Monday, March 26, 2012

Mar 26: 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: 433 (281, 152)
New Listings: 1066 (760, 465)
Active Listings: 3997 (3908, 3832)
Sales to new listings ratio: 41% (37%, 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

Looks like both listings and sales are lagging a bit from last year. Sales/new list is the same.
An interesting article this morning from Canadian Mortgage Trends. The CMHC is projecting almost 10 times slower growth in their portfolio in the next 5 years as they've experienced in the previous 5. If their cap is not raised, it will be interesting to see how this plays out for new buyers.

Marko also reports the SFH average is $620K and median is $555K.


DavidL said...

Sales may slow a bit more with RBC raising their 5-year rate by 0.50 percent ...

RBC hikes 5-year mortgage rates - Business - CBC News
Canada's biggest bank, the RBC Royal Bank, on Monday raised its posted five-year mortgage rates.

a simple man said...

Wonder how long it will take the other banks to follow. Also wonder what impact the US announcement that they are unlikely to change any of the stimulus measures (ie. increasing interest) over the next while.

Jason Lowe said...

Going through the mortgage broker channel, consistantly beats the big bank rates. They just don't get national T.V. exposure. All RBC and BMO are doing is going back to thier previous rates..
Rates spike every year when the spring market starts to move. Rates aren't going anywhere for a while, but something's got to give? maybe a 25 year max amortization is coming? we'll find out by the end of the year.

Leo S said...

Welcome Jason. What do you think about CMHCs new growth projections? Do you think it will impact the availability of CMHC insurance to individual borrowers? Or are they going to curtail growth simply by no longer insuring low ratio and bulk insurance portfolios from the banks?

Jason Lowe said...

Thanks, I joined last year, but some guy ripped into me for 8 hours for answering a question, ha.
I mean their numbers make sense, considering the last 5 years of growth. They've already started doing it, banks have gotten rid of their self employed products for people who can't prove their income(stated income), even if they have 35% equity! The banks are saying they're too risky already.
If they stop insuring the low ratio mortgages, other countries won't invest in non insured mortagages..slowing things down I think.

DavidL said...

@Jason Lowe wrote: All RBC and BMO are doing is going back to thier previous rates...

You are absolutely correct ... I believe that the general public isn't tracking the ups and downs of rates. If they hear that rates are going up (a number of times, from different "major" lending agencies), then it will further dampen resale sentiment.

We will find out very soon what further mortgage changes may be imposed...

Just Jack said...

Equity loans are very risky.

Especially when the broker and appraiser are working too closely. When the bank wants 35% equity, but the appraised value was too low, the broker just leaned on the appraiser to raise the value.

Broker statements like "my client is only willing to pay for an appraisal if it comes in at X amount." Bingo 35% equity!

Or the broker just games the CMHC appraisal program and bingo 35% equity.

If you're a banker and a broker drops a "trust me" mortgage on your desk backed with a 35% equity to show the strength of the loan - you just can't trust it.

That's why most of the Chartered Banks will not do equity mortgages unless they are insured.

As in every industry, there are always a few who will abuse the system. Especially when the end user (CMHC) is giving this practice a wink and a nod.

Alexandrahere said...

Good Monday to you all. Here are my stats for the week of 19-25 Mar,2012

SFH: Min 2 beds & 2 baths, priced between $375K & $775K in the core areas of Vic,OB,Esq,SE & SW.

Sold: 36
Avg Price: $560K
Med Price: $584K

16 of the 36 sold came with secondary suites and 15 went for below BC Assessment.

Last week was the best week in terms of sales within my criteria since I began tacking in June of 2010.

With the identical criteria, the avg sale price of SFD from mid June 2010 to end Dec 2010 was $562K.

For the entire year of 2011, the avg sale price was $561K, and last week the avg price was $560K.

Pretty boring stats. The only thing is you don't see very many war time homes coming up for sale in Esquimalt anymore and most homes now going in the $500K range in say Gordon Head were going in the $600K range in early 2008.

Condo Stats: Min 2 beds, and 2 baths, priced between $248K and $550K, in Vic, OB, Esq. SE and most of SW:

Sold Condo: 9
Sold Townhomes: 3

Avg price condo: 328K
Med price condo: 352K

The three townhomes went for 463K,372K&305K.

All of the townhomes went for above BC Assessment and 8 out of the 9 condos went for below BC Assessment.

On another note: My feeling is that interest rates won't be going up until early 2014.

a simple man said...

In case you have not seen the global report from yesterday yet: Vancouver in trouble.

a simple man said...

and the TD has joined RBC in hiking mortgage rates.

dasmo said...

I can not defend Van in anyway... at 3 mil for a bulldozer shack outside of town because it's close to the train... Same bulldozer shack here in town where you could walk to work would be 550k in Vic. I mean we are out of reach here but in Van it's just out of hand.

Phillip said...

Vic and Van's metrics (price-to-rent and price-to-income) are both at extreme levels. Thus, one can easily argue they are equally out of hand.

Jason Lowe said...

BMO and RBC told us those rates were only good until the end of March..
The condo market is always the first to tank in the real estate market and it's over saturated in Van and Vic. I wouldn't buy a pre build condo for investment anywhere right now! That's just me though If you can afford it and you aren't selling, you'll be fine.

Leo S said...

The reporting on mortgage rates is more than a little hysterical.
Rates are going down! Rates are going up! I wouldn't be at all surprised if the %2.99 rate comes back at some point and the media will hyperventilate about the new mortgage wars, and then talk about the danger of rising rates when the promotion expires a week later.

SilverSurfer said...

"Interest rates are going back up!"... Yeah, until the next global crisis threatens contagion.

The game since 2008 is interest rates to the floor and currency depreciation against hard asset classes. USA is commited to this 'til at least 2014, unless of course the bond market breaks. Of course, the longer this goes on the greater the global systemic risk. We are certainly living in interesting times... that will get even more interesting when this all these central planning, synthetic derivative, HFT traded markets blow up.

Marko said...

High end sales are really pushing the SFH average up this month....another 4 million dollar sale this morning has resulted in the average going above 630k month to date.

A few big condo sales this month as well.

chris said...

hope Spring^s eternal on the slope of hope

Tanya said...

"average going above 630k month to date"

average in Feb = 580,000
OMG prices going up by 50 K a month!

Buy now or you'll be priced out FOREVER!!!


caveat emptor said...

oops the last post was by caveat emptor

a simple man said... this morning...

"As concerns over the state of the Canadian real estate market abound, a new survey says nearly half of Canadians are unsure about their ability to afford their homes if rates rise by as little as two percentage points.

The survey commissioned by the Bank of Montreal study finds 43 per cent believe an interest hike would either hamper their ability to pay or leave them on unsure footing.

Regionally, residents of Alberta were the least concerned, with 73 per cent saying that rising rates would not affect their ability to afford their homes, while residents of British Columbia were the most concerned. Just 48 per cent B.C. residents are comfortable in their ability to handle higher rates."

DavidL said...

Here's a link to the CBC article:
Canadians worried about mortgage rate hikes

Just Janice said...

Which is one reason why a 10 year rate at less than 4 percent is so guarantees no rate increase for 10 years and is only 1 percent higher than the prevailing 5 year rate.

I know for my family having a 10 year horizon before the next renewal is very re-assuring, particularly as we have no plans of moving over those 10 years. Furthermore, in about 10 years time our ability to face an increased rate should be substantially improved as some of other financial obligations are likely to be over by then.

a simple man said...

Wow - the comments section of that above-lined story really show where peoples minds are. There has been a shift.

Dave said...

4 percent is so guarantees no rate increase for 10 years

So you think you can outsmart the bond market, do you? What if the 10-year mortgage rate were to average only 3% or less over the next ten years? Are you aware Japanese 10-year mortgage rates are more than a percent lower than ours?

Are you aware that when nominal rates (the only ones ever talked about) have fallen over the past 4 years so have real estate prices? Do you know how to determine the real interest rate, the only rate that really matters to help you understand the questions above?

Mrs. W. said...

Dave -
It's not about 'out smarting' the bond market - its about managing uncertainty and sleeping at night. As an economist I am aware of all those things - you are quite patronizing when you put it that way.

Just Janice

Rhino said...

After years of no reporting now every 2nd article on globeinvestor is something negative towards RE. Here is the latest:
Genworth using internal resources to deal with foreclosures

Rhino said...

^I guess after reading the whole article its not that negative, but interesting none the less

Introvert said...

After years of no reporting now every 2nd article on globeinvestor is something negative towards RE. Here is the latest:
Genworth using internal resources to deal with foreclosures

Genworth says its stress tests show that it could withstand a 40% housing market correction. Wow! Not even the most pessimistic economists are predicting anything higher than about a 25% correction. I guess Genworth is going to be OK.


Leo S said...

I guess Genworth is going to be OK.

Is that a surprise? Genworth is 90% guaranteed by the government. They'll be ok because they just shift the losses to the taxpayer. CMHC has nowhere to shift them to. Of course they will be bailed out it came to that, but that's not exactly ok.

happy renter said...

Why is 2252 Cranmore (MLS 306465) so "cheap"? It's $589,000 for a descent looking house on a 9,360sqft lot in Oak Bay.

a simple man said...

Why is 2252 Cranmore (MLS 306465) so "cheap"? It's $589,000 for a descent looking house on a 9,360sqft lot in Oak Bay.

Across from High School and near the Oak Bay Lodge - you will have construction work around there for the next years and years to come (new high school and new Lodge). Plus, the "health care workers" from the lodge are always outside smoking like some kind of Simpson's episode with patty and Selma.

happy renter said...

Thanks, simple man. That makes a lot of sense.

pod_x said...

Wow, Genworth says Genworth is going to be ok? Shocking!

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