 beds & 2 baths with 1700 sq. ft. A nice, spacious, updated and solid house in an average neighbourhood.
Alexandrahere,
The owners must be disappointed. 584 Judah was on the market for 58 days and had 2 price reductions before the buyer threw a discounted offer at them.
Started out at 469K which was 20K under assessment. Walked away with 415K and paid the agent 15K commission netting 400K.
Here is the listing for anyone interested.
http://i52.tinypic.com/6iduma.png
http://i52.tinypic.com/6iduma.png
Is it just me or does anyone else hate the faux HDR treatment realtors are putting on the photos?
ok - I'll bite - what is HDR?
High dynamic range. And yes, I skip past any house with those idiotic doctored pics.
Hmmmm. I would think doctoring pics would be a little bit of fraud. Where do you draw the line?
While we are on the subject of misleading photos. My pet peeve is photos of the "ocean view" taken with a bazooka sized lens carefully cropping out the power pole and neighbor's two story gargage. I think pictures of a view should be required to be taken with a standard lens. HDR only works if it isn't photoshopped way over the top as it often is done.
Here is a link to HDR shots done in a 360 scrollable/zoomable panorama.
http://www.victoriavr.ca/real-estate/leslee-farrell/1069-beach-drive/
Make sure you check out the "other views" link on the top left corner.
I suspect this technique will always be reserved for properties in the ultra high end as it takes some work to do. I am not sure how I came upon this listing as it is miles out of my price range.
@a simple man, there is no line. It's akin to marrying off the fat daughter.
Shouldn't we ask there be a line drawn? If they cannot impose ethics upon their own membership maybe it is time someone asked it of them?
"Shouldn't we ask there be a line drawn?"
No. In this particular case, the more the picture is doctored, the more disappointing it is when people show up for a viewing. I highly doubt it will reap any benefit.
Not in this particular case, but in general. Should there not be a rule not to doctor photos at all?
aren't we talking real estate agents here? Considering that some act on the same level as used car salesmen (others don't thankfully), should it be expected that any piece of information is true?
Find out for yourself rather than trusting the word of someone who has a big cheque coming to them if they can convince you to trust them - unless they have provent that they can be trusted.
but if we are paying them so handsomely, often more per hour that we would pay a lawyer or a doctor, should we not expect absolute professionalism?
after 111 SFH sales average price is over 680k+ so far for August.....
Up $100,000 in 13 days - I had better buy quick!
So far this week within my criteria for SFH, I have 18 sales, 9 or 50% of these went for below BC assessment. One of the 19 went for only 2K over and 1209 Greenwood (in Esquimalt ... Just Jack) went for the highest at 39K over BC Assessment. Also I have 6 condo sales with 4 out of the 6 going for below assessed value.
A couple of years ago, a house that went any where near assessed value created something to talk about.
and now houses are frequently going below assessed and bidding wars are with rare unenlightened clients.
There is real change afoot.
Vancouver average and median price has been falling by a couple hundred thousand over the past 30 days.
http://www.yattermatters.com/2011/08/changing-conversation/
@a simple man, is there a case where doctoring photos of real estate is ever going to work? For existing props I can't think of any cases. Presales are a different story, but I wouldn't touch those with a ten foot barge pole anyways.
I guess I just feel that ethics and honesty should always prevail, no matter how trivial the matter.
"is there a case where doctoring photos of real estate is ever going to work? ... Presales are a different story"
How do you doctor a photo of something that doesn't exist? :-)
"ethics and honesty should always prevail"
Sure, though I think there are way more egregious problems with the REIC on this front than a doctored photo. To wit, paltry enforcement of deficiency disclosure and double-ending commissions is borderline criminal, and Realtors' collective unwillingness to clean their own house makes them all culpable.
"A couple of years ago, a house that went any where near assessed value created something to talk about."
Assessments have also gone up....
"Presales are a different story, but I wouldn't touch those with a ten foot barge pole anyways."
Just curious as to why?
Marko: Yes, I see what you mean about the high avg prices right now. For this week only, I'm running $580K for avg price in the four core municipalities of Vic,OB,Esq,SE&SW but the Median price is coming in at much, much lower at $529K.
Also Marko those "new" condos built in the Cook St Village 2008/2009 are pretty well all still sitting there. Is the only reason the price or do you know of another problem? Even the commercial suites are vacant. The new 2011 condo's just up the street with the funky 50's look seem to have all sold including the commercial spaces. Also to note are the new ones built on Fairfield Road by the shopping centre and across from the cemetary ..... they also seem to be not selling. Thanks, Marko
"Assessments have also gone up...."
Because sale prices have gone up.
So what does it mean when it's common for properties to sell below assessment?
It means prices are coming down. In a rising market you will see properties sell for a greater percentage over assessment as the year goes on, now we are seeing the reverse.
Currently rent shopping. I get pretty discouraged when I see this crap and the asking price!
http://victoria.en.craigslist.ca/apa/2536519373.html
http://victoria.kijiji.ca/
"...damage deposit plus $150 non refundable cleaning deposit."
How about half a duplex for nearly 3 large?
And if I drop $150 for the cleaning can I just walk away and leave it a $hit pit?
"It means prices are coming down. In a rising market you will see properties sell for a greater percentage over assessment as the year goes on, now we are seeing the reverse."
Or you have a relatively flat market where assessments jumped 5-10% for 2011.
2535 Scott Street sold for $399,000 a few days ago or $71,000 below assessment.
In late 2005 it sold for $325,000 or $75,900 above assessment.
Tax History Assessed Value
2011 - $470,000
2010 - $446,000
2009 - $415,600
2005 - $249,100
This home was not worth more than 400k in 2009, 2010, or 2011 (I am very familiar with the comparables in the area). Since 2005 and in particular the last 3 years the assessments have been totally out of whack on this property and many others.
1430 Braefoot just sold for $1,090,000. In 2007 it went for $1,140,000.
2033 Allenby just sold for $610,000. In 2007 it went for $572,000.
In a flat market you will have some winners and some losers.
Kind of weird but a lot of my sold listings this year were purchased in 2007. Everyone I have dealt so far this year has ended up above water.
1102 Reno, purchased in 07 for $395,000 and sold for $440,000.
1253 Chapman, purchased in 2007 for $$717,000 and sold for $759,000.
1320 Ryan, purchaed in 2007 for $516,000 and sold for $565,000.
207-630 Speed, purcahsed in 2007 for $275,000 an sold for $332,000.
274 Plowright, purchased in 2007 for $430,000 and sold for $485,000.
Common trend is everyone is in the core.
@Marko do you think it's an accident that most sales are at a profit? I don't.
Now Canada is different of course but marginal sellers selling at a profit below assessment is mighty familiar for certain bubble states.
Interestingly, almost all those sales were up about 10% from 2007, which is about 2.5% a year or basically the rate of inflation. Throw in cost of sale, property taxes and maintenance and it's not much to write home about.
I don't think anyone was trying to make a profit. Out of the 5 above, two sellers retired and sold to move up island. Both purchased nicer/bigger homes up island; however, prices were lower than what they sold for in Victoria.
My late 20s/early 30s sellers both sold to upgrade, one set upgraded by approx 400k, other by approx 600k. Both could afford it due to career advancement & duel professional incomes.
One person just wanted a newer home so they sold moved a few minutes further out and upgraded by 100k.
Or you have a relatively flat market where assessments jumped 5-10% for 2011.
As they have every year for the past decade or so. And every year sale prices are still significantly ahead of assessments. Not anymore.
Whether it is a flat market or the start of the descent remains to be seen.
Since 2005 and in particular the last 3 years the assessments have been totally out of whack on this property and many others.
That isolated case is not the norm or indicative of any widespread overinflation of assessments.
Assessments have risen with sale prices, since that's what they're based on. Now that sale prices are no longer increasing, we are seeing them at or below assessment, instead of 10% over. I'd like to see my graphs back 10 years, but the information hoarding by the VREB makes that somewhat impossible.
"Throw in cost of sale, property taxes and maintenance and it's not much to write home about."
The real killer is what you left out - mortgage interest, plus the other costs, that add up far in excess of the cost of renting. That's a tangible loss whether you're a landlord or owner-occupier.
When monthly costs of ownership are so much higher than renting you have to do a lot better than a 2.5% per annum capital gain to break even.
Which is why all bubbles burst.
We need Paul Schaffer to make the "Monday Morning RE Numbers Song", yah!
Marko, pretend that Paul just played your intro, and...
Monday, August 15, 2011 8:00am:
MTD August
2011 2010
Net Unconditional Sales: 236 425
New Listings: 595 956
Active Listings: 4,843 4,356
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
SFH average is now north of 690k...it will obviously come down by months end but we could potentnailly set a record. What is driving it?
Someone from Vancouver dropped $3.8 million on a Lands-End property. A number of other out of towners (Calgary, Toronto, etc.) are dropping some huge coin this month to live in Victoria.
Mainland China buyers are starting to pop up a bit more...someone from Chongquin, China just dropped $2.9 million on 620 St. Charles on Friday.
Condo average is running low at 310k.
^ Few too many spelling/grammar mistakes.
Some listings have sold for above assessment, some for below. Some have sold above what the sellers paid in 2007 and some below.
But the elephant in the room is the huge number of NON-SOLDS.
These are the bellwethers of future sale prices. Listen up! The non solds are speaking loud and clear! Prices are going down - just watch.
Have to agree with Patriotz - once you add in mortgage interest, property tax, maintenance, lawyer fees, property transfer taxes, and opportunity cost of the downpayment (you could have put it in a GIC...) there is no-profit, and there may be less than if the person had decided to rent instead.
The non-solds are speaking volumes...as are the 'we refuse to drop our price at all's'...some places haven't budged pricewise...and they need to if they want to go from non-sold to sold.
@a simple man: see http://seattlebubble.com/blog/2011/08/15/real-actual-listing-photos-provoke-yr-imagination/
"I don't think anyone was trying to make a profit."
This is a bit of a fine line. According to you, some of these sellers subsequently bought. In some cases, if they're leveraged, selling without a loss is a necessity to enable the purchase of another property.
As Craig pointed out, net fees, these places are barely treading water on equity.
If prices drop a bit more, equity is reduced enough that there simply is no available option for such sellers, except to rent or default. We're not there yet of course so it's too soon to call anything.
Everyone wants to make a profit. Of course! Doesn't matter if it is to move up or to leave to the kids or simply to put in the bank. EVERYONE wants to make a profit.
thanks jesse - great link.
10.26 months of inventory.
"Currently rent shopping. I get pretty discouraged when I see this crap and the asking price!"
A&J, the sad thing is that this isn't that bad for the area! We just finally found a fairly relatively nice main floor for decent rent but it took us 2 1/2 months to find something that was reasonable for us.
Also, isn't a non-refundable cleaning deposit illegal?
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