We all know that the correction of the second half of the 90s was the kind that the government is trying to orchestrate right now: a soft landing where prices declined a little, but then just stayed flat until incomes caught up.
Generally the debate on this blog is between market bulls and bears, but I believe Dasmo coined the term halibut for those that think we are in for another flat market like the 90s. So let's look at the situation at that time and see how it compares to today.
|SFH Median and Residential MOI for Greater Victoria 1996-2012 (click to enlarge)|
The average MOI from 1996 (the earliest available active listing data) to the end of 2000 was 7.3 and prices were appropriately fishy. If we look at the last two years, we see an average MOI of 8.1 or about 10% higher than in the 90s. Sure enough in that time we've seen some gentle declines. The current inventory is certainly quite extraordinary. If we continue to see YoY increases in MOI we will start to see the market slide faster.
In other news here are the latest VREB Monday numbers thanks to Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.
October 2012 month to date (previous weeks in brackets)
Net Unconditional Sales: 166 (106)
New Listings: 483 (276)
Active Listings: 4616 (4565)
Sales to new listings ratio: 34% (38%)
Net Unconditional Sales: 483
New Listings: 1086
Active Listings: 4687
Sales to new listings ratio: 44%
Sales to active listings ratio: 10.3% or 9.7 MOI