Dec 16 Market Update

MLS numbers update 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.

	December 2013				December  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	94	195			283
New Listings	148	282			405
Active Listings	3829	3709			3896
Sales to New Listings	64%	69%			70%
Sales Projection	---	330ish
Months of Inventory					12.3

Again no point in sales projections using days of the month.  It's Christmas time, only a handful have a presents budget of half a million dollars.

Dec 9 Market Update and a Note on New Condos

MLS numbers update 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.

	December 2013				December  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	94				283
New Listings	148				405
Active Listings	3829				3896
Sales to New Listings	64%				70%
Sales Projection	---
Months of Inventory					12.3

No point in doing a sales projection when sales drop off so quickly in the later weeks of December.  Should be between 300 and 330 according to last year's performance.

A quick note on construction.   Here are the condo starts and completions over the last 23 years.

Some periods of note:

1. The condo boom in the early 90s, when we were building some 75 units a month.  That was when the term leaky condo still made you think of defective prophylactics rather than building envelopes.
2. The aftermath when completions dropped down to 25-30/month for almost a decade.
3. And the market recovery in the 2000s, leading to first a pickup in building, and then a period of over exuberance in 2007/08 when credit was flowing like water.
4. The current levels is what I found interesting.  The price of condos have flatlined and are significantly down from their peaks in 2008.  You can likely ignore the small rebound this year, the MLS HPI shows a dead flat market amongst condos.  And yet despite this miserable market, condo building is going strong.  Some 70 units a month are sprouting up and there is no sign that builders are getting tired of it.  We've seen some evidence of older condos being hit pretty hard by all the new construction, and I think at the current rate of building we will continue to see declines.   

Developers are building at boom-time levels in a declining market.  Interesting strategy...

November numbers and another comparative look

Last time I said that the Victoria market was almost the weakest in Canada since 2008.  Of course it could be that the market here has just been weak to compensate for above average performance in the decade before.   Well since we have Teranet back to the early 1990s we can take a look.

Since 2008 we are the second weakest market in the country.

If we look back 5 more years the picture changes a bit.

We can see that Victoria along with the rest of the west got a little overly exuberant in the years leading up to the financial crisis.  The relaxation of credit seemed to have no effect in the east, while over here it drove prices very quickly.   Back more until 1999 (the earliest year of data for many cities).

This shows the entirety of the boom for Canada.  After our extended flat period, we are on the middle to lower end.  Hamilton, Toronto, Halifax, and Ottawa have appreciated less in 14 years, while the rest appreciated (relatively) more.  Back to 1993, we are once again the weakest link.

In other news the November update is out.  The VREB is a sad panda because sales aren't quite as rip roaring as they have been.   What with last month's discovery that prices are actually down instead of flat, they are struggling to find something positive to say about November numbers.  Well at least prices are up since 2005! "This represents a 36.5 per cent increase since January 2005, when the index was 100".

Funny the headline still says prices are flat, when the article goes on to elaborate that SFHs in the core are down 1.65% from last year, in the peninsula they are down 2.57%, and SFHs in the west shore are down 5.94% in one year.   

IMF wakes up: Canadians shouldn't socialize mortgages

Is this a case of stupid housing policy begets stoopid housing valuations?

The IMF, big bureaucracy accountable to no one that it is, in its infinite wisdom points out that Canadian home prices *may* be out of whack with reality given that people who pay taxes to the government of Canada just also happen to be on the hook for a lot of the day to day mortgage lending decisions of the mortgage industry in Canada (give or take a lot here or a lot there depending on the government oversight of the day, or not).

The IMF, of course, says Canada's home prices are the most over-valued anywhere in the world.

Cheap mortgage rates and banks' tendency to give money to folks they otherwise wouldn't because Joe Public will bail them out regardless has a way to do that to a market.

Perhaps the most salient observation in the IMF's pontification: “We suspect the fact that banks may benefit from government-backed insurance on mortgages (…) it sort of makes it easier for banks to do mortgages than other kinds of lending which presumably, we think, is going to be more useful for the real economy.”

It's not like Canada wasn't warned before... like in 2008 by an anonymous schlep living in his parent's basement in Victoria because, despite an above average household income, he and his wife couldn't afford much more than a crack shack in a shady Vic West 'hood. 

Nov 18 Market Update

MLS numbers update 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.

	November 2013				November  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	140	224			366
New Listings	276	408			706
Active Listings	4118	4077			4488
Sales to New Listings	51%	55%			52%
Sales Projection	490	428
Months of Inventory					12.3

It's interesting to keep on eye on the mortgage industry insiders, and they're getting nervous again.  According to Rob McLister at CMT, "We’d submit, however, that there is no need to wonder if we’ll get new mortgage restrictions. It’s a given that more regulations are coming. The only questions are what rules to expect and when."  These possible upcoming limitations might be more obtuse to the average consumer, but the effect is the same: reduced access to credit.

Nov 13 Market Update

MLS numbers update 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.

	November 2013				November  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	140				366
New Listings	276				706
Active Listings	4118				4488
Sales to New Listings	51%				52%
Sales Projection	490
Months of Inventory					12.3

Teranet out and it is turning negative again.  With the strong growth in the Alberta housing market we are no longer just almost the weakest market in the country over the last 5 years.

Up in Rupert right now where you can buy this beauty for $39,500,  and the most expensive house currently for sale costs $459,000.  It sure rains a lot, but the place has it's charms, with a mix of Cowichan Bay, Victoria, and east coast..   Time to invest before they put in the pipeline?

The VREB discovers price skewing

You may have noticed that the VREB has a new trick up it's sleeve.  It's the MLS Home Price Index (it's a home silly, not a house like that heartless Teranet index says).

The MLS HPI is a repeat-sales index quite similar to the Teranet index.  However unlike the Teranet, they separate it out into "benchmark" single family homes, townhouses, and condos.  They also have separate data for the various regions, not just greater Victoria as a whole.

With this new information, the VREB has come to accept the skewing of medians and averages that we've talked about here for a few months already.  “Past reporting of averages and medians showed flat pricing across the Board’s trading area but MLS® HPI indicates a moderate decline in prices in many markets over the last year,” says VREB's Shelley Mann.   
So prices continue their slide at a rate of 3-5% a year depending on where you live.

Overall the HPI tells us nothing we don't already know.  Prices on a slow downward slide since 2010.  Victoria the weakest market in the country.  Over 5 years, prices are down 5.6%.

Update:   So how does the new MLS HPI compare to our existing measures of the market?   Pretty similar, but surprisingly the MLS HPI is the most pessimistic of the bunch.  Note that this is the SFH median, while the two indices are comprised of all properties.

Based on the SFH median we are down about 8% from peak.  According to the Teranet we are down 5%, and the MLS HPI says we are down 8% as well.

Oct 28 Market Update

MLS numbers update 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.

	October 2013				October  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	89	214	319	433	373
New Listings	240	444	650	828	1068
Active Listings	4408	4390	4369	4338	4876
Sales to New Listings	37%	48%	49%	52%	35%
Sales Projection	--	546	524	524
Months of Inventory					13.1

Surprisingly enough there is no slowdown in sales yet.  Continued on pace of last week and should be easily over 500 sales at the end of the month.

Some chatter about an article out of Australia which shows Canadian real house prices on a flat line since 1981 and therefore there is no bubble or even the slightest hint of one.  I made the assertion that the data is bullshit, and here are some more details about why.

First of all, the article references the BIS database of house prices as a source.  Looking at that database, they use the New House Price Index from statscan.

Here's that data for BC, Canada, and Victoria.

Now look carefully at that data and consider that (as best as I can tell), the NHPI is NOT inflation adjusted (they say they use it as a component of the CPI).  That is according to this index, NOMINAL prices for new housing in Victoria are over 20% cheaper now than in 1981.

Of course this is impossible, so there's something else at work here, which is that the data is quality adjusted.  I'll let Ben explain the problem with that (scroll down for the section on NHPI).

The divergence between the NHPI and other indices like Teranet or the average national price really says it all.
I'd say that anyone using the NHPI to make some determination about the valuation of real estate in Canada is going to come to the wrong conclusion.

Oct 21 Market Update

MLS numbers update 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.

	October 2013				October  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	89	214	319		373
New Listings	240	444	650		1068
Active Listings	4408	4390	4369		4876
Sales to New Listings	37%	48%	49%		35%
Sales Projection	--	546	524
Months of Inventory					13.1

As always, we are on the descending slope for sales. Even so we might almost hit 500 this month, which would put us at an MOI of about 8.5.   Still firmly in buyers market territory, but not quite as extreme as last year.

Oct 17 Market Update

MLS numbers update 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.

	October 2013				October  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	89	214			373
New Listings	240	444			1068
Active Listings	4408	4390			4876
Sales to New Listings	37%	48%			35%
Sales Projection	--	546
Months of Inventory					13.1

A strong start to the month.  Don't believe that sales projection as sales will slow down, but there is a real dearth of new listings (active listings still high) out there right now and relatively (to last year) decent sales.   October is about the last month that could be affected by ultra-low rate holds, so either this is the last hurrah or rates increasing are having very little effect.  As a point of reference, last Oct 15th we had only 166 sales and 483 listings, and that was with 2 mondays to that point where this year we only have one month to date.

Had a Jehova's Witness REALTOR® drop off a letter today...

Dear Homeowner,

I am pleased to let you know that the house as <neighbour's address> has just been unconditionally sold.  The property was sold before it was actually listed which is an indication of a strong interest for homes in established areas such as yours.  The offer that was accepted came in close to the asking price and both parties are very happy with the outcome.

Should you have any questions related to this sale or any other real estate inquiries, feel free to get in touch etc and so on.  

Well I guess you don't get in the top 10% of realtors in this market by sitting around!

I do wonder about who is basing their decision to sell their house on what the neighbours are doing, rather than what their own plans are...

Boxes in the sky

CS asks:  "have condo sales increased relative to house sales since 2008?"

Here are the SFH and condo sales back to 2007.

At first glance it's hard to tell if there has been any shift, so let's plot the ratio of SFH sales to condos.

Now here's something interesting.  This year there has been a massive shift towards SFHs.   At the same time cheap the skew factor tells us that within SFHs sales are more concentrated on the higher end.   The bottom may have dropped out of the market and no one noticed because it was disguised behind higher sales and flat prices.

As boring as this market currently is, there is something brewing and I think many people could be surprised (including myself).

Edit:  Some perspective:

I'm quite mystified..   There seems to be some alignment to the market but maybe it's all just random.

Oct 7 Market Update

MLS numbers update 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.

	October 2013				October  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	89				373
New Listings	240				1068
Active Listings	4408				4876
Sales to New Listings	37%				35%
Sales Projection	--
Months of Inventory					13.1

Another month another same old in the Victoria market.   Sorry for the lack of monthly update, it's been a bit insane at work.  Will post it eventually and I also have some thoughts about the state of condo construction in Victoria that I'd like to write up.
Again it is going to be tough for this October to match the miserable lows of last year.   However the last of the ultra low rate holds should be expired by now so let's see what kind of hit sales are going to take.

Monday market update: is it still raining?

MLS numbers update 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.

	September 2013				September  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	96	224	354	456	416
New Listings	305	598	874	1073	1210
Active Listings	4513	4556	4579	4565	5025
Sales to New Listings	31%	37%	40%	42%	34%
Sales Projection	403	470	495	485
Months of Inventory					12.1

The final monthly numbers will get confirmed tomorrow--at which time this post will be updated.

Sept 23 Market Update

MLS numbers update 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.

	September 2013				September  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	96	224	354		416
New Listings	305	598	874		1210
Active Listings	4513	4556	4579		5025
Sales to New Listings	31%	37%	40%		34%
Sales Projection	403	470	495
Months of Inventory					12.1

It does seem there are legitimate questions about how accurate sales stats are around the country.  Not just in seedy Toronto but even the CREA might be adding up suspect numbers.  However what isn't discussed in the numbers is whether this is a new practice. One would think that realtors have been listing houses on multiple boards for years or decades.

Sept 16 Market Update

MLS numbers update 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.

	September 2013				September  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	96	224			416
New Listings	305	598			1210
Active Listings	4513	4556			5025
Sales to New Listings	31%	37%			34%
Sales Projection	403	470
Months of Inventory					12.1

Last year at this point we had 208 sales so we're running a bit ahead, but surprisingly not much, considering last year we were in the middle of the mortgage rule change hit.

Interesting discussion about pre-sales.   How can you evaluate whether a pre-sale is a good deal?   I find it hard to imagine that buying a condo that won't actually exist for another 2 years is anything but speculation.  How many people are buying the pre-sale because they just love the building versus thinking they are getting in at a good price and they can turn it over later?   How many people plan ahead 2 years to get into a microcondo?

Sept 9 Market Update

MLS numbers update 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.

	September 2013				September  2012
	Wk 1*	Wk 2	Wk 3	Wk 4
Unconditional Sales	96				416
New Listings	305				1210
Active Listings	4513				5025
Sales to New Listings	31%				34%
Sales Projection	403
Months of Inventory					12.1

Slow start but there was the long weekend in there.  Hard to imagine we won't exceed last year's numbers.   Should be coming in around 500 if we don't get a serious slowdown.

August wrap up

It's that time of the month again.  The time when the VREB optimism bunny is jumping up and down because our sales have improved from dreadful to average.   So is the market picking up or is this just another bump on the road down?  Well let's take a look.

Sales first, where indeed things are looking up.  The best summer in 5 years!   Well that may be but 2013 is still the worst year in 5 years.  Perhaps next month the market will no longer be the worst.  Unless we hit more regulatory tightening we should surpass 2012, in which the slowdown didn't really hit until the latter half of the year.  There will likely be a minor hit when the last of the ultra-low pre-approvals expire, but I don't think it will have the same magnitude as the intervention last year.   On the other hand, the hounds are getting restless again and rumours of more OSFI tightening are starting to appear.

And prices?  Flat as a halibut.  The VREB is excited about as 12.5% increase in the townhouse median, but it's nought but noise.

But do we recall our skew factor?   Turns out when I wrote that last article I screwed up my X axis and left out the last couple months.   Those happened to be the ones where the skew factor increased even more (the VREB paid me off to leave those months out the first time).  It's pretty severe at the moment as it turns out.  Hard to say much about magnitude, but this could be hiding the actual decline in prices.  Thanks to Koozdra for continuing to provide the data to make this graph.

(Almost) the weakest market in the country for over 5 years

Easy to forget when you're stuck in our sleepy real estate market, but the rest of Canada has been going gangbusters while we were stuck being boring.  The little upward blip in July saved us from last place (that honor going to Edmonton), but over there the market is pretty hot with 3.3 months of inventory in July, while we sit at 8.2.

Market Update:

MLS numbers update 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 2013				August  2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	181	305	440		462
New Listings	337	568	778		1025
Active Listings	4661	4663	4643		5034
Sales to New Listings	54%	54%	57%		45%
Sales Projection	568	559	569
Months of Inventory					10.9

*Week 1 being 7 weekdays

Market update: August 20

MLS numbers update 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 2013				August  2012
	Wk 1*	Wk 2	Wk 3	Wk 4
Unconditional Sales	181	305			462
New Listings	337	568			1025
Active Listings	4661	4663			5034
Sales to New Listings	54%	54%			45%
Sales Projection	568	496
Months of Inventory					10.9

*Week 1 being 7 weekdays

Sales continue to pace around 16 per day. Apologies to Leo if I did the sales projection math wrong...

Some friends of mine sold their house in the past month or so. They'd owned it for not quite four years. From purchase price to sale price they got about 20% more. Crazy considering they hadn't done anything significant to the property other than slap on fresh paint and replace a small rotted deck. Individual house transactions can be completely disconnected from 'the market' eh?

August 12 Market Update

MLS numbers update 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 2013				August  2012
	Wk 1*	Wk 2	Wk 3	Wk 4
Unconditional Sales	181				462
New Listings	337				1025
Active Listings	4661				5034
Sales to New Listings	54%				45%
Sales Projection	568
Months of Inventory					10.9

*Week 1 being 7 weekdays

Strong start to the month with 16 sales/day compared to 13 last year, and fewer listings this year.   Looks like the recent mortgage tweaks were necessary to beat down a resurgence in this market.  Beginning of month predictor said 477 sales, but it seems the market is up for a late summer hurrah.

Skewmorphism

Despite collapsing sales after our mortgage changes last July, prices have stayed on a relatively sedate course in Victoria.  Declining slowly at a couple to a few percent a year, but stubbornly holding out against a whole year of inventory.  Regular commenter info has raised the issue of the prices being skewed upwards by the sales mix, with the mortgage rule changes having taken out the buyers on the low end, and thus having a larger proportion of higher end sales.

To test this theory it requires another look into the regional data kindly extracted from the VREB monthly reports by koozdra.  The VREB divides sales into 19 regions, some of which have very little activity, and trying to compare the sales mix individually by region would be quite messy.  Info simplifies the comparison by considering the mix between the sales in the lower priced regions (defined to be Esquimalt, Colwood, Langford, Sooke, and Sidney) compared to the higher priced regions (Victoria, Oak Bay, Saanich East, and North Saanich).  

To verify these groupings, let's take a look at the historical prices in these regions.  I've removed areas outside of Greater Victoria, as well as the Highlands, Vic West, and Metchosin, which have very few sales (often only one or zero in a month).  

Going strictly by prices, we can't really include Victoria in the high priced group without also pulling in View Royal and Central Saanich.  So I've decided to ditch the middle group and divvy everything up into low and high priced regions as below.

The ratio of low end sales is then simply the sum of all sales in the lower priced regions divided by the sum of all sales in the higher priced regions.  Let's take a look at how this ratio has behaved in the last 7 years.

Some interesting points to note:

1.  There is a definite shift after the peak in prices 2010, with the sales ratio dropping some 10-15% from the period 2008-2010 compared to late 2010-2013.  This means that before 2010, we would see about 87 lower priced homes sell for every 100 higher priced homes, while after 2010 we are only seeing about 75 lower priced homes sell for every 100 higher priced homes.  This matches well with what has been discussed here many times, that the outer areas are suffering more than the inner ones, so far.

2.  Average ratio over this period has been 82% (82 lower priced homes selling for every 100 higher priced ones).

3.  If the sales mix had not shifted more towards the higher end in 2010, our median prices would now be lower than they are.  

By subtracting the sales ratio for the month from the "long term" average, we can get a measure for how the monthly median price might be skewed in that month.  I call this the skew factor for the month.  

For example, in July there were 119 sales in the lower end regions and 172 in the higher end, for a sales ratio of 69%.  Compared to the average of 82%, the skew factor for July is 13%.  This means that the median price for July is likely shifted higher than it would have been if the sales mix was more in line with the average.

Let's take a look at the skew factors for the same period.

1. Again we see the strong shift in sales mix between the upswing and the downswing in Victoria's market.  I'll hazard a guess that this is due to the credit tightening measures that started in earnest in April 2010 (even though 40 year mortgages were abolished in 2008, the CMHC taps were wide open during that period to compensate).  The skew factor moves upward after April 2010 when refinancing was limited and qualifications tightened up.  It was boosted some more in 2011, and just as the market was starting to normalize the government kneecapped it again in July 2012, cutting out the first time buyers for a while longer.  

2. You can quite clearly see the effect of the mortgage changes last July, with the sales mix strongly shifting towards the high end as the lower end buyers are priced out of the market.  This shift seems to have moderated somewhat, but still it has been positive for a year now.

3.  January 2013 we had a median of $489,000.  The skew factor for that month was exactly 0%.   Now one data point is nothing much to go on, but it's an interesting coincidence if nothing else.  

4.  In general I think we can say that prices are likely down somewhat more than our medians would imply.   How much is anyone's guess.

Now just because our sales mix is currently more towards the higher end doesn't mean it will come down again anytime soon.  However it is another interesting factor to look at to provide more meaning to the monthly stats (which I'll get around to posting one of these days).

Update:  Closer look at the credit tightening measures effect on the sales mix.  The effect from the July tightening does seem pretty clear, with a rush to the exits followed by an anemic low end until now.

July 30 Market Update

MLS numbers update 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 2013				July 2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	120	256	381	513	523
New Listings	315	622	919	1123	1242
Active Listings	4762	4817	4855	4836	5178
Sales to New Listings	38%	41%	41%	46%	42%
Sales Projection	552	588	584	590
Months of Inventory					9.9

Reasonably solid week with 132 sales compared to 110 in the same week last year.  I suspect this pattern will continue for the rest of the summer and possibly the year unless mortgage rules are tightened again.  Compared to last year market conditions will look better, but make no mistake it is still weak out there.  July MOI will come in between 8 and 8.5.  Interestingly enough, active listings actually declined last week which usually doesn't happen until late August.

Joke of the day comes from DavidL who says "I hope that VREB will avoid spinning this as "sales volume up 5% over 2012""

July 21 Market Update

MLS numbers update 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 2013				July 2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	120	256	381		523
New Listings	315	622	919		1242
Active Listings	4762	4817	4855		5178
Sales to New Listings	38%	41%	41%		42%
Sales Projection	552	588	584
Months of Inventory					9.9

The third week of last July was the first week when sales started to seriously slow, dropping to 113 for the week from rates of 138 and 120.  This was most likely due to the mortgage rule changes starting to hit, and continued to make up the worst late summer, fall, and winter in well over 10 years.

No major mortgage changes yet this year (aside from the lenders becoming more and more nervous), and there is also no matching slowdown in sales, with last week hitting 125 (after 136 and 120 the weeks before).  Of course as the selling season winds down, sales will naturally start slowing regardless of the mortgage market.  Surprisingly enough, listings are up over last year by about 7%, hence our sales/list coming in a bit under.

July 15 Market Update

MLS numbers update 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 2013				July 2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	120	256			523
New Listings	315	622			1242
Active Listings	4762	4817			5178
Sales to New Listings	38%	41%			42%
Sales Projection	552	588
Months of Inventory					9.9

Might as well repost last year's numbers they are so close.  What's interesting though is that last year we had these month end anomalies with the inventory, where the weekly updates showed a couple hundred less active listings than were reported in the month-end from VREB.  For example, July 30, 2012, the reported active inventory was 4939.  However two days later, it was apparently 5178. 

This year this is not happening, and month end numbers are basically what one would expect given the weekly updates.  Last year Marko explained it was a different algorithm run at the end of the month, but I don't understand what algorithm is involved in counting.   Data fudging or what is going on here?

July 8 Market Update

MLS numbers update 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 2013				July 2012
	Wk 1	Wk 2	Wk 3	Wk 4
Unconditional Sales	120				523
New Listings	315				1242
Active Listings	4762				5178
Sales to New Listings	38%				42%
Sales Projection	552
Months of Inventory					9.9

First week of July 2012 was exactly the same at 120 sales and 306 listings.    Goes to show the uselessness of projections in the first week, as back then HHV (using calendar day method) projected 465 sales.   Business days (ignoring the holiday) gives us 552, the predictor based on last year and June's sales gives us 551 using calendar days, or 613 using business days.

Edit:  Die giant fonts die!

June wrap up

The VREB is up to it's usual optimistic antics with June's report, saying that real estate has rebounded in the second quarter.   A truly amazing 65% more activity in the second quarter than the first.  I can't wait for the 3rd quarter when they report that sales activity has collapsed compared to the second quarter.

As is every month, June was a balanced market in their eyes.  Despite their convoluted active-listings-to-sales-ratio, this time they may have a point, since the residential MOI at 6 is on the tall side of balanced, and 14% lower than last year.

Here's a tower of graphs for you.

How's the decline from peak looking?   Little rebound this spring, but expect it to keep dropping in the following months.

Despite the VREB's hyperventilating (it is hot out there), 2013 is still the slowest year for sales in almost 15 years.

MOI seems to have peaked, at least for the time being.   Before anyone gets too excited though, the MOI in Seattle peaked as well, and the market kept declining for 3 years.  What do you think, are we past peak inventory?

Alberta floods: black swan that kills the market?

Calgary, arguably Canada's centre of economic growth, is slowly drying out after a massive flood event that few were warning about even 24 hours before the Bow and Elbow Rivers started hammering the downtown core and surrounding neighbourhoods with flood waters unrivaled since the 1930s.

This most definitely could be an economic black swan that affects all corners of our great nation.

A black swan is defined as "an event that is a surprise (to the observer), has a major effect, and after the fact is often inappropriately rationalized with the benefit of hindsight."

Pundits are already suggesting that Canada's GDP reporting numbers will shift as a result. I've read stories suggesting that Calgary--not to mention Canmore, High River, Medicine Hat and communities in between--has roughly $5 billion worth of damage. These numbers will certainly climb as businesses feel the trickle down effect of once-disposable cash being pulled from the economy to be spent on things like foundations and drywall. The richest province in Canada most certainly will be borrowing money on the open market for the first time in a decade.

And the Calgary housing market will most definitely be affected.

Given the fact that Calgary's wealthiest neighbourhoods were some of the hardest hit, and Calgarian's penchant for holding second homes on Vancouver Island and the Okanogan, I suspect that these markets could suffer, at minimum, a minor ripple effect.

Exactly what happens elsewhere time will tell.