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.
February 2012 month to date
Net Unconditional Sales: 80
New Listings: 245
Active Listings: 3539
Sales to new listings ratio: 33%
February 2011
Net Unconditional Sales: 488
New Listings: 1276
Active Listings: 3714
Sales to new listings ratio: 38%
Sales to active listings ratio: 13% or 7.6 MOI
And we're off to the spring market. Looks like sales are starting pretty strong, but it's too early to really tell. Months of inventory has been high and putting pressure on prices. Can it continue as sales heat up?
29 comments:
Here is the months of inventory back to June 2008. As you can see, during the financial crisis MOI was sky high and prices plummeted. Then we had our very strong spring market with MOI going as low as 4. Hard to really say, but it looks like the range of about 7.5 to 9.5 makes for a stable Victoria market, while higher values push down on prices.
The trend has been up. Listings have slowed a bit while sales have increased.
If anyone has monthly data further back, I'd be interested to see it. What was the MOI in the rising market of the mid 2000s?
Depending on the data you are using can make the months of inventory difficult to understand.
7.5 to 9.5 months might be for the entire market from manufactured homes to mansions. Within that group condo prices could be falling and waterfront homes rising. Also, prices lag inventory. Which means that by the time you see 7.5 to 9.5 MOI, prices have already come down.
A better judge might be that if inventory is over 6 months for 2 consecutive quarters then the market would be indicative of a "bear" market that favors buyers and may lead to future lower prices or other concessions by sellers.
You would probably have to limit your data to the home you are looking to buy to see where future prices may be heading.
Like a 5 to 15 year old non view condominium in the Victoria area having between 850 to 1,150 finished square feet.
If your are seeing the MOI for this type of property continue to rise the chances are good that sellers will have to lower prices or increase incentives to lure buyers.
Personally, I would only use re-sales and not new condominium complexes because the tax rebate can obscure data and the sale is a "contract" not necessarily at market value. Also, I have occasionally found that the purchase price for pre-construction condominiums is not the same as what is registered at land titles. And lastly, for pre-construction condominium the date that the offer is accepted can be 6 months, a year or more until the property's title can be registered. Its just messy using new or pre-construction.
Even in the condominium market, some types of homes may be heading lower before others.
In my opinion, the luxury condominium market is in a glut, perhaps that is why the high end suites are rolling back farther than the more modest homes.
Back in December 2006, a sixth floor condominium sold in Harborside for $675,000 and today it sold for $640,000.
Does this mean that all condominiums are now back to 2006 prices? I don't think so. But if the luxury market stays in a glut, eventually it will force lower prices for the more modest suites.
(NOTE) this is also why I think the Case-Shiller or Teranet method is a future indicator of market prices.
PS I had to change my picture as some people were mistaking me for some B actor.
So, the federal budget will be released next month and will all the media releases about the govt concern with personal debt (esp. mortgage) and the "potential housing bubble" what changes do you think are in store?
- Change 30 yr to 25 yr amortizations?
- increase down-payments to 10%?
- Stop big banks from essentially creating zero-down mortgage (cash back)?
Others?
It would certainly be better to do MOI for each market segment. However I only have access to the publicly released data so the whole market data is all I can look at.
Would be interesting to see separate MOI history for different regions and types for sure..
@a simple man
Change 30 yr to 25 yr amortizations?
Almost certainly.
Increase down-payments to 10%?
I think 7.5% is possible, but staying at 5% is most likely.
Stop big banks from essentially creating zero-down mortgage (cash back)?
Although I whole-heartedly agree that there should be no zero-money down ... this may be very hard for the feds to enforce.
Better yet, I would love to see a situation where CHMC only insures 80% of the value of the mortgage so that the banks have some "skin in the game". I expect the banks would be much more cautious when their own money is at risk (rather than the taxpayers).
Well that was short lived.
Changing the amortization to 25 years would be a logical move in my opinion.
I'd go for the combo:
- amortization to 25 years
- require proof of income (and CMHC have recourse on lenders if proof is stated, but none real)
- must put 5% of own money down
Have Halibut?
These two graphs get posted a lot on articles comparing the Canadian situation to the US one.
First
and second
They seem to be measuring the same thing, since the value for Canada's debt ends up at the same value.
But one shows us far more in debt than the US ever was, and the other shows us just surpassing them now, but still under their maximum.
Which one is correct? Anyone know why they're different?
It's obvious that they get the same numbers for the Canada curve but different numbers for the US curve. Both the magnitude and the timing of the peaks for the US curve are different, and the Economist graph consistently shows higher debt/income for the US than the other graph.
So it would appear that they are using different sources and/or methodology for US debt and/or income. Perhaps the Economist is deducting personal medical costs from US disposable income, while the other one isn't, for example.
19 SFHs under $400k in the core areas today.
Hi Leo - how does this compare to the past year or so?
No idea :) I think someone else was monitoring that segment at one point but I can't recall.
Gotta take notice when a publicly traded bank sells $600B of its own bonds guaranteed by Canadian taxpayers.
These bonds are 100% guaranteed by prime mortgages insured by the Canada Mortgage and Housing Corp., a government agency.
typo: it's $600M (not billion)
typo: it's $600M (not billion)
A Freudian typo.
There selling mortgage backed securities (MBS) to raise capital.
The bank has bundled a large group of mortgages together. Some will be absolute sheeeet and others will be secure loans at 70% of current value. All will be backed by CMHC insurance which makes them triple A rated MBS's suitable for insurance companies and pension funds to buy.
In the USA these same style of MBS's were backed by Fannie Mae. Of course CMHC most likely lacks the reserve funds to pay out large losses on these securities but that's where you and I step in.
Now as I understand it, CMHC may have already massed these same mortgages into an MBS and sold it. Now, you may have the case of one property being used as security for two debt instruments. Kinda like selling 200 percent of a Gold Mine.
Jim Flaherty's bum hole probably puckered up on hearing this news.
CMHC doesn't sell their insurance policies as MBS so these are not synthetic in nature. CMHC buys mortgages from banks and packages them as MBS paper and sells that but they still hold the insurance policy.
@commuter 12
Some of my bond funds hold a selection of Canada Housing Trust (such as Canada Hsg Tr No 1 4.55%). I assume these are the same MBS?
http://www.cmhc-schl.gc.ca/en/hoficlincl/mobase/index.cfm
My mistake commuter 12
I thought CMHC had the right to sell the securities of the mortgages that they insured.
In that way, CMHC could raise capital for projects like new Blue Bridges and highway interchanges.
Canada Housing Trust are straight bonds, not MBS, i.e. they are direct IOU's of CMHC, i.e. the taxpayer.
Thanks for the clarification, @patriotz.
Could be a relatively good month in an overall downtrend. We have great February weather.. and the banks just pushed interest rates down substantially.
Someone who is paying 2,000$ a month mortgage, with the new 3% rates, can borrow ~480,000$
The same payment at 3.6% can borrow ~445,000$.
This is a good way to gradually defuse a bubble.
It is very early in the month but seeing strong averages so far...SFH 650, Condo 334k, and when we see a few accepted offers on Rainbow Hill Townhomes (900k) go unconditional that average will be very strong as well.
"This is a good way to gradually defuse a bubble."
I'm not sure that can be done. Unless "lost decades" like Japan has experienced can be considered good.
You either pull the band aid off quickly or slowly.
Almost a million for a TOWNHOUSE??!!! That's sick.
I am so thankful that there are so many company such as a bank that will offers for Best Mortgage Broker Vancouver
It was early 1980's when the condominium market boomed! Thousands and thousands of condominiums had been built all over the country.
Condo Market
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