Thursday, November 1, 2012

October Market - Spooky Scary

Another month, another deterioration in market conditions in Victoria.  It's so boring out there that we were reduced to arguing about Alberta for the week.

From our previous year of inventory, we have advanced even further to 13.1 MOI for the entire region. The only other time in VREB recorded history that we've had higher MOI was in fall of 2008 when everyone was convinced that we were heading into another great depression.  That October our MOI was 14.8 and prices were dropping.

Of course this is for the overall market, and Just Jack quite rightly points out that the MOI varies significantly between regions.  Especially for single family houses in the core, the MOI is still within the range of a balanced market.

Victoria City - 7.2
Oak Bay - 6.0
Esquimalt - 7.2
View Royal - 9.0
Saanich East - 5.9
Saanich West - 5.7
The VREB has placed the blame for the slowdown firmly in the lap of the feds, which is certainly an improvement over blaming the weather.  If true, we should see sales recover around Jan to April as the market adjusts.

Both the VREB and Just Jack show us how even hard facts aren't quite as facty as one would expect.  Reported sales for the month don't seem to line up to actual sales from the 1st to the 31st, and the VREB shows us that the average price for 6 manufactured sales is apparently negative $122,417*.  Another reason never to pay attention to single months numbers.

*Negative result reflects a collapsed sale of $1,545,000 reported as complete in Sept 2012 - VREB

146 comments:

Leo S said...

By the way, does anyone have the residential inventory? (Sept was 4097 with total inventory at 5025) About the only number that I got from Marko's historical data that is not part of the VREB's regular monthly update.

Leo S said...

Price/Assessment for SFHs in the core under $550k continues to drop. 50 sale median down to 90.93%.

Marko said...

Residental Inventory is 3,948.

info said...

Thinking of buying in Victoria?

Don't. Now is not the time. Victoria's housing market is in full correction/crash mode and this will continue for years, not months.

The average price is basically useless in a market where there are very few sales. The same can be said about the median. The VREB reports the average number, ignore it.

Follow what Just Jack posts on this blog. Today, he wrote that a one-bedroom condo on Lee Street is priced at $135,000. That tells us a lot about the current state of the housing market and where it is headed.

Do not believe the VREB when they write that we have a stable, flat market.

In Richmond, houses can be bought for 33% below assessed value. Will the Vancouver real estate board or the media report this? No, they will not. They know it could cause panic. One needs to find this information from other sources.

How did prices get so high? Why did they double in the last 10 years? It was the artificial stimulus of excess credit.


The media, banks, real estate boards, etc. have been telling Canadians and the rest of the world that our banks are conservative. Not so much. Moody's is reviewing 6 Canadian banks for downgrade
.

It isn't different in Victoria or Canada in general when it comes to real estate. There is basically no country left on the planet that hasn't recently gone through a major correction/crash or is currently in the process of doing so. All for the same basic reason (excess credit) and Canada is no different.

The bank regulator (OSFI) has very recently implemented new regulations. This, among other things, is being done to tighten credit in Canada. Cash-back mortgages are a thing of the past. As well, it has mandated tighter lending regulations and stricter appraisals. These measures will only add weight to an already sinking Victoria market.

Hold off from buying in Victoria right now. You will thank yourself.

SaanichRealEstate said...

How fitting for Halloween

Marko said...

Despite the poor numbers there isn't panic out there. I made three offers this week for three different buyers on three different properties, all rejected by the sellers. One of them came back with, "this is our bottom line, take it or leave, we will rent January 1st if we can't get what we want."

We saw 2.55% drops in 2011, 2.17% drop so far this year. Economy is stable, vacancy is relatively low, and interest rates are extremely affordable.

Maybe we drop another 2-3% next year but nothing in my opinion worthwhile delaying a purchase if you plan to live in a home 10+ years. The advantage to shopping right now is you can take your time and find the right home at the right price. Also with interest rates so low you are paying off in the range of 2 to 3% of your principal per year.

Trying to predict the absolute bottom is impossible.

Marko said...

Today, he wrote that a one-bedroom condo on Lee Street is priced at $135,000. That tells us a lot about the current state of the housing market and where it is headed.

To put this into context, I have an accepted offer on a listing on Johnson street for $316,000 that is 36 sq/ft smaller than what sold on Lee for $135,000.

koozdra said...

Prices are not dictated by the people that refuse to sell. Prices are set by people who do sell. The people that hold up in their bunkers with immoveable prices will see the value of their home drop and drop.

There isn't a panic out there because Martha and Stan from next door are uninformed. This will change very soon.

totoro victoria said...

"There is basically no country left on the planet that hasn't recently gone through a major correction/crash or is currently in the process of doing so."

You might want to cite a source for that. Seems like it could not possibly be true given that global real estate markets do not move in tandem or in the same cycles and have significant local variation depending on economy and culture etc.

In addition, are you only referencing industrialized countries?

Also, how do you define a "major correction"?

DavidL said...

From the TC: October house sales down 25 per cent from year ago

info said...

totoro victoria

Name one country that has not recently corrected or is in the process of correcting significantly. China, Australia and Canada were considered to be the last three hold outs. All three are on the way down.

The US, UK, Spain, Greece and Iceland are examples of countries that have seen significant corrections recently.

Let's say that there exists a country that is currently in a housing bubble but has not yet corrected. You failed to mention any such country. Even if you would have, my overall point still stands. You are nitpicking in a futile attempt to discredit what I wrote because you purchased a home recently and want prices to go higher.

Can you come up with an argument that convinces everyone that it is a good time to buy Victoria real estate? I challenge you to do so. Please include things such as the new mortgage rules, new OSFI regulations, etc.

info said...

Marko

As I have said, average prices are useless when there are so few sales. Take it from a math major.

Victoria has seen much more than a 4.7% drop (approx. according to your numbers) in prices over the last 2 years. You are quoting average prices. Prices are probably closer to 15% down from peak if you talk with people who have recently sold. Different areas will vary in severity.

Your contributions to this blog are appreciated, however, there are certain numbers that you know are misleading, such as the average price.

As prices fall in general, there will be some examples of sales that buck the trend, however, they do not constitute the majority or the market would be headed higher, not lower.

patriotz said...

Despite the poor numbers there isn't panic out there.

No surprise, most people don't even catch on that prices are falling until the decline is approaching 20%.

Just like in the US circa 2006, would-be sellers are taking their properties off the market and waiting for better prices.

But as koozdra pointed out, falling prices aren't the result of homeowners panicking and selling, rather of a dearth of buyers for those who do have to sell.

Leo S said...

@Marko Residental Inventory is 3,948.

Thanks.

@info The average price is basically useless in a market where there are very few sales. The same can be said about the median. The VREB reports the average number, ignore it.

Yes the monthly numbers are very volatile, but over several months they do need to go down. Whenever prices don't drop, we hear this argument that monthly prices are useless because
1. The mix of properties has changed and more higher end places are selling or
2. People are getting more house for the same money.
Both things are possible, but only in the short term. The mix of properties can shift the average and medians in one direction for a while, but eventually the mix will return to be representative of the properties in Victoria. Same for reason #2, since that argument basically says cheaper houses aren't selling. They might not be, but once they start again the price would have to come down. In the end the only proof of a correction is that prices have declined. So far we haven't seen anything particularly significant.

There is basically no country left on the planet that hasn't recently gone through a major correction/crash or is currently in the process of doing so. All for the same basic reason (excess credit) and Canada is no different.

I challenge you to prove this. Do you have a source that lists all or a significant majority of the 1st world countries in the world and their real estate prices?



Leo S said...

@info Prices are probably closer to 15% down from peak if you talk with people who have recently sold.

You say you are a math major but then you discard all math in your arguments. You say the prices are down 15% based on talking to a few people? Have you heard the expression "The plural of anecdote is not data"?

Did you look at the updated graph in this post? Did you notice that it also has the Teranet House Price Index graphed? It is down 4.5% from peak or pretty much exactly the 4.7% that Marko deduced from average prices. So, is the HPI also useless? You might want to examine the methodology.

Name one country that has not recently corrected or is in the process of correcting significantly.

You made the claim that there is basically no countries left that have not corrected. It is up to you to prove your statements, not totoro.

Leo S said...

@Marko One of them came back with, "this is our bottom line, take it or leave, we will rent January 1st if we can't get what we want."

They might be in for a surprise when they try to rent. We are moving out of our appartment and the landlord advertised it for the same price as when we moved in 2.5 years ago. No showings. Landlord says there has been no interest.

We saw 2.55% drops in 2011, 2.17% drop so far this year. Economy is stable, vacancy is relatively low, and interest rates are extremely affordable.

All true. But the market has deteriorated since then so I wouldn't count on continued business as usual. Average MOI is up 30% since 2010.

The advantage to shopping right now is you can take your time and find the right home at the right price.

I'm very confident that advantage will still be there next year. MOI might not be at these insane levels, but will still be firmly in buyers territory for a couple years.

totoro victoria said...

info -

I don't believe house prices will rise in Canada in the near future and the fact that I am a homeowner does not make me ignore market conditions. If you have read my posts you will see that this is, in fact, true.

What I dislike is false logic and misinformation being used to justify a position.

Here are some markets that are slightly declining, stable, or rising: Austria, Holland, Switzerland, Sweden, Belgium. There are many, many, more worldwide that have not recently experienced a "major correction" and do not appear to be in a "bubble". Here is a great site with current and historical stats from all the countries:

http://www.globalpropertyguide.com/

As far as reasons to buy now, well, I think I have covered that pretty exhaustively in previous posts, along with detailed financial calculations and long-term mortgage rates, and my conclusion is that it is a fine time to buy for some people. If you have a really large down payment it might be better to wait.

Also, I don't see what the lending rules have to do with whether it is a good time to buy. What they may have something to do with is whether a buyer can qualify for a mortgage. If you can't qualify for a mortgage, it's a moot point.



Marko said...

Victoria has seen much more than a 4.7% drop (approx. according to your numbers) in prices over the last 2 years. You are quoting average prices. Prices are probably closer to 15% down from peak if you talk with people who have recently sold. Different areas will vary in severity.

15% would mean that a 500k Fernwood home is now 425k and that the 600k Gordon Head box is now 510k...I don't think so.

Even when I look at Bear Mountain homes most aren't reselling for 15% less, you see one here and there.

Marko said...

All true. But the market has deteriorated since then so I wouldn't count on continued business as usual. Average MOI is up 30% since 2010.

The average MOI is ridicolously high and I ponder where all the inventory is! Right now I have six buyers looking for 6 different things. Showing about 20 to 30 properties per week and not seeking many quality properties, or crazy deals. Seems like there is a ton of garbage out there at 2010 prices.

Introvert said...

The average price is basically useless in a market where there are very few sales. The same can be said about the median. The VREB reports the average number, ignore it.

Follow what Just Jack posts on this blog. Today, he wrote that a one-bedroom condo on Lee Street is priced at $135,000. That tells us a lot about the current state of the housing market and where it is headed.


So don't pay attention to averages and medians because the number set is too small, but do pay attention to one sale on Lee Street?

That's intelligent stuff, info.

Introvert said...

The media, banks, real estate boards, etc. have been telling Canadians and the rest of the world that our banks are conservative. Not so much. Moody's is reviewing 6 Canadian banks for downgrade.

Would that be the same ratings agency that gave AIG a AAA rating right up until it collapsed?

Introvert said...

You are nitpicking in a futile attempt to discredit what I wrote because you purchased a home recently and want prices to go higher.

You are making absolutist statements about the future because you likely do not own a home, can't afford one at present, and want prices to go lower.

koozdra said...

"Ask about assumable mortgage @ 2.10% with 44 months left on term. MOTIVATED SELLER - IMMEDIATE POSSESSION!"

Get ready to see a lot more of these.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12561229&PidKey=-1582698857

hap pychucky said...

Kooz

900k for a house on 6000 sq ft lot in Gordon Head.

Seems pricey! How is this a sign of a weak market?

koozdra said...

Yes I agree it is very over priced. It is the assumable mortgage that is the signal. I'm assuming the mortgage that these people hold on the property is substantial. Looking at the selling prices of the houses on the block, it looks like they paid this amount for it in the past two years.

In the market ahead people won't be able to off load their over priced properties nor will they be able to lower their asking price because of the amount outstanding.

What they can offer is that someone assumes their mortgage.

There is a reason that property values have risen so drastically in recent years. It is because of people looking a listing similar to this and saying "sounds like a good deal to me".

Introvert said...

"Ask about assumable mortgage @ 2.10% with 44 months left on term. MOTIVATED SELLER - IMMEDIATE POSSESSION!"

I've walked past this house many a time. I feel as though it's been on the market forever.

You can't see it in the pictures, but the owners planted a cedar hedge in the front yard but evidently neglected to water it during the summer drought. Consequently half of the bushes are now dead. They're still in the ground, of course. You know, for curb appeal.

Just Jack said...

The sale on Lee Street is an anomaly. Marko's sale on Johnson is likely more in the range of the norm.

But that's how the market starts to unravel. An anomaly here, an anomaly there. String enough of them together and you start seeing a sub market emerge.

Although both the Johnson and Lee street sales are condominiums, I doubt very much that they would appeal to the same buyer. And there are also government incentives to purchase new condos that do not exist for pre-owned condos, like the one on Lee, built some 40 years ago. Government incentives can alter prospective purchasers buying habits.

The market for new or near new condos might still be in favor of sellers and at the same time the market for older condos can be tumbling.

And that is different from two or three years ago.

As prospective purchasers get fewer and fewer they tend to concentrate in sub markets and locations. Properties that don't fit into these niche markets just wither in the marketplace.

And Introvert is right, one sale does not make a market. But that it even exists in today's market is noteworthy.

For those that study the market, this is an interesting time. As you are actually experiencing in real time how a market breaks apart. The last time this happened we didn't have the world wide web or so many people blogging. In the past, some economic professor years later would gather the data and look to find some "trigger" as the turning point. And they would continue to look until the found one that was the most plausible.

I think we see now that free markets have a natural tendency to exhaust themselves. Unless the government intervenes to re-vamp the cycle. But then real estate is no longer a free market, and when those incentives are removed
the market has to correct hard and stay low for years, until the number of home owners substantially declines and the size of the households increases significantly to once again increase demand.

To me, the quickest way to do this, is to pay people to demolish homes.

hap pychucky said...

Kooz

Or they do not need the morgage and do not want to pay the fees to get rid of it.

hap pychucky said...

JJ

"As prospective purchasers get fewer and fewer they tend to concentrate in sub markets and locations. Properties that don't fit into these niche markets just wither in the marketplace"

This sums it up. What we do not know is what is going to happen to the core. Non core imho is getting back to where it should be in a balanced market. Crap sells for land value.

Just Jack said...

Assumable mortgages are definitely something to look into.

In some cases you might be looking at buying a home that has a bigger mortgage than the house is worth. And it could happen that the seller will pay the closing costs or cash - for you to buy their home!

Not often, but sometimes this can be a good deal. This is something that Totoro might be interested in when looking to buy investment properties.

koozdra said...

Hap, perhaps you're right.


I'm eagerly awaiting January. It seems many discouraged sellers are planning to rent their houses/condos if they can't sell in the next few months. Lets not forget that renting is a market also.

I've been following rentals on Kijiji and have seen many price reductions. We went to go look at some suites but found them poorer than our apartment. The people showing the suites seemed frustrated as a good renter is a hard commodity to find these days.

What will happen when a torrent of rental space becomes available in January?

hap pychucky said...

JJ and Marko have pin pointed what is going on.

Crap and non core sold big time pre 2010. Now that stuff only sells at land value or major discounts. Sellers are not there yet, thus we have massive inventory of the stuff.

Core SFH are still selling but there does not seem to be inventory, so even in this weak market, prices are holding up.



hap pychucky said...

"Core SFH are still selling but there does not seem to be inventory, so even in this weak market, prices are holding up"

meant quality inventory.

Introvert said...

900k for a house on 6000 sq ft lot in Gordon Head.

Seems pricey!


The house is in an awful location, too. It's in a cul-de-sac, but directly beside a public walking path, a playground/basketball court, and the Montessori school.

Worst possible place to build a mansion.

Just Jack said...

The one thing that humans do very well and probably what makes us the dominant species is that we can compare items and then judge which one is better. And when you get enough Humans doing this in a consistent manner you develop a market.

Take two identical homes on opposite sides of Foul Bay road. One is in Victoria and one is in Oak Bay. Which one will sell for more?

But how much more? 5,10,15 percent?

Obviously, there is a limit to what a rational person will pay for that Oak Bay address. And that percentage seems to always stay around the same.

So, if that identical home on the Victoria side should drop by a hundred thousand dollars - it will have the psychological affect on us humans in what we bid on the Oak Bay side.

So we do know what will be happening to the core district and niche properties. I think we do. These smaller niche markets can not sustain their high prices when prices around them are declining. They are just the last ones to fall.

dasmo said...

I would pay more for the Victoria side personally. Less building restriction, more relaxed bylaws and lower taxes.

totoro victoria said...

Actually, Oak Bay has the lowest tax rates. Victoria's tax rates are about 30% higher.

Alexandrahere said...

This mornings TC article on slipping real estate sales conveniently missed out the stats on the condo market.

Esquimalt's taxes seem to be the highest....but then they have done alot of upgrading to the underground services in recent years.

I know quite a few people who have secondary suites in their homes. They all have dropped their rents and and there still hasn't been any interest. Is it because there are so many new/newer stylish condos' now available to rent?

DavidL said...

@totoro

Based on that logic, moving to View Royal would be your best bet because it has the lowest residential tax rate:

- Core Areas -
5.04 View Royal
5.67 Oak Bay
5.89 Saanich
6.50 Victoria
7.43 Esquimalt

- Outer Areas -
4.40 North Saanich
4.84 Metchosin
5.24 Langford
5.72 Colwood
5.74 Sidney
5.88 Central Saanich
6.39 Sooke

* Note how lower property prices typically translate into higher tax rates.

BC Local Government Tax Rates and Assessments 2012 (Excel spreadsheet)

dasmo said...

Interesting I just assumed after recently going through the hunting process. I guess oak bay assessments are higher because property taxes were consistently higher for similar value properties (within the small sample we looked at). Maybe they are more active updating them in OB.

I stand corrected!

totoro victoria said...

Also, i don't know where the backup doc is now but I understand that Oak Bay property holds its value longer than other areas and appreciates at a faster rate...

If you bought a property today in Victoria for $550 000 or one in OB for $600 000 and Victoria appreciates at 4 percent per year while OB at 6 percent per year... you would make $100 000 more on the OB property in a five-year period.

OB price in five years is $802,935.35 - home value appreciation $202,935.35

Vic price in five years is $669,159.10 - home value appreciation $119,159.10

Of course, this is all speculative given that we are flat or down for a bit... but when things start to go up...

DavidL said...

Victoria's tax rates are about 30% higher.
Actually, Victoria (6.50) is < 15% higher than Oak Bay (5.67).

lolatengo said...

totoro: The link you provide to Global Property Guide only provides numbers for the past year, when the global economy showed some, albeit timid, signs of stabilizing. I prefer my data to come from the Economist:

http://www.economist.com/blogs/freeexchange/2011/03/global_house_prices

which provides a much longer timeline. You can see here that house prices in a diverse set of countries moved up in tandem to 2008ish to 2010ish, and then dropped. A few holdouts like China and Australia started to decline even later.

It is not totally off the wall to claim that many countries experienced a property bubble that has corrected or is correcting.

lolatengo said...

Sorry, folks, here's a more recently updated chart from the Economist:

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

The text below the chart says it was updated in August 2012.

Just Jack said...

I think Oak Bay or any of the other premium neighborhoods would be the last to loose their values. That's where the location, location, location mantra likely stems from.

But any out of sync significant differences in neighborhoods would quickly be exploited by home buyers. That's when you get a good deal, but it doesn't last long. The different neighborhoods may time lag each other, but when the market slows then those neighborhoods come back into balance.

It would be impossible for Oak Bay to sustain appreciation rates greater than say Fairfield or Oaklands. The lump sum differences in the hoods would continue to get bigger and bigger and bigger. And that just does not happen.

That's because Oak Bay is not a market by itself, it is only a fraction of the housing market as a whole.

info said...

Thinking of buying in Victoria?

Now is definitely not the time. Prices have been moving downward for well over a year and will continue to do so for an extended period of time. Victoria's housing market correction/crash is gaining momentum and the price declines will accelerate soon.

If you are currently working with a realtor. Ask this person what made prices almost double over the last decade. They will likely not want to talk about this. However, it is at the center of the big picture in terms of real estate in Victoria and Canada. They should be talking with you about it. If they don't know about it then find one that does. If they know about it and pass it off as insignificant then demand that they explain it to you.

Prices in Canada have shot higher over the past decade because of loosening of credit. This was the reason for the price bubbles in the US, UK, Spain, Ireland, etc. that we all know have since deflated, causing financial hardship for millions of people.

You should also ask your realtor to explain the tightening of credit that has been happening in Canada over the past months and how this will cause significantly lower prices. Very recently, the OSFI (bank regulator) has permanently disallowed cash-back mortgages, as well it has mandated tighter lending regulations and stricter appraisals. This means fewer mortgages and less money per mortgage which will result in fewer buyers, fewer sales and falling prices. If your realtor will not conclude that prices will fall because of the new regulations, then you should be very suspicious.

Remember, realtors get paid only if they make a sale and are able to collect the commission. They will always tell you that it is a good time to buy. Why wouldn't they?

In Canada we have seen extremely low, emergency interest rates for an extended period of time. Emergency rates are very rare in Canada's history and are only used in desperate times when the economy cannot stand on its own. Such has been the case in Canada in the last number of years. An extremely weak economy is bad for the housing market since people need jobs to afford houses. However, realtors and real estate boards often talk about low rates as a good reason to buy a house. If you buy now, you will be buying near the peak in terms of price. Rates can only go higher while prices can only go lower. You would be buying at a time of maximum risk. Millions of people around the world did this only to see prices decline rapidly. It has forced millions to deal with financial hardship for decades.

When considering interest rates, you should factor in higher rates when purchasing to protect yourself for future rate hikes. That will bring you peace of mind.

There will be a good time to buy Victoria real estate in the not too distant future. Wait it out for a year and watch prices sink. Mortgaging a house actually makes you pay for the house 2 to 3 times over the length of your mortgage, depending on rates. If you wait for prices to decline and pay $150,000 less for the same house in 1.5 year from now, you will save $300,000 to $450,000 on that house by the time your mortgage is paid off. All you had to do was hold off from buying now and let the price go down $150,000.

Do as much research as possible before purchasing a property since it will likely be, by far, the biggest financial decision you will make in your life.

a simple man said...

thanks, info. Appreciate your passion for this.

hap pychucky said...

info

thankyou for your ad. I see u changed up from the 40% crash ad.

hap pychucky said...

Info

please show me the calculation on this. Is this for a 50 year mortgage

$150,000 less for the same house in 1.5 year from now, you will save $300,000 to $450,000 on that house by the time your mortgage is paid off. All you had to do was hold off from buying now and let the price go down $150,000.

Introvert said...

info, thanks for the creepy advertorial.

dasmo said...

Personally the sewage project has revealed that OB in in trouble tax wise in the future so it might not be lower for long. Not because they will be billed more per household but that the project has also revealed their general sewage infrastructure is in need of an update. They don't have the industrial and commercial tax base that Victoria has so the burden of such things will fall on residential....

hap pychucky said...

So a 150000 25 year mortgage at 6.5will cost 300k and at 12% about 450k. So Info lets puts some reality into your ad. Neither interest rate is realistic.

nan said...

@ totoro:

"Also, i don't know where the backup doc is now but I understand that Oak Bay property holds its value longer than other areas and appreciates at a faster rate..."

I'd believe that OB holds value longer, simply since I would think that it is more likely that OB residents have deeper pockets and don't have to take haircuts as frequently, but stating that OB property appreciates at faster rate is probably not possible.

This would imply continuing and reliable separation between what OB residents earn/are willing to borrow and what the rest of the city can earn/ are willing to borrow.

I don't see why this would happen with any regularity.

dasmo said...

also...Victoria has a greater diversity of neighbourhoods affecting such stats. For instance Fairfield would perform differently than Rockbay...

Introvert said...

All you had to do was hold off from buying now and let the price go down $150,000.

That's all you have to do! It's so simple! Why aren't people getting this???

dasmo said...

Thinking about buying in Victoria?

Use your head and make up your own mind. You will feel better if you make a mistake listening to yourself than blindly listening to the prophesies of an anonymous internet poster....

Just Jack said...

I don't know if it is fair to ask an agent about the economics of what is happening in Canada. It simply isn't their job to know why prices are what they are. Their purpose is just to bring buyer and seller together and make a trade.

I don't advocate people just stop buying. First of all, it is never going to happen. Even in collapsing markets people buy homes. You buy when it makes financial sense to you. And that is different for everyone of us.

If I were to win the $50,000,000 lottery would I go and buy one of Marko's condos. Of course I would, I need some place for my pack of Dobermans. (kidding!)

patriotz said...

Yes I agree it is very over priced. It is the assumable mortgage that is the signal.

An assumable mortgage is only worth something to a buyer if its rate is below the current market rate, which clearly would no be the case today.

I assume that the seller hasn't figured this out.

Introvert said...

info's post triggered the resentful renter alarm and I haven't been able to quiet it.

totoro victoria said...

lolatengo - that is incorrect.

global property guide provides price information back to 1993 - please go to a country and then click "price history"

Introvert said...

Thinking about buying in Victoria?

Use your head and make up your own mind. You will feel better if you make a mistake listening to yourself than blindly listening to the prophesies of an anonymous internet poster....


LOL!

dasmo, you nailed it.

totoro victoria said...

Why are Victoria’s residential property tax rates 18% higher than in Saanich and 29% higher than in Oak Bay?

Victoria’s “mill rate” is 3.7731 per $1,000 of assessed value, while Saanich’s is 3.2034 and Oak Bay’s is 2.9257. That means a $700,000 property in Victoria would have paid $2,641.17 in 2011, versus $2,242.38 in Saanich and $2,047.99 in Oak Bay — in other words, the same property would pay $593.18 more in Victoria than in Oak Bay. (Many Victoria homes are also charged a boulevard tax of about $130, so the sample property could actually pay as much as $723.18 or 35% more than in Oak Bay.) Other taxes for schools, hospitals, and regional government are similar for both municipalities.
http://openvictoria.ca/council-qa/#Q1

patriotz said...

Here's information on global RE prices from the Economist:

RE prices

Unfortunately they do not give price changes from peak for countries that have fallen, only since 2007 which may be before or after peak.

They do give estimated overvaluation, and Canada comes in 1st amongst all large countries, and 2nd only to Belgium

totoro victoria said...

nan - I will try to search out the stat again = I know that I have come across this document before. I believe it is the location, location, location effect.

info said...

Just Jack

If a realtor's job is only to bring buyer and seller together, then why do many realtors tell clients that now is a good time to buy based and x ad y?

info said...

Introvert

It's possible that I own multiple properties.

Hypothetically, let's say that I do not own a property, how does your comment make me any less credible?

patriotz said...

Economist interactive graph

info said...

Introvert

What do you think of the overvaluation of Canadian RE as talked about in the article provided by Patriotz?

It would be nice to see a post from you that actually has substance.

Just Jack said...

I don't know if you could safely say that Oak Bay buyers have deeper pockets than others. The more you earn, the more you spend.

info said...

BMO warns boomers that using home sale to fund retirement could backfire.

Introvert said...

It's possible that I own multiple properties.

Anything is possible, I guess. However, your bitter, preachy tone strongly suggests that you're a bitter, preachy renter.

What do you think of the overvaluation of Canadian RE as talked about in the article provided by Patriotz?

The article didn't mention Canada once.

Just Jack said...

Well Info, anyone can have an opinion of why it is a good time to buy. That's just being a salesman and wanting to appear knowledgeable about the product their selling.

And you know - sometimes they are right.

We all do it. The last time your significant other said: "Does this swim suit make me look fat?"

Did you reply

"No dear, you look better than the day I met you"

or

"Just don't go near the water, or Greenpeace might drag you back in."

VP said...

The last sentence of TC’s Oct. sales article was comical.

“BC. Real Estate Association chief economist Cameron Muir is optimistic that a growing population, strong full-time job growth…”

Did he mean to say “strong full-time job loss“

and a shrinking population

dasmo said...

@Patriotz You want to see a bubble? compare Spain to Canada on that interactive chart!

VP said...

I still think Vancouver takes the cake for bubbles.

Leo S said...

@info. Way to ignore all the specific counter points to your arguments with a giant wall of text.

Lets at least agree that decline in Victoria is 5%, and not 15% like you claimed.

lolatengo said...

totoro: Your website GlobalPropertyGuide does have historical information, but you were obviously only looking at their most recent, somewhat dated yoy data to make your pronouncement about healthy housing markets.

My point is that there are many countries that experienced property bubbles in the lead-up to and aftermath of the 2008 GFC. The Economist agrees. You are correct that some countries haven't experienced a dramatic increase or decline, such as Austria and Switzerland. However, your other examples--Netherlands, Sweden, and Belgium--don't make the point you think you are making. They have each had large price increases and are only now starting to see declines. The decline in the Neth. is quite dramatic, and appears to be worsening. Prices dropped 8% yoy in September, which is not shown in the out-of-date info provided by GlobalPropertyGuide.

patriotz said...

Thanks for another great graph Leo. Is the 6 month average for the median centred or trailing?

Leo S said...

@Patriotz Economist interactive graph

That data is actually quite misleading and understates the appreciation in Canadian house prices. You might want to read this article that explains why.

patriotz said...

You are correct that some countries haven't experienced a dramatic increase or decline, such as Austria and Switzerland

That actually supports the bear case that only price/income and price/rent far below those in Canada today are sustainable.

What would support the bull case is a country with a runup like Canada's and then a flat line.

Leo S said...

@Patriotz Is the 6 month average for the median centred or trailing?

Simple moving average trendline from Excel, so trailing.

totoro victoria said...

lolatengo - my point was info's pronoucement was sensationalistic and unsupportable based on the available data. The point I am making is that global generalizations do not work.

You would need to go through all the data for all the countries and compile the stats to make some attempt at some sort of trend analysis - which I don't think exists.

I did look at the historical trends for the countries I referenced - I have no interest in going further than that because - well - as far as I am concerned the data does not support the statements made.

The countries I referenced were ones which were rising, slightly declining, or flat. The assertion was that all countries worldwide were experiencing a "major correction" or had recently experienced such a correction. This is false.

I think I made my point. The site itself contains all the data to support the point. Explore it and analyze it further if you are interested.

totoro victoria said...

Also, I made no pronouncements about healthy housing markets. My only statement was that not all countries had experienced a bust. I am not qualified to make any pronouncements on healthy housing markets. I only know two small areas of the BC housing market well enough to be comfortable with speculating on trends: Oak Bay and one specific area of the Okanagan.

koozdra said...

Oh, Vancouver Sun, say it ain't so.

http://www.vancouversun.com/business/fp/yourmoney/Canadian%20families%20debt%20worse%20than%20expected%20housing/7392384/story.html

ArtVandelay said...

CTV Vancouver Island - RE News Vidoes for Nov 2.

Condo Development Numbers Grow While Sales Shrink

West Shore Home Sales Plunge: Buyers’ Market but Where Are They?

Bear Mountain Looking to switch up

ArtVandelay said...

...and this one from yesterday (Nov 1)

Greater Victoria Real Estate Market Takes Big Hit

Seeing these reports in the main stream media makes me nervous for two sets of close friends who recently purchased in what might be the peak of the market.

Sure they will continue to pay their bills but if prices drop by 15%+ - it's gonna hurt. As first time home buyers they have a lot to loose.

Stuff I hear on a regular basis now...

I* record household debt
* a hiring freeze in from our largest employer (bc gov)
* sluggish consumer confidence
* businesses closing

I'm currently renting (with little to loose) and I feel nervous about the whole thing. I'm not one to panic but all this stuff starts to take a toll on your psyche.

Marko said...

I'm currently renting (with little to loose) and I feel nervous about the whole thing. I'm not one to panic but all this stuff starts to take a toll on your psyche.

Are you serious? .......what is there to panic about? People will keep their Iphone 5 for 2 months longer before upgrading to the future Iphone 6? People will eat out twice a week instead of three times?

Marko said...

http://www.timescolonist.com/business/Victoria+gains+come+mostly+from+service+sector/7492261/story.html

Leo S said...

Monthly unemployment figures are about as useless as monthly price figures. Here's the past year:

Nov-11 6.1
Dec-11 5.9
Jan-12 5.7
Feb-12 5.3
Mar-12 5.3
Apr-12 5.0
May-12 5.2
Jun-12 5.3
Jul-12 5.6
Aug-12 5.9
Sep-12 6.0
Oct-12 5.6

Leo S said...

He noted Statistics Canada calls about 6,000 households in B.C. to gauge employment and extrapolates for the entire labour force of 2.5 million when it does the survey each month.

So they called about 465 people in Victoria... Unemployment rate dropped by 0.4%, so does that mean 2 additional people reported being employed from Sept to Oct? Hmmm....

Patient renter said...

Hi all, glad to have found this local RE blog, been watching for awhile, renting and waiting for the time being. Starting to see some big drops, a house across from Elk Lake dropped $51k in one shot this week (499 to 448), another one (909 Alexander) in Esquimalt is priced $120k below assessed (

Patient renter said...

(assessed at $555k, for sale at $435k). I suspect it needs work, but still...

MC said...

"I know quite a few people who have secondary suites in their homes. They all have dropped their rents and and there still hasn't been any interest. Is it because there are so many new/newer stylish condos' now available to rent?"

The crap that people try to rent out is ridiculous. Not a lot of people actually want to live in a basement, nor an outdated suit. It would be nice if most landlords updated their suites and took care of it like it was actually someone's HOME, not just a space to make a quick buck off of someone. Maybe give your tenant some yard space to use, put in insuite laundry, allow pets etc.

Introvert said...

I'm currently renting (with little to loose) and I feel nervous about the whole thing. I'm not one to panic but all this stuff starts to take a toll on your psyche.

The world is not ending. Relax. If the panic does not subside, talk to your doctor.

Introvert said...

It would be nice if most landlords updated their suites and took care of it like it was actually someone's HOME, not just a space to make a quick buck off of someone. Maybe give your tenant some yard space to use, put in insuite laundry, allow pets etc.

The perks of owning...

patriotz said...

You think a perk of owning is having someone living in your basement (as long as you spend enough money to make it attractive)?

Well I think a perk of renting is not having someone in my basement. To each his own.

a simple man said...

If Marko is right with his assertion that a lot of people who do not sell in the near future will put their houses into the rental market is true then I am excited. With at least another year to wait it would be great to try a new house out and if the market is that flooded, there will be good deals to be had for good tenants.

Leo S said...

I expect sales to pick up in November. After all there was an extra hour.

a simple man said...

Actually, this past Oct had more business days (23) than the vast majority of Octs (last year had 21) - they don't tell you that in the media release.

Leo S said...

Question posed by Marko on VV: "Does a 12 MOI market in a 3% mortgage interest environment behave the same as 12 MOI market with 6% mortgage interest?"

I say yes. Thoughts?

info said...
This comment has been removed by the author.
patriotz said...

The interest rate in itself is irrelevant, what's relevant is how many prospective buyers are willing and able to make the monthly payment at asking prices.

12 months MOI means not enough for all sellers at asking prices.

Which means most sellers must drop the price to get a buyer.

Marko said...

It has been a while since I took economics 101 at UVIC but I think interest rates would affect elasticity of supply?

If your mortgage is at 3% and the home rents for $1,500 per month you are probably likely to hold onto it for longer versus same house, same price with mortgage at 6% and rents for $1,200?

I don't know, just throwing it out there.

info said...
This comment has been removed by the author.
patriotz said...

If your mortgage is at 3% and the home rents for $1,500 per month you are probably likely to hold onto it for longer versus same house, same price with mortgage at 6% and rents for $1,200?

You don't get the same price at 3% as you do at 6%.

Monthly payment versus rent was more attractive when rates were at 6% than they are today at 3%.

Alexandrahere said...

What I was getting at, when I was talking about people not being able to rent their secondary suites even after they had dropped the rents from what previous renters had paid is....

Many that are now buying homes with secondary suites, and owners that already have them may see their fortunes slide because of the competition of many higher end condos now on the rental market. (that were not there just a few short years ago).

koozdra said...

"Does a 12 MOI market in a 3% mortgage interest environment behave the same as 12 MOI market with 6% mortgage interest?"

If interest rates were the only factor, I would say there would be more sales at 3%. However, this is a very narrow view of the situation.

The bubble has allowed people to buy who would not be able to buy outside of the bubble with loose credit. If that loose credit is taken away, prices will return to where that loose credit was not available. As the CMHC winds down people just won't be able to purchase existing stock.

In the states during their housing collapse the government lowered their interest rates to mitigate the downfall. It did not work.

My point is that interest rates are irrelevant if people have trouble accessing credit.

Another point to consider is that since so many people have entered the housing market we have robbed the future of potential buyers. This combined with building of additional homes (which are just now coming to market) will mean that inventory will continue to grow and grow. This will put further downward pressure on prices.

koozdra said...

A good read. Presenting the bull and the bear arguments for a housing crash.

http://www2.macleans.ca/2012/10/31/canadas-housing-market-is-it-a-cooling-is-it-a-crash/

HachiRoku said...

Here is a sobering read from the TC:

"It's little wonder insolvencies are surging: B.C. has the most heavily indebted population in the country. The average B.C. consumer has $37,879 in consumer (nonmortgage) debt. That's 40 per cent higher than the national average."

Read more: http://www.theprovince.com/people+debt+most+heavily+indebted+population+country+number+growing/7496191/story.html

Dave said...

Does a 12 MOI market in a 3% mortgage interest environment behave the same as 12 MOI market with 6% mortgage interest?

Like Patriotz said, rates are irrelevant to MOI. In reality, our 12 MOI market @ 3% rates is the more precarious situation, as the govt now has no further rate stimulus left to help cushion a price collapse.

If your mortgage is at 3% and the home rents for $1,500 per month you are probably likely to hold onto it for longer versus same house, same price with mortgage at 6% and rents for $1,200?

What you have backwards here is, in a 3% rate environment rents are lower, than in a 6% environment. Five years ago for instance, I've been told I would have paid $1800-1900 rent for what I'm now paying $1200.

Leo S said...

Five years ago for instance, I've been told I would have paid $1800-1900 rent for what I'm now paying $1200.

I doubt this is accurate. Rents might be a bit lower at the moment due to increased vacancy, but on average rents have still risen.

If rates were at 6%, home prices wouldn't be at this level. I don't see how rates affect rents.

Dave said...

I don't see how rates affect rents.

Falling interest rates entice more renters to become owners, hence our record high ownership. Less renters (rising vacancy rates), lead to falling rents. Also, low interest rates are a sign of a sick economy, meagre job growth and stagnant wages -- leading to people doubling up, young adults returning home and again, higher vacancy rates -- falling rents.

Dave said...

I know a few owners who were getting $1500 or more per month for condos in 2007, today, can hardly get them rented at $1000.

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

Rents have dropped 35%...seems about right.

Marko said...

rent for what I'm now paying $1200

Hmmmm.....my mortgage is a few dollars over $600/month. Renting doesn't seem that cheap.

Dave said...

Admittedly 2007 was likely the tightest vacancy rate (0%) so these owners were milking it.

Here's a bit of forecasting question for everyone, take a look at these two StatCan figures

Look at Figure 2.3

For this one, choose BC, then drag the year to 2011

and then tell me what direction you think rents are headed over the next ten years-- keeping in mind the typical renting age is the 'twenties'.

dasmo said...

It looks pretty good since the feed into the twenties is showing slow and steady growth no sign of a cliff there. Old folks homes and burial sites will start to get tight though....

Al + TOH said...

Rent increase is normally part of the inflation, give or take, especially long term wise. When I was a student at UVic 23/24 years ago, single room rent was around $200, one-bed suite was about $350; Nowadays for the students, single room is around $500, one-bed suite is about $750. So if there is no big depression/university closing event in next 10 years, rent of those type of housing should ride along with the inflation.

You do have a point on the demographic change though, which could have some impacts on certain types (say family type) of rentals, especially those who were charging abnormal high rates at low vacancy times.

Another way to look at some rent reduce cases (besides the old rent was probably too high case) in current investment condition, the landlord's borrowing/carrying cost is lower, the market return is also lower. So even with somewhat lowered rent, the investment return rate is probably still better than current HSA/GICs.

TOH

dasmo said...

But if you look at that graph and you move the bar you will watch the twentysomethings grow independent of the prior age feeding them....

I don't see rents going down in Victoria. I see renters having to rent less garbage though...Sooke? That's another matter.

Dave said...

What you're seeing Dasmo, is BC's positive migration from 2003-2010. You will notice the growth of 20 yr olds stops when you move from 2010 to 2011 for instance, in that animation. The concern is, what happens now if both migration stays negative -- highly likely, since it also did when the NDP ruled in the nineties -- combined with the looming drop off in twenty year olds?

Good points Al.

dasmo said...

That's interprovincial flow, which was -1,920. However, net inflow in 2011 was 33,962...

dasmo said...

In fact the capital region was a net positive inter and intraprovincial by 3,723...

Dave said...

If you're interested Dasmo, here are the best and latest graphs on all 3 population components: natural increase, international, and interprovincial. As you can see all 3 components have been declining for a few years now.

http://housing-analysis.blogspot.ca/2012/09/bc-population-growth-to-q2-2012.html

dasmo said...

To be more accurate the only component declining is interprovincial. Natural increase and international are both increasing. It's their rate of increase that is declining.

Marko said...

Monday, November 5, 2012 8:00am

MTD November
2012 2011
Net Unconditional Sales: 40 482
New Listings: 116 847
Active Listings: 4,397 4,329

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

koozdra said...

"Sellers will commonly say, ’I’m going to wait until the spring, when the market is better.’ And I warn them that it could be worse"

http://business.financialpost.com/2012/11/05/canada-braces-as-housing-slowdown-takes-hold/

Marko said...

I’m going to wait until the spring, when the market is better

I hear this a lot.

SilverSurfer said...

Marko:"Economy is stable"
LOL. A nation awash in debt may have the credit to keep their heads above water a little longer, but I wouldn't go calling that a stable economy.

Marko:"Hmmmm.....my mortgage is a few dollars over $600/month. Renting doesn't seem that cheap."
The depth of your analysis supported by plausible examples to backup your arguement here is outstanding. /sarc

Marko: "Trying to predict the absolute bottom is impossible."

An "absolute" bottom, maybe; but real estate is amongst the slowest and most predictable markets out there. If you can't figure out when to buy low in real estate, you have no business being in the stock, bond or forex markets... heck, might as well put all your money in a GIC and pretend like inflation doesn't exist.

PS. Believe it or not, I'm not picking on you Marko, I'd rather give you my real estate business than most realtors out there, but come on, we all know you are smarter than this.

yogurt said...

My wife has started kinda-sorta looking at houses again. (We rent, having sold two years ago.)

Is the proper etiquette to rustle up a buyer's agent or is it okay to ask the listing agent to show the property?

koozdra said...

"The cost of housing is also expected to continue to rise next year, but by a smaller amount than previously forecast."

CMHC is feeding the bull's.

http://www.cbc.ca/news/business/story/2012/11/05/cmhc-forecast.html?cmp=rss

Just Jack said...

Yogurt, it really depends on your personal experience and confidence.

A first time buyer would benefit by having his own agent. Someone to hold their hand, fill out forms and give positive feed back and give you a moderate priced bottle of wine or food basket when the deal is done. But it is going to cost you and you may loose out on some deals.

On the flip side, if you use the listing agent only, then you can directly appeal to greed. Not of the home owner, but the agent. If they are doubling ending on the commission, you are first in line for that house. Even if someone has bid slightly more than you, they can push your deal by lowering their commission. But you have to know the market or hire people who do know the market.


You are never going to be negotiating directly with the home owner. You are in negotiations with the agent and you have to appeal to their greed. You can say to the agent that this is your final offer. But they know that's not true. You already told them what you are qualified for and how much you make. They've given you a PCS account, which tells them how many times you've gone on line and viewed the home, so they know your level of interest.

I wish there was a professional negotiator that you could hire for a flat fee. That would sit beside you at the table and offer guidance. And I'm using the term professional as someone who holds your interests above their own. This definition would preclude any salesman as being a professional.

ks112 said...

marko, could you show an example of a current condo for sale where its more economical to own than rent? please exclude any pre construction buys. For example from what i have seen, the current rent prices on a 500k condo is about 1800 a month.

Leo S said...

The days where most people take their houses off market to wait is past. That's what happened in 2008. People saw the weak market and pulled their houses, resulting in a big drop in supply and a quick bounce back in prices.
Now many of those people have been waiting for a year or two. Maybe they are looking to downsize, and 2 years ago they didn't absolutely have to sell but every year they are more motivated.

Just Jack said...

That's what happen to a friend of ours. A very intelligent person and well educated in his field.

Two years ago he bought a home and went to sell his first one. He refused to take anything less than $515,000 and the home did not sell. He then rented his original home and ended up owning two homes with a combined value of some $1,150,000.

He's now been bleeding a few hundred bucks a month on the rental for two years as well as property taxes. But the only reason that he did this, was he believed real estate prices were going to go back up. Otherwise it didn't make sense.

Today, both properties have a value of around $1,050,000. But, he still has the hope, that next year prices will go back up again.

As prices continue to decline, he may soon reach the point where he can not sell. He is so heavily leveraged that if had to sell the rental property he would have to also come up with cash to pay down his remaining mortgage.

His first house is getting to the age where repairs are going to be coming steadily for the next few years. Hot water tank, roof, decks, appliances. The condition of the home has slipped over the last two years and the tenants could possibly find a nicer home in the same subdivision for a little less rent.

He says that he is lucky to have such good tenants, but he knows that they are looking to buy a house too.

Just Jack said...

It looks like the Huns are breaching the Tweed curtain.

South Oak Bay along Guernsey, bought September 2010, after 10 days, on the market for $638,000.

And just sold this week after 212 days on the market for $610,000.


When the vendors were asked why they sold they replied. "Well, there's this guy walking around the neighborhood in his pajamas with this big "I" painted on his chest - he scares us".

And how about those urban professional micro condos?

Not so good, if you bought one at 860 View in July 2005 for $225,000, you would have sold it for just $2,000 more this week. The good news is that the complex allows children, as long as they can share a space with the brooms and mops.

Did I ever say thank you to all the Mayors and councilors for their insight in how to solve the problem of affordable family housing in Victoria. Simply discourage families from moving here by pandering to the developers need for mega profits by building smaller and smaller suites.

Just Jack said...

And for those that buy real estate based on their income, there is a listing in James Bay of a four-plex at $650,000 with a gross income of $38,500 or 17 times Gross.

In 1995, the four-plex had an income of $22,500 and sold for $190,000 or 8.4 times gross.

Rents up 70 percent from 1995. Prices up 242 percent. That sure the heck doesn't sound sustainable to me. But maybe the new paradigm is that people have now become altruistic and no longer want to make a profit? - NOT

Just Jack said...

Meanwhile in Sooke...

A 1,400 square foot rancher on a city lot hasn't had an accepted offer in over 130 days. Even though it is listed at $30,000 less than what it was bought in 2009 for $310,000. And this home is just as nice as most of the homes found in Victoria.

But, I suppose the two to three hundred thousand dollar difference between Victoria and Sooke Village is attributable to the weather and that gruesome bus ride through some of the most beautiful scenery in the world, while reading the Financial Post, sipping on your Starbucks and chatting with the woman who keeps asking you "Does the top make my boobs look too big."

info said...

Leo

You said that people taking their houses off the market in 2008 was the reason house prices bounced back. That is completely wrong. House prices bounced back because of the unprecedented, emergency intervention that took CMHC's total of $300 B in 2009 to nearly $600 B today.

Suddenly in 2009, credit was made available to mortgage applicants that were previously unable to qualify. This resulted in many high-risk, high-ratio mortgages being backed by CMHC over the next 3 years, causing prices to escalate. Credit has now been tightened and prices are tumbling as a result.

This article explains it.

Anon said...

JJ:

...bus ride ... with the woman who keeps asking you "Does the top make my boobs look too big."

---------------------------------

Which bus would that be again...? ;-)

Just Jack said...

But it even gets better if you are looking at Condos overlooking the water in Sidney.

Back in 2007, units flogged by the developer sold as investments to baby boomers for $690,000. Now, today, yours for $515,000.

But, what kind of idiotic bank would ever lend that kind of money for a 1,300 square foot condo in SIDNEY! back in 2007. Only the largest bank in Canada, which was the first to go to a computerized valuation model, because the human appraiser was getting in the way of faster and bigger profits.

And how about the couple who invested their money and believed that the property was well worth what they were paying.

Ahhh, $%^$ em

Leo S said...

You said that people taking their houses off the market in 2008 was the reason house prices bounced back. That is completely wrong.

Increased credit availability boosts demand but that's only half the picture. People taking their homes off the market reduces supply. Obviously the balance of both affects prices, not just one or the other.

Just Jack said...

So, what if we have almost 15 months of inventory in the Western Communities! This is Greater Victoria, a great place to live, raise a family and get a pension cheque sent to your mailbox. How bad can it really get here?

Well, you don't have to look far to find the answer. A short boat ride and you're on Salt Spring Island were there are 223 homes for sale and only 8 sold in all of October with 2 to 3 homes being added for each one purchased. And its been like this for over a year now. If you need to sell your home, you'll have to price it at 2004 prices!

The correction for Salt Spring has been going on for over a year with sustained high months of inventory that has pushed sale prices back 8 years. And the correction is not over yet.

Eight years ago, the typical house in the Victoria Core sold for $345,000. But there was a lot more buyers for houses back then when our economy was expanding, the population was growing, and both unemployment and the vacancy rate were low.

I'm not comparing our market to some distant banana republic, or a corrupt government, or a polarized nation of voters.

In the bastardized words of Tina Fey as a past presidential hopeful.

"I can see Salt Spring from my back yard"

Have a happy Obamma day.

Patient renter said...

We got ourselves a buyer agent. Why not, its out of the buyer's money anyway that agents are paid, might as well have 1 working for you .

Patient renter said...

I never told my agent how much I am qualified for and would advise against reveling that info. Keep your cards to yourself, and remember, the buyer is the only one bringing money to the table. That holds a lot if power in a flat or declining market

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