Bear Mountain - Victoria's Vegas - Part 1

The Bear Mountain development, brainchild of Len Barrie, a former NHL hockey player, along with several other NHL players acting as investors, broke ground in 2005. The original $2.1 billion plan called for 1,112 single-family homes, 1,997 condos, 220 townhouses and more than 1,000 fractional-ownership town homes. Early in the last real estate boom, the development received country-wide attention and was even mentioned in the New York Times.

By 2006 several condominium buildings were under way and many more had been approved, including the 20-storey Soaring Peaks and 14-storey Highlander (started but never finished).

In 2006, the Bear Mountain sales team set a record for condo sales in one day with $66 million worth of units sold!

In 2007, Vancouver-based development company Quigg announced plans for 45-, 39-,33- and 27-storey towers--these plans stalled in 2008 due to the economic downturn. 2007 and 2008 were also the years that condo prices on the mountain hit their peak.

By 2009, due to a weak global economy and poor management decisions, things slowly began to unravel – the entire development was put on hold and remaining condos prices were slashed significantly to clear out remaining inventory. While prices in to the Bear Mountain condo market recovered slightly in 2010, 2011 has brought another bear market to Bear Mountain. Let's examine some of this year’s sales, previous purchase prices and current listings:

Current listings looking at huge losses

Unit	List price	Previous sale price	Date
105 – 1400 Lynburne	$258,000	$334,900 + GST	Nov 2008
509 – 1400 Lynburne	$319,900	$355,000 + HST	August 2010
305 – 1325 Bear Mountain Pkwy	$298,000	$350,000	June 2008
417 – 1325 Bear Mountain Pkwy	$311,000 (court ordered)	$479,000 + GST	June 2007

2011 sales and previous purchase prices

Unit	2011 Sale price & date	Previous sale price & year
416 – 1325 Bear Mountain Pkwy	$312,800 (Sept)	$517,924 + GST (2007)
302 – 1375 Bear Mountain Pkwy	$365,000 (Sept)	$319,047 + GST (2009)
147 – 1335 Bear Mountain Pkwy	$412,000 (Aug)	$415,000 + GST (2010)
414 – 1335 Bear Mountain Pkwy	$345,000 (Aug)	$365,000 (2009)
144 -1335 Bear Mountain Pkwy	$220,000 (July)	$262,000 (2010)
617 – 1400 Lynburne	$307,500 (July)	$335,000 + GST (2009)

*The above post was contributed by an anonymous reader. Sales data was fact-checked for accuracy. 

Monday market update, it's ugly

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.

September 2011 (previous week's numbers)
Net Unconditional Sales: 352 {237} [126] (51)
New Listings: 1,065 {810} [502] (186)
Active Listings: 4,745 {4,738} [4,689] (4,590)
Sales to new listings ratio: 33% {29%} [25%] (27%)

September 2010
Net Unconditional Sales: 395
New Listings: 1,211
Active Listings: 4,323
Sales to new listings ratio: 32%
Sales to active listings ratio: 9% or 10.9 MOI

We're likely to break 400 sales by month-end, maybe even hit 430ish. Which is better than September of last year, but only marginally so. It's not been a good month no matter how you spin it. Take a look at the rest of the decade (h/t Just Watching for updating the graph):

Victoria, not as beautiful as Saskatoon

Call it craziness, but those funny folks over at Microsoft's MSN.ca think there are six cities in Canada with more attractive people, places and things than Best Place in Canada™ Victoria. And I thought blue-hair was the new black?

A favourite argument of the ever-increasing-Victoria-home-price crowd is the desirability of Victoria in the minds of too-many-to-count, from-away Canadians. "Everyone wants to live here." "We have the mildest climate in Canada." "We're in a rain shadow!" All of which are subjective statements only partially grounded in comparable truth. Victoria might be in a rain shadow, but it still has miserable months of endless grey in the winter time, four of them, from November to February, that chase many a snowbird to sunnier climes for a desperate dose of natural Vitamin D.

It's funny, when we compare the most beautiful cities as ranked by MSN to the most expensive cities as ranked by MSN, you'd expect, if the argument that beautiful equates to people willing to pay more to live there, that places more beautiful than Victoria would also cost more. It ain't so though.

Victoria is the seventh most beautiful city, yet the second most expensive. There must be something missing in that argument to justify high home prices then outside the beauty. It must be livability; or maybe not, as MoneySense, a magazine that factors in costs relative to incomes/opportunities etc, ranks Victoria 8th on their list, behind places like Brandon, Manitoba and Fredericton, New Brunswick, yes, New Brunswick.

Now I know, I know, using MoneySense to fight an argument originally supported by MSN is like saying these apples aren't as nice as these oranges. I tried to find an MSN article, but the one I found didn't have Victoria on it. But of course, it also contained the qualifying word "Next" so I'm sure Victoria was omitted primarily because it must be included on the original list. Funny though, CBC has an article and poll up about Canada's most livable cities, including such desirable locales as Yellowknife and Winnipeg, but it leaves Victoria off it's list entirely.

Now I know, some of you who think the sun shines out from underneath the soon to be rebuilt Johnson Street Bridge will lambaste my "arguments" in the comments as pure hogwash. Which is perfectly fine. I chose to fight fire with fire on this little topic.

When you want to dig up some population growth, household formation, housing start and demographic data to support the claim that "desirability" is higher in Victoria than elsewhere, that land constraints are actually leading to a reduction in available supply creating a supply/demand imbalance supporting escalating prices (isolated from other factors like interest rates, incomes and the looming demographic purge of real estate), we can move on from tripe-filled, spurious arguments about local real estate valuations.  

Monday market update

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.

September 2011 (last week's numbers)
Net Unconditional Sales: 237 [126] (51)
New Listings: 810 [502] (186)
Active Listings: 4,738 [4,689] (4,590)
Sales to new listings ratio: 29% [25%] (27%)

September 2010
Net Unconditional Sales: 395
New Listings: 1,211
Active Listings: 4,323
Sales to new listings ratio: 32%
Sales to active listings ratio: 9% or 10.9 MOI

Daily sales volume is averaging 13 units per day... a noticeable drop from last month's 16-17 units per day average. This is remarkable as the typically industry spin usually tells us the market picks up again once the summer buying doldrums end. Am I the only one noticing the absence of that line? Seems steady-as-she-goes is the new buy-now-or-be-priced-out-forever. There are only two truths in the Victoria market right now: sales are low and inventory is high.

Stupid is as stupid does

EagerBuyer(Not) pointed us to a most interesting survey released recently by Manulife Financial. It contains some startling, OK, not really, let's call them confirming, results about just how crazy and ignorant debtors really are in Canada:

• More than 1 in 3 Canadian homeowners aged 30-39 are unaware interest rates are near historic low

This just happens to be my age cohort. How in the name of all that is good in this world could anyone of my generation not know that interest rates have been on the steady decline for almost 30 years? Even if they've been smoking too much herb, they'd have to be completely oblivious to not know that rates dropped drastically just over the past few years.

• When asked how today's interest rates compared to historical norms, more than one in three Canadians aged 30-39 incorrectly responded that today's rates were about average or relatively high.

Emphasis mine. I think the only thing "relatively high" are 1/3rd of Canadian homeowners between the ages of 30 and 39, which, coincidentally happens to be the age range of the bulk of first time home buyers in Victoria. Coincidence? I'll let you decide.

• While there is no expectation we'll see rates like those of the 1980s, a rise of even a few percentage points could have a significant financial impact on this younger generation of Canadians.

The effect of a "few percentage points" rise in interest rates will very likely be catastrophic considering more than one in two Canadians are living pay cheque to pay cheque.

The rest of the release reads like an advertisement for a Manulife One account, if you know what that is, and odds are at least 1:3 that readers don't. Regardless, I'd like to say these results are shocking, except they're not. The evidence of stupid consumers is all around us. I guess the message that Canadian lenders are prudent and conservative has had the unintended consequence for one-third of us believing that means they'll take care of us and we don't need to learn anything basic about money ourselves.     


Further reading: Ben, over at The Economic Analyst linked to this Irish Times article: Canada's Northern Tiger looks very like a bubble. Not that Ireland would know anything about real estate bubbles.

Monday market update, listings jump

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.

September 2011 (last week's numbers)
Net Unconditional Sales: 126 (51)
New Listings: 502 (186)
Active Listings: 4,689 (4,590)
Sales to new listings ratio: 25% (27%)

September 2010
Net Unconditional Sales: 395
New Listings: 1,211
Active Listings: 4,323
Sales to new listings ratio: 32%
Sales to active listings ratio: 9% or 10.9 MOI

Time to pull the ejection seat? Holy Hannah batman, I can't recall the last time we saw 316 listings hit the market in one week in any September. For every housing unit sold in Victoria so far this month, four have been put on the market. If the trend continues (likely won't as listings tend to be front of the month heavy) we could see around 1400 new listings offered. Those are height of the spring selling season (April/May/June) type numbers.

What gives? Panic selling? We won't know till we have more data. But I'd hesitate to call this kind of listings dump normal activity for early September.

September slumber? Monday market update

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.

September 2011
Net Unconditional Sales: 51
New Listings: 186
Active Listings: 4,590
Sales to new listings ratio: 27%

September 2010
Net Unconditional Sales: 395
New Listings: 1,211
Active Listings: 4,323
Sales to new listings ratio: 32%
Sales to active listings ratio: 9% or 10.9 MOI

No bones about it. September 2011 is off to a slow start. Yes, there's a long weekend in there. Regardless, 10 unit sales per day is a drop of nearly 40% from the averages we've witnessed over the past couple of months. It won't continue thought. Sales numbers will rise, even if slightly. I say this with confidence because this first "week" was really a holiday weekend.

Will September be a good or bad month for local real estate sales? I'm guessing more of the same. Slow sales with a glut of overpriced, crap-quality inventory. There are a few deals to be found in some segments... as long as you define deal as "priced lower than this time last year" and you ignore the fundamentals of price to rent and price to income ratios.

August sales, a modest bounce

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.

August 2011 (weekly in brackets)
Net Unconditional Sales: 542 <469> {354} [236] (116)
New Listings: 1,200 <1,056> {845} [595] (296)
Active Listings: 4,944 <4,811> {4,821} [4,843] (4,783)
Sales to new listings ratio: 45% <44%> {42%} [39%] (39%)
Sales to active listings ratio: 11% or 9.1 MOI

August 2010 
Net Unconditional Sales: 425
New Listings: 956
Active Listings: 4,356
Sales to new listings ratio: 47%
Sales to active listings ratio: 9% or 10.25 MOI

If you compare the year-over-year numbers, we're looking at a sales volume gain of nearly 22%. Month-over-month, we're looking at a modest gain of only 2.8%, or basically a flat market. It's interesting that over the first 28 days of the month, daily sales volume was about 16.5 units; then suddenly in 3 days, we see a "spike" to 24.3 units per day. Strange.

The SFH average reported price will be in the $650,000 range. I think happy hour will start around 11:30AM for the communications team, along with their friends at the TC, today. These are the kind of days they live for: press releases like the one you'll see in about 3 hours time write themselves and require no editing. Just cut, paste and hit Upload! Badaboom badabing, now we're drinking pints on the patio in the summer sun. And it's only Thursday before the long weekend.

Truths. Much needed but rarely told in the Victoria real estate market.