Tuesday, August 28, 2012

Tuesday's Monday Update

MLS numbers courtesy of the VREB via a dead heat between JustWatching and Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.


August 2012 month to yesterday  (previous weeks in brackets)
Net Unconditional Sales: 358 (254, 153, 75)
New Listings: 810 (620, 397, 207)
Active Listings:  4813 (4834, 4834, 4836)
Sales to new listings ratio: 44% (41%, 39%, 36%)

August 2011
Net Unconditional Sales: 542
New Listings: 1200
Active Listings: 4944
Sales to new listings ratio: 45%
Sales to active listings ratio: 11% or 9.1 MOI

Prices are weak at the moment, with the SFH average at $583k, median at $525k, and condos averaging $328k.  
Sales and new listings balance have recovered slowly from the terrible levels of the start of the month to just similarly bad as last year.   Too little too late for this month where we will likely come up 100 sales short.  However if the momentum continues maybe September will be better.  Otherwise we will be pushing 11 months of inventory for August with predictable pressure on prices.  

Friday, August 24, 2012

Orange Crush: Can government kill the housing market?

Given the current political situation in BC, it's almost a given that a new party, with very different economic goals and policies, will form government next spring. 

To be clear, this blog post isn't political. I could care less if you self-identify as a far-left moonbat dipper, a right-wing whacko or a centrist liberal who simply tries to get out in front of the herd... this post has nothing to do with your personal political leanings. Or mine for that matter.

I'm trying to answer the question: should we expect the local housing market to react to a government change next spring? 

History, perhaps, tells us we shouldn't: 

The areas highlighted by the orange are the years the NDP was in power in B.C. The rest of the time we've been governed by so-called free-enterprise coalitions under Social Credit or Liberal names. Does this chart tell us anything? You could perhaps make an argument that prices are more likely to rise, and rise further, when the NDP isn't the government, but I'm willing to bet a savvy statistician could make a mathematical argument that this is a junk claim.

Between 1972 and 1975 prices rose, but we can't say with certainty exactly what the dollar amounts were because VREB only gives us hard numbers from 1978 on.

Between 1991 and 1994, prices rose from around $192K to $256K or 25%, a nice little jump should you have bought and sold the average SFH in those years.

Between 1994 and 2001, prices fell around an inflation adjusted 21% if you believe inflation was 3% for each of those years - in non-inflation adjusted terms prices were roughly flat.

Does the provincial government establish policies that can impact the inflation rate? Economically speaking, not so much. So we can't really say with any certainty that the provincial government of the day was responsible for the financial woes apparent in our mid-to-late 1990s housing market.

There's a bit of a myth around B.C.'s population during NDP governing times in the 1990s--I fit into the myth too as I left the province for the last 5 of the 10 years they were in government to find decent work--but the data doesn't support the myth:

Population growth rates
1986-1991 = 13.8%
1991-1996 = 13.5%
1996-2001 = 4.9%
2001-2006 = 5.4%

Sure, it's true that the growth rate of B.C.'s population declined sharply after 1996, which may partly explain the housing doldrums in those years, but the rate didn't jump sharply afterwards to coincide with the rapid rise in home prices between 2002-2007 (or the change in governing party).

B.C.'s property transfer tax came into effect in 1996--this is definitely a provincial economic policy with direct effect on the housing market--but it appears to have had little to no effect on the local SFH price.

To end this post, and hopefully spark some discussion and some other contributions to the history here, I'll point out that I've failed to answer my own question and failed to bring in a number of other housing market factors (supply & demand rates, etc). What do you think? Will a change in government cause home prices to rise or fall next spring?

Tuesday, August 21, 2012

Market update; day-late, dollar-short

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.

August 2012 month to date  (previous weeks in brackets)
Net Unconditional Sales: 254 (15375)
New Listings: 620 (397, 207)
Active Listings: 4834 (4834, 4836)
Sales to new listings ratio: 41% (39%, 36%)

August 2011
Net Unconditional Sales: 542
New Listings: 1200
Active Listings: 4944
Sales to new listings ratio: 45%
Sales to active listings ratio: 10.9% or 9.1 MOI

Almost 13 unit sales per day on average in August. It's F'ugly out there if you're trying to sell your home. I imagine more than a few listing agents are telling their clients "it'll pick up in September." Will it? One had better hope or one had better drop their price if one is trying to get a home sold.

SFH MTD Average = $591,274
SFH MTD Median = $539,000

Condo Average = $342,538

Monday, August 13, 2012

Market Update and a Lazyweb Request

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.

August 2012 month to date  (previous weeks in brackets)
Net Unconditional Sales: 153 (75)
New Listings: 397 (207)
Active Listings:  4834 (4836)
Sales to new listings ratio: 39% (36%)

August 2011
Net Unconditional Sales: 542
New Listings: 1200
Active Listings: 4944
Sales to new listings ratio: 45%
Sales to active listings ratio: 10.9% or 9.1 MOI

Looks like August is off to a very slow sales start.  So far we're at just under 13 sales a day.  At this rate we'll be lucky to hit 400 sales in the month.  Even factoring out the stat holiday, it seems we are on a much slower pace than last year.  An anomaly or are the new rules now being really felt?


I also have a lazyweb request for everyone that I'm hoping could result in a nice resource for Victoria house hunters.  We're looking at various places, and I'd like to know more about what to ask about the condition of the house before committing to an offer.  Of course we would always insist on a home inspection, but is there a solid checklist of things that could be assessed by the average buyer?  For example, whether walls are 2x4 or 2x6 construction, whether there is aluminum wiring in 70s boxes, whether there is vermiculite insulation, etc.   

Could we come up with a list of general non-obvious construction and maintenance related items that could be inspected or asked about by a buyer?  Perhaps a general list that applies to all houses, and then some that are of special note for 50s houses versus 60s, versus 70s, etc.  I've seen lots of good advice here over the years, it would be great if it was all collected into one place.  I'm happy to do the collecting but have little knowledge of what to put in such a document.  If there are good resources out there that would be helpful, but I think it would be useful to have a Victoria-specific resource as well.  Anyone else interested and want to throw out some suggestions?