2012

End of the world? Doubtful. End of the Victoria real estate market stability? Perhaps.

Here's a prediction post for you to do some educated guessing.

From Animal Spirit:

Spent a bit of time modeling the relationship between the listing price to sales price ratio (y axis bar) and month within 2011 (x axis bar). While the pending, new listings and price change ratio medians jump about quite a bit, the sum of all listings with an update on PCS exhibits an extremely strong relationship to month. A full 92% of the variability in the median list price to assessed price ratio (for the median for the entire month) is explained by the month of the year. Using the equation y = 106.14 -1.0428 x, one can see that list prices started at 106% of assessed and have dropped by 1.04% per month. Only 8% of the change in the list price to assessed price (monthly median) ratio is not explained by the chimes of the clock.

Looking forward, what does this mean? Absolutely nothing of course. Unless you want it to be different here.  Or prefer to see if the 7K drop per month on a 500K house continues.

Here's an interesting blog post with all kinds of good, sound, expert economic analysis of the Canadian housing market data. It doesn't deal directly with Victoria, but offers some provincial analysis that we can reasonably extrapolate to the local market. Isn't a particularly pretty picture, but then again, nor has the Victoria market been a pretty picture post 2009.

And of course, we have Marko Juras to thank for the December 2011 snapshot to further base some of your predictions on (still 3 days left though):

December 2011 (month to date)
Net Unconditional Sales: 301
New listings: 441
Active listings: 3,695
Sales to new listings ratio: 68%

December 2010
Net Unconditional Sales: 349
New listings: 522
Active listings: 3,252
Sales to new listings ratio: 66%
Sales to active listings ratio: 10.7% or 9.3 MOI

On a personal note, I want to thank the dedicated readership here and the contributions of the those who share data and anecdotes. This blog and its discussion is so much more because of your time and efforts. It's appreciated and you're the reason why it continues to be what it is. If it weren't for your commentary, analysis and data sharing, it would have morphed into home-updating-on-a-budget 101, which partially explains my growing absence. 

Double counting

US home sales, for the past 5 years, seem to have been, in some cases at least, double counted. WOW. So the NAR misreported already weak home sales, on the upside. Who would have thunk it? A weak market is weaker than they tell us. Sheeeeeeeet.

Early this year, the Realtors group was accused of overcounting existing homes sales, with California-based real estate analysis firm CoreLogic claiming sales could have been overstated by as much as 20 percent.

Could this also be happening locally? Now don't get me wrong, I'm not making an assertion that monthly data released by local boards across the country is nefariously manipulated to misrepresent the strength of the market. I'm just asking a question: why do we put so much trust in data so jealously safeguarded against third party verification? Is the Landcorp info, or the Teranet info, enough to allow a firm like the US-based CoreLogic from exposing issues with the reported data?  

Monday market update: pre-holiday doldrums

MLS numbers are courtesy of the VREB via Marko Juras. Numbers are for the entire board reporting area, including Gulf Islands, Sooke and Shawnigan Lake.

December 2011 (month to date)
Net Unconditional Sales: 146
New listings: 222
Active listings: 3,879
Sales to new listings ratio: 65%

December 2010
Net Unconditional Sales: 349
New listings: 522
Active listings: 3,252
Sales to new listings ratio: 66%
Sales to active listings ratio: 10.7% or 9.3 MOI.

We're averaging 13 sales per day. That's about a 14% drop from a rough three month daily average. Nothing too shocking considering we're at the pointy end of the annual sales slowdown. But listings are also up over 16% from this time last year--in other words, a seller's market this aint!

Quiet times: open thread

Clearly I've been MIA most of this week. Thanks to regular contributors for keeping the comments going, especially for those willing and able to supply readers with fresh and accurate data (Marko Juras and JustWaiting Cheers!)

Here's an open thread to hopefully make the comments section a little easier to navigate. I'll get back to the regular Monday market updates in a few days.

Based on JustWaiting's recent daily data, it looks like daily sales volume is down significantly (35% or so). I wouldn't be too quick to say this is anything but the Holidays are looming effect; interesting trend no less.

November data

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.

November 2011 (last week's numbers)
Net Unconditional Sales: 482 |419| {314} [200] (90)
New Listings: 847 |756| {570} [369] (201)
Active Listings: 4,329 |4,202| {4,218} [4,265] (4,503)
Sales to new listings ratio: 57%
Sales to active listings ratio: 11% or 9 MOI

November 2010
Net Unconditional Sales: 479
New Listings: 722
Active Listings: 3,723
Sales to new listings ratio: 66%
Sales to active listings ratio: 13% or 7.7 MOI
Average prices are as follows: SFH = $592K TH = $380K Condos = $320K

Sales volumes are so low, and have been for months, that they're more influenced than ever by unit-type and price sales mix. 

Animal Spirit feeds us some more really gem analysis on the low end market:

As people may know, as part of a master plan to take over Starbucks I’ve been collecting a few datasets on single family homes in the core areas. Since prices are generally set at the margins and since the lower margin is much more important for house prices than the upper one (i.e. house prices include a nominal lot value for which a house would sell to a builder like Marko’s dad, serving then to regenerate the housing stock). 

For quite a while prices at the low end of the market weren’t changing much. A house listed for 400K two years ago was listing (and selling) for 400K this year. Then fall happened. In May, out of 1050 listings, there were only 36 houses listed for under 400K. November 24, with 1008 listings on the market, there were 62 low priced beauties – or a 72% increase from May. If this is converted to dollars, the 5^th percentile (95 listings out of 100 are for more money) in May was $415K, and in November this had dropped to $388K – $27,000 – 6.5%, or more than most down payments.

So how does this compare over time? The figure below shows that there were comparatively more low end houses in February of 2009, but that since April, 2011 (the dark blue line) there is a clear drop in prices (or at least more listings) for everything under $450K. I’ll let people play around a bit to see how much. But wait, doesn’t Marko tell us that lots are still going for $330-$350K in Fernwood. Sure, the graph shows us that there are virtually no houses listed for under $350K – the change (right now) is happening from $350-$450K.

Since someone will probably say that the types of houses that are listed for are changing, I’ll pull out a new data series that I’ve been collecting. Taking all houses $575K and less in price, >1,000 sq ft and in the core areas (including Central Saanich) and pulling out the area, list price, assessed price, sq. ft. and other data one can get a pretty good idea of what Mr. Market is doing without having a real estate license in good standing. Today’s post focuses on changes in the low end between May and November, so here is a scattergram/regression analysis showing the price per square foot (y axis) with the square feet of the listing (x axis).

Taking the output trend line, one can solve for what the average price for a listing of a given size would be at different points in time: 

Size (sq ft)	May	Oct / Nov	Change
1,000	453,359	427,560	-25,799
1,250	473,205	450,377	-22,828
1,500	490,063	469,922	-20,141
2,000	517,893	502,501	-15,392

Here we can see that a 1,000 sq foot shack that would have listed for an average of $453,000 in May is now $428,000 (26K, or 5.7% less). Interestingly, there is less change as houses get larger. Could this be that the underlying lot value is dropping? Or is it because speculators have been chased out of the market by the CMHC changes?