Monday, September 12, 2011

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.

13 comments:

EagerBuyer(Not) said...

Alexandrahere,

Thanks for posting your weekly stats in the last topic. Two things seem evident when looking at your stats:

- The majority of properties are selling under assessment which indicates a falling market.
- The average price of SFH in your price range is lower than a year ago

JustWatching said...

HHV,

This is beginning to look like 2010 all over again. Sales tanking and new listings piling on. Here is a link to your graphs and stats from a year ago.

Click here for Sept. 13 2010

I updated Double Agents graph for September 2010 sales using MS Paint. Readers will see that even if Sept sales hit last years 395 it is still the worst Sept. sales level in 10 years. Sales have to reach 600 to be near the 10 year average.

Revised Sept. MLS Sales

Alexandrahere said...

EagerBuyer and others: A year or two ago the BC Assessment was just a number that buyers would be confused by. Probably 98% of homes sold for over assessed value, with many going for 100K - 200K over. Now, at least buyers can give some credence to the assessment, as it somewhat indicates a ball park figure of what they likely should be paying at this time.

Just Jack said...

I think to understand why there are so many listings coming on the market, you have to look back in time three and five years ago. Those were peak sales activity years and these mortgage are coming up for renewal. And because of the flat market for the last few years, I would think many are choosing to sell rather than renew.

So what I see is increasing inventory and possibly a lot fewer homes taken off the market this winter. The days-on-market stretching out well into the 60 to 90 day range. At the same time the months of inventory for the outlying areas such as Sooke and for strata homes will likely be more than 12 months. And we will see home prices for small homes in less desirable areas in the core districts fall under $300,000.

Properties under duress to sell because of divorce, estates, court sales, etc. will command more of the marketplace as buyers start to chase down the deals. There still will be out-of-towners and some of the locals willing to pay premium and premium plus prices for choice properties but they will be the exception to the market as a whole.

I think we're coming into the season of bargain hunters looking for big price concessions of $30,000 and more off the list price. The key being, to bid what you can afford rather than what you think someone else can afford.

Just Jack said...

If you never miss a mortgage payment can you be foreclosed on?


Yup,

With a lot of the American lenders getting into trouble, these lenders may not want to renew your mortgage. That means you will have to pay out the mortgage. If you can't get financing, because your income has dropped or the mortgage is more than 90 percent of the value of the property, then the original lender will sue for the money and most likely will sell the collateral that you pledged (the house).

In Victoria, a lot of brokers sold the mortgages to American lenders in order to save their clients a quarter point or so on the mortgage. This really hasn't been a big problem in Victoria because our prices have been flat, but the new mortgage rules say that you can only refinance at 90% of the value. And that would be the current "appraised value"

So you can see that even a small drop in prices could put a lot of hurt onto some people. And while these people have been good paying clients they could be forced to sell.

So a nice big bitc% slap out to Jim Flaherty for once again protecting foreign interests at the sake of the people who pay his salary.

omc said...

The likening of this market to 2010 is probably true in more than one way; lots of inventory and many of the same crap houses still on the market. Remember, prices actually rose in the winter as the listings fell off as per usual.

I really think the market has split with a market slightly favoring the seller in the core areas, to a very strong buyers market in outlying areas.

I think HHV's prediction of more of the same is probably true; lots of overpriced cr@p and slow sales. So far a 90s style correction. Prices are down in most areas, except of course Oak Bay and Fernwood. Will the financial crisis spook many, or will the ultra low interest rates spark the market as is happening in much of the country?

Just Jack said...

Even in Sooke, with close to 11 months of inventory in detached homes, you can still get a sale by pricing just a little bit less than the competition. So while there are fewer buyers, the market is still strong enough to keep prices reasonably stable.

Even in the Gulf Islands, where there is close to two years of inventory, it seems the best deal would be at 2006 prices, but most still will get offers equivalent to 2007 or early 2008 prices.

Two years is an amazing amount of inventory for a market to carry in order to support these prices. Only because prospective buyers are still confident in housing can these prices be maintained. So this isn't a bubble bursting but more like a leaky ballon.

The risky part as there becomes fewer and fewer buyers, even a small economic shock could stall the market.

jesse said...

Lotsa listings, eh? Same's going on the other side of the Strait. My guess is this will be more of the same, a few people "wanting" to sell but no major impetus to get a sale at all costs. Rates are still very low so they "can always rent it out".

I'll wait 'till the spring, they'll say.

Animal Spirit said...

I'm calling this market a bust.

As some of you know, I follow the number of listings in different SFH percentiles. Since April, 2010, the median sales price has diverged upwardly from the 25 percentile list price - which it had tracked for a long time. Now, the 25 percentile listing price has dropped to 500K, from a maximum of 553K in April 2010. A drop of 9.6% in a year and a half.

What happened to median sales price in the States when the housing bust started? From Calculated Risk, February 2008:

"The NAR, DataQuick and other reports use the median house price; they take all the recent sales, and find the median price. This can be distorted by the mix of homes sold. When the bubble first burst, the median price continued to rise because fewer lower end houses were sold (the low end portion of the market with subprime loans slowed first). Now with jumbos being limited, the high end sales volume has fallen, and the median price has fallen quickly."

Given that the key index - MOI is increasing rapidly, that the 25 percentile list price is down 10% in 18 months and that reported medians and averages went up for a while, I'll suggest that we are seeing the same phenomenon Calculated Risk reported in 2008. That is, the higher end sales have been pushing reported values up, but actual prices are down considerably.

If the high end drops out, then Wile RE Coyote goes off the cliff sending Squawky the TC Parrot for a bender while us born again renters thank the heavens for salvations, patience, foresight and plain old luck.

pod_x said...

@jesse: People will hunker down, but the inevitable march of higher taxes, higher cost of living, and job losses as economy flatlines will take the same toll as higher rates. But if banks keep getting squeezed, they'll raise VRMs too to improve margins.

EagerBuyer(Not) said...

Manulife Bank recently conducted a consumer debt survey. The results are shocking...

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

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.

The Manulife Bank survey showed that only 48 per cent of respondents had reduced their personal debt over the last 12 months, down from 57 per cent in last quarter‟s survey results.


You can read the full news release by clicking here

jesse said...

"if banks keep getting squeezed, they'll raise VRMs too to improve margins."

They just did that last week, but I don't think it had much to do with collusion; there are too many smaller lenders who keep (or kept) the banks honest. I think it had to do more with increasing spreads of late forcing up the "actual prime" rate. But hey it might be collusion, it's happened before!

In my view perpetually low rates are no free lunch; there are too many leaves for the roots (or vice versa) and the money tree stops growing.

CanSpeccy said...

There's an interesting interview with Steve Keen -- one of the few academic economists to predict the 2008 market crash -- on the outlook for Australia's property market.