Monday, July 30, 2012

July 30 - 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.

July 2012 month to date  (previous weeks in brackets)
Net Unconditional Sales: 481 (371, 258, 120)
New Listings: 1114 (857, 606, 306)
Active Listings:  4939 (4900, 4868, 4827)
Sales to new listings ratio: 43% (43%, 43%, 39%)

July 2011
Net Unconditional Sales: 523
New Listings: 1374
Active Listings: 5094
Sales to new listings ratio: 38%
Sales to active listings ratio: 10.2% or 9.7 MOI

Sales continue to take a minor hit after the mortgage rules were implemented.  110 sales last week is about the same as 113 from the week before.  Before the change we saw 138 and 120.  Likely a combination of slowing sales as we go into late summer, and some buyers being priced out.


It seems quite unlikely that we'll hit last year's sales numbers this month.  Our sales average is 16 sales/day, while we would need 21 sales/day today and tomorrow to match July of 2011.  So far we are ahead in sales for the year compared to last year, but I suspect that will change going forward.  Listings are lagging last year as well, but the last few months have seen a surprising number of new listings in the last few days, so we might still get there.  

138 comments:

koozdra said...

I wonder how long this will take to sell?

"$120,000 below BC Assessment."

http://www.realtor.ca/propertyDetails.aspx?propertyId=12146105&PidKey=1363526287

Just Jack said...

So how about the Western Communities - like any of us really care.

In the last 30 days, there have been 80 house sales. And 52 of them were in Langford and Colwood. So, I'll dump the areas of Sooke, Metchosin and the Highlands because of there pitiful sales activity. They would just skew the numbers anyway.

Langford and Colwood had 52 sales versus 97 new listings or a sales to new listings ratio of 0.54. One sale for every 1.87 new listings.

There are now 338 homes for sale in Langford and Colwood which is 6.5 months of inventory. This means the Langford and Colwood market is healthier than Oak Bay!

Median price for a roof over your head is $509,000 or $228 a finished square foot.

Last year the median was $503,500 or $236 per square foot and the month before it was $466,729 or $224 a square foot.

Seems to be a repeat of what happened in the Victoria core used condominium market. Despite lower sales happening and more homes to chose from, buyers are paying more to secure a property before the new CMHC regulations come into affect.

As for the used condo market in Langford and Colwood, its close to being non existence with only 10 sales this month versus 31 new listings and 12.4 months of inventory. Yet you will still pay $248,750 or $277 a square foot for a condo this month. Which is down from last year at $285,750 or $324 per square foot last year. And down from last month at $267,500 or $256 per square foot.

Some one put a fork in the Langford and Colwood condo market - it's done.

Just Jack said...

Hats off to those 21 people that were able to sell their homes in Sooke last month, while 251 home owners got nothing.

Lots of "fire" sale prices in this small district of 11,435 people. Including condos and other property types there is one dwelling up for sale for every 32 people! Or one out of every 20 dwellings is for sale today in Sooke. My guess is that the rental market in Sooke is devastated with the vacancy rate so high that the time to fill a vacant basement suite being more than three months.

And the future for Sooke?
Think Windsor in December prices.

Marko said...

We have 21 sales so far today...it is going to be close!

Mindset said...

I thought I would take a break from statistics and pass along some Realtor comments a friend shared with me today that has been looking at homes in Oak-Bay/Fairfield/Uplands. I know this is subjective (feel free to jump on me for that Introvert) and I'm sure this is not everyones market, but interesting comments.

"Oak Bay is the slowest it's been in 20 years"

"The (down-sizing) owner had an offer for 20% more in 2008 than he can get today, but turned it down because at the time he was offended by what he thought was a lowball"

"If a house has any obvious issues at all, people are just walking away without making offers"

"I think things aren't moving in the 750K-1Million market, because people are either deciding to spend less, or the homes over 1 Million are becoming such a great value by comparison"

"It took 4 significant price reductions to get an offer, which was quite hard on the owner."

She also said that she is shocked by how slow it is out there in her price range and how different the Realtors are treating her as a buyer.

Introvert said...

I know this is subjective (feel free to jump on me for that Introvert)...

Not to worry, Mindset: I actually prefer the subjective. Anecdotes are much more fun.

Leo S said...

"The biggest hits to May growth came in the arts, entertainment and recreation sector, which fell 1.7 per cent, and among real estate agents and brokers, whose output dropped 4.8 per cent. "

Read more: http://www.ctvnews.ca/business/canada-s-economy-edged-up-only-0-1-per-cent-in-may-1.898922#ixzz22D7L7O6B

Mindset said...

...and among real estate agents and brokers, whose output dropped 4.8 per

Was this statement in the article? Looks like they edited it out already if it was.

So much for the 'free' press...

Leo S said...

Hmm. Odd. Copied it straight from the article this morning.

The Financial Post still has it in their article.

a simple man said...

Oak Bay below $1M is very quiet for sales. Many price reductions and lots of listings coming on.

Just Jack said...

July in Review

The least costly home in the Victoria Core districts sold for $84,000. This was a 936 square foot leasehold townhouse on First Nations Land along Admiral's Road. Perhaps this could have been Vancouver's solution to developing affordable housing - give the land back to the Natives and let them build townhomes.

The most expensive sale of the month was in Saanich East at $2,190,000. Constructed in 2005 by the vendors. This home went up for sale in 2008 at $3,650,000 and has been listed 15 separate times for a total of 958 days on the market. Judging by the number of agents that were hired and fired, these just might have been the Vendors from Hell to deal with.

The typical Victoria Core house sold for $593,000. That bought you a 50 year old, 2,115 square foot home on a 7,640 square foot lot in a slightly better area of housing than Fernwood.

The least expensive condominium sold for $105,000 in a complex that has to have repairs at an undisclosed amount. Why so cheap? Almost impossible to get financing. You simply have to pay your money and take your chances on this one. This could be the smartest purchase of the year depending on the cost to repair.

The most expensive condominium sold at $1,100,000 or $638 a square foot for a penthouse on Burdett. A good location, but at almost 4 times the price of a typical condo but with less than twice the space certainly not a property with any upside in future appreciation.


The typical Vickey condo went for $303,000 which got you an updated 18 year old 950 square feet suite within biking distance to the down town core.

Leo S said...

Very interesting JustJack.

Marko said...

"Judging by the number of agents that were hired and fired, these just might have been the Vendors from Hell to deal with.'

Just Jack, the amount of incorrect information you provide this blog on various topics is quite a bit. Unfortunately, or fortunately, depending on how you look at it I do not have the time to correct you.

The vendors only used one agent the entire time, it would pay dividend if you looked into some of the things you post.

a simple man said...

Marko - just kindly point out his errors - I don't think for a moment they are purposeful.

We all make mistakes.

Just Jack said...

The information is correct, how I interpret some of that information may not be.

But, I always make it clear what is fact and what is opinion.

I don't think giving the land back to the First Nation's People will solve the affordability problem in Vancouver either. I do think some condominiums can be smart buys though. And 15 times re-listing a property since 2008 is overly excessive.

Or don't you?

Just Jack said...

I have to admit though, that on an occasion or two, I have thought of correcting some of your statements as well.

Like recently when you said there were 21 sales for that day alone. Actually there were only 8. (the clue is to look at the heading of the column of where you got your information) But, then I thought for what purpose would I do that? It doesn't add or promote to the conversation on the blog and just sounds petty. Sure it was misinformation - but it wasn't intentional on your part.

Marko said...

"Marko - just kindly point out his errors - I don't think for a moment they are purposeful.

We all make mistakes."

The problem is on certain topics such as pre-sales incorrect information is provided over and over again whenever the topic comes up.

"The information is correct, how I interpret some of that information may not be."

Well no, the information you posted is incorrect, and then based on incorrect information you made the assumption that "these just might have been the Vendors from Hell to deal with."

There isn't anything to interpret, the vendors used the same realtor for 4 years, I doubt they were "Vendors from Hell."

Marko said...

What will the VREB report later today in the news?

Wednesday August 1, 2012 7:50am:

July July
2012 2011
Net Unconditional Sales: 523 523
New Listings: 1,242 1,374
Active Listings: 5,178 5,094

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

Just Jack said...

Oh there's the rub - pre-construction sales.

The dark side of real estate.

Marko said...

"Like recently when you said there were 21 sales for that day alone. Actually there were only 8"

How do we go from 481 sales to 523 sales in two days without having about 21 sales reported per day?

If I was going by the "pending date" entered for each sale I would have to be provide data at least 4-5 days old as that is how long it can sometimes take realtors to report a sale.

Secondly, the "21" was in addition to 481, your "8" would miss 13 sales not reflected in the reported number of 481 on Monday morning.

Leo S said...

>> Net Unconditional Sales: 523 523

Haha. Nice. I stand corrected, we made it!

Marko said...

"Oh there's the rub - pre-construction sales.

The dark side of real estate."

Yes, they'll tell you ceiling height is 8'8'' and deliver an 8'0'' product and you will have no recourse ;)....the dark side.

I really don't mind your opinion of pre-sales being a horrible investment, too much risk, you could loose you shirt, etc, really a matter of opinion and everyone is entitled to one but on some aspects the information you provide is off.

Leo S said...

What the heck is going on with end of month listings??

2 days ago we had 4939 listings, and 1114 new ones for the month. Now we have 1242 new listings. So in the last two days we added 128 listings.

And yet, 4939+128=5067 is where we should be at, but we are at 5189. Where did the extra 122 listings come from?

Marko said...

^I've noticed that before. I'll call the VREB and hopefully they can provide an explaination, I'll post in on here.

koozdra said...

Lots of vacant homes around on MLS. Is this common or are speculators dumping their holding properties?

Just Jack said...

I don't think all pre-construction condominiums are horrible investments.

I think that there are a few developers and agents who tend to exaggerate. But that's just marketing.

Would I be upset, if I got 8 foot ceilings instead of 9 foot. Yes, I would. But if it isn't written in the contract - shame on me.

I think that an agent and/or his company must disclose that they purchased so many suites in the complex as a condition of getting exclusive listing rights to all prospective purchasers.

I think that all advertising claims, brochures and plan renderings should form a part of the contract to purchase.

I think agents should be held accountable for unrealistic claims of potential rent or rates of returns too.

I think that the list prices should be disclosed as current values or estimated values upon completion of the project.

Too harsh?

Just Jack said...

Since this was the month of mortgage changes in CMHC, I thought I would look at the velocity of sales. Was there any significant change in the number of sales pre-change versus post change.

I couldn't find any significant difference any greater than 5% in the sales activity between the two time periods in either condominiums or houses for the Victoria Core districts. We started the month at an average 5.8 home sales per day and ended the month at around 5.3

For condos, it was around 4.2 per day on average at the beginning of the month and close to the same at the end of the month.

So, it seems that the Victoria Core skipped through the change in the mortgage regulations quite nicely with very little change in daily averaged sales activity.

Just Jack said...

Here is a better breakdown of residential sales only for the period between July 1 to July 31. The number in brackets were for July 2011

491 (521)Residential sales including the islands, etc
463 (464)of these were in the Core, Western Communities and the Saanich Peninsula
249 (239)of these were detached homes
141 (144)of these were condominiums
47 (46)were town homes
26 (35)were other

Pretty consistent year over year numbers. Again, no noticeable affect due to CMHC changes.

a simple man said...

Because of the lag of time from pending until sold, I would not expect to see the impact of the CMHC changes until this month. if anything, the deadline may have coerced buyers that were on the edge of affordability to come out of the woodwork

Just Jack said...

How about the months of inventory?
There are currently 3,476 residential listings in Greater Victoria or 7.5 months of inventory

1,754 detached houses listed for 7 months of inventory

1,115 condos listed for 7.9 MOI
362 town homes listed for 7.7 MOI

Other includes revenue properties under 4 suites, manufactured homes, and a load of other weird stuff

246 of these are listed for 9.5 MOI

*****WARNING WARNING OPINION*****

Since 2007, demand has dropped for housing in Greater Victoria and appears to have stabilized at the current levels. That was a demand-driven downturn in the market with prices slipping a bit here and a bit there. That demand-driven downturn appears to have stabilized and our sales volume may not fall any further.

However, the inventory of housing is increasing dramatically especially in the outer areas of Victoria. Now, our market has moved to the next stage as being a supply-driven downturn.

Now, think of a condominium as a can of soup in Wal-Mart. How do you get someone to buy your can over someone else's can?

Houses are a bit different, because there is more variety in them. However, if you live in a boring subdivision with the same house plan used over and over and over again. Your just a can of soup.

Just Jack said...

YOU'RE just a can of soup.

Just Jack said...

I thought about that lag period between pending and sold too. But, my understanding was that the property had to be CMHC approved no later than the 9th of July.

I guess there still could be a lag. I especially thought it would show up in condo sales as this is where most first time buyers would be. The other lag that may be happening is that last month's buyers were committed to buying. Maybe because they had sold a property or the bank of mom & dad were firmly behind them in buying.

With the recent turn of the media to being more bearish, maybe that will turn prospective buyers opinion of real estate to being more bearish too.

reasonfirst said...

Always appreciate your analysis Jack. What about about total $ volume as opposed to # of sales?

Just Jack said...

Thank-you,

Maybe I'll wander over to Vibrant Victoria and see if they'll skin this bear.

a simple man said...

3182 Wessex Close:

Was in July $900K
Now in Aug $800K

patriotz said...

Assessed at $774,000. Somebody's a real dreamer.

Just Jack said...

You would think that an entire generation of contractors that got their formal education by watching re-runs of Bob the Builder would be snatching up all the vacant lots in town.

Not so, only one sale last month of the 48 lots listed. And that was for a waterfront lot in View Royal that was bought back in 2010 for $1,150,000 and sold this July for $857,000.

I know, I know -they aren't making anymore land (except in Dubai). But luckily that has nothing to do with what land sells for.

In the last 12 months there have been 28 lots bought in the Victoria Core district. Prices ranged from $195,000 to a smidge over 2 million. But the typical lot of less than 10,000 square feet sold at $333,000 which is about $50 a square foot. Last year it was $357,500 or around $60. The year before it was $355,000 or $54.

The last time land in the core was at this current rate was back around 2007 -2008

But today's land is still expensive relative to a decade ago when a building lot was $140,000 or the cost of two big ass Dodge Ram Trucks with Bob the Builder painted on them.

Just Jack said...
This comment has been removed by the author.
Just Jack said...

Cute little home along Hampshire in Oak Bay sold this week for $590,000. A house that would have been built by someone's Great Great Grandpa.

Previously purchased in April 2008 for $545,000.

This repeat sale, seems to evidence that market values in Oak Bay have been rolling back just like everywhere else, just lagging by a year.

However, it appears that the roll back in the outlying areas has fallen further back to pre 2008 price levels as evidenced by the sale on Metchosin Road this week at $365,000. Previous bought for $429,000 in 2009.

Market corrections know no borders and it is entirely likely that Oak Bay prices will continue to roll back like other areas have been doing. That's easily another 10 percent drop from today's Oak Bay prices in the next year.

This assumes that the current supply and demand stays about the same over the coming year. If sales volume drops and or listings increase dramatically from today's MOI, I would expect something more severe than this soft decay in prices.

Just Jack said...

A quick look at homes in Cordova Bay.

Over the last three years, some 214 non water front homes have sold in this neighborhood. The typical home being around 25 years old, 2,672 finished square feet and situated on a large 10,763 square foot lot.

A lot of the properties in this hood have water views and that makes coming up with a benchmark price for the typical home more of art than a science. But if you are looking to buy in this neighborhood then most of the non view homes would fall in the range of $575,000 to $950,000.

Obviously this is not a first time home owner's neighborhood. This is mostly for upper middle income families with a few areas of housing that would stretch even their pocket books, like around Matticks Farm.

The sales to new listings ratio is outstanding with nine new listings versus 8 sales last month and the months of inventory is well balanced at 4.6. So don't expect any deals on a house in this neighborhood.

Not a bad place to raise a family. And it is possible to bike to the downtown from here but it will take about 40 minutes each way, so don't sell the second car yet.

Most of those that live here have heard of the homeless, but have never seen one. So no surprises in the park or people pushing Thrifty shopping carts with eight glad bags filled with pop containers here.

Just Jack said...

How about the Fernwood/Oaklands hood.

This hood had seen an above average amount of activity with some 309 homes exchanging during the last three years.

The typical home sold at $495,000 and was a small house at 1,574 square feet on a 5,500 square foot lot or about $315 per square foot. Most people will have to budget between $375,000 to $625,000 to live here. This is your blue collar neighborhood where people know more about the different brands of Cannabis than French wines. A good neighborhood to raise a young family although I feel Oaklands Elementary should get inner city subsidy status, like Vic West does.

As neighborhoods go, this is middle of the road. You don't leave spare change visible in your car, but it's still safe to walk home late at night. On a scale of one to ten, I give this neighborhood 5 abandoned Thrifty shopping carts.

10 homes were listed last month for a sales to new listings ratio of 0.3. And currently there are a total of 36 homes for sale for 12 months of inventory.

Ouch, this neighborhood was like an Indy Pace car and now it seems someone has just thrown a boat anchor out the window. My guess is that the prices are about to go down in smoke too.

Just Jack said...

The lowest price neighborhood would be around Burnside and Battleford roads, Hampton and Rudd parks. A short stroll to Silver City.

$400,000 buys you the typical home here which gets you roughly 1,450 square feet and a 5,500 square foot lot. It seems just to be a forgotten neighborhood. Small homes, no sidewalks. I think a lot could be done to improve this hood. And that does NOT mean any more #$%* condos. A land assembly of low rise townhomes that would average 2.5 bedrooms per complex with lots of greenspace. Some of the corner lots allotted for ground floor retail use like a grocery or bike store or coffee shop.

You know - build a community

Total number of sales last month - NONE

Just Jack said...

So let's just say you've decided the market is going to crash and you are going to get out of that micro downtown condo at the Reef at $375,000.

But, you don't want to be a low life renter. Have no fear - manufactured homes are here!

For a little as $49,900 you can be the owner of a 530 square foot manufactured home off Craigflower Road. All of your stuff from the condo will fit neatly back into this same sized trailer and the pad fee is the same as what your condo fee was! And your still only 10 minutes from downtown!

Not sure if she loves you or the condo - now you'll get to find out! Or better yet, to much of a coward to dump the live in - this will do it!

Be like Charlie Sheen
and start "winning"

Just Jack said...
This comment has been removed by the author.
Marko said...

Fascinating New Listing of the Day:

#305 - 545 Manchester
Listed today for $178,000.
Purchased in 1992 for $116,900.

Talk about poor return....

Leo S said...

Vancouver suddenly got the wind knocked out of it

dasmo said...

You mean Fascinating old Listing of the Day Marco. A google shows that one started in April at 209K. I guess MDF and particle board sin't flying off the selves anymore at those prices...

dasmo said...
This comment has been removed by the author.
Marko said...

Re-listed as a "new listing," either way crappy return. Could have bought a 2 bed 1 bath house in Fernwood for not much more in 1992...would be close to 400k now.

Roger said...

Greater Victoria MLS sales in July have been anemic for the last 3 years. The boom years are behind us as shown in this graph

Active listings and months-of-inventory have climbed to a new high for July. click here

Low interest rates are the only thing keeping prices at these levels.

a simple man said...

Great graphs, Roger. Appreciate the work behind them.

Also, JJ - thanks for all of your analyses - keep them coming.

Leo S said...

Amazing how close the sales have been in the last 3 years.

Just Jack said...

Houses have been appreciating at a higher rate than condominiums. And there is a plethora of reasons why this happens. I think one of the better reasons is the type of ownership. Freehold versus Strata.

Our society generally regards the possession of land and the full bundle of rights associated with it to be the most favorable. Condominiums have a legal concept of land called the strata lot, but its not the same as a shovel full of dirt in your back yard. Also, the bundle of rights that you have are restricted by a strata council.

So, when a demand-driven downturn occurs with far fewer prospective buyers, it is the strata condominium and strata townhouses that drop first in value.

And it is also good evidence to show that we have an over supply of condominiums.

Now, you would think that the best way to protect your condo investment is to stop new condominium construction. But that would actually cause unemployment to rise followed by a further drop in demand for strata homes, followed by lower prices.

If I were a condominium developer, what I would do is a condominium swap plus cash. I would approach the strata council of one of the older condo complexes built in the 70's and 80's and offer all of the owners a new condo of equal or greater value in exchange for their old one.

Then I would keep the older complex as a rental property and sever all the surplus land. There are several older complexes along the Gorge sitting on a few acres of the waterway that would make me slobber for. Because in tomorrow's world it's all about cash flow. Cash will be King.

Introvert said...

Man, this is some crappy weather! :)

koozdra said...

And... all I have to do is bring an unconditional offer?

http://www.realtor.ca/propertyDetails.aspx?propertyId=12144160&PidKey=-625280638

koozdra said...

"Buy this property - NO MONEY DOWN (5% cashback is the dwnpymt) @ $1430/month."

http://www.realtor.ca/propertyDetails.aspx?propertyId=12143849&PidKey=240027327

Watching and waiting said...

re: Motivated seller MLS®: 308070 - anyone know what the monthly strata fees are advertised as?

Marko said...

$100 per month.

DavidL said...

Interesting points about doing a swap with condo owners, Just Jack. I agree about some of the Gorge waterfront properties.

Al + TOH said...

[url=http://news.nationalpost.com/2012/08/03/the-clock-is-ticking-megathrust-west-coast-earthquake-could-resemble-japans-studies-say/]The clock is ticking[/url]

Based on the news as above, for those of us who own houses, to include earthquake in house insurance is probably a good idea. For those who haven't bought yet, maybe the best time to buy would be after the quake?

Phil said...

Introvert - you're right. Sometimes it's forgotten when we talk about places like Phoenix and Tampa that we actually get 6 weeks of good weather here. LoL.

Watching and waiting said...

tks Marko re: strata fees.

Be interesting to see if the $100 strata fees are in line with the requirements under the BC Strata Act. Usually it's not, given the size of the strata.

Myself, having lived in one,would never move back into one no matter how beautiful the home or attractive the price. There is something unnerving about being beholden to the other homes on your street and more unnerving trying to collect strata fees from a family that stops paying (i.e.a divorcing couple who wants the other spouse to pay). Makes for a tense neighbourhood atmosphere based on my experience. Oh and good luck trying to collect the money - basically stuck placing a lien on the home.

CS said...

Re: ‘Megathrust’ West coast earthquake could resemble Japan’s, studies say

This may be no time to buy Oak Bay waterfront.

Anton said...

I think there is more risk from a shallow earthquake right under Victoria than a subduction zone tsunami. For a subduction zone quake there would probably be enough warning to get out of the way of the wave. Someone here may know more but in Oak Bay, maybe an hour from quake to wave – almost enough time to explore and collect sea life from the new beach!). Unless you are above Port Renfrew or are in the head of a bay the wave height would likely only be a couple of metres. Houses built right at the high tide line would probably be affected but they are on borrowed time anyway if the sea level keeps rising. There is a map of greater Victoria showing seismic risk. I would probably think twice before buying a house on one of the liquefaction zones. Unfortunately these are also nice areas (eg. Lower Cook Street and other areas of Fairfield). Here is a link to the map:
http://www.empr.gov.bc.ca/Mining/Geoscience/SurficialGeologyandHazards/VictoriaEarthquakeMaps/PublishingImages/composite.jpg

Introvert said...

Introvert - you're right. Sometimes it's forgotten when we talk about places like Phoenix and Tampa that we actually get 6 weeks of good weather here. LoL

In terms of Canada, Victoria's overall weather is tops (IMHO). When you include the U.S., you're right, Victoria certainly isn't the best location.

Personally, I love Victoria winters; shoveling snow only one or two days a year--in Canada--is pretty darn good in my books.

Introvert said...

http://i.imgur.com/x6vLm.jpg

mrmike said...

We have EQ insurance, it's expensive I know that. My wife added it years ago and pretty sure the best coverage you can get is 10% deductible, might be 10k deductible...can't remember, but it wasn't full coverage and it's pretty expensive for optional coverage.

mrmike said...
This comment has been removed by the author.
mrmike said...

For a condo, I assume EQ coverage is included in the strata fee?

Leo S said...

>> http://i.imgur.com/x6vLm.jpg

Haha. Good one :) Nice to see some summer for a change around here!

Leo S said...

Was tempted by 3771 Jennifer (312908). Some reasonable places coming up...

Introvert said...
This comment has been removed by the author.
Introvert said...

We have EQ insurance, it's expensive I know that. My wife added it years ago and pretty sure the best coverage you can get is 10% deductible, might be 10k deductible...can't remember, but it wasn't full coverage and it's pretty expensive for optional coverage.

Just checked my home insurance: I have earthquake coverage up to $458,000 with a 5% deductible. My total cost for home insurance is $31.50 a month.

Leo S said...

A question for the realtors here:

If you client asks you to put in an offer that you think is too low, what do you do? Heard about a scenario where the client put in an offer and their realtor tried to argue against it, thinking it was too low. Turns out it wasn't, but that's beside the point. What do you do when you think the offer is too low and a waste of time?

Iggy_12 said...

http://www.realtor.ca/propertyDetails.aspx?propertyId=12144853&PidKey=-1631797837

REDUCED $70,0000. NEEDS TLC. ABSOLUTELY MUST SELL. WILL CONSIDER ANY OFFER!

Any offer???

SilverSurfer said...

"What do you do when you think the offer is too low and a waste of time?"

Waste of time goes both ways, like realtors who insist on 6 month contract but can't sell your place worth beans, and you can't legally get rid of them.

Mindset said...

Waste of time goes both ways, like realtors who insist on 6 month contract but can't sell your place worth beans, and you can't legally get rid of them

Ok, now that cracked me up. Thanks for a good start of the morning laugh Silver Surfer.

Leo S said...

Lots of realtors jumping on the cash back and low fee MLS listing model... No longer is it just for the newcomers to get in the business. Even some old timers are starting to offer it.

At the same time there's a lot more low-commission options for sellers too, so the cash back deals start to become more rare.

Leo S said...

Also many realtors moving to Fair realty.

JustWatching said...

Selling a condo? Beware the taxman

Marko said...

Reporting from Zagreb, Croatia.

Tuesday, August 7, 2012 8:00am

MTD August
2012 2011
Net Unconditional Sales: 75 542
New Listings: 207 1,200
Active Listings: 4,836 4,944

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

Mindset said...

Looks like the banks are getting on the downturn bandwagon.

Scotiabank - Your going to be poorer than you think

With how vested the banks are in this industry, this reads like damage control to me. The current reality in our housing market must be getting too obvious for neutral market messaging. Will be interesting to see how other banks respond, their credibility is at stake with what they message now.

EagerBuyer(Not) said...

Where did everybody go? Same topic for 10 days and only few reader comments this week.

Leo S said...

It's summer time. The market is slow and uninteresting. :)

Figured we didn't need a market update since it was a short week and not too many comments on here.

EagerBuyer(Not) said...

OK Leo....

Here's something interesting. Readers should know that time is running out to get that big HELOC.

The HELOC Clock Starts Ticking

Leo S said...

Yes. Not sure how big of an effect it will have, since it sounds like you can get a HELOC for 60% and then an amortizing loan for 15% to get essentially the same money out.

However if you want to write something longer about it I'd be happy to post it.

Mindset said...

For the numbers geeks out here or those wishing there were more postings, here is the actual Scotiabank analysis behind the article.

Scotiabank Report

I have always found the economicanalyst (Ben Rabidoux) credible and interesting as well. (He's like a Leo S for the Vancouver Market). He posted some extensive research last week as well.

Vancouver in Correction Mode

A few of his graphs depict Vancouver going into an 08/09 style drop. My bet is this time it doesn't bounce. The Canadian consumer is just too tapped out and this time the Government isn't likely to intervene.

It will be interesting to see what all of this means for the Canadian economy and RE as an investment category.

As an aside, is it just me, or does sentiment on housing seems to be getting weaker by the day? I can't remember the last time I read or heard anyone say that prices are going up. It's like a someone hit a magic consumer confidence switch somewhere.

When the herd finally turns, it sure turns quickly.

Leo S said...

I have always found the economicanalyst (Ben Rabidoux) credible and interesting as well.

It's too bad he stopped posting regularly. He's got some great analysis.

a simple man said...

Interesting anecdote - both realtors I know personally are selling their homes here.

dasmo said...

That's why it's best to buy when people are leaving the market and not when they are getting back in. Unless you think the end of the world is coming, this spring will be a good time to buy I think. price drop will most likely be reflected in listing prices and rates will most likely still be low. Now that most of the distressed properties have been bought in the US their stats are on the incline once again. I predict a somewhat sharp bump due to the distortion of those distressed sales on the stats. (I saw $450k properties in Seattle for for under $200k). This might change confidence levels and thus rates might go up, most likely without further price declines...

Leo S said...

Interesting anecdote - both realtors I know personally are selling their homes here.

Funny I noticed the same thing, and we probably don't know the same two realtors.

Leo S said...

That's why it's best to buy when people are leaving the market and not when they are getting back in.

I agree, but I think we're a long ways from a recovery. 2 years at least.

patriotz said...

That's why it's best to buy when people are leaving the market and not when they are getting back in.

When someone (the seller) leaves the market, doesn't someone else (the buyer) get in?

Taigaa said...

Our realtor is selling his house as well

Watching and waiting said...

The real question is are the realtors selling out of financial necessity, greed or due to a natural selling cycle.

What I can anecdotally add is that our 6 % "full service" realtor is now looking at putting a rental suite in his garage in his once $1.3 million home. That'll really excite his neighbours ...

Anton said...

Distress sales?

Mindset said...

Realtors see new Market Realities first, and experience the effects of trend changes on their bottom line first too.

Maybe this makes Realtors the canaries in the coal mine for the RE Market?

koozdra said...

Greater Nanaimo:
population: 98021
properties: 2994

3.05%

To compare with Greater Victoria:
population: 344630
properties: 4057

1.18%

Collected from informal MLS search.

dasmo said...

@patriotz not all sellers find buyers...I don't really need to explain supply and demand do I?

@ Anton "Distress sales involve the sale of assets that must take place due to conditions outside the control of the owner. With a distress sale, there is the need to sell the asset quickly, even if it has to be sold at a loss. The idea is to generate some type of return on the asset, even if it does not cover the current market value."

@ Mindset, Realtors buy and sell properties all the time so the fact that one is doesn't say much...the fact that properties sit on the market for so long does.

patriotz said...

not all sellers find buyers

Well yes they do. A seller is someone who sells.

I suppose you really mean someone who would like to sell at some price. Yes not everyone would would like to sell at some price sells. But not everyone who would like to buy at some price buys.

The thing is that those who would like to sell are listed on the MLS, but there's no such listing for those who would like to buy, so you can't make any meaningful comparision between them. As opposed to the stock market, which lists both asks and bids.

All you can say is that the number of people who would like to sell always equals the number of people who would like to buy at the market price.

dasmo said...

Seller: "A party that makes, offers or contracts to make a sale to an actual or potential buyer. Also called vendor."

dasmo said...

I hope you meant "All you can say is that the number of people who sold always equals the number of people who bought at the selling price." That would be hard to argue with ;-)

a simple man said...

Realtors selling their long-term family homes does tell me something.

Mindset said...

If Realtors buy and sell all of the time, this is actaully more useful as a statistic because you would have a baseline. All you would need is to watch is the ratio between the number of realtors buying homes vs the number of realtors selling homes over time to see the trend in their market confidence.

When markets are picking up, they would buy more than sell, and when markets are going down, they would sell more than buy.

I think the same would be true of investment properties, but the general public is generally behind the curve, and have the most certainty when it's getting near the top of a peak or nearing the bottom of the trough.

mrmike said...

I have an off topic question about home inspections. Is this just a ploy used by realtors to renegotiate the price lower? I mean the inspector is working for the buyers which to me is very bias and think they will be hell bent on finding anything to justify their existence. These guys want to spend three hours in the house, it's very well maintained but it is over 30 years old. I have nothing to hide but at the same time feel like shark bait.

dasmo said...

I think the people here know as much about what the market will do as a Realtor. A few weekend courses and a 100 question multiple choice exam doesn't give you a crystal ball.
I'm curious why they are selling their long term family home? if it's to make a profit and buy back in later...good luck with that. the cost of moving, renting for two years and buying again just doesn't seem like a good play. the market would need to drop a lot more than 10% for that to make any sense.

Unknown said...
This comment has been removed by the author.
Animal Spirit said...

Mr. Mike - when I buy a house, I'm sure as stink to have a good house inspector spend a half day looking at everything in detail.

Case in point. Friends own in the Jubilee area. The house a couple down sold in the last year. They wanted to dig out the basement or lift the house to add a suite. Not only was black mold found in the walls but also rats. The kicker was that an underground stream was found when doing the prep. work for the dig out/lift. Couldn't do anything more, but stuck with large invoices.

Feel sorry for them - hopefully they had an inspection done and could make a claim against the inspector for the mold and rats (I wouldn't expect the stream to be found).

Renter said...

If buyers don't have house inspections done by a reputable inspector they are idiots. And yes, it's their job to find anything that could possibly be wrong so that the buyers are making the purchase with their eyes wide open.

Don't take it personally, MrMike. It's not about you. It's about the buyer knowing that they're not about to make the biggest mistake of their life. If your house is good shape, the inspector will say so, even while they're pointing out the things that need work.

mrmike said...

After thinking about it for awhile I guess it's good for the seller knowing he can move on in good conscious.
But 3 hours WTF.

a simple man said...

mrmike - I would NEVER buy a house without an inspection - it is absolutely foolish not to with the biggest decision of your life. And three hours is on the low side of the ones that I have had done.

dasmo said...

mmike, House inspection is a must. I would embrace it if you want to sell your house. In fact If I were selling I would get one done first so I can address any issues in advance. Any strangeness can spook a buyer very easy. Like not disclosing things. I negotiated a lower price post house inspection because they found vermiculite insulation. It wasn't disclosed so I felt obligated. If it was disclosed it would have been known before. If your house is truly in good shape you should have nothing to worry about. If you have some minor things to fix, either do them or disclose them.

Marko said...

"If Realtors buy and sell all of the time, this is actaully more useful as a statistic because you would have a baseline. All you would need is to watch is the ratio between the number of realtors buying homes vs the number of realtors selling homes over time to see the trend in their market confidence.

When markets are picking up, they would buy more than sell, and when markets are going down, they would sell more than buy."

In reality a horrible statistic. Ive seen lots of realtors that bought at the top, overpaid, took massive losses. Realtors werent buying between November 2008 to March 2009.

A smart realtor would have sold in 2010 not now. The reality is we cant predict the market whatsoever. I basically have live stats and you are a week behind, that is about all. A realtor can help to identify a good buy, maybe, if they know what they are doing.

Anton said...

Most Realtors I know had drunk their own Kool Aid and were convinced that prices would keep climbing, without pause, infinitely (I'm paraphrasing). If Realtors are disproportionately represented amongst the sellers I wonder if they are under pressure to sell due to declining income with the sustained lower sales numbers. I know of one Realtor who has left the industry. Before he did I remember him speaking disparagingly about sellers with unrealistic price expectations.

Just Jack said...

Is Oak Bay our Richmond?

Paper millionaires abound in Oak Bay and by the recent stats, a lot more of them this month want to crystallize that paper gain into cash.

But are there too many rushing for the exit doors at once? With over a hundred houses for sale and only some 10 sales in the last month that makes it difficult to make your Oak Bay home stand out from the crowd. And more are coming onto the market each day at the rate of 2 new listing for each sale.

So, is it time to cut bait?

Of those that were listed in the last 30 days and were also able to sell, the common trait is that they all sold near or at least 15% below assessed value.

Trough pricing may soon establish that your home is worth less than the last home sale on your street.

Just Jack said...

The heartland of our market is Saanich East.

The land of middle income suburbia. The place to raise your 2.3 children, walk your .75 dog and drive your 2.2 cars per household.

With over 320 house listings, 63 sales in the last 30 days and 1.7 new listings for each sale, this is middle income stability. Yet to list and sale in 30 days, you have to price at to 5 percent under assessed value.

Just Jack said...

Then there is Esquimalt.

This is the land of the "bad boys" and really tough chicks too. Where facial tattoos actually improve the appearance of many of the inhabitants or at least hide the beer bottle scars received from the Carleton Club on a Friday night.

51 homes for sale and 4 sold in the last 30 days with 2.5 new listings per sale being added.

Looks like the fleet is leaving town.

mrmike said...

Thanks very much for the advice, I'm not a real estate guy.
I haven't bought or sold real estate since 98.
The reason I'm so uncomfortable is my listing agent is away for a month and I have
absolutely no one to consult with. My listing agent left me with a colleague but he's the guy
who brought me the buyers. So now I'm stuck dealing with the buyers agent.
Nice enough guy, but he's the BUYERS agent. I can't even email my listing agent because it goes straight
to the colleague. I have no one to talk to regarding the negotiating.
I accepted the offer because it was less than 3% of ask.
I am not experienced with this shit at all.
I don't know If I should be here for the inspections, do I get a copy of the report, are they lying?
I'm flying blind...just about ready to cancel the whole deal.
The stress is killing me, wife thinks it's a conflict of interest.

I'll take any advice I can get.

mrmike said...

^ meant +97% of asking.

Anton said...

Mrmike - You should chill about the house inspection. Wouldn't you want one if you were buying a house? I think they are very standard except in red hot markets where there are multiple offers. House inspections cost a few hundred dollars and I expect they would spend at least 3 hours and produce a fairly detailed report. It is possible the buyers may use the report to try and lower the price, or have you do repairs. That is part of the game. You don't have to agree to fix the problems or reduce the price but they could walk away at that point. If you are getting an offer at 97% of your asking price that is no lowball. I think you should count yourself lucky and see what unfolds.

JustWatching said...

MrMike,

Selling can be stressful and you have to keep your emotions in check when dealing with the agents. If you got 97% of asking I think you can rest easy that you got a fair offer. In a "normal market" that is a good offer. In today's slowing market I would take the deal and sleep easy.

You should be there for the house inspection to make sure you can assist the inspector if requested to do so. For example the inspector may need to know where the access to the crawlspace is located or you can demonstrate that the appliances work ( if included in the deal). For peace of mind you also want to be there when someone else is going through your house. However, you need to be careful what you say to the buyer if they are in attendance.

You will not get a copy of the report. The buyer is paying for it and is under no obligation to show it to you.

The buyers agent should not be representing you without a dual agency agreement being signed by you and the buyer. This is a document signed by the seller and the buyer that outlines the responsibilities of all parties. If you don't have one ask why this hasn't been done. If you are feeling uncomfortable call the managing broker of your listing agent and tell them your concerns.

mrmike said...

yeah, I need to relax...we have a dual agreement. I'm over reacting.

patriotz said...

I hope you meant "All you can say is that the number of people who sold always equals the number of people who bought at the selling price."

No that's not what I meant.

If the number of people who would like to buy at a given price equals the number of people who would like to sell at a given price, THEN

That number of sales will take place at that price. Which is defined as the market price.

It doesn't make sense to talk about the number of people who want to buy or sell without reference to price, because that number DEPENDS on price. There is a virtually unlimited number of people who are willing to buy at SOME price, which means it never makes sense to say there are more people who want to sell than want to buy, or more sellers than buyers if you want to put it that way.

This is really, really, really elementary supply and demand.

dasmo said...

mmike, 97% is a good offer! Any Agent I have had was did not seem to motivated to negotiate a lower price on my behalf so I highly doubt there is a single relationship with a house inspector that goes that way. A good inspector should take three hours. Go into every crawl space, closet, attic hatch, poke the walls with a hydro meter, poke the beams under the house, smell everything etc. So it might be stressful... A person spending half a million or more should know exactly what they are buying though, no conflict of interest there at all. If in doubt, get your own done.

@ Patriotz, There are not always an infinite number of buyers at some price. Everyone does not want everything all the time, even if it's free...And yes, there can be more people who want to sell than want to buy. Something needs to create demand. That can be price, hype,fear, hunger, pride, desire, jealousy, any number of things. Similar on the other side, overstock, fear, greed etc...

if you are talking about elementary supply and demand then you are talking about the effect of one on the other and it's result on price. What creates demand and supply is another thing in itself.

Mindset said...

In reality a horrible statistic. Ive seen lots of realtors that bought at the top, overpaid, took massive losses. Realtors werent buying between November 2008 to March 2009

Are these rookie Realtors, or seasoned Realtors?

You'd think that seeing a couple of cycles play out would make you a lot smarter.

Just Jack said...

Even realtors seasoned or not can buy into the hype of the last few years. It was very hard to resist.

S2 (JJ's wife)

Just Jack said...
This comment has been removed by the author.
Just Jack said...

A review of the last 5 condo sales in Langford over the weekend.

Just bought for $222,500 - Previously bought new in 2009 for $269,000

Just bought for $229,000 - Previously bought new in 2007 for $289,900

Just bought for $235,000 - Previously bought new in 2006 for $254,000

Just bought for $247,000 - Bought new in 2006 for $339,900. Then sold during the last demand-driven downturn in 2009 for $285,000.

And

And a suite in a nearing completion condominium complex just purchased for $311,900.

Just Jack said...

Ooops, the sales are for the month so far - not just the weekend.

Langford has over 12 months of condominium inventory and a sales to new listings ratio under 0.3.

Projected sales for Langford condominium sales in August might only total 11. So it's not likely that you can get 5 condominium sales in just two days. Not impossible - just not probable.

Just Jack said...

Why is a sales to new listings ratio between 0.4 to 0.6 considered to be balanced? Or putting another way why does it takes about 2 new listings to make just one sale?

While there are many possible reasons, the most common is the unrealistic price expectation of the Vendor.

Take the first three months of this year in Oak Bay for example. Some 125 homes were listed for sale in the first 90 days of the year.

61 sold (0.49 sales/new listings)
1 went inactive
32 were cancelled
18 expired
13 are still up for sale

In this case, it took around 2 new listings to make one sale.

Marko said...

Monday, August 13, 2012 8:00am

MTD August
2012 2011
Net Unconditional Sales: 153 542
New Listings: 397 1,200
Active Listings: 4,834 4,944

Please Note

* Left Column: stats so far this month
* Right Column: stats for the entire month from last year

koozdra said...

http://www.realtor.ca/propertyDetails.aspx?propertyId=12259469&PidKey=695706273

"BONUS: BRAND NEW 70' TV SHARP BOUGHT & INSTALLED BY SELLER VALID IF A FIRM CONTRACT IS ACCEPTED BY SELLER BY AUGUST, 31 2012"

After that... NO TV!!!

Just Jack said...

Or this if you wanted to buy a new condo on Treanor in Langford.

** Special Time Offer - Brand New 2012 Fiat Included! ** La Vie at Millstream Village - Over 85% sold!

Of course, nothing is for free, you had to pay some $25,000 over that of a comparable condominium.

The problem is bank financing, but if the banker doesn't ask?

"Don't Ask - Don't Tell"

The new slogan of the Canadian banking industry.

DavidL said...

@Marco

With the listings remaining stable but sales trending down - any predictions for the end-of-month total sales?

SilverSurfer said...

"BONUS: BRAND NEW 70' TV SHARP BOUGHT & INSTALLED BY SELLER VALID IF A FIRM CONTRACT IS ACCEPTED BY SELLER BY AUGUST, 31 2012"

WOW! A 70 foot wide TV!! That's gotta be worth more than the downpayment. London Olympics would be jelous. Is the property near commercial rezoning? Because, if I was the buyer, I'd be starting a drive-in theatre business.

DavidL said...

@JustJack

Is that a monkey on your back?! LOL

Anton said...

Good spotting SilverSurfer. I think there must be a small typo in that. Maybe they meant a 70' TV SHARK BOUGHT & INSTALLED BY SELLER (on one's roof, I presume).

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