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: 371 (258, 120)
New Listings: 857 (606, 306)
Active Listings: 4900 (4868, 4827)
Sales to new listings ratio: 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
SFH average = $580,000
SFH median = $532,000
Condo average = $331,000
Roger reports the weekly sales volume dropped to 113 from 138 and 120 in the previous weeks; atypical for the third week in a month or a sign of a sales drop off due to new mortgage rules? Time will tell.
123 comments:
hello again.
How much has the average price dropped in Victoria since last summer?
@SARV
Some neighbourhoods in Victoria definitely have dropped while others are maintaining their price. Check out the June Monthly Sale Summary from VREB.
Most notably, the average price for single family dwellings in Greater Victoria fell from $628K in June 2011 to $591K in June 2012 (5.9% drop,) while the median price fell from $569 in June 2011 to $530K in June 2012 (6.9% drop).
Like I said a while back, a 10% correction has already happened, the stats are just delayed and or distort reality...I hold firm to 10% of peak and then flat for a number of years... I have a suspicion interest rates might even drop a bit.
Just Jack said:
"The District of Saanich is the most desirable area of housing for middle income households. There are 483 houses for sale today just in Saanich alone. And 88 sales in the last 30 days with the typical home selling for $595,000. With about the same volume of sales and around the same median price as one year ago."
But something has really changed
On PCS I track SFH in Saanich (East, West, Central) in the price range from 390K to 620K. There are 238 listings and 138 (58%) have had one or more price reductions. Six months ago only 40% had price reductions. Sellers are clearly trying to unload in what has been a hot area for sales. The median price may be staying the same but it looks like buyers are getting more house for their money. In other words the prices are falling but the average and median price stats aren't showing it. Last week I also noticed the fewest weekly sales in a long time.
If you live in Langford or Colwood your down about 4 to 5 percent year over year. Which is not too bad. But at 6.5 months of inventory, prices have to continue to slide. Lately the velocity of the decline seems to have increased to between 1 to 1.5 percent per month.
I doubt if you are going to find a person in Greater Victoria that is NOT aware that prices are lower today. Yet most home owners' hang on to the believe that prices will not drop dramatically.
Of course that is meaningless, because home owners have no affect on market prices. Only sellers and prospective purchasers determine price.
Thanks HHV for the update. I've been super busy lately. Will get to it Monday nights if you don't beat me to it.
I think July's sales will come in lower than last July by a bit. Last week we had 113 sales. In order to hit last year's number, we need 152 sales in the last 9 days of July, which is an increase in the sales rate. Sales are slowing just due to the season, and last week should have been the last of any sales from before the CMHC change so I doubt we are going to see a bump in sales.
CBC article - 'Average' house prices don't tell the whole story
@dasmo
I can't see interest rates moving much either up or down any time soon.
Interest rates won't drop as Canada's enconomy, while sluggish is not shrinking. BoC Prime is at 1%, there isn't much fuel there to add to the fire.
Interest rates won't go up either as doing so will push the Loonie higher, which hurts exports. Our exports are already down as other countries USA and EU are slow and buying less from us.
Lastly, we are very tied into what the US Fed does. and Bernake has stated that he won't raise their rates till sometime 2014 at the earliest. Some economists are even predicting a QE3 in the coming months.
I’m going with 10%/year as well for the next three years. However, keep in mind that once adjusted for inflation and currency, the average place here will fall close to 100K per year for the next three years. 50K/yr from the 10%/yr nominal decline. 2% inflation adjustment for 10K/yr. The final 40K/year will be in currency adjustment as our dollar (CAD) falls an average of 8%/yr against the US greenback.
To put it in perspective, if you had sold here a year ago and purchased a home in the US that merely paces inflation, you will be approximately 400K wealthier in real CAD denominated terms by 2015.
I saw a sign for the Promontory offering 1.9% financing. That hints to me a possibility of lower rates. zero percent interest could happen here. Maybe this is why they have put these lending restrictions in place? This way perhaps they can stimulate inflation without over stimulating further real estate growth. Thus eroding everyone's debt problem to a more manageable level over the span of a decade or so...through controlled inflation. Sounds super paranoid doesn't it?
Today's CBC news article that 'JustWatching' linked to above repeats a common beef on this blog; which is: Real Estate Boards give misleading regional statistics rather than more meaningful neighbourhood-specific statistics.
For example, the Statistics that Marko quotes each week are numbers for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.
These numbers that Marko provides are almost totally misleading.
Realtors are always saying that the top three most important things to consider when buying are: Location, Location, Location. Then realtors continue their spiel by saying that sellers must price their house according to neighbourhood comparables. Two good points, one for buyers and one for sellers.
Both these good points that realtors make are neighbourhood specific - BUT - then the local Real Estate Board provides meaningless statistics that ignore both these neighbourhood-specific-tenets when they use an amalgam of Greater Victoria Statistics that include Sooke, Shawnigan Lake and the Gulf Islands. The board knows that statistically, the high end sales will almost always give a rosy regional picture, even if those same high end homes recently sold for mush less than they did a couple years ago, because the high end sales will always skew the average and median to a higher number.
And, of course the local real estate boards and the national board then use unsound statistical practices to put a positive spin on any negative trends, so consequently naive buyers are always manipulated into believing that it's always a good time to buy, even when a closer look at specific neighbourhoods and specific 'locations' and specific building types might show negative trends that are actually growing more negative with each 'comparable' sale.
The real estate boards and realtors are not being forthright with their statistics.
This time it may be different!
In the recent past, low interest rates and deficit government spending kick started economic expansion. But after four years of near zero interest rates and massive US and European government deficits and with China's economy faltering, there's reason to doubt there'll be a recovery any time soon, which will likely mean falling resource demand and increasingly hard times here, perhaps for many years.
Coinsider this via Fox News:
"Many analysts ask if another big innovation—like the automobile or computer-- is coming and could save the economy. The problems are many new products are creating more jobs in Asia than in the West, and many technology companies are consolidating or facing extinction—consider the smart phone, Hewlett Packard and Yahoo.
A lot of US innovation is starting to look more like French art than American commerce. Icons like Yahoo, Facebook and Twitter have made great contributions to the economy and culture but simply don’t have business models that generate enough revenue and sustainable jobs growth.
Google has succeeded by cannibalizing newspapers—the net effect has been to destroy more—and branching into software and media—which merely displaces workers elsewhere."
because the high end sales will always skew the average and median to a higher number.
The whole point of the median is that it won't be affected as much by outliers. A sale at $500,000 affects it just as much as a sale at $5,000,000.
We have lots of good data. The picture painted by the medians is pretty much the same as the picture painted by the more sophisticated indices like the Teranet (repeat sales model).
I saw a sign for the Promontory offering 1.9% financing.
No doubt a vendor rate buydown for a limited term. This is the kind of thing that will get buyers into trouble a few years down the road.
It used to be common in the US too. It's a strategy to get people to buy into a falling market without dropping prices. When it stops working, then they drop the prices.
CS Said: But after four years of near zero interest rates and massive US and European government deficits and with China's economy faltering, there's reason to doubt there'll be a recovery any time soon
This is a key point CS. I find it a bit strange, that most conversations around RE investments these days do not consider the global economy, or many of the broader economic issues that the west is facing.
The fact that interest rates are the lowest they have been in recorded history and cannot be pulled any lower shouldn't make people feel confident.
Rates are incredibly low today because there is zero economic confidence by those that control our global monetary system. They are scared to even touch the rate lever, even though they urgently need to move rates back up as soon as they can.
A simple question of the day, "Is this a business-as-usual slowdown like the 90's, or a full scale global recession like the 80's?"
It is my opinion that this is not only more like the 80's than the 90's, but is more severe than the 80's because this slowdown includes new global competition for our middle-class jobs.
And what happened to Victorias bulletproof RE in the 80's? Almost a 30% reduction in prices (and that's based on VREB stats).
I am not a bull and have made great money off of RE in the past. I just can't find a single good reason to be optimistic about RE these days. Like others that have been through a few RE cycles, I also feel the need to post for those that are thinking about leveraging up on a big mortgage today and are using the last decade as context for their decisions.
I've been underwater on a mortgage before, and had one home up for sale for over a year while reducing prices and having buyers pick my home apart and lowball me.
My advice. If you can wait to buy, wait. If you have to sell, price it right and move it.
Why are Victoria real estate prices not climbing when you can get a 5 year fixed mortgage under 3%
The answer may be in this report click here
we believe that the Canadian consumer has hit a point of "debt exhaustion" in which debt accumulation stalls not necessarily due to restrictive credit or higher borrowing costs, but due to the accumulation of multiple factors including economic fears, sentiment, stubbornly high unemployment, stagnant wage growth, as well as debt servicing limitations.
Great Article JustWatching, thanks for sharing.
An important point to consider for those buying or selling today: the decade long bull market in Canadian Real Estate has not been the result of "healthy drivers" such as income growth, growth of the economy, nor is it the result of housing scarcity.
In fact, housing price growth has outpaced wage growth (see Chart 6 below) and GDP growth (see Chart 5 below). In addition, most major Canadian cities are significantly over-supplied (see Chart 3 below). Instead, housing price appreciation has been made possible in large part due to rampant debt accumulation, both mortgage and personal credit (see Chart 5 below).
Thus a lack of future debt accumulation by households implies that the key driver of past real estate performance may no longer be available to stimulate real estate going forward.
My parents (high income Boomers, with loads of real estate) are very bullish on real estate. Just the other day they proposed the following MLS listing to me as a gold mine.
MLS: 308448
It is a duplex near Camosun College with a 2bd basement suite. A very nice house on a nice street and a nice area.
Their idea, live in one unit, and rent the other two. Say you get $3200/m rent, a mortgage at 3% is a monthly payment of only $3600 so you are living in a very nice house for only $400 per month + taxes a little work as a landlord etc.
Sounds like a sweet deal, until I told them about the new mortgage rules and that you have to pay income tax on the rental income.
First off, you can't offset the mortgage payment with rental income anymore, you now add 50% of the rent to family income. You also have to qualify at the BoC 5 year rate of 5.24% not your variable rate of 3%. You also require at least an $85,000 downpayment (Usually 20% for rental property but I have heard you can get away with only 10% if owner occupied).
What started as a "Sure thing! Only $400 per month for a home plus rental income plus future capital gains YOU CAN'T LOOSE!" turned into a gap of $300,000 in mortgage qualification to purchase price. Unaffordable monthly payments, and catastrophic risk in the event of a few months of vacancy, a major repair or a 1% increase in interest rates.
Once this dawned on them, "Maybe we can find something better if we go out of the city further, maybe in Gordon Head..."
They don't get it. I put the numbers in black and white in front of their face and they still don't get it.
"I saw a sign for the Promontory offering 1.9% financing. That hints to me a possibility of lower rates. zero percent interest could happen here."
This was just a promotion they were running for a while.
I personally purchased a small 1 bedroom unit at the Promontory for $199,900 and they gave me an additional $7,300 discount via the "1.9% financing offer." They just calculate the difference between 1.9% and going mortgage rate and give you a discount on price.
You don't actually get 1.9% financing.
Robert Renolds: I bought something similar to what your parents proposed, although less expensive by $100 000.
We qualified to purchase the duplex plus suite and had 20% down. Rental income was not factored in because we qualified on the basis of income for the whole purchase. The rules for primary residences were applied.
In any event we got 3.79 for ten years and end up paying $600 a month to live in one of the units for mortgage/tax/insurance after deducting the after tax rental income. I'm pretty happy about that.
By the way, you can deduct the rental income against your expenses on a floor space allocation. The taxes paid are pretty minimal.
I would suggest that your parents may be correct that this home would work well for some purchasers with 20% down who plan to live in one unit for some time to come.
RE MLS 308448... A goldmine? Uhm not at $850. $3200/month in rent? That seems steep. My guess, if it's nice inside, the top suite max would be $1700 and basement $1000. @3% you will be paying min $1100/month including property tax AND you have to be a landlord, pay for maintenance of the entire property, and assume a bunch of risk... No advance math necessary here.
$750 would be more doable but still not a "goldmine"...
Robert @ HMR
I think you may be over-analyzing the duplex. The property is only 849K, is in a nice area and looks to be in good shape. Here are some suggestions.
* Maybe Totoro Victoria can make some calculations (mortgage payments, taxes etc.) and show you how it can work for you.
* Go to the Bank of M&D and see if a loan is available so you can put down more than 20%. They can always "gift" it to you with an understanding about how you can make a "gift" back to them later. This way you get around the CMHC rules.
* Consider living in the basement suite and renting the rest out. You will get higher rental income and more of the mortgage interest will be deductible.
* In the long term things should work out OK.
Robert Reynolds said:
you can't offset the mortgage payment with rental income anymore, you now add 50% of the rent to family income. You also have to qualify at the BoC 5 year rate of 5.24% not your variable rate of 3%. You also require at least an $85,000 downpayment
Robert - could you supply more information links on your quoted statement, I'd like to read more about these changes. If I understand your statement correctly, these changes will radically change the rental property economics. If I can't deduct mortgage interest from rental income, then it's probably uneconomical to be a landlord; especially if I have to add 50% of the rental income to my family income without the ability to balance the revenue with the expenses from mortgage interest. I hope I just misunderstood you... I sold my rental property, but I'm always looking for another, but these changes might force me to retire my landlord hat. Thanks
Robert Reynolds said:
"you can't offset the mortgage payment with rental income anymore"
If I can't deduct mortgage interest from rental income, then it's probably uneconomical to be a landlord
That's not what he was talking about. He was talking about qualifying for the mortgage, not income taxes.
"add 50% of the rent to family income" needs thinking about but if you aren't totally cheating it sounds like it might be a wash. If you are a landlord as a sole proprietor then you can still have business write-offs I'm sure... time to talk to the accountant.
I think we could all have a lot more cash flow by renting 75% of our homes out. That's an obvious truth.
A communal car or time-share boat are also very affordable based on the same logic.
For some reason, these types of arrangements rarely work out as initially planned.
Why not just put the '800 large' in an investment and manage a small apartment? Cheap rent, no risk, and it sure looked like Mr Roper had a good time on Three's Company. ; )
If you qualify for a mortgage without "needing" the rental income as part of the qualification, then you just apply the old rules. " I think"
I think Robert was perhaps confused. You can deduct rental income from expenses. What has changed is how rental income is assessed for qualification purposes.http://www.cra-arc.gc.ca/E/pub/tp/it120r6/it120r6-e.html
As for the scenario described, I understood that Robert would get $3200 a month and a place to live. Lets say that he gets the place for $800 000 and puts $160 000 down plus closing costs. His mortgage would be $640,000.
At 3.79 for ten years that would be $2968 per month.
You have a mortgage interest payment of $2000 a month and are occupying 40% of the space (est) - you can deduct $1200 of interest per month plus 60% of taxes/insurance/maintenance (lets say another $360/month).
My calculation is you are adding $300/month onto your tax bill if you are in the 20% tax category. Might be more for higher earners.
You pay the remaining $140 a month for property taxes/ insurance/ maintenance. This plus the tax hit is $440 less the $234 left from the rent is $206 out of pocket each month.
Of course this does not take into account vacancies, bad tenants, unexpected repair bills or lost opportunity costs or having to sell if the place drops over the next few years.
Also, for that property, I cannot imagine that there will be an issue with vacancy. It is right next to Camosun College. In addition, it is assessed at 919,000.
Mindset: owning and renting a property or object for a profit is very different than having a communal interest.
Communal cars often don't work because of scheduling issues, although there are several car share programs.
Timeshares often don't work because there is no ownership of the underlying real property interest (land), only a right to use.
Totoro victoria said "Of course this does not take into account vacancies, bad tenants, unexpected repair bills or lost opportunity costs or having to sell if the place drops over the next few years."
I like your analysis because it doesn't focus on small details like "opportunity cost" or repair bills and keeps the big picture front and centre. As you have pointed out before these are not big issues. The important thing is making sense of the basic numbers and buying the property. Bad tenants and vacancies can be mitigated like you have done with your properties. Most repairs like painting or plumbing can be done by a handy landlord.
Totoro victoria said "Also, for that property, I cannot imagine that there will be an issue with vacancy. It is right next to Camosun College"
Camosun students typically are only in school from Sept. to May. What would be your rental strategy to keep the place full in the summer months?
Some of your are misunderstanding the "deduct rental income from expense"
You certainly can deduct expenses incurred by the investment portion. IE: replace a sink in the tenents suite can be written off against rents that came in.
What I was meaning to refer too was If I have $3200 of rental income, and the mortgage payment is $3600, then I only need to qualify for a mortgage with a payment of $400 per month. like $80,000 rather than $800,000. Apparently this used to be doable, not anymore. Now you add 50% of the gross rental income to your personal income, and it all gets calcualted into debt service ratios.
My scenario already takes into account me and my wife living in the basement suite, and getting maybe $1600 per month each(guess) for the upstairs suites.
Bank of M&D is not on the table. Neither is a 20% downpayment, simply don't have it.
That property is quite nice. I imagine you could require a September to September one-year lease for the upper unit(s).
As for the lower suite, there are still students and programs running at Camosun during the summer. I think that one could safely go month to month.
Yes, without the 20% or income to qualify with the additional rental income you likely would not get a mortgage.
In the last topic Marko estimated July sales would range from 510 to 540.
Readers might find this graph interesting (using Marko's sales estimates).
July MLS sales since 2000
Sales have been well below the 10 year average for the last three years even with exceptionally low mortgage interest rates. Kinda makes you wonder..
You are better off renting someone else's basement suite for $1000/month and saving money, going out and relaxing....
Totoro Victoria said "Yes, without the 20% or income to qualify with the additional rental income you likely would not get a mortgage."
This property seems to be a great investment after seeing your calculations. Is there nothing that can be done in Robert's case or for anyone without the 20% down payment? It doesn't seem fair. Would a mortgage broker be able to assist in any way?
"Readers might find this graph interesting (using Marko's sales estimates)."
You would think prices would have dropped by now given how slow the market has been?
owning and renting a property or object for a profit is very different than having a communal interest
True. My point was about how the cash flow includes the inconvenience factor that comes with sharing assets with others. The discussion was ignoring quality of life considerations.
I shudder at the thought of buying a 3500 square foot character home or duplex, bucking it up, and living in it with 3 other rental suites that I have to manage. Even if it only costed me $400 a month.
I'd rather be the one renting a suite in the same home for $1200 and have my cash invested somewhere else.
There is more to sharing assets than cash flow, and many investments out there that are not housing.
I like your analysis because it doesn't focus on small details like "opportunity cost" or repair bills and keeps the big picture front and centre.
Hmm... Ignoring repair and opportunity costs is not smart. Maybe you will find they are insignificant, but just ignoring them because they're probably not a big deal is risky.
You would think prices would have dropped by now given how slow the market has been?
They have dropped and are still. It's just slow slow slow. Taking into account the cost of money, prices are down ~30% from peak. Nominal prices are down something like 5-10% (with a 2010 peak), and flat from the local peak in 2008.
The next 6 months will show if there is any acceleration in the rate of drop from the new rules.
Marko said "You would think prices would have dropped by now given how slow the market has been?"
Why do REALTORS® keep making this statement when it is clearly not true? VREB median stats and Teranet's HPI for Victoria are clear evidence that prices are down from the May 2010 peak. This is also when sales slowed down as shown in the graph I posted earlier.
Leo S created a great graph which has been posted several times but deserves another look.
Prices down in Victoria since May 2010
^If you pick the highest point they have dropped.
......how long has this blog been going? Since May 2010 or earlier?
Is anyone else noticing the high amount of "For Lease" signs downtown?
@LeoS
I think Wilshire is just cleverly trolling totoro.
Or is it just me?
Dave3
......how long has this blog been going? Since May 2010 or earlier?
2007. In 2007 the average home in victoria on a 5 year fixed rate with 20% down cost $2892/month.
5 years later, the average home on the same terms costs about $2350/month.
So. 18% decline in monthly costs since this blog started. Higher if you count from the peak (2008, $3184/month).
Maybe you want to talk to Just Janice/Ms W and ask if they are happy that they waited to buy their house at 4% for 10 year fixed vs whatever it was 5 years ago (7%? 8%, 9%, more?)
Dave3,
Why am I a troll? Because I suggested that Totoro Victoria might be good at crunching some numbers for Robert? She bought a duplex and is making money on her investment. I thought she gave some good advice and put some numbers on the table for discussion. You on the other hand contributed zilch.
Last week one of the other posters said that there are those that just sit and talk and others that actually do something. Totoro Victoria is a "can do" person - why not ask her to share her experience?
Just Janice -
We are happy we waited to buy and feel we got a fair deal that mitigates much of the risk going forward. We also feel the price point we got our place for was very competitive in the current market ($87000) below assessed value...
Husband was grumbling about our weekends since buying being occupied with maintenance/repairs that had been deferred while we rented, but by late fall we should be caught up....
I kind of anticipate that we could have gotten a better deal waiting another 5 years - but between what would then be higher interest rates and 5 more years of rent paying it'd be a bit of a wash compared to buying now.
Also as we bought our rental, I don't think our landlord was going to hold off another 5 years before selling, so if we forewent buying now, we'd likely be moving twice more (once into another rental and again into whatever we bought at that time)....
'After the crash' I kind of think the basement value on the place we bought is $700-$750...
And given two small children (age two and expected arrival in September) and a dog - the idea of moving isn't very attractive at this time.
koozdra - I was walking around downtown on the weekend and made the same observation you did. Lots of places to lease and many in prime locations just off Government St. and the mall.
It's tough for small businesses these days.
And given two small children (age two and expected arrival in September) and a dog - the idea of moving isn't very attractive at this time.
All makes sense to me. I was just pointing out that the market has already dropped quite a lot, even though prices haven't come down much.
Especially for buyers wanting 5 or 10 year terms, it has been a great move to wait as interest rates came down over the last 5 years, and they will have saved tens of thousands of dollars in interest.
Who knows what will happen going forward, but there have already been huge savings for those who waited.
"2007. In 2007 the average home in victoria on a 5 year fixed rate with 20% down cost $2892/month.
5 years later, the average home on the same terms costs about $2350/month."
July 2007 the average and median for SFH homes were lower than they are now. If you bought in 2007 sure with 20% down your cost was $2,892/month; however, now you have refinanced 5 years later at the new terms and because the purchase price was lower you are less than $2,350/month and 5 years of mortgage payments have dented the principal.
$2,350/month and 5 years of mortgage payments have dented the principal.
Sure. And that dent cost a mere $175,000 in mortgage payments alone.
In any case, the easiest and only definite way to compare whether it was good or bad to wait is to take an actual place you were looking at 2 years ago, and plug in the actual numbers for your rental and investments into Roger's wait or buy tool.
"Sure. And that dent cost a mere $175,000 in mortgage payments alone."
Or you could have rented close to nothing and made crazy returns in the stock market since 2007...;)
Or you could have rented close to nothing
Certainly nowhere near $175k.
Marko said
July 2007 the average and median for SFH homes were lower than they are now.
Not exactly. If you consider real dollar terms, 2007 was definitely the peak for Victoria house prices. Our dollar spent time above $1.10 per the world’s reserve currency in 2007. Throw in inflation, and we are way below 2007 real prices now.
Besides, even if you look at Teranet’s nominal graphs (arguably the most reliable data), it looks like we might even be below late 2007 already. Add in currency and inflation adjustments, and we are easily 20% off 2007 in real terms.
Leo - I actually did account for average repair costs. What I did not account for was the big stuff that hopefully you inspect before buying ie. roofs, perimeter drainage ($10 000!), asbestos, foundation. You can control for these risks but if you don't that can be a big issue.
As far as lost opportunity costs go, well, that generally works out in favour of buying (except if you can't ride out a downturn) when you have rental income too based on Roger's graphs.
Quality of life - yes, some people would HATE having close neighbours. In that case, having a suite or duplex just makes no sense.
I don't happen to mind because I like to manage and improve the properties for myself and for the tenants. I enjoy making things look and work better. I also would like to be financially independent in seven years and have a choice to retire early if I would like. If I get tired of having tenants in seven years, I won't anymore. I will sell provided the market is doing ok.
You can get to FI with other types of investment but this one just happens to appeal to me - probably because I haven't learned enough about other types of investments... yet :)
Leo - I actually did account for average repair costs.
I know you are. I was replying to Wilshire who said opportunity cost and repairs were "small issues" that could be ignored.
"Not exactly. If you consider real dollar terms, 2007 was definitely the peak for Victoria house prices. Our dollar spent time above $1.10 per the world’s reserve currency in 2007. Throw in inflation, and we are way below 2007 real prices now."
Yes, but you as the buyer is still paying a larger absolute amount. Hypothetically, if a house is $500,000 in 2005 and $800,000 in 2015, but only $450,000 in real dollars if you were considering buying in 2005 you would have been better off. (Well, unless we do calculations that show that renting is obviously a lot cheap and you saved $400,000 renting during that period).
Yes, affordability may be better but prices have still gone up at the end of the day.
Large spread right now between Price List and Price Sold on SFH....
MTD
Price List: $617,398
Price Sold: $595,961
A large spread between list and sold indicates a falling market to me. This stat is more convincing for me than monthly medians.
Price/assessed also dropping in the higher end at the moment.
Lower end is about stable at 96% still.
The spread is large but not enormous, relatively speaking.
For example June 2005 was $475,487
and $465,672 respectively. Even in the craziest boom markets there is a 10k spread.
Price List: $617,398
Price Sold: $595,961
is not a large spread to me. that's only a 3.5% difference. The list price is an arbitrary ask that is usually the max they think they can possibly get. These figures look to me like a normal market. You will go to a garage sale and negotiate won't you? If you are buying a car you will start with a lower price yes? This is a lot of money folks.. 3.5% I would target 10% less depending on the property. Do your research and figure out what you think the property is worth. If it's close to the asking price then make an offer. The key is to remain detached until the keys are yours. Both properties I have bought I started at 15% less. That's a starting offer mean to start the process. Are they willing to negotiate? The first property countered right away with almost 10% off asking. We settled at 13% in the end. Mind you both properties were not fresh listings. The first was in VicWest and needed a paint job and a new roof (after the paint job the neighbour said I should have bought the place). Vic west was also a "Bad neighbourhood" at the time. The other place I bought also sat on the market for a while but had it's own hidden gold. A lot of places are sitting on the market for a while right now so if you are looking to buy, NEGOTIATE!
Dasmo -
That depends on the marketing strategy they've used - in a "hot market" the list price is often used as the "Minimum Acceptable Price" in a buyer's market, the list price is more as you see it, a "price cieling"....
It can be very contextual.
Victoria continues to be an anomaly in Canada. Out of the 11 markets included in the Teranet house price index, Victoria is the only one to post a decline year over year (down 2%). Every other city showed an increase, with the average increase being 4.84%.
Agree it's contextual Mrs. W but I have rarely seen a house priced low to create interest, hot market or not. ;-)
For what it's worth, I was taking the elevator today downtown and a developer was talking to another guy...
Some Guy: "So you working on any new condo development projects again?"
Developer: "No we are not buying anything right now".
Some Guy: "Yeah I hear the housing market is really slow right now"
Developer: "Yep, I'm just going to wait on the sidelines to pounce"
Some guy: "My friend has had 2 houses for sale in his neighbourhood with no offers after 9 months"
(I left the elevator, didn't hear the rest).
^I highly doubt that is a serious condo developer...waiting on the sidelines to pounce on what? Land is not a huge component cost per unit when it comes to condos. Sure, construction costs can drop a bit but the biggest factor is what can you sell the units for.
From the downtown developers I know personally they run a profit margin of about 12% to 18%, depending on the building. The biggest worry for them is starting a project and the market dropping 15%-20%.......if they don't start and the market drops doesn't really give them an opportunity to pounce on anything, maybe pick up a future development sight for slightly cheaper and spend the next 2-3 years rezoning depending on how anti-development city councillors are at the time.
Marko said: "Land is not a huge component cost per unit when it comes to condos. Sure, construction costs can drop a bit but the biggest factor is what can you sell the units for."
That's a good point, and so yeah the "pounce" comment doesn't really seem to make too much sense. I don't know the developer at all, so not sure what projects he's worked on or size.
That said, the price drop risk is significant enough. You can continue to sell condo units at discount during slow times to cover loan interest payments; however toward the end if there is no significant per unit price appreciation, you can kiss your developement company good bye.
Price drop is a huge risk for developers that is why they push pre-sales, take slightly lower prices but mitigates the risk on completion.
The biggest worry for them is starting a project and the market dropping 15%-20%.......if they don't start and the market drops doesn't really give them an opportunity to pounce on anything
If the market drops 15-20% while they wait, they've just reduced their risk hugely. It's much less likely that it will drop another 15-20%, so in that sense they can "pounce" at that point.
@Wilshire
I suggest you go back a few posts and read the discussion of rent vs buy between totoro, LeoS, Roger, Patriotz et al.
They covered multiple situations and factors to be taken into account. Roger's spreadsheets were explained and gone over.
Dave3
"If the market drops 15-20% while they wait, they've just reduced their risk hugely. It's much less likely that it will drop another 15-20%, so in that sense they can "pounce" at that point."
Most developers have held their development sites for a very long time. For example, the Duet site in James Bay was purchased in 2005 by Chard Development. It took him 7 years to rezone and get it to the pre-sale stage.
If the market drops they just don't build and let it sit as a parking lot. Construction costs come down a bit but typically not enough to overcome the lower sales revenue.
If the market sucks you don't see downtown construction (1995 to 2001)....you don't see a drop in prices and then a bunch of developers "pouncing" and building.
The data I've been collecting show that sales to orginal list price over the last year (for SFH generally core areas <575K) has moved between a low of 94% and a high of 96.5%, with the average (and modal value) being 95%. No discernable trend whatsover in the last year.
If the market sucks you don't see downtown construction (1995 to 2001)....you don't see a drop in prices and then a bunch of developers "pouncing" and building.
Condos get built to a price. Like you said the profit margins are around 12 to 18%. So if you're building to a price point and then the market drops 15%-20%, you're losing money.
That's why building after a drop is reduced risk. You're building to a lower price point, so maybe you leave out the premium finishings, and maybe you make the units a bit smaller.
Case in point, all the successful developments are the low cost microcondos that came up after the market flattened and were built to that lower price. The unsuccessful ones are the ones that were overpriced for the market (they were priced for a continuing rise).
Actually quite a few sales this week, at least in the higher end SFH segment. Mortgage rules don't seem to have made any difference there.
More real estate news and bubble talk:
Canadian housing looks to be in soft landing, but actually heading for 25% crash: Capital Economics
David Madani, economist with Capital Economics, said on Wednesday that Canada’s housing market is currently experiencing what appears to be a soft landing, but is, in fact, a bubble in the process of bursting.
“There is always a stand-off period at the end of a housing bubble, when prospective buyers refuse to meet the price of sellers, who refuse to drop the asking price,” he said in a note. “Eventually it begins to dawn on sellers that the market has shifted and, as they become more desperate, they eventually agree to lower their asking price. But until that happens, any stagnation in prices can be misinterpreted as a successful soft landing.”
Housing prices typically respond to changes in the market with a lag of five to nine months, according to Mr. Madani. He points out that home sales have already seen material declines, down 4% over the last two months. Vancouver in particular has been hard hit, with sales down 28% year-over-year.
“Overall, the willingness of buyers to pay these historically high house prices now looks to be proving fragile against the increasingly disappointing macroeconomic backdrop,” he said. “The housing bubble in Vancouver already appears to be deflating, with only Toronto defying the inevitable.
Vancouver - Look out!
A very confusing market - at least for me.
The sales volume and median prices are not much different from a year ago, yet I seem to be seeing more sale prices for homes now under $500,000 than I have seen in half a dozen years.
Then there are the re-sales. Like the one in the Fernwood/Oakland area on Walnut street. Originally listed at $649,000 for 133 days, and finally selling at $580,000. The same home sold back in September 2007 for $592,000.
While, informed sources have said that 20 percent of buyers are first time purchasers and 40 percent of them had opted for 30 year amortizations, it seems that the change in the mortgage rules have had no discernible affect on our market in either the number of sales or the price.
So the stats show one thing, but the daily sales show the opposite.
And that's why I am confused about what is really happening in the marketplace today.
"While, informed sources have said that 20 percent of buyers are first time purchasers and 40 percent of them had opted for 30 year amortizations"
The way I look at it, 20% of buyers x .40 = 8% of all buyers affected. Of those 8% affect their max purchasing power was reduced by 8% (if you assume all were previously maxing out).
I didn't think it would affect the market whatsoever, and it doesn't appear to be doing so....
"Then there are the re-sales. Like the one in the Fernwood/Oakland area on Walnut street. Originally listed at $649,000 for 133 days, and finally selling at $580,000. The same home sold back in September 2007 for $592,000."
The likely reason it sold for less is because it depreciated being relatively new at time of purchase in 2007.....I doubt a 1950s bungalow would go for less in Fernwood?
Just Jack said: The sales volume and median prices are not much different from a year ago, yet I seem to be seeing more sale prices for homes now under $500,000 than I have seen in half a dozen years.... So the stats show one thing, but the daily sales show the opposite.
And that's why I am confused about what is really happening in the marketplace today.
The median and average prices may be staying the same but it looks like buyers are getting more house for their money. In other words the market value of homes is falling but the average and median price stats aren't showing it because the dollar value of transactions is about the same.
Marko said this about the new mortgage rules: "I didn't think it would affect the market whatsoever, and it doesn't appear to be doing so...."
The new mortgage rules just went into effect 2 weeks ago and the OSFI rules are still being implemented. It will take some time to see the effects. The housing market isn't like the stock or bond market - much slower to react to news or changes to market rules.
No, it doesn't seem that the new regulations are having the desired affect on the market that the government wanted.
That's too bad. What will the government and OSFI do next?
10 percent down payments?
The house and lot size that people are buying is the same as last year too. So they are not getting more house for their money either.
Now there is a lot more to choose from, so the crappier homes may just not be selling. So while people are not getting more home for their money, they don't have to buy the crap anymore either.
I don't know - maybe this is what a transitional market is suppose to look like?
the bubble is bursting, I have advised friends to watch what happens next, yet, I just closed on my house last month. I have my reasons for buying. But still see a substantial decline headed our way. Worse in Vancouver, propertys in the Core Victoria, will be a little better, but I still think a 15-20% overall in 2 years, is not absurd.
The way I look at it, 20% of buyers x .40 = 8% of all buyers affected.
Affects a lot more than that. First of all, if I want to trade up and the guy I want to sell to can't pay as much as before, then I can't pay as much for the property I want to buy.
Also a drop in affordability for some buyers at a certain level affects the price at that level for all buyers and sellers. Marginal pricing.
The elimination of CMHC eligibility for million+ properties has a similar cascading effect from the other end, as I think someone has pointed out already.
There certainly is an effect, but the effect is likely smaller than the variance in the weekly sales numbers. The only way we will be able to judge the effect is to look at the next few months and compare to last year, when conditions were very similar.
"The way I look at it, 20% of buyers x .40 = 8% of all buyers affected"
So only first time buyers were going for 30 yr ams?
As for million plus home sales. So far this month there have been 14 sales. Last year during the same period there was 9.
P.S.
There are some 299 house listings for a million and more in Greater Victoria today.
The other thing is sales aren't the only possible effect. For example, this week there were already 17 SFH home sales from $550k to $900k in the core areas. All of last week we only got to 13.
However at the same time our price to assessed value has dropped to a multi-year low. So, is the market healthy because of a reasonable number of sales, or is the only reason things are moving because people are finally compromising more on price? We'll see in the average/median prices in the next few months.
"So only first time buyers were going for 30 yr ams?"
Has nothing to do with first time buyers. 20-23% of buyers according to VREB surveys buy with less than 20% down....that is who it affects.
Right now within my criteria for SFH in the core areas of VIC,ESQ,OB,SW & SE, I am seeing the same volume of sales that there were in the same week of July 2010 and July 2011. The Avg price in the same week of July 2010: $555K; July 2011: $545K and this week so far..July 2012: $586K. Yet, out of the 19 sales so far, 13 sold below BC (2011 mostly) assessement. Also, almost half sold with having existing suites. So yes, things are confusing. There is no doubt people are getting more house for their buck than they have been for the last several years.
20-23% of buyers according to VREB surveys buy with less than 20% down....that is who it affects.
It affects more than that.
1. Now that CMHC is no longer insuring conventional mortgages from banks, the funding costs for conventional mortgages are rising.
2. Banks generally follow after CMHC on their conventional mortgages. So when 40 year CMHC mortgages disappeared, they also disappeared from almost all conventional lenders. Same with 35 year mortgages. Some banks are continuing with 30 years, but not all.
3. OSFI regs affect both conventional and CMHC insured loans.
4. Any move up buyer needs a first timer or a downsizer to buy their old place. No first timers, no moving up (or moving up less).
Any subtraction of first time buyers cascades through the entire market.
Interesting to see how the Months-of-Inventory for houses has shot up to 8.2 in Oak Bay with the recent mortgage changes.
115 homes are now listed for sale in this district with only 14 sales in the last 30 days. With the typical asking price at $1,090,000 or $380 per finished square foot. The median sale price is $763,000 or $305 per sq. ft.
Compare that to Victoria City proper with 5.1 MOI and the typical asking price at $599,000 or $309 per finished square foot. The median sale price is $580,000 or $286 per sq. ft.
Generally and historically the lowest MOI have been in Oak Bay and Victoria City. The MOI increasing as you get farther away from the city core. Like in Langford that shows 6.3 MOI with the typical buyer paying $228 per square foot or $514,000.
In the past, an increase in the MOI, like that which is happening in Oak Bay, has been a precursor to a drop in prices.
"Has nothing to do with first time buyers. 20-23% of buyers according to VREB surveys buy with less than 20% down....that is who it affects."
My question was a tad rhetorical and you made my point...not just 8%affected.
^You are making the assumption that the 20 to 23% noted above all were previously opting for the 30 year mortgage, which is not the case.
If 40% were opting for the 30 year mortgage then .2 x .4 = .08,
AND that is still making the assumption that those 8% were totally maxing out how much they can borrow.
From page 3 the May 2012 report from the Canadian Association of Accredited Mortgage Professionals (CAAMP):
For homes that have been purchased recently (during 2011 to the present), fixed rate mortgages are most popular, with a 66% share of new mortgages. Variable and
adjustable rate mortgages have a 28% share and 6% are combination mortgages.
During recent years, mortgages with longer mortgage amortization periods have become increasingly prevalent. For mortgages obtained during 2011 to the present, 60% of
mortgages have amortization periods of 25 years or less and 40% have extended amortization periods
There is nothing about the 40% of "extended amortizations" being first-time buyers.
On page 12, in table 2-4 - that 40% breaks downs as:
33% 26-30 years
7% 31-35 years
Seems like a fair price:
http://www.realtor.ca/propertyDetails.aspx?propertyId=12191398&PidKey=-938999709
found this funny
http://thethirtiesgrind.com/2012/07/26/absurd-vancouver-property-of-the-week-july-25-2012/
@Robert Reynolds
Great link! :-)
Marco,
I am confused - the .2 is first time buyers and you say it has nothing to do with first time buyers then why use the .2 in your equation?
Sounds to me like it's 40% will have an impact on their cash flow whether they max out on debt or not. And thus it's not just about whether they max out on how much they can borrow, it may affect how much they are "willing" to borrow.
.2 is nothing to do with first time buyers.
.2 (20%) is approximately how many people buy homes with less than 20% down payment.
663 Richmond over asking at 593k.
Quick question on some of the 10 year 3.79% mortgage numbers I have seen floating around like places like this
http://www.ratehub.ca/best-british-columbia-mortgage-rates/10-year/fixed
Is this a rate that an average person with good credit could actually get or is it "too good to be true"
"Quick question on some of the 10 year 3.79% mortgage..."
Doubtful anyone could get that rate after today as some fixed rates shot up close to 10% today!
http://www.bloomberg.com/quote/GCAN5YR:IND
Marco - Gotcha, this is where the conversation started, hence my confusion:
While, informed sources have said that 20 percent of buyers are FIRST TIME purchasers and 40 percent of them had opted for 30 year amortizations"
The way I look at it, 20% of buyers x .40 = 8% of all buyers affected. Of those 8% affect their max purchasing power was reduced by 8% (if you assume all were previously maxing out).
Robert Reynolds: I think True North Mortgages are offering a 3.84% 10 year fixed. I believe they go thru different instituions, mostly ING direct. You could go on-line and do their application and then leave the site before finishing.....just for info.
Today ING direct is advertising a 10 year fixed at around 3.94%. Also, I think you can pay down 25% each month and 25% annually.
"Marco - Gotcha, this is where the conversation started, hence my confusion:
While, informed sources have said that 20 percent of buyers are FIRST TIME purchasers and 40 percent of them had opted for 30 year amortizations""
Sorry, I should have explained more clearly. A bit confusing as first time buyers make up 20% of buyers and those putting down less than 20% also make up about 20% of buyers; however, they stand on their own. I've had a good chunk of first time buyers put down 20% or more and a few non-first time buyers put down less than 20%.
ING's Lending Criteria
http://www.ingdirectbrokerteam.ca/en/reslendingcriteria.html
A minimum credit score of 620 is required, a score of 680 or higher will allow a bigger loan amount.
I got 3.79 for 10 years three weeks ago. I don't think it is too good to be true.
It was actually going to be 3.84 through True North/ING but a local mortgage broker beat it using a local lender with the same terms as ING.
If a broker wants the business and it makes financial sense for them sometimes they will buy down the rate (take a slightly lower commission).
Not sure if this has been posted on this site yet, but I found it quite humorous:
If I lost a million dollars
(If I lost a million dollars)
I’d have bought me a house
(A big old Vancouver house)
If I lost a million dollars
(If I lost a million dollars)
I’d sell my furniture on Craigslist
(Maybe my fancy clothing too)
And if I lost a million dollars
(If I lost a million dollars)
Well, I’d buy you a k-car
(84 months payment of course)
If I lost a million dollars, I’d lose your loveeeeeee
If I lost a million dollars
I’d post rants on greaterfool
If I lost a million dollars
You could too, it wouldn’t be that hard
If I lost a million dollars
Maybe I could sell my fridge to BC hydro
You know, they come and pick those up for free now right?
Like, no money at all?
No… I don’t think so.
How am I supposed to pay my mortgage?
I don’t know, sell your kidney?
Uh… do you have a buyer?
If I lost a million dollars
(If I lost a million dollars)
I wouldn’t shop on Robson Street
(No one else would either)
And if I lost a million dollars
(If I lost a million dollars)
Well I’d rent out my basement suite
(You already rent out your basement suite)
And if I lost a million dollars
(If I lost a million dollars)
Well then I’d rent out my living room
(I feel sorry, for you)
And if I lost a million dollars, you’d divorce me….
If I lost a million dollars
We’d have to walk to the store
If I lost a million dollars
My k-car payments would default hard
If I lost a million dollars
We couldn’t afford to eat kraft dinner
But we would eat kraft dinner
Of course we would, we’d just eat the no name brand
And steal those little ketchup packets from fast food places
That’s right, all the fanciest ketchup… MCDONALDS KETCHUP!
Mmmmm mmmmmm hmmmm
If I lost a million dollars
(If I lost a million dollars)
Well I’d buy you a green dress
(From value village, Surrey’s best)
And if I lost a million dollars
(If I lost a million dollars)
Well I’d stop paying strata fees
(They are overrated, anyways)
And if I lost a million dollars
(If I lost a million dollars)
Well I’d steal wifi from Timmy’s
(You’ve always done that anyways)
If I lost a million dollars
I’d have bought in Vancouverrrrrr
If I lost a million dollars, If I lost a million dollars
If I lost a million dollars, If I lost a million dollars
If I lost a million dolllarrrssss….
I’d be broke.
Not sure if this has been posted on this site yet, but I found it quite humorous:
If I lost a million dollars
(If I lost a million dollars)
I’d have bought me a house
(A big old Vancouver house)
If I lost a million dollars
(If I lost a million dollars)
I’d sell my furniture on Craigslist
(Maybe my fancy clothing too)
And if I lost a million dollars
(If I lost a million dollars)
Well, I’d buy you a k-car
(84 months payment of course)
If I lost a million dollars, I’d lose your loveeeeeee
If I lost a million dollars
I’d post rants on greaterfool
If I lost a million dollars
You could too, it wouldn’t be that hard
If I lost a million dollars
Maybe I could sell my fridge to BC hydro
You know, they come and pick those up for free now right?
Like, no money at all?
No… I don’t think so.
How am I supposed to pay my mortgage?
I don’t know, sell your kidney?
Uh… do you have a buyer?
If I lost a million dollars
(If I lost a million dollars)
I wouldn’t shop on Robson Street
(No one else would either)
And if I lost a million dollars
(If I lost a million dollars)
Well I’d rent out my basement suite
(You already rent out your basement suite)
And if I lost a million dollars
(If I lost a million dollars)
Well then I’d rent out my living room
(I feel sorry, for you)
And if I lost a million dollars, you’d divorce me….
If I lost a million dollars
We’d have to walk to the store
If I lost a million dollars
My k-car payments would default hard
If I lost a million dollars
We couldn’t afford to eat kraft dinner
But we would eat kraft dinner
Of course we would, we’d just eat the no name brand
And steal those little ketchup packets from fast food places
That’s right, all the fanciest ketchup… MCDONALDS KETCHUP!
Mmmmm mmmmmm hmmmm
If I lost a million dollars
(If I lost a million dollars)
Well I’d buy you a green dress
(From value village, Surrey’s best)
And if I lost a million dollars
(If I lost a million dollars)
Well I’d stop paying strata fees
(They are overrated, anyways)
And if I lost a million dollars
(If I lost a million dollars)
Well I’d steal wifi from Timmy’s
(You’ve always done that anyways)
If I lost a million dollars
I’d have bought in Vancouverrrrrr
If I lost a million dollars, If I lost a million dollars
If I lost a million dollars, If I lost a million dollars
If I lost a million dolllarrrssss….
I’d be broke.
this will push up borrowing costs
http://www.theglobeandmail.com/globe-investor/sp-cuts-outlook-on-7-canadian-banks/article4445550/
Monday, July 30, 2012 8:30am
MTD July
2012 2011
Net Unconditional Sales: 481 523
New Listings: 1,114 1,374
Active Listings: 4,939 5,094
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
Monday, July 30, 2012 8:30am
MTD July
2012 2011
Net Unconditional Sales: 481 523
New Listings: 1,114 1,374
Active Listings: 4,939 5,094
Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year
Maybe VREB will "spin" that the nice July weather has been lowering sales? ;-)
I know a number of sales (at the lower end of the market) that fell through this past month: one due to the home inspection, and a number due to "financing issues".
A quick snapshot of the single family home market for the core districts of Victoria over the last 30 days.
Over the last 30 days the core districts have had some 148 home sales. During the same period some 266 new listings were added for a sales to new listing ratio of 0.57. In other-words, for every home that sold in the last 30 days - 1.8 homes were put up for sale.
This of course has lead to an increase in the months of inventory for the core districts which now stands at 6 months. Generally, 3 to 6 months of inventory is considered to be a balanced market between buyer and seller with stable prices. More than 6 months would be a "buyers" or "bear" market that favors buyers with concessions made by sellers in both price and terms and a decline in general market values.
However the median price of a core home has increased to $595,250 from $585,000 year over year and also up from the month before when the median was $590,000.
But, as one well respected blogger on this site has mentioned, buyers are getting more home for their money today than they did a month or even a year ago. This month's buyer paid $280 per finished square foot as compared to last years buyer at $289 and last months buyer at $294.
At this point it doesn't seem that the changes in CMHC regulations have had much if any affect on the market place. But, that may be a premature statement, given that this month's buyer was most likely firmly committed to buying. The change in the regulations will be most felt by those at the cusp in affordability. That weakens future demand for housing and will lead to a further increase in the months of inventory and declines in the median price of a home in the core districts.
Some districts are affected more than others with the CMHC changes.
Oak Bay is a nice compact area of costly homes. Slightly over half of the homes listed for sale in this area are asking a million or more for their homes. This small area of housing with a population of 18,000, has 20 percent of all the million plus homes listed in the Greater Victoria area.
A tear-down in this hood starts at $450,000. That's if they ever did tear them down. This is property flipper heaven, so don't expect to find a great many new homes as the flippers out bid the builders on homes here. This is not a neighborhood for first time buyers. It is a trade up market that is strongly dependent on prospective purchasers selling their current home.
Well, this month Oak Bay did a complete reversal. The sales to new listings ratio fell to 0.47. Which means that for every house sold some 2.1 homes were listed and the months of inventory went from being the lowest in the core districts to the highest at 7.7 months.
My opinion, is that the bankers are putting a brake on loans of a million and more. Without CMHC insurance on million plus homes, and the prospects of lower future prices, Oak Bay is not where a mortgage officer wants to end their career by making optimistic loans.
Trying to do an analysis on condominiums in the core has its problems. You have to exclude leaseholds, co-operatives and pre-construction sales.
So, lets get rid of them and just concentrate on used strata titled condominiums built say before 2011.
The sales to new listings ratio is 1.78 and the months of inventory at 7.3
That would suggest that prices should be at best flat lined.
Nope, despite a plethora of listings, prices for used condominiums in the core went up, both year over year and month over month. Actually an impressive gain. The rush by first time buyers to get into the real estate game before the new regulations took affect drove the median price up from $279,000 the month before to today's median of $310,000.
This is irrational behavior by buyers. But fear and greed are great motivators, especially when they're trying to beat the clock before the change in the CMHC regulations.
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