Monday, March 12, 2012

Mar 10: 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.

March 2012 month to date
Net Unconditional Sales: 152
New Listings: 465
Active Listings: 3832
Sales to new listings ratio: 33%

March 2011
Net Unconditional Sales: 622
New Listings: 1501
Active Listings: 4100
Sales to new listings ratio: 41%
Sales to active listings ratio: 15% or 6.6 MOI

Seems like slow sales to start out the month, back down to under 14/day. While there is always a (re)listing surge at the beginning of the month, do sales usually start off slow?


Marko said...

SFH Average = $613,577
SFH Median = $571,000

^Sample size only 73 so this may swing quite a bit before the end of the month.

Condo Average = $297,015

a simple man said...

That sales number does seem on the lower side.

Spent time hiking the Gowlland Tod Trail yesterday - what a beautiful place we live in. Saanich has some amazing rural places just minutes from downtown.

Introvert said...

Spent time hiking the Gowlland Tod Trail yesterday - what a beautiful place we live in. Saanich has some amazing rural places just minutes from downtown.

Indeed! It's one of the reasons our real estate carries a premium.

reasonfirst said...

That announcement that 6,100 jobs were added last month doesn't pass the sniff test for me. It is significantly higher than normal month to month changes. Anyone with anecdotal information of big hires going on?


a simple man said...

Our RE will always carry a relative premium (barring a catastrophic event, like THE major earthquake/tsunami event due to hit any time). That said, it is still absolutely too high.

happy renter said...

Any idea how re-sale units in The Chelsea (999 Burdett) have been doing? I've heard anecdotally that some of the original owners from 2008 have had to sell at a loss last year and this year. Does anyone have the numbers to back that up or disprove it?

Sweetrealtor said...

Not surprising that they'd lose money reselling a 2008 purchase. I was evaluating a property yesterday and the best comparable I could find was a sale in June 2008. SFD median price as of Feb '12 is $8k lower than June 2008.

omc said...


I am ussually very sceptical of the jobs #s too, but lately things have been a different.

Microsoft has opened shop here and there has been quite a bit of work due to the Navy which will be on going for some time.

The big federal ship building contract awarded to seaspan is having some of the work done here. Also much of the work that would have been done in the vancouver area ship yards that are now busy with the federal contract is being redistributed around.

Major mid life refits of the navy's frigates is all being done here, including much of the engineering work.

Planned replacement of major buildings and huge utilities projects on base are already under way.

A mini local boom of jobs that pay much better than the local average.

Just Jack said...

That 6100 jobs were created in one month in Victoria sounds incredible to me also. Put that number into perspective. That's equivalent to one-fifth of all the people living in Langford getting a job last month.

But, that's what was reported in the Times Colonist.

happy renter said...

@ sweetrealtor

Were you evaluating a unit in the Chelsea?

patriotz said...

It's one of the reasons our real estate carries a premium.

That (or any other amenity) is not a reason for prices to be out of proportion to rents. Because, of course, renters have the same access to them.

a simple man said...

That (or any other amenity) is not a reason for prices to be out of proportion to rents. Because, of course, renters have the same access to them.

Shhh. I have a great thing going here.

Phillip said...

While high-tech and naval will help lessen the slide, they’re such small industries compared to the big three: construction, tourism, and government. Some weekend TC articles on subject:

With expectations the tourism industry will continue to struggle, the real estate market will remain steady, if unspectacular, and the construction sector will slowly rebound, Victoria can expect overall economic growth of 1.9 per cent in 2012 and about 2.6 per cent over the next three years, experts predicted.

Prairie province cities are growing closer to 4%.

Greater Victoria's construction dry spell began last fall. "We find that, since the middle of September, it has been extremely flat," Baynton said. "Generally [employers] have been forced to lay off employees due to a lack or work."

Full-time equivalent positions in government are projected to decrease at an annual average rate of 2.7 per cent over the government's three-year fiscal plan, tabled Tuesday. B.C. Government Employees' Union president Darryl Walker said the public service will drop to levels not seen since the early 1970s. Going forward, "it will be the lowest I can ever remember in B.C.," he said.

The key reason the unemployment rate is falling is the labour force is contracting at a faster rate as people exit. It’s too bad Halifax beat Vancouver for the big contract. Then naval would have provided some stability.

dasmo said...

Actually tech is bigger than tourism.

Phillip said...

"employing 13,000 people"

Are you suggesting tourism related jobs are less than 13,000

dasmo said...

Yes P
rofessional, scientific and technical services is bigger than A
ccommodation and food services (and food services can't all be attributed to tourism.

Anonymous said...

Tourism employs a lot more people but tech generates more revenue (because each individual product can be sold for tens of thousands of $).

Just Jack said...

If I started a business repairing computers would I be considered Tech? Or if I wrote Apps for an I phone?

Everyone seems to want to be "tech" these days. 30 years ago, TV repairmen were tech, now with electronics in every item, a lot of jobs that weren't tech have become tech. An elevator repairman, a cablevision installer, etc.

Or does tech actually mean something specific?

I don't know.

happy renter said...

This series oughta be interesting:

I Want to Stay!: My journey into Vancouver's real estate racket

Anonymous said...

I agree that they've stretched that definition of "high tech" - it used to mean electronics or software systems that supply the backend functionality of, say, cable modems, data centers or communications networks (complex enough that only engineers can really design or support them). The ViaTec site lists their member companies but that list even contains web designers (and now that non-technical people can use high level software tools to design their own web sites, that's not really high tech. But the designers of those software tools are).

dasmo said...

repairing computers would most likely be Repair and Maintenance 4200 people employed across Vancouver Island...

dasmo said...

And what does tourism mean?

Anonymous said...

Apparently tourism covers hotels, transportation, attractions, and things like food/beverage by overnight visitors. There are some reports here: Tourism Victoria research

Leo S said...

Looks like that will be an interesting series, happy renter.

So the guy makes $40k/year. If he reports tomorrow that he is able to get approved for a place in Vancouver, we can say for sure that this is just a house of cards.

Robert Reynolds - HMR Insurance said...

@ HHV from previous post. Glad the calculator does what you want, Nothing beats a little boredom on a Saturday afternoon like spreadsheets. I think it is all right but no guarantees, E.O.& E. ;)

Bernake says interest rates will stay low till into 2014.

BoC won't increase our rates without a corresponding increase from the USA, it would push our dollar higher and hurt the economy and export sectors in Ontario and Oil sales in the West. While it is not the BoC's mandate to control the value of the dollar, rather they control inflation, but inflation is already higher than the 2% target of the BoC and they have yet to act. I expect we will see revisions to what makes up the CPI yet again. Red Meat: Steak -> ground Beef -> fell on the ground, beef...

Banks are also not expecting rate increases, hence the low offers on rates, they are hurting for more fees and income, so they are tempting you and it is working.

I bank with TD and I just had my Line of Credit rate increased from Prime +2.5 to Prime + 5.75
when BoC Prime is 1%, TD prime is 3% and Bonds are not yielding much either, purely a money grab.

dasmo said...

Another cross section of our economy

Vancouver Island and Coast employed in thousands 2011
Management occupations
Senior management occupations
Other management occupations
Business, finance and administrative occupations
Professional occupations in business and finance
Financial, secretarial and administrative occupations
Clerical occupations, including supervisors
Natural and applied sciences and related occupations
Health occupations
Professional occupations in health, nurse supervisors and registered nurses
Technical, assisting and related occupations in health
Occupations in social science, education, government service and religion
Occupations in social science, government service and religion
Teachers and professors
Occupations in art, culture, recreation and sport
Sales and service occupations
Wholesale, technical, insurance, real estate, retail, wholesale & grain buyers
Retail salespersons, sales clerks, cashiers, including retail trade supervisors
Chefs & cooks, occupations in food and beverage service, includ. supervisors
Occupation in protective services
Childcare and home support workers
Sales and service n.e.c., includ. travel & accom.,recreation & sport
Trades, transport and equipment operators and related occupations
Contractors and supervisors in trades and transportation
Construction trades
Other trades occupations
Transport and equipment operators
Trades helpers, construction, transportation labourers & related occupations
Occupations unique to primary industry
Occupations unique to processing, manufacturing and utilities
Machine operators and assemblers in manufacturing, including supervisors

patriotz said...

The key question is how many of those jobs are actually bringing money into BC as opposed to being funded directly by the taxpayer or selling goods and services to companies and persons funded by the taxpayer.

Precious few except tourism. And I think the great majority of "high-tech" jobs in VI are providing services to the government or to companies which sell to government or to goverment employees.

Anonymous said...

Thanks for finding all those great stats, Dasmo.

dasmo said...

I'm in the tech biz and not servicing any government. The industry is not very visible to most because Victoria is neither a market for the products. Did you know we had the largest online book seller based in Victoria?

a simple man said...

Bigger than Amazon or Chapters?

Why is there so much tech here is there is little market for it? It is not cheaper for office space.

VP said...

If you missed this on CHEK last night, its worth a couple minutesForeclosure tours on CHEKNews

dasmo said...

Once yes, but technicallythey are amazon now

Leo S said...

Would be interesting to see foreclosure stats over time in Victoria. However I don't know of any source for those. Anyone?

Just Jack said...

I don't know if we have any more tech than any other city. Tech just seems to be everywhere these days.

Me, I'm into Low Tech these days. Got rid of my hand set telephones and bought old 1980's Canadian made push button phones with cords for the house. Picked up an old 78 RPM record player made in 1933, re-wired it and have been buying old 78's for 50 cents a piece at garage sales.

Don't us a gas or electric mower anymore. Instead I have a push mower made in England (really England) in the 1950's. I took it apart to grease it up and the parts are machined so precisely there is no metal wear - there is also NO plastic anywhere on the mower)

My favorite radio is an old Zenith trans-oceanic made in 1957 and I'm going to build a 90 volt battery (yup 90 VOLTS - hot chassis radio so its a widow maker if you stick your fingers inside when its on). Going to run an antenna (might try building one using Fractal geometry) up the mast and use it on a sailboat this summer.

And I'm going to make one room in the house a Guangdong Free area.

Oh yeah, I like watching old VHS B movies. And my dream car is a 1971 Volvo P1800 where all you need is a set of standard American wrenches to work on it. And a big hammer.

a simple man said...

Low tech is awesome. the more simple the tool, the better.

dasmo said...

Here are a few more that I know of:
they are amazon now - digital design office here

Russ said...

Anecdotally, my friends small, local, high-tech firm just won a contract beating some of the biggest IT firms in the world. It isn't going to make headlines but it means 5-7 more well paid jobs exporting specialty software to industry all over the world.

dasmo said...

maybe Victoria just isn’t the sleepy tourist town you think it to be

a simple man said...

Sleepy and geeky. What a combo.

dasmo said...

My favourite quote about victoria was by Dr. Andrew Weil after he spoke here. I think it was in a monday mag interview. His summary of victoria? "underground sex dungeons and hight tea at the empress" Nailed it IMO...

Anton said...

Sex dungeons... I wonder if they add value on resale or are kind of neutral, like a swimming pool.

Just Jack said...

Depends if the dungeon is high tech.

Just Jack said...

From quarter shares in Bear Mountain to multi million dollar waterfront homes along Beach Drive. Court ordered sales are here in Greater Victoria. And there is no clear winner (or loser) when it comes to the type of property either. Half seem to be condominiums and half are houses.

There have been some 60 court ordered sales over the last 12 months in Greater Victoria. And today there are about two dozen listed properties advertised as court ordered sales. That makes only 1 percent of the marketplace advertised court ordered sales.

Hardly enough to sink a marketplace. But certainly enough to change public opinion.

Sweetrealtor said...

@happy renter. No, it was a CMA for a house but people who purchased in 2008 and are selling now are likely to lose anywhere. Looking at the last two Chelsea sales, #414 sold last Nov for $522k, last sale in Aug, 2008 for $595k. #113 sold last May for $647.5k, last sale May 2008 for $765k. Ouch...

dasmo said...

They took a 50K hit on the house I bought...

vw said...

I'm surprised how quickly Australian prices are dropping. Not sure if any place up here has fallen 10 yet, alone 40%.

Top 10 median price drops in percentage terms for 2011
1. North Booval (QLD) -46.3% (houses) to $154,000
2. Mittaggong (NSW) -45.1% (units) to $225,000
3. Jolimont (WA) -44.4% (units) to $342,000
4. Carey Bay (NSW) -42.6% (houses) to $266,001
5. St Kilda West (VIC) -41.8% (houses) to $1,455,000
6. Port Augusta (SA) -41.5% (units) to $120,000
7. Golden Beach (VIC) -40.9% (houses) to $85,750
8. Rainbow Beach (QLD) -40.8% (units) to $219,750
9. Acacia Ridge (QLD) -40.8% (units) to $298,500
10. Eagle Farm (QLD) -40.4% (units) to $786,500

DavidL said...

Recreational property prices are dropping at Mount Washington. This is the fourth time I've been vacationing here in the past year. I've been unofficially tracking a few condos at Blueberry, Bear and Deer Lodges. Many of the same units in saw a year ago remain on sale. Prices are slowly dropping, buy have a lot further to go if anyone investing in a recreational property hopes to break even.

The market is flooded with properties that can't sell. How long until desperate owners start slashing prices? I consider recreational properties the proverbial canary in a coal mine. Will the same pattern follow suit in the urban housing market in Victoria?

dasmo said...

It just might take the major quake to hit with similar effects as their devastating floods...

happy renter said...

Thanks, sweetrealtor! That's a bigger drop in The Chelsea prices than I even suspected there might be. You'd have to be pretty desperate to sell at that big a loss.

Still thanking my lucky stars that I sold my condo 1.5 years ago.

Marko said...

1960 Cochrane St flipped succesfully!

patriotz said...

Not sure if any place up here has fallen 10 yet, alone 40%.

It is well documented that both Calgary and Edmonton are down over 10% from their peak in 2007.

Fewer reliable statistics are available for the disaster area that is Kelowna and the Southern Interior, the former is surely down over 20% across the board and some smaller towns likely down more.

Plus you have up-Island, Gulf Islands and Sunshine Coast which have been well reported on this forum.

Just Jack said...

Are all types of real estate created equal?

Not if you have a small (erh cosy 557 sq. ft.) condominium from the 1970's on Mckenzie Avenue in Saanich. Amenities in the complex like a swimming pool, tennis court and a workshop couldn't stop the slide in price.

Originally bought in July 2007 for $179,900. This well kept one-bedroom took 223 days to sell and finally re-sold this week for $145,500 or about $55,000 less than original list price.

That's a 19 percent drop from a 2007 price?

Now, I'm not saying that the marketplace for condominiums has dropped that much. This sale is probably just an anomaly. Yet, back a dozen years ago, when the market first started to go ballistic, like the trajectory of the space shuttle, it was first seen in anomalies too.

Just Jack said...

Vancouver has its Hot Asian Market (HAM) and so do we.

And the poster child for our HAM (Hot Albertan Market) was Bear Mountain condominiums. Biggest one day totals in sales ever in Victoria. The sale building's parking was full of back hoes with Alberta plates as everyone wanted to live here.

And that's when you could buy a pre-construction top floor suite for $499,000 PLUS GST.

Today, all that is left in the parking lot is a dusty Alberta rose as the same suite re-sold for $370,000 this week.

So cheer up Vancouver, when all that is left of the Asian invasion is a rusty real estate agent's helicopter, your prices will fall to the local yocal level too.

a simple man said...

Those are some painful drops in condo prices. People are hurting. Taking a $165K bath before fees really would financially devastate a lot of people.

But when the developers slash their prices by up to 65% in surrounding condos (new), then you have little choice if you have to sell. I would be livid if I bought a condo and then the developers fire-saled the rest of the units.

Just Jack said...

It's very, very rare that we get "fire sales" like that in Canada. Almost all of the time, it's because the previous owner over bought the condominium.

They bought the sizzle and not the steak.

When prices were steadily going up, most of those mistakes were covered up by higher prices. However today is a vastly different market than 2007.

So the owner should be angry at the developer, but they should also recognize their own gullibility and greed as a mitigating factor.

Being human, you would have empathy for that person which can lead you to pay a little extra for that property because you "feel" for them.

But if the Bank has conduct of sale, and especially if it is CMHC insured, then you will see them burn in hell before you offer close to market value.

In my opinion.

dasmo said...

Bear Mountain is our Vegas. I would expect it to be hit hard relative to other areas. It's an unfinished dream with an uncertain future right now. I expect recreational and speculative property to have a harder time selling right now than in established neighbourhoods with good schools.

a simple man said...

true, dasmo. but the letter is in the mail for those places, too. we aren't talking about closed economies./ All the neighborhoods in Victoria will in some way impact the others.

patriotz said...

I would be livid if I bought a condo and then the developers fire-saled the rest of the units.

The developer is not responsible for the fall in prices. They would rather keep selling for the previous prices, but there's nobody left willing to pay them.

The people who are responsible for the fall in prices are the people who pushed the prices up in the first place, i.e. the buyers. But they never get it. US, China, here - always the same story.

dasmo said...

Is there a fire sale on Condos going on somewhere?

a simple man said...

Finlayson reach - been discounted for at least a year - only 3 left now. I remember some for as much as 65% off.

Mrs. W. said...

It will be interesting to see how house prices fair on the way down - there was definitely an uneven pattern of inflation and I imagine the same will be said for the way down.

However, there's been some dramatic changes in the distribution of the population in the last 10 years. Langford/Colwood are no longer "out there" with limited shopping and entertainment opportunities. As these areas have urbanized, there has been an increase in the underlying value - they are simply more desireable places to live than they were 10 years ago. As such, I don't think they'll fall as much as they would have if they remained entertainmentless suburbs.

Sooke on the other hand is much as it was 10 years ago, so is Sidney, Brentwood Bay, Central Saanich, North Saanich.

Arguably the "intrinsic" value of living in the core of Victoria has fallen over the last 10 years - entertainment opportunities haven't improved and the downtown atmosphere has actually declined. I think it might suffer disproportionately larger corrections than other areas, particularly Fernwood/Hillside/James Bay/Fairfield.

I think the 'core premium' is about to get really eroded...

dasmo said...

True the West Shore has improved tremendously. That one can walk or bike to work, the beach, Beacon Hill park, the coffee shop, to brunch, to the pub, will always carry a premium since that is a lifestyle only offered in the core neighbourhoods.

Marko said...

"Today, all that is left in the parking lot is a dusty Alberta rose as the same suite re-sold for $370,000 this week."

You also forgot to mention that this unit sold for $345,000 in October of 2009.

Just Jack said...

The fault in your logic is that you assume that people who live in the Western Communities aspire to live in Fairfield or Oak Bay. And the only reason that they are living in the Western Communities is because they are less wealthy than parts of Victoria and Oak Bay.

I have a difficulty in accepting that underlying premise. If you look at the traffic congestion during the weekends, you actually see the opposite. More people are traveling out to the Western Communities than are coming into Victoria during the weekends. The traffic always seems to be backed up going to Langford and rarely coming into Victoria.

With better shopping, entertainment and recreational opportunities than Victoria City. Victoria City may become the bedroom community of Langford and Colwood at least during the weekends.

The last few mayors of Victoria have let valuable opportunities slip pass them. The biggest mistake was believing what the developers were telling them. Victoria may just become the place you work on weekdays, but rarely travel to, after work hours. A reasonable assumption when you see the amount of retail vacancies in the City.

Last one leaving the City, please turn out the lights.

dasmo said...

I never said "I assume that people who live in the Western Communities aspire to live in Fairfield or Oak Bay. And the only reason that they are living in the Western Communities is because they are less wealthy than parts of Victoria and Oak Bay."
I do not assume that. I just pointed out a uniqueness of features that is constrained to a very tight area that cannot expand thus creating a premium in pricing...

a simple man said...

That one can walk or bike to work, the beach, Beacon Hill park, the coffee shop, to brunch, to the pub, will always carry a premium since that is a lifestyle only offered in the core neighbourhoods.

But in Langford one can walk or bike to work, walk to Esquimalt Lagoon, walk through Thetis Lake Park or up towards Gowlland Tod, go to one of the many coffee shops, go to brunch (many new, well-reviewed restaurants are opening there), go to the pub (definitely have those), or do a lot of shopping.

There are some perks to living out there. As much as I love Oak Bay, I deplore the fact that I have to drive to hike or ride my mountain bike. In Langford, I would not have that problem.

caveat emptor said...

"The traffic always seems to be backed up going to Langford and rarely coming into Victoria."

The cars go out there and disappear into the Langford Triangle...

caveat emptor said...

Clearly the vast majority of homeowning Western Communitarians don't aspire to live in Victoria and Oak Bay and just lack the means to do so.

However a percentage do have exactly that aspiration. I have met some of them.

OTOH I would assume that fewer home-owning Core Municipalitarians have an unfulfilled dream to move west since they would be less likely to be held back by finances.

Justified or not, the market currently views living in Vic to be "better" than living in Langford otherwise old crappy housing in Vic wouldn't sell for more than newer better quality housing in Langford.

And BTW it is great that Langford/ Colwood etc are becoming better places to live. IMO that's good for the whole region even if the result is a gradual erosion of the "core premium". Of course if they tear down the legislature and re-open it in a Langford warehouse I may have to worry about the future of Vic.

caveat emptor said...

I deplore the fact that I have to drive to hike or ride my mountain bike.

totally agreed - I love walking and biking in Vic, but to get off the beaten track into the really nice parks usually involves jumping into the car. Although in summer I enjoy the mini-triathlon - Ride to Thetis Lake, run/hike around the lake/ jump in the lake to cool off and then ride home.

a simple man said...

Put the new Leg on top of Bear Mountain with a big series of mega cable cars moving up from the train station at the bottom.

Cheap real estate up there.

a simple man said...

caveat emptor - I like the cut of your jib.

Just Jack said...

I enjoy riding on the Goose, but first I have to get there. And that is a bit dodgy with Victoria's traffic.

Is Victoria the only city in the world that you can't get from A to B without having to change lanes!

And the bike lanes in this city should be marked "use at your own peril" I don't think the city will ever make it easier to bike to work than it is today. It is only going to get worse. The streets are just too narrow. Maybe if the city got rid of street parking. But then where would the tenants be able to park their cars? The two things we don't have a shortage of in Victoria - cars and houses.

But once your on the Goose its a really enjoyable ride to Sidney or Matheson Lake - unless you get a puncture (twice last year - ugh).

Just Jack said...

Broke through another barrier in price houses this week.

It wasn't too long ago, that you could not find a detached home for under $300,000 from Oak Bay to Port Renfrew. Well one just sold for $186,500.

Yes, its only 875 square feet on a 1/4 acre of land in Sooke Village. Yes the home needs some finishing work, and yes the owner's renovations are like the fellow was on crack cocaine, and yes the home was a foreclosure.

But more importantly it took 113 days to sell and did I mention it sold for under $200,000.

Or how about a condo on Lochside with an incredible panoramic view over Haro Strait and waterfront at your door step. The agents claimed the condo was bought pre-construction in 2007 for $979,000. And it sold today for $700,000.

Or you could have bought a 1970's two-bedoom condo in Sidney for $133,000.

And in delusional Fairfield a 1940's bulldozer shack on Earle Street sells for $555,000. Its biggest selling feature being that it was priced under assessed value.

dasmo said...

I guess that shows the difference in what a 1/4 acre with a bulldozer shack will fetch in Sooke vs fairfield...

Just Jack said...

And I have just as many friends in Victoria that are holding onto their homes until the price goes up, so that they can sell and buy acreage in the Western Communities. Because they want a "healthier" lifestyle than living in a city.

The big assumption that you have made is that more expensive means "better". We judge others by what we have not what they are. Are the people in Uplands better than the people in Fernwood?

If you live in Uplands the answer is yes and you are willing to pay more for a property to make that clear to those who live in Fernwood. And if you're a wannabee Uplander then you will even pay more than those that already live in Uplands in order to get your Upland's membership card.

Do you find yourself saying that your better than that guy because you earn more or live in a more expensive home?

Well, actually you probably do - because you're human. But, too much of that self adoration and you're at risk of being a sociopath.

So are there more sociopaths in Uplands than Sooke. Probably.

-And this is where you want to live?

DavidL said...

I don't understand why people feel the need to live in an expensive home. You'll never lie on your deathbed thinking that you should have lived in a nicer home or spent more time at work. Having more modest aspirations means more money for enjoying life and being able to spend more time with loved ones.

Just Jack said...

Ahh, but that's because you're not a sociopath.

Try living in my -I mean their, world.

Just Jack said...

Okay, I get the Orson Wells movie now!


happy renter said...

While the guy who's doing the series on Vancouver pricing over at The Tyee seems, remarkably, to be on an OK track...
Vancouver Foreign Ownership

...the CBC is fanning the flames of panick:
Offshore Bids Price Canadians Out of Housing Market

Introvert said...

Justified or not, the market currently views living in Vic to be "better" than living in Langford otherwise old crappy housing in Vic wouldn't sell for more than newer better quality housing in Langford.


I guess that shows the difference in what a 1/4 acre with a bulldozer shack will fetch in Sooke vs fairfield...


But once your on the Goose its a really enjoyable ride to Sidney or Matheson Lake - unless you get a puncture (twice last year - ugh).

Maybe if you laid off the Monterey Jack you wouldn't bust your tires so often!

happy renter said...

And on a cheery note from the G&M:

Real Estate Sales Tumble in Vancouver, Kootenay Region

happy renter said...

Last one, I promise. An interesting read, again from the G&M:

Why the latest mortgage war was months in the making

dasmo said...

I'm not the one talking about anyone being better than anyone else. I certainly don't believe where you live or what you have makes you better or worse than anyone else.

Just Jack said...

And where you live doesn't make you a better person.

But we are human and we all suffer from pride. And in my opinion, that is one of the bigger reason why Oak Bay properties are typically more expensive than say a comparable property in Sooke. Being close to city amenities is important, but bragging rights are important too. Not that other people lay awake at night and wish they were you - because they don't.

Really, how many of us wish we were Bill Gates? Now, how many of us wish we looked like Bill Gates?

Why does one pay $550,000 to live in an Oak Bay property that should be demolished? Its all emotional - a way to say to YOURSELF, that you're better than someone else.

When your business is doing well, when you're in a good relationship, etc - you have a positive emotion and you want to demonstrate that to the world and property prices rise. And the longer the economic expansion, the higher the prices go.

So, property values are actually just an illusion based on your own delusional estimate of your own self worth and others like you. Could the most likely reason why Oak Bay prices are so high, is that Oak Bay is so small in land area that there are more delusional prospective purchasers for Oak Bay than there are current listings in Oak Bay?

Because, is there any major physical differences in the housing between Oak Bay and Brentwood Bay? Not really. There is a lot of self serving justification of why you would live in Oak Bay over Brentwood Bay - but it really is just nonsense.

And by extension is there really much difference between us and comparable sized American city, like Bellingham. Not really.

Americans were at one time just as delusional as Canadians, the only difference was that the US banks stopped supporting that delusion. One day, one banker in the USA looked at mortgage application for 450 square foot skybox for a million dollars and and refused to lend - and then the American market fell like a child's game of dominoes.

That's it NO MORE reading Schiller with my morning coffee!

Phillip said...

This piece from the 6 o'clock CTV news is worthy enough to share.
More than 175 properties in the central Okanagan are up for court-ordered sales right now after their owners defaulted on their mortgages. According to realtor Jason Newmann of Century 21, the total number of foreclosures five years ago was in the low teens.

Just Jack said...

Ouch, it seems like bankers in the Okanagan are waking up to the risk of real estate and are say no.

Parts of Alberta have also seen a ten fold increase in court ordered sales.

Victoria hasn't. There are only about two dozen listings in Greater Victoria that are advertised as court ordered sales or 1 percent of the total listings. A ten fold increase in court ordered sales would be pretty serious here.

patriotz said...

According to realtor Jason Newmann of Century 21, the total number of foreclosures five years ago was in the low teens.

"Those are the people that your heart goes out to. They're just trying to make ends meet and they're doing everything they can and this is sort of like the last straw," he said of the former homeowners.

Er, weren't you telling the same people a few years back that RE was a great investment, Jason? Such a big heart you have.

dasmo said...

Our entire financial construct is an illusion, this is the world we live in! Personally it's more about lifestyle choice. I don't want to drive the crawl, I want to be close to downtown so I can walk to work, I wan't to be close to the Beach so I can carve sand with my son, I want to be close to the French Immersion school with the good rep. These are my choices that I am willing and able to pay for. I grew up in Langford, on Finlayson arm Rd. I know full well what the area has to offer. I also know what Sooke has to offer, I used to deckhand on a Boat that fished out of Sooke. Arbutus Cove Guesthouse is one of my favourite spots. I know and love many spots on the island. I chose to live close to town at this point in my life. I am proud of that but don't think any less of anyone else for their decisions. When I bought my first house in Vic West it was still considered a rough neighbourhood. I called it the nicest sh*tty neighbourhood in the world....

Just Jack said...

Court ordered sales within 8 miles of downtown Victoria, tend to be "problem" properties and are neglected or the renovations have not been finished.

Those outside of the 8 mile circle are problem properties like in the City, but they can also be newer homes too.

So two identical newer homes, one in Fernwood and the other in Bear Mountain, but $300,000 difference in price. Ask yourself - would a "rational" person turn that down?

Most of the population of Greater Victoria will NEVER have $300,000 in CASH in their bank account. Yet very few would sell the Fernwood home and buy the Bear Mountain house. Is that rational?

My neighbor has a $700,000 paid off home. Her 25 year old son is unemployed and lives in the basement for free (he ain't going no where at that price - although I said 6 months in Afghanistan would do him good).

Her work hours have now been cut back to 4 hours a week and she cries the blues constantly of how "poor" she is.

She won't sell. How rational is that?

Another person I know has a 6 suite character conversion home. The reason why he won't sell is because the property is so expensive, the government would take most of the money in taxes. So, I guess he is going to wait for the property to drop in value before he sells? How rational is that?

Another neighbor owns two homes worth well over a million dollars in total. His hot water tank went on him three years ago. He hasn't replaced it and takes cold showers and washes in cold water. He smells bad and his dishes have a layer of organic growth on them. But he won't sell.

A lot of people have won the real estate lottery in this City. Have half million dollar and more homes and collect welfare.

This is one F*&^ up city.

Alexandrahere said...

Just Jack: Believe what you see and not always what you hear. There is more to the ladies story who owns a $700K home and is crying the blues. People only tell you what they want you to hear.

Just Jack said...

So, why don't these people sell?

If they did, there is no question that their quality of life would improve.

Is there something about real estate, that drives our primaeval brain? Is it sex, drugs, food, money and a little cottage with a view that drives our reason for being. Is that why modern man left Africa 200,000 years ago. Were the searching for waterfront? A cave with a view?

Walk out the door of your home. What are the two numerous things you see. Cars and houses! There are 1.68 persons for every dwelling in Victoria. I think the national average is 2.7 persons per dwelling. There is no shortage of housing in Victoria - its everywhere.

So, why do cars loose value as they get older, but houses don't? Is there any other asset that increases in value as it begins to fall apart. It just seems plain goofy to me, that anyone would lock up so much of their future earnings in something that is as common as - well dirt.

dasmo said...

Ah yes the age old question, what is the meaning of it all?

mrmike said...

So, why do cars loose value as they get older, but houses don't?

They do. If bcla has no record of improvements they DO start taking value away from the house portion of the assessment. My 2011 assessment was 539k went down to 507k for 2012. I was like WTF and called them. He said because the house was built in 81 with no record of improvements it starts to depreciate. I was kind of pissed off about it and appealed it. I told him some things I had done but he wanted to come see for himself, I said ya sure hoping to get my assessment back up to the previous year...he came looked, agreed with all the improvements and reassessed it to 555k

mrmike said...

Mind you I did alot of improvements.

Leo S said...

mrmike, are you preparing to sell? Or why else would you want to increase your assessment?

mrmike said...

Yes I am preparing to sell. Been here over a decade time to move on.

Leo S said...

Good luck. It's slow out there but the good places are moving just fine.

caveat emptor said...

For the record:

My comment:
"Justified or not, the market currently views living in Vic to be "better" than living in Langford otherwise old crappy housing in Vic wouldn't sell for more than newer better quality housing in Langford."
was purely a comment on how the market on average views housing in the two locations. Many people may have excellent reasons for taking advantage of the relative housing bargains in Langford. And I certainly wasn't implying that anyone was better because they lived one place or the other. Good god no!! I have lived in a few high priced neighbourhoods and believe you me the people there are not "better".

Russ said...

Could somebody please tell me what 980 Nicholson (MLS 305172) sold for recently? Thanks

Marko said...

^ $521,900

Mindset said...

Alexandra here said: "Just Jack: Believe what you see and not always what you hear. There is more to the ladies story who owns a $700K home and is crying the blues. People only tell you what they want you to hear"

That’s a loaded statement.

If this is true, wouldn’t this logic make most points on this blog moot? All we have on this blog is what people are saying, rarely do we get an insight into what their associated actions or motivations are. Well, with the exception of folks like Just Jack or Marko that are very transparent in their actions and opinions.

To extend your point, I am going to go out on a limb here and say that there are three categories of opinion out there based on the position people are in and their associated RE actions.

Group 1: Realtors & Owners that have emotionally 'invested' in the housing market - Emotional messages based on the need for market stability (Housing market is fine, seek statistics and examples that say it is stable or going up like CREA, and tend to make general points of how it's different here or different this time)

Group 2: Sideline renters with the ability to buy, owners whose home is just a house and not an investment, or non-emotional RE investors - Rational messages based on available information (global economic patterns, rent/own ratios, price/earnings ratios, debt ratios, price/inflation ratios.... housing will correct 20-30% in mid-term, longer term trend will mirror inflation and other historical factors)

Group 3: Those trapped out of the market and angry about these crazy housing prices, or perhaps those that invested in things other than RE (i.e. precious metals) - Emotional messages from a position of frustration (Housing is ridiculous, prices will collapse and never recover, and in extreme cases, the world is ending)

Just Jack’s example of the lady with no cash but $700K in RE investment is probably in Group 1. It's understandable how she would feel if she let in the messages of Group 2 or especially Group 3 with how much her home and its appreciation in value has created a feeling of forward motion and stability.

The value of this blog, in my opinion, is to help people move into group 2 where informed buy/sell decisions can be made on the largest purchase in most peoples lives.

dasmo said...

You think that because you are in group 2. Investing in Real Estate is different than buying a home. One should be rational when buying a home but it's just different. The person with the PAID OFF 700k home doesn't sell because it's their home. Life is short, Happiness is an emotion, fulfill that whenever possible.
I get what your saying, I'm going to "sell" my apple shares so I can build my "home"....

Just Jack said...

For those who think the detached homes in the Victoria Core never decline, here are the past median prices for the last 30 days of each year, along with the number of sales and the days on market

141 sales, median $576,500, DoM 27

162 sales, median $609,500, DoM 21

165 sales, median $628,700, DoM 13

138 sales, median $537,500, DoM

176 sales, median $552,075, DoM 19

207 sales, median $530,000, DoM 17

Now if the government hadn't increased CMHC's insurance limit from $450,000,000,000 to $600,000,000,000 and encouraged more buyers to enter the market with low interest rates, zero down, 40 year amortizations, and trust me mortgages, where would our market be today?

That entire massive stimulus package only slowed the drop in sale volumes and steadied prices.

So what is Flaherty going to do? The way I look at it, the banks have offered long term money at low interest rates and that will save most people from court ordered sales, until renewal time 5 to 10 years from now. And a lot of things can happen in 5 to 10 years from now- like a new government.

But it's sales volume that drives an economy not high prices. The only way to stimulate the economy is by letting prices fall. That means no more stimulus packages and no increase to CMHC's insurance limit. That means the banks will have a tough time getting insurance for new home buyers. That means that new buyers may have to come up with 20 percent down and have good credit.

Nationally that may not be a hardship, but in over zealous markets it could kill off the condo market entirely.

This is my opinion, and I have been wrong many times before and I will most likely continue that tradition into the future.

Just Jack said...

I think my neighbor will sell her home. But not until, home prices start to tumble. She has a lot of fear in her life and her home right now is the only life preserver she has. If she sees that drifting away, she'll panic. It's just her nature.

Just Jack said...

Owning a home is making her miserable, but the idea of not owning is horrifying to her. So, she gets upset about having to get a new roof for $15,000. Or fearing that her upper floor tenant will leave. All that anxiety makes her mad at her ex-husband because he is moving ahead in life, or her daughter that doesn't come around anymore.

And of course I'm not very helpful because all I can say is "Get over it - sell the f^&*ing thing and enjoy the years you've got left"

I have no empathy for her or anyone who cries the blues when they've won the real estate lottery.

She doesn't talk to me anymore. I wonder why?

CFA Joe said...
This comment has been removed by the author.
dasmo said...

Sounds like she makes herself unhappy so even if she sold, would be something else I'm sure.
Tell her to get a quote from High Def roofing

I just got my 3 old roofs ripped off, then re-sheeted in plywood, membrane, 50 year roof, new vent caps and flashing for 9500 with HST. They did a great job. It felt good seeing the old crappy roof (s) slapped one on top the other ripped off and redone properly...

Just Jack said...

She got Parker Johnson to do it for $15,000. Didn't help that one of workers fell off the roof and broke his arm. Then in the windstorm the skylights blew off and the roofers had to come back and nail them to the roof. She was busy writing letters for a month afterwards complaining about the workers.

It's easy to find her house - its the one with the dark cloud overtop.

dasmo said...


Just Jack said...

Well I suppose there is always the reverse mortgage!

I am really really not a fan of this type of mortgage. But at the same time I can see it being very seductive to the elderly in Victoria and Oak Bay.

The older you are the more equity you can take out of the house and never make a payment. So if your 80 you can draw out a maximum of 40 percent.

This type of mortgage gobbles up equity fast.

Anton said...

Another Chartered bank warning us about the risk of a real estate correction and high household debt.
I think there will be a tipping point where it will be general knowledge that real estate values are heading down. After that it will be a self-fulfilling prophecy. Long time bears will need nerves of steel to commit to a real estate purchase because everyone will be a bear... Of course, that is probably the perfect time to buy IMO.

Just Jack said...

I would say that a good majority of our home prices are just emotional. If prospective purchasers become bearish on real estate and hold off buying, then prices should fall to the point where investors would jump in to purchase. But they would require a return on their equity. Also the investors would probably not be able to use the equity in their own homes to buy as that equity would have been wiped out.

Then of course, if prices and interest rates are that low, there is no incentive to rent. Which means basement suites and other rentals would go vacant. Which means home owners could not afford their mortgages even at the low interest rates because they no longer have cash flow. Which means prices would have to fall again.

Of course if prices are falling like that, then CMHC may require tighter lending requirements.

or not

Of course, it wouldn't be bad paying a mortgage payment of $1,000 each month for a starter home. Nor $1,500 a month for a middle income house and not having to share it with a basement suite. Or even $2,500 a month for an upper income home.

And still be able to pay the home off in 15 years.

You know - how it used to be in Canada

Introvert said...

Even if one doesn't view one's house as an investment, that doesn't mean it's not one.

It's arguable whether real estate is a good investment, but it's an investment nonetheless.

A Tyee article once asked: "Are you living in a house or camping in an investment?"

My answer is: I'm camping in an investment (as everyone who owns is), but my objective is to live in my house.

Just Jack said...

There are a lot of things that people call investments.

Faberge Eggs
Pez containers
Hair transplants
Gremlin Cars
Beer bottle collections

So go ahead call your home an investment it doesn't make it any more or less desirable to someone else. Its like the terms urban professional, high tech, location, location, location. They are so over used that they have become meaningless.

But say you really want to use your home as an investment. Are you making use of that equity? or are you mismanaging the asset. For an investment you want to maximize returns. If you are leaving the equity in your home untouched then you are guilty of being just a bad manager.

If you then say, but I choose not to touch the equity in the home and that's my investment strategy. Then it really isn't an investment its just a house.

caveat emptor said...

'There are a lot of things that people call investments'

Of the ones you list I'm guessing that education has the surest and biggest payoff. The vast majority of people are never going to acquire enough financial or real estate assets to make a huge difference in their standard of living, but a well chosen trade or profession can make the difference between a lower middle class lifestyle and an upper middle class lifestyle.

Not that I haven't seen lots of people with a good education screw up their lives too...

Mrs. W. said...

Just Jack -
We are never ging back to a world where $1000 gets a starter, $1500 gets a suite free middle income home and $2500 gets into the upper crust. Even the rents on these places right now exceed that.

Actually much to my surprise average 2bds rentals (looking for a friend) are now $900-1300 per month... Competitive with the carrying costs of 200k to 250k in mortgage. might be the exit path we get this time.

-Just Janice

happy renter said...

Another interesting piece in the G&M:

Real Estate as an Investment? Look Elsewhere

Just Jack said...

A year or two ago, I would have said the same thing Just Janice. But, I think its going to get pretty bad for awhile and you will see more homes sell for under $225,000 like the one that sold this week in Sooke Village.

The wave of foreclosures is heading west and it would not be unthinkable to expect our rate of foreclosures to increase 10 fold as Kelowna and parts of Alberta have. That would make 1 out every 10 homes listed under a conduct of sale. Right now the lowest asking price for a starter home is in Esquimalt for $339,000. With 20% down, thats roughly $1,150 per month mortgage payment on the asking price.

Oak Bay and Fairfield, really do not have starter homes. Some of the homes may not be fit for a dog, but they are not starter homes.

patriotz said...

"The vast majority of people are never going to acquire enough financial or real estate assets to make a huge difference in their standard of living"

Quite the contrary, whether you buy a house at the top or bottom of a RE cycle will make a huge difference in your standard of living for the rest of your life.

dasmo said...

What? there is a wave of foreclosures heading west? Run for the hills!

Alexandrahere said...

Just Janice: I have also been looking for a 2 bedroom apartment for a friend. A decent one in Esquimalt is approx $875 - $1100 per month, James Bay, Fairfield & Oak Bay are usually around $1175 but can be much more. Fairfield apartments (1960's & 70's) seem to charge more for parking. I've seen everything from $10 - $40 per month. Heat and Hot Water are usually included but you still have to play Parking: say $20, Hydro $25, Cablevision/Internet fees and Laundry equipment charges and, hopefully, content insurance.

Leo S said...

Unlike a tsunami, this wave will probably hit the hills first.

dasmo said...

As in Mt Finlayson?

dasmo said...

More like a long flat horizon than a tsunami

Just Jack said...

As in Bear Mountain?

S2 (JJ's wife)

Phillip said...

Is a "long flat horizon" similar to a "permanently high plateau"? Peculiar, since after the p-words were uttered by a famous economist, the thing he was referring to fell close to eighty percent. I've noticed similar phrases in the media lately. The things said in the denial stage are certainly the most amusing.

dasmo said...

I'm going a lot on history . The two prior meltdowns resulted in long flat horizons. What extenuating circumstances make this one worse? certainly it's not over supply or high interest rates...

Leo S said...

What made the meltdown in Seattle worse? They had the very same history of plateaus. Some things that could be worse this time are tightening credit instead of loosening, population pressures starting to reverse, and the simple fact that prices are just way higher.

Of course, maybe it is another extended plateau.

Phillip said...

I agree with you dasmo that "The two prior meltdowns resulted in long flat horizons." The part you may be overlooking is we haven't had the meltdown yet. The 1980s meltdown resulted in real prices falling in half in less than 5 years. I suspect we are about to experience something similar, ie. we have roughly another 40% to go off the initial 10%. It could be worse this time as rates can now only rise, whereas in the early 80s when house prices fell in half, so did rates which cushioned the fall.

Just Janice said...

Anybody know what 1482 Dallas sold for?

SilverSurfer said...

1) Oil @ $128 & Iran war looming doesn't help. $147/barrel oil was part of the trigger of the 2008 recession. We are $20 away, but if Iran war occurs, expect $175-$250.
2) Interest rates should be about 3-5% higher. We will eventually get there, or suffer currency depreciation against rising commodity prices (food, energy,metals).
3) Global stock market risk is still high and very susceptable to shocks.
4) China hard landing could spell trouble for commodities, draging down Canadian stock market
5) Canadian dollar is much higher, our $$ will buy more abroad, like US real estate investments
6) Boomers are starting to retire, many will downsize, many without RRSPs will need to sell.
7) Excessive global sovereign debts are MUCH higher than 80's. Entire countries are walking over cliffs, contagion is likely whenever bigger countries start getting into trouble.
8) US Bond market is in a bubble.
9) We are at the end of the great keynesian experiment, there is no US department of "Unintended Consequences". They'll have to add new chapters to economics books in 10 years, cuz what's going on now has never been tried before.
10) 750 TRILLION unregulated derivatives market with no centralized OTC clearing house should scare the #($* out of anyone. Extremely unlikely all those casino bets are fully hedged with no counterparty risk.

Animal Spirit said...

interesting. after working out at the gym yesterday I heard a conversation between two new immigrants. both were well educated, but unable to work in their field due to credentials not being recognized.

Fellow #1, the janitor, wanted to build houses. Fellow #2, was going to leave Victoria because he couldn't afford to live here. Was giving up and moving somewhere cheaper.

No clue where they were from - the steam sauna was too steamy.

The talk in the media could become a self-fufilling prophecy.

Marko said...

"Anybody know what 1482 Dallas sold for"

Still has not gone pending.

Marko said...

Monday, March 19, 2012 7:45am


March 2012 2011

Net Unconditional Sales:

281 622

New Listings:

760 1,501

Active Listings:

3,908 4,100

Please Note
•Left Column: stats so far this month
•Right Column: stats for the entire month from last year