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.
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.
225 comments:
«Oldest ‹Older 201 – 225 of 225A hint about appraisals in general.
Hire your own appraiser, it may cost a little bit more - but
- You will get a copy of the appraisal report
-the appraiser will answer your questions rather than cite client (the bank) confidentiality.
- you can ask for more clarification or specifics about the market and the property.
- actually you could probably bug the hell out of them for future updates and other freebies too.
Really, at 200 bucks, the appraiser is just filling out a form to meet the very minimum regulations for financing and in a lot of cases not even meeting the minimum standards. If he/she spends more that 2 hours on your home they are loosing money. As most appraisers are on a commission they earn about a hundred bucks for each appraisal and they pay all of their expenses out of that hundred bucks.
So, where can you buy a detached home for $20,000 more than the owners paid in May 2006? AND with newer carpets and cabinets that the owner has recently installed?
Well, that would be in Sidney. Where $390,000 gets you a 1,200 square foot one storey home on a 9,000 square foot duplex lot.
So much for the retirement wave coming to Victoria. It seems that tide is now going out.
@a simple man
Can we please start a new post topic? Now that we are 200+ replies, the blog spans multiple pages ...
@DavidL - I agree - however, I do not have administrative privileges here. Either Leo or HHV must start a new thread.
Some nice low ball sales this week.
Livable house on 5,000 square foot lot along Blackwood Street for $320,000.
A not so livable home on a 6,400 square foot lot along Obed Avenue for $325,000.
Yet both are still rent-able for $1,300 to $1,500 a month.
As property values continue to slide, I think we are going to see rents moderate lower as well.
@a simple man
My mistake ... I thought that HHV gave admin privileges to both you and Leo (who is on vacation?). Maybe HHV can rectify this!
Using historical VREB data, I decided to create a create a chart showing the: average, 6-month average and median single family home price for August over the past eight years.
https://docs.google.com/spreadsheet/ccc?key=0Aj_0HTYHq-YsdEpaVkU3M09pNVdXMnhFZHI5ZUdzb2c
The 6-month average and median clearly show the market decline that has been discussed.
Source data: http://www.vreb.org/mls_statistics/historical_statistics.html
Yet they too have been hit by the changing economy. A King George home that sold in 1997 has doubled in value to $1,450,000. In relation to the typical home that has increased 2.5 times in that same time period.
Just Jack, I've noticed that you often say some goofy things when you're comparing selling prices of properties.
"Yet they too have been hit by the changing economy." People who live on King George Terrace aren't "hit" by changing economies; they're pretty comfortable no matter what happens to the economy and to their house price.
And even if KGT residents agonized over their house price (which I'm sure they don't), they would not be bothered much by (or even notice) the difference between 2 and 2.5 times. Sheesh!
Hypothetically, do you suppose many Uplands residents would desire KGT over their current location if they thought that homes on KGT appreciated slightly more than houses in the Uplands? God, no! They live in the Uplands because it's amazing there--just like it is on King George Terrace.
The vast majority of well-to-do people (and all people, really) approach it as "living in a house," not "camping in an investment."
You often make it seem as though most people's mentality is the latter; I argue it is the former.
Don't try to read so deep into the posts, Introvert. Chill out and have some fun.
If you want to dress up in your pajamas and paint a big "I" on your chest as a defender of Uplands real estate go ahead. But remember to stay away from the brown acid.
You're starting to sound like Clint Eastwood at a Republican convention.
Some posts on this blog indicate that house prices are declining and the cost per sq. ft. to build is also declining.
Question: If I had three narrow lots for sale, side-by-side, 6200sq.ft. each, would it be more profitable to hire a builder to build three houses, then sell all three, or would it be more profitable for me to just sell the land as three lots?
I suppose if land values are also declining then it might be the same, either way.
Anyone know the answer?
"You're starting to sound like Clint Eastwood at a Republican convention"... ha ha.
It would be most profitable for you to go the west hills way and subdivide, build 6 1300 sqft prefab panel houses and sell them for $399k a piece. The kit is only 80k delivered. Say another 20k for the slab, flatwork, assembly and site work for each one. So 600k to build your mini burb. You bring in 2.4million. Subtract your land cost and legal costs and servicing costs. Design costs too but they will be minimum because it's prefab. What was your land cost?
The economies of scale are in your favor when building three homes side by side. You can keep your crew rotating through the construction rather having down time waiting for a city inspector to pass at different points in the building. You need something changed in the electrical or plumbing, the tradesman is over at the other house and he can come back over and fix it right away. Otherwise you might have to wait a couple of days for the tradesman to show up.
You only need the concrete pumper truck to come out once, to pour the three foundations. Lots of other things too. Better bulk prices. etc.
BUT, if you are worried about being caught in a downturn, then you might want to spread the risk and sell one lot for a profit and build on the other two. And if it turns really bad, you might have to move into one for a year or two so that the taxman takes less.
Everything hinges on what you paid for the land and what the land is worth today. If you have plans, then get the proposed construction appraised and you will have a better idea of your costs and profit margins.
A builder that gets to build three houses side by side is going to give you a really good price. Especially when we are in a slow time for most construction companies.
It should be a lot of hard work and a lot of fun too.
You should build to the neighborhood standard. Don't build one-bedroom homes in a family neighborhood. Nor should you build a mansion behind a McDonalds. And the construction should not be in architectural contrast with the neighborhood, not too big and not to small. Your pricing shouldn't be more than 30 percent of the neighborhood's median price.
Very general tips, lots of variables to consider that can change a lot of the above.
And don't be too artsy fartsy on your design and always build to the KISS principle (Keep It Simple Stupid)
"If I had three narrow lots for sale, side-by-side, 6200sq.ft. each, would it be more profitable to hire a builder to build three houses, then sell all three, or would it be more profitable for me to just sell the land as three lots?"
If you need to hire a builder you are done, sell the lots. The only way it would be a bit more profitable to build out is if you acted as the builder. Margins on build outs are razor thin for builders right now so my suspicion is you hired a builder to do the build out it would actually be less profitable than selling the lots.
If margins are razor thin for builders it sounds like you wouldn't save much by being your own builder?
All sarcasm aside, it is probably the easiest money to just sell the lots. If they are serviced and zoned and ready to go, if you price them right and they are in a good location they will most likely move. If you build on them you are risking a lot more. I think JJ makes sense. I guess he isn't always being facetious. Bottom line is you need to cost it out and look at actual numbers. Buildings aren't actually built on a cost per square foot basis. If you aren't willing to make that effort and put in that upfront cost to analyse the build option, then just sell the lots.
On average, vacant land takes a lot longer to sell, than improved properties.
So, when I hear that builders have a razor thin profit margin, I can only think that someone selling vacant land is going to get only low ball offers from builders.
It sounds like building homes on speculation (no purchaser yet) may be too risky. Although you could reduce the risk by selling one of the lots, or a partnership with a builder where you provide the land and he builds the house and you split the profits.
I just wonder what razor thin profit margins means? To some people that might be 15%, to others that's working for wages only.
So, what is the typical construction management cost to build a $400,000 home? And how long will it take to build that home?
While it may take 6 months to build a home, that does not mean you will have workers on the site every day building the home. There is a lot of down time, where the drywaller can't do his job until the electrician is finished and the plumber is waiting for the carpenter who is waiting for a building inspection, etc, etc,
The construction manager might be charging you say $10,000 a month to oversee these crews and to schedule the tradesmen. If you have three homes, you are likely to have workers on site, almost every day. And the time to construct three homes will be a less than the cumulative 18 months.
Time is money.
But, as Marko has said, and he should know best as his father is a builder and Marko sells them, with these profit margins you might maximize your profits just by selling the lots.
But, I think you should run the scenarios through on paper before you make that decision.
More sense from JJ...
I think it depends on where the lots are though.
I am looking at building for myself so have gotten an idea of such costs from some builders. Margin depends. I've gotten numbers like 12% on materials, nothing on labour and no management fees, since the builder and their crew is also doing some of the labour and is hands on. I've also gotten 6% on everything-flat. Now that said, there are further profits to be made on materials and labour if it's their own crew and they are getting hidden discounts on materials. Percentage wise these are not high margins but they will make money on the labour as well. I don't think it's so bad for them from that perspective. It might be for some due to lack of volume. So if you are only doing a couple of houses a year then it's not so great but then again, if you weren't doing any of the labour, that would be 60k for making some phone calls, knowing the right trades people, coordinating a schedule and keeping two clients happy. Maybe average 250 hours per house? That's 120/h. not bad. not a lawyers wage, but not bad.
I am winging it here and don't actually know anything about the profession though...
Just a tip for selling building lots, no need to pay a high commission like 6%100k+3%balance.
I would throw it up on usedvictoria and craigslist first without a REALTOR®, builders often look at these website hunting for lots.
If that doesn't work just flat fee list them or similar, paying 6%100k+3%balance to sell a piece of dirt doesn't make sense. You probably know more about the lots then a listing realtor would.
Also with lots in my opinion you can get away with offering a slightly lower cooperating commission as most builders don't work with a REALTOR® when buying and if they are working with a REALTOR® they will be unlikely to sign a fee agreement as they know it will affect the purchase price.
Just to get Introvert upset...
The Westshore is getting HAMMERED with 12 months of inventory. Granted inventory in Sooke is now 2 years with four new listings for every 1 sale and repeat listings showing property values have rolled back to at least 2007 levels.
Langford is near 10 months of inventory with 2 listings being added for every sale. With starter homes poised to drop below $300,000 which was where they were back in 2006.
The urban core housing is still doing well in comparison with 7 months of inventory and around 2 new listing per sale. And people are still willing to pay high prices in select hoods.
Oak Bay is at 6.5 MOI and 1 1/2 new listings per sale. Hard to say, where prices are today but starter homes can once again be bought for under $450,000 which is around 2007 levels.
Now with the kiddies back in school, people's attention and life priorities can once again return to where they should be - real estate and the fall line up of new reality TV shows.
Don't try to read so deep into the posts, Introvert.
JJ, don't worry: your posts usually aren't worth reading deeply into.
Here's a distillation of half of all your posts:
Hey, look! This house lost value over x amount of time. Too bad for the owners.
With a slight variation being:
Hey, look! This house didn't gain in value over x amount of time as much as that other house. Too bad for the owners.
Thanks Marko, much appreciated!
Can anyone chime in on how much these other costs might be
"Septic, well, speciality inspections (electrical, plumbing) extra.
- Mortgage costs (appraisal $200-$300, etc.)" <-- and the etc. part.
Also, what exactly does the property transfer fee cover, what is it supposed to pay for?
But, Introvert, think how good this is for the buyers. And how good this will be for the economy when the sales start picking up again. And how good it will be for the small business owner who will be selling his goods and services and not worrying if they will earn enough to pay the shop's lease this month.
And it will mean nothing to those that own a home as long as they make their payments. They still will have shelter.
When gas, food or the price of cat litter comes down, people are happy! Why not real estate?
A lot of home owner's have effectively won the lottery. We are a city of paper millionaires. If they choose not to take advantage of this once in a lifetime gift - that's "too bad for them."
Thanks for all the posts in answer to my question about selling three lots or building on them. Much appreciated to hear other people's opinions.
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