Wednesday, February 6, 2013

Another look at Seattle

Time for another comparative look between Victoria and Seattle.  I like doing this for two reasons:
  1. I think Victoria and Seattle share some important similarities and think that Seattle's decline might be a decent model for Victoria's and 
  2. almost everyone else seems to think that Victoria is nothing like Seattle so the discussion should be interesting.
Last time I looked at the long term price history, with the conclusion that even those cities that think they are immune to crashes and have a long history of soft landings can come down pretty hard.

This time let's take a glance at what happened after the peak.  Seattle seems to have bounced off their bottom (at a median price/income of 5.8) and currently have an extreme sellers market with an MOI of 1.82.  Expect further price increases there in the spring.  

Seattle hit absolute bottom at 33% down from peak after a decline of 4.5 years, however this didn't last long and the stable bottom seemed to be more like 25-27% down.  As we know Victoria's monthly medians are quite variable because of low sales.  King County generally has about 10 times our monthly sales, so their monthly medians don't vary nearly as much but to reduce volatility for both I've smoothed all values with a centered 3 month averaging window.

So how does Victoria stack up?  Well we are 2 years 8 months into our decline and down 10% from peak median prices.

The chart below compares the two with both prices and residential months of inventory compared to the values at market peak for each respective area.  You can see that for both markets the conditions continued to deteriorate after the market peak for several years, with peak MOI coming in year 2 of Seattle's correction, while we are still exploring new heights well into our third year.   

So if one were inclined to use Seattle as a model, you might conclude that we have another ~15% drop ahead of us.  Certainly the market conditions are pointing to an accelerated drop in the next few months compared to what we've seen in the last two years.

However let's look at the absolute values as well.  It is interesting to note how much higher our prices started (despite having lower household incomes) and how much higher our current MOI is than anything Seattle experienced in their downturn.  


Update:  Patriotz points out that King County doesn't include outlying areas.  Here is the normalized chart using Case Shiller (which includes King, Pierce, and Snohomish counties) and the Victoria Teranet index (greater Victoria).  Using the Teranet data, Victoria's peak moves back to June 2010.

On an unrelated note, the video below has been posted on multiple sites but deserves another link.  Rick Mercer hits the nail on the head with respect to government interference in the markets.


224 comments:

1 – 200 of 224   Newer›   Newest»
patriotz said...

Comparing Victoria GVREB area (i.e. all of metro Victoria) to King County is a bit misleading, as the latter is only the core of metro Seattle. In the north the King County line (which is also the Seattle city limit in that direction) is only 9 miles from downtown.

As usual it is the periphery which took the biggest hit in the bust. "Current (Case-Shiller metro Seattle) standing is 38.4% off peak for the low tier, 28.3% off peak for the middle tier, and 22.0% off peak for the high tier." (Seattle Bubble)

The low tier properties tend to be in the outer counties.

Leo S said...

Updated with new graph using the Case-Shiller index and Teranet rather than the median.

Introvert said...

From the last thread:

It's amazing how tolerant of bad grammar he becomes when it's not a bearish viewpoint.

This is true, I'll admit. For example, dasmo's grammar is often horrid, but I rarely chastise him. Of course, his tendency to apologize for his poor writing also makes a difference.

koozdra said...

Itz an interesting comparison.

This isn't really discussed much but I think our bust is going to be worse than the states. Our population and economy are tiny compared to the behemoth of the states. Our prices and personal debt rates have soared higher. So many people have bought into the rental income dream that a burst will wipe out their savings. A recovery will be that much harder.

Introvert said...

From the last thread:

Remember, interest rates are going up.

This is like the bears on the blog who were warning of a collapse five years before prices even started declining, let alone "collapsing."

The point is: yes, interest rates are going up, but probably not any time soon.

And believe it or not, the "when" is equally as important as the "what."

koozdra said...

"but probably not any time soon"

Mortgage rates or BOC overnight rate?

Which one is not going to be rising any time soon?

Introvert said...

Which one is not going to be rising any time soon?

Both.

koozdra said...

Did you know?

"Many people believe that the Bank of Canada’s key interest rate decision has a direct impact on all mortgage rates, but that’s not the case. Fixed mortgage rates and variable mortgage rates in Canada are actually influenced by different factors."

Why do Mortgage Rates Change? What Factors Affect Fixed and Variable Canadian Mortgage Rates?

koozdra said...

Further since our economy is doing so well, everything should just continue status quo.

Well the status is not quo, interest rates will rise.

Introvert said...

By the way, the "itz" construction is pretty funny. When you can't lick elementary school grammar, just invent a new word.

Hey, do what you gotta do!

nan said...

There are many with 35 years left on a 40 year amortization. For them, anytime in the next 20 years is too soon.

The older I get, the more I realize that what I have is worth nothing without the agreement of society. There is no "financial security" without a functioning & happy society.

Your wealth is dependent on more than whether YOU can afford your mortgage or not.

The comfort you feel based on your own personal circumstances is probably misplaced.

koozdra said...

"When you can't lick elementary school grammar, just invent a new word."

I can lick anything I want.

koozdra said...

"own ent. $4,000. cash for flooring upon closing withfull offer"

So instead of dropping the price the owner will "ent." (entertain?) a cash bonus that has to be exclusively used for flooring related expenses. This is of course if you don't low ball and pay the full asking prices.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12811046&PidKey=2018731182

koozdra said...

Seems like a fair price.

Listed: $899,000
Assessed: $709,000

http://www.realtor.ca/propertyDetails.aspx?propertyId=12811067&PidKey=99000721

Just Jack said...

I once licked a frozen horse trough. My brother watched as I was stuck there for a couple minutes before I tore my tounge off the ice. Most reading this, would say "what an idiot".

Then - my brother did it.

It's kinda like real estate. You see prices coming down and people getting hurt - but you still have to do it for yourself. Somehow, you've convinced yourself that it's going to be different. Meanwhile all of the real estate cheer leaders are rolling with laughter. They may have been the intial idiot but you have stepped up to the level of moron.

Just Jack said...

$4,000 cash back deals on a full price offer!?

Why not just reduce the home price by $4,000!?

Because the property isn't worth the full price or the full price less the $4,000. As a vendor you're trying to entice those that don't have enough cash to buy a home. This is essentially what the BC government is doing with the $10,000 cash back scheme on new construction. The government is making it much more attractive to buy new than a home just a few years older. And most of these prospective purchasers will buy a new home for a lot more than the $10,000. Because the over market value they are paying is financed. To get $10,000 cash in your hand you might finance another $25,000 or $50,000 in a purchase.

So, as a home seller, why not do the same thing to sell your old home? Inflate the price by $10,000 and offer a $4,000 cash back. Makes your home more attractive to a buyer that is just on the edge.

Surely, the bank checks on these cash backs? Nope, if it isn't written in the offer to purchase, rarely would the lender discover that a cash back has been accepted. In the past, the banks would have sent out an appraiser that they had a long term relationship with to investigate these things. Now, it's rare to have actual appraisal done on a sale. Or the bank uses a appraisal management company from Toronto that hires the cheapest and fastest appraiser. The appraiser doesn't know which bank she is doing the appraisal for and is not allowed to speak directly with the lender. A receipe for a law suit.

Alexandrahere said...

Interesting article..Google: "Mortgage rules take bite out of Canada building permits."
"Tighter Canadian mortgage rules appear to have put a SERIOUS damper on the housing market, especially on the heated condominium sector, judging by Stats Canada data released on Thursday."

koozdra said...

The CBC article on building permits.

Building permits cool by 11% in December

I guess it's not just buyers that are taking a "wait and see" approach. Builders can't clear their existing inventory. Of course intention to build is going to fall.

caveat emptor said...

@koozdra
"Further since our economy is doing so well .....interest rates will rise.

I trust you are being sarcastic. With slow growth in the forecast there is little chance of short term rates rising for a while. And I don't see where the pressure on longer term (5 year plus) bond rates is going to come from.

koozdra said...

@caveat emptor

"slow growth"

I don't think we are headed for growth. I see a recession in the tea leaves. Caused by a spectacular housing bubble burst.

DavidL said...

@caveat emptor
And I don't see where the pressure on longer term (5 year plus) bond rates is going to come from.

The stock market has been performing much better than bonds over the past six months - so this is where the "smart" money has been moving. Yields have been dropping, so bonds rates will have to be raised (likely within the next year) in order to entice investors back into the bond market.

Also there is inflation which has been "hiding in the wings". So far, government policy has kept variable interest rates (and wage growth) low - but the the cost of consumable items (food, fuel, transportation, etc.) has been rapidly rising over the past few years. As inflationary pressures increase, variable rates will eventually follow.

Contrary to most, I expect modest increases in the BOC overnight rate before the end of this year.

caveat emptor said...

"I see a recession in the tea leaves."

Quite possible IMO. Of course if that happens we'll most likely see our low rates go even lower for a while...

nan said...

Growth is defined in nominal terms by the government.

Decrease in money supply = deflation = decreasing consumption & prices = hard to get nominal growth.

Not only is it hard to tell the plebs you aren't growing, but debts get really hard to pay in deflationary environments, so governments increase the money supply to increase export market competitiveness and deflate debt.

This type of activity causes inflation eventually, which will cause interest rates to rise.

With the largest demographic cohorth being the boomers and now moving into retirement, they need to be net lenders to survive. They won't vote for a party bent on transferring their wealth to a bunch of lazy entitled borrowers through low interest rates forever.

What part of this has anything to with real growth? None of it. It all has to do with the appearance of growth and staying elected.

That being said, it is wholly possible for there to be no real growth in an inflationary environment - it's called stagflation and in al llikelyhood, it's where we are headed.

Introvert said...

Even 33% off peak (worst case scenario, if Seattle is any guide) wouldn't materially change anything for me. Repeat: for me.

I'm not selling until at least the year 2038. So there better be a big-ass housing boom right around then!

caveat emptor said...

"yields have been dropping"

You mean yields have been rising! (i.e. bond prices falling due to higher interest rate demanded)
http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

Yields for shorter term bonds are back up to where they were in August. For longer term bonds yields are back to where they were in May. It remains to be seen whether this is just a blip or whether yields are rising sustainably (in which case new fixed rate mortgages will be more expensive).

For BoC to raise rates this year we would need to see three things. (1)Stronger than expected US growth, (2) Stronger than expected Canadian growth, (3) Core inflation rising. I don't think we are going to see all of those so I don't expect BoC to raise rates this year

CS said...

"When you can't lick elementary school grammar, just invent a new word."

The really devilish things are those pesky heteronyms, with one spelling but two meanings, each with its own pronunciation.

Thus crazy things like "at the Battle of New Orleans, General Pakenham would lead the British into a wall of lead.

The solution, obviously, is to vary the spelling according to the sound, thus: would LEED the British into a wall of LED.

Packenham himself finished up DED, full, presumably, of LED. He was returned to Britain in a barrel of rum.

When they unloaded the barrel in England it turned out that the barrel had been tapped, the rum evidently consumed by the sailors. No record appears to exist of whether they suffered from LED poisoning.

DavidL said...

@koozdra, @Just Jack

Here's a similar offer ... It's unoccupied and somebody's in a rush to sell:

$10,000 cash-back to Buyer upon closing for an unconditional offer by March 15, 2013!
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12625102

koozdra said...

Looks like they updated the description. Just...

"Ask about the purchase+renovation financing option."

CS said...

I don't think we are going to see all of those so I don't expect BoC to raise rates this year

In a way CE what you are saying is a truism.

Current rates are always a reflection of what the market thinks — if a market can be said to think. Therefore, if you are as wise as the market, then your expectation will be of no change in rates.

Which is to say, if the market thought rates were going up, they would immediately go up, at which point, what you said, i.e., that you see no forthcoming change in rates would be, as I have defined the term, a truism.

Or, what I am trying to say is that it's a waste of time making predictions, because anybody's prediction is as good as anyone else's — at least until proved otherwise.

And if that is correct, those struggling to predict the course of the market are probably wasting their time.

Naturally that won't stop me or anyone else from attempting to predict the course of the market. And if anyone has insider information, or if they are a genius and spot a trend that market watchers in general are unaware of, then they may, indeed, beat the market!

info said...

"A quick look at my data gives:
August 1 2011 - January 31 2012
284 SFH sales under $550k
337 SFH sales $550k-$900k

So ~46% of SFH sales in the 6 months starting August 2011 were under $550k

August 1 2012 - January 31, 2013
251 SFH sales under $550k
263 SFH sales $550k-$900k

So ~48% of SFH sales in the 6 months starting August 2012 were under $550k.

So in fact there doesn't seem to be much difference, with the last 6 months even having a slightly higher percentage of low end sales than in 2011."


The sales date the is needed to prove that the new mortgage rules temporarily boosted the average price (higher than it would have been had there been no mortgage rule changes) over the last 6 months does not exist.

The sales data "that would have been" simply did not materialize, since the data for the last 6 months was affected by the mortgage rule changes.

The big drop in average price for January will prove not to be an aberration once more sales data is available. Most likely the 3 month average price for Jan., Feb., and March will be down substantially from the 3 month average of Oct., Nov., and Dec. This will prove that the average price for January was not an aberration. It will probably be noted in the future as the turning point in Victoria's housing market.

info said...

When it comes to interest rates, the only thing that anyone knows for certain is that rates will rise substantially.

Introvert said...

When it comes to interest rates, the only thing that anyone knows for certain is that rates will rise substantially.

And after they rise, they will drop.

See. We know lots of things for certain!

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

Info, interesting link.

It's interesting how stable the index was between 1995 and 2000.

info said...

Victoria's correction will be a lot more like that of Miami, Phoenix, Las Vegas, San Diego, San Francisco and Los Angeles than Seattle.

However, let's put into persepective what a 33% drop on the Teranet index would look like for Victoria.

A 33% price drop from peak would put Victoria at 99 on the Teranet index. According to the Teranet data, Victoria has corrected about 6% from peak so far.

A 33% correction from peak in Victoria would completely erase 56% of all price gains since the year 2000. That's correct, 56%!

A price decline of only 33% would be very conservative considering the extreme price run-up in a relatively short period of time. Victoria experienced a 147% price increase (at peak) relative to 2000 prices. In contrast, Seattle experienced a price run-up of 93% (at peak) relative to 2000 prices. The two are not comparable.

Victoria's price gain from 2000 to peak (+147%) is much more comparable to the price gains in cities such as Phoenix (+125%), Las Vegas (+135%), San Diego (+150%) and Los Angeles (+175%).
Thus, Victoria can expect a similar correction to these cities, rather than Seattle.

Corrections in Los Angeles, San Diego, Phoenix, and Las Vegas ranged from 45% to more than 65%.

It is evident from the US housing crash that virtually every US city reached bottom at the same time - December 2011. In the same way, Victoria will reach bottom at the same time that all other Canadian cities reach bottom, despite having started its correction earlier than most other cities.

info said...

"Info, interesting link.

It's interesting how stable the index was between 1995 and 2000."

Obviously I made changes and reposted my last comment.

Indeed the index was stable during that time. 1999 was the year that the implementation of lax lending standards and the loosening of credit started in Canada. Is there any doubt that this is what caused the current bubble prices in Victoria?

Marko said...

Thus, Victoria can expect a similar correction to these cities, rather than Seattle.

Wishful thinking.

koozdra said...

Really puts things in perspective.

http://imgur.com/6GU3hoH

It must have been really demoralizing for the bears in 2009. It really looked like that was the end of the bubble.

Alexandrahere said...

I was talking to an older lady at the supermarket yesterday. We started out by suggesting how to cook her chicken breast and the conversation jumped abruptly with "my daughter bought a condo in Toronto and just after she moved in she lost her job." The daughter is now renting out the condo and supplementing the mortgage payment with EI premiums whilst "hot bedding" at her numerous friends' digs. The talk apparently in her crowd in the Toronto area is that a recession is looming.

info said...

"It must have been really demoralizing for the bears in 2009. It really looked like that was the end of the bubble."

It certainly would have been the end of the bubble had the government not intervened in a big way. My famous line is certainly worth repeating here. It was a massive, unprecedented, dramatic intervention.

In 2009, CMHC's total mortgage insurance coverage was about $300B. That total today is about $600B. As well, private insurers, such as Genworth, have also seen their total insurance coverage skyrocket since 2009.

In 2009, the combined total insurance coverage for CMHC and private insurers in Canada was about half of the more than $1.2 trillion that exists today. This gives you some idea of the size of intervention that took place, starting in 2009, to turn the Canadian housing market around.

Introvert said...

This gives you some idea of the size of intervention that took place, starting in 2009, to turn the Canadian housing market around.

Those irresponsible Conservatives! No bears here would ever vote Conservative, would they?

;)

koozdra said...

"Those irresponsible Conservatives! No bears here would ever vote Conservative, would they?"

At least they are starting to live up to their name.

Just Jack said...

The bigger they are, the harder they fall.

So true in real estate. Never have so many won the real estate lottery, yet failed to redeem their ticket.

CS said...

Looking at US Treasury bond yields, the difference between the two-year bond and the ten year bond is almost exactly the same today as one year ago. Presumably this indicates that the people who invest literally $trillions in US Treasuries do not think the probability of interest rates rising is any higher today than it was a year ago.

So why should we believe that a mortgage rate increase is any more imminent now than was the case a year ago?

Possibly there is something about bonds I don't understand. But so far as I do understand the data, they seem to provide no grounds for expecting interest rates to jump in the immediate future.

But if we cannot do better than the market in predicting interest rates, the situation may be different in the case of RE.

Bond prices respond to changes in supply and demand almost instantly. RE, however, seems to adjust very slowly, hence the current increase in the ratio of inventory to sales. What this increase says is that, overall, vendors seek to obtain more than buers are willing to pay, a situation most likely to be resolved by a decline in prices as vendors come to terms with the reality of the market.

Russ said...

Marko,

Can you tell me what 982 Lovat was bought for a few years ago?

Also question for Marko et al. I like to watch the market, and plan to trade up in the next year or two. I wouldn't say we are actively looking but sometimes I find places online that interest me, that I think would suit my family. My question is this; If I find a place online that interests me, and I would like to view it but am not a particularly serious buyer, should I contact the listing agent to arrange to view it, or should I have a buying agent to gain access to the house.

I'm not talking about buying, negotiating, evaluating, or inspecting, the place on my own. Just getting inside to have a look around in person.

Introvert said...

So why should we believe that a mortgage rate increase is any more imminent now than was the case a year ago?

Because info, a Mensa member and the world's first verified psychic, told us so.

DavidL said...

@Russ

I'm in much the same situation as you, and considering moving within five years. So far, I've just contacted the listing agent and requested a floor plan. If the neighbourhood, listing photos and floor plan and look interesting, then I've arranged a viewing with the listing agent. When asked about whether I have an agent - I just answer: "When I'm ready to make an offer, my agent will be involved".

@CS

I don't pretend to be a bond expert - particularly with treasury bonds. That said, I cannot imagine why someone would want to get just 2% on their investment buying US T-bills. This is not even keeping up with inflation! From what I understand, the rate of return on bonds is such that some "large" investors are liquidating and moving back into stocks (even though there is 8 times more money invested in bonds than stocks). As such, when new bonds are issued - the coupon may have to be increased to attract the volume of investors needed. Time will tell!

Incidentally ... two years ago I cashed out some of my investments from low MER index funds tracking the stock market to bond funds. I managed to do very well - primarily because many investors followed suit driving up the trade price for bond funds (although yields went down a bit). About a month ago, I "cashed out" 80% of my bonds and moved back into low MER index funds. I'm glad I did it when I did - as all the funds I cashed out have dropped since a month ago.

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

982 Lovat - $380,000 in 2009

Marko said...

My question is this; If I find a place online that interests me, and I would like to view it but am not a particularly serious buyer, should I contact the listing agent to arrange to view it, or should I have a buying agent to gain access to the house.

To be honest if you aren't prepared to write an offer if all the marbles line up (home is perfect, price makes sense, etc.) you shouldn't contact either. You are putting out at least one realtor and the family living in the home.

Go to the open house if there is one. Enough listings have open houses that you can get a good idea over a year or so as to what is selling, at what price, and what is not selling.

Marko said...

To add to my comment above maybe you can find a buyer's realtor that is willing to show you knowing that you aren't particularly serious?

I just can't afford to do that with my discount model.

Al + TOH said...

To be honest if you aren't prepared to write an offer if all the marbles line up (home is perfect, price makes sense, etc.) you shouldn't contact either. You are putting out at least one realtor and the family living in the home.


Absolutely agree. And there are lots open houses around the weekends, just check the link below:
http://www.vreb.org/buying/open_house.php

caveat emptor said...

@ CS
"But if we cannot do better than the market in predicting interest rates, the situation may be different in the case of RE."

I would agree. Probably the bond market is pretty "efficient" in that most people buying and selling are highly knowledgable and the market quickly adjusts to any new information

Real Estate is anything but an efficient market, so at least in theory there should be more oportunity for the knowledgable small investor to make money or avoid losses.

DavidL said...

I like to do as much research as possible before contacting a realtor. This way, I have a clear idea about the property and I am not wasting either my of the realtor's time (and money). Here's how I refine properties that I'm interested in:

[1] Using either a Private Client Service (PCS) or VREBMatrix account, search for properties that match my criteria. I can view room dimensions, property information, heating method, photos, historical tax information, etc. Depending on the interface, I can view some mapping information such as Google or Bing maps.

[2] If I like what I see, I'll use Google Street View to look at the front of the property and to check out the neighbours. I'll also use the Bing Aerial Map view so that I can view the property from four sides (sometimes in different seasons).

[3] If the property is in Saanich, I'll use their GIS Map Service to look at high resolution imagery, water and sewer hookups, gradients, property boundaries, easements, etc. (It's a wealth of information! Historical aerial maps can show changes to the landscaping, house footprint - even attic vents!) The Property Profile Report can give historical permit listing, protected tree information, etc. In other areas, the CRD Atlas has the same high resolution imagery available from Saanich.

[4] High resolution property photos can be "scraped" from the realtor.ca site. After searching for an MLS number, click the "More" button to view property photos, right-click then "View Image", and then substitute "highres" for "medres" in the URL. (For example, instead of http://cdn.realtor.ca/listing/reb3/medres/5/308825_1.jpg - substitute http://cdn.realtor.ca/listing/reb3/highres/5/308825_1.jpg. (I have no idea why they don't bother making this easily available!)

DavidL said...

[5] I do some research on the history of the property, looking for alternate MLS numbers that the property may have been listed under. (PDF's are really good for this.) I may discover that the property has been on and off the market a few times and what the asking prices have been. This gives me some idea about how much the owners may want to sell for, and if there are any "issues" regarding the property. Things like: additional interior photos, floor plans, heritage information, development plans, rezoning applications - can often be found.

[6] If the property still looks good, I contact the listing agent asking for a floor plan. I tell them "up front" that I'm just researching to see if the property is suitable for my needs.

[7] At this point, I "check in" with my wife to gauge her interest in the property. We have similar criteria that we are looking for - so the discussion is a useful chance to review our wants/needs and her interest.

[8] If still interested, I do a drive by of the property to check out the neighbourhood. Rush hour is a good time to find out about traffic problems, parking, noise, etc. I might even be able to have a quick chat with neighbours about the area, etc. I've also done a drive by late in the evening to find out about street lighting, transient "nightlife", etc.

[9] Finally, if I still want to find out more - then I contact the listing agent and request a viewing.

Marko said...

Calgary's SFH average approaching that of Victoria.

Introvert said...

Good tips, DavidL. That "highres" trick is neat! Did you discover that one on your own?

Introvert said...

Calgary's SFH average approaching that of Victoria.

Well, my mom will be pleased! Plan is to sell in the spring and move to Victoria to live out her golden years gardening like nobody's business. (Speaking of gardening, I saw some crocuses starting to bloom today--TODAY!--February 7th!)

In my mom's case, it'll be an all-cash purchase, which, if stats are to be believed, aren't as rare in Victoria as one might think.

Demonstrating that this blog has influenced my thinking, I will be counselling her to rent while she takes her time finding the right house in the right community. And with prices declining, there's no hurry to buy.

When she's ready to buy something, maybe I'll send her Marko's way! ;)

DavidL said...

@Introvert

Yup,I figured out the high resolution URLs on my own. Smart move suggesting that your mother rents while deciding on the right house and neighborhood.

patriotz said...

Real Estate is anything but an efficient market

Most of all because you can't short sell. This allows the dumb investors to bid up prices without the smart investors being able to do anything about it.

so at least in theory there should be more oportunity for the knowledgable small investor to make money or avoid losses.

Not really because the market moves so slowly. And there's nothing like selling a call option which allows a stock owner to take profits without selling the stock.

koozdra said...

If we encourage enough workers to stop looking for work, our unemployment rate will eventually be zero.


"Canada's economy shed 22,000 jobs in January, but a corresponding drop in the number of unemployed people looking for work caused the jobless rate to also drop, to seven per cent.

Statistics Canada said the jobless rate ticked 0.1 percentage points lower as 57,500 people stopped looking for jobs — more than enough to offset the decline in the number of jobs."



http://www.cbc.ca/news/business/story/2013/02/08/business-jobs-canada.html?cmp=rss

Marko said...

Looking at some sales this morning...condos & townhomes taking a huge hit with some reverting to 2005 prices. I have a few condo listing presentations in the next few days....it will make for some difficult conversations.

I lost a listing last week by giving the home owner the truth and my truth was on the high-side of things in terms of listing price; however, their idea of listing price is 10% higher than my high-end. Yikes.

a simple man said...

Marko - do you still believe that the market is going to be essentially flat?

Marko said...

Give or take yes. I just sold a listing for $642,500 and it was purchased in 2008 for $635,000.

In December I sold a listing in Fernwood for $509,500 and it was bought for $535,000 in 2010.

The market can never be completely flat and there will be variation from area to area and home to home.

There are certain condo complexes and areas that are taking a huge hit; however, my thoughts are people overpaid during the frenzy of 2005-2008. People were paying 400k for certain condos in 2005/2006 when you could buy a nice house in Fernwood for a lot less. There was a lot of irrational thinking going on.

caveat emptor said...

@patrotz
"This allows the dumb investors to bid up prices without the smart investors being able to do anything about it."

agree somewhat. But aren't the "smart investors" in this case the ones that build and sell overpriced condos and other developments causing supply to eventually exceed demand?. Of course some of those "smart investors" were a little late in timing!

Dave said...

Re: jobs numbers

BC lost 16,000 jobs in January - the most per capita of any province. Ontario also hard hit.

And so, our 2-year trend of
-declining inflation,
-declining growth
-declining interest rates,
-and declining home prices,
shall continue.

Marko said...

There are two sides to this whole story.

The unrealistic sellers and bulls. The fact is the market has dropped 5% to 7% on average, time to accept it. It could drop further and no things will not magically recover in the spring. I think we'll see things stabilize but by stabilize I mean slightly higher sales for 2013 versus 2012.

Then you have the bears who are predicting 20-50% drop in prices because all their friends are losing jobs, maxing out line of credits, every single store downtown is closing, etc. When you step back from this blog things are not crashing and burning. I've been reading this blog too much;therefore, I was shocked at how many people called me to rent my condo.

Personally I would have bought the lot on Roseberry a few months ago for $367,000 if all the marbles and timing had lined up. So if it drops to $330,000 who cares? Timing that would be impossible and that type of property comes along once every 5 years. Large suite in a new house would rent for $1,400 to $1,500, interest rates are dirt cheap which means in the first 5 years I could really dent the mortgage and I wouldn't have to move for 25 years.

In my opinion in conclusion sellers need to get realistic, 20-50% drop won't happen for the bears, and I think the right property is far more important than trying to time the market as my feeling is that is very difficult.

Dave said...

Of course some of those "smart investors" were a little late in timing!

At least builders are finally waking up. New housing starts over the past few months have finally fallen. But you're right, the last to the punch bowl will lose their shirt. It's going to be painful for all the developers completing this year and next. There's one heck of a lot of new units coming on.

koozdra said...

"trying to time the market as my feeling is that is very difficult"

You are implying that we are near a bottom. We aren't.

Everybody in Victoria knows that such a huge drop won't happen. There is no precedent. Nowhere in the world has a decline so severe occurred and certainly not recently.

Another reason a huge drop won't happen is that we have a budding middle class. Unemployment is super low and jobs are plentiful. Also lets not forget the "Marko renting experience index". This means that the rental market is doing just fine. I guess the apartment blocks that you pass in the city that have "2 Bedroom, 1 Bedroom, Bachelor" signs are just joking.

Sales will pick up this year. Because... well just because.

koozdra said...

"That’s the lowest level of housing starts since August 2009 when the Canadian economy
was climbing out of recession"

This will pick back up any day now...

http://www.bmonesbittburns.com/economics/econofacts/20130208b/econofacts.pdf

a simple man said...

marko - you moving?

koozdra said...

If you look at Victoria devoid of the rest of country, you might be confused why sales are so low. However when you factor in that EVERY SINGLE city across the country is experiencing the same thing, things get quite clear.

2009 2, the sequel.

CS said...

The fact is the market has dropped 5% to 7% on average, time to accept it.

But why should we accept this when it was established on the basis of data presented by Leo and other on another threat that the market from the high of 2010 to January 2013 had dropped 18%.

If property is now selling at only 7 or 8 % off the peak of 2010, prices must have rebounded, which is possible, but has yet to be confirmed by any data presented here.

From several properties I've looked at in OB, most vendors seem to think their place is worth about 10% above the BC assessment. If they're right, we on a huge rebound.

a simple man said...

Places in OB are sitting for good reason.

I do not want to spend $800-900K for a house that is 60-100 years old and needs at least >$100,000 in updates.

Sellers need to wake up, because the buyers have.

Leo S said...

But why should we accept this when it was established on the basis of data presented by Leo and other on another threat that the market from the high of 2010 to January 2013 had dropped 18%.

Only on a month to month level and because of the volatility that doesn't mean a lot. Of course as info says it may turn out the January numbers are confirmed by following months, but that doesn't make the month to month comparison any more useful.

With some smoothing it appears that median prices are down about 10%. The Teranet index is down 5-6% which is probably a better judge of the decline. However keep in mind that the Teranet index lags the market so ~7-8% down from peak is probably a safe bet as of January.

I am very confident that there are more drops coming. A market this weak cannot be price stable (and January is a sign that it isn't)

info said...

The Teranet index shows a price decline of about 6% for Victoria so far.

There is another way to look at this. The total price gain from the year 2000 to peak was 147%. However, the total price gain from the year 2000 to today is only 133%.

A small 6% price decline from the peak has a much bigger effect on the market than what most people think.

If we use $650 K as the peak, then a 6% decline equals a loss of $40,000. Those who bought at the peak and are trying to sell now will lose that amount plus all of the extras that quickly add up to be a big surprise.

I, personally, think this market has lost more than 6%. I estimated Victoria to be down about 12%, 6 months ago.

I'm sure most sellers will tell you that the market is down more than 6%. A house listing at 36% below assessment suggests a much weaker market.

info said...

The Teranet data has Vancouver down 4% from peak. I think Victoria and Vancouver will experience a similar price decline pattern from this point forward.

koozdra said...

Two houses one street.

House #1:
965 RIVER RD
Listed: $579,000
Assessed: $678,000

85% of assessed.

House #2:
1058 River Rd
Listed: $949,000
Assessed: $693,000

137% of assessed.

This data point lends credence to my argument that age of the realtor can be correlated with market delusion.

CS said...



Month to month comparisons may be questioned on the grounds that the comparison cannot be exactly like for like. That I can see creates imprecision in monthly estimates of the price level.

But insofar as the houses sold one month are comparable to those sold another month, then the month to month comparison is the objective measure of price change.

Which raises a question about the cause of the seasonal fluctuation in prices. Are prices in the winter generally lower than in the spring through fall because the winter inventory is the residue of what's been picked over during summer and fall? In that case, short-term price changes can only be gauged on a seasonally adjusted basis.

subprime11 said...

agree with simple man about O/B prices...like the place just listed on Dalhousie st..nice lot but almost 80 years old needs to be reno'd to bring it up to standard for $150k..at the asking of $895 that puts you over a million and it's assessed at $793. Not worth it in a declining market but maybe there will be a buyer for as the location is desirable.

DavidL said...

For the past few months, I've been researching various "character" homes, and have been surprised by how many have been "butchered" to make room for poorly constructed suites. Many houses built before the 1950's had basements that were never intended to be lived in. Often these bottom floors were constructed without insulation or electricity, ranging in height from about 5½ ft. to 7 ft. More recently, in order expand the livable area of a house that (typically around 1200 sq. ft.), these basements have been renovated to "squeeze in" another 800 sq. ft. or so. I can understand adding a recreation room, laundry, and a storage area - but many conversions done in the last dozen years have been turned into "mortgage helper" suites. The workmanship is often shoddy, the lighting remains dim and the ceiling ... is simply too low (I'm over 6 ft. tall).

I expect that as property resale values fall - these low height basement suites may end off being a hindrance rather than an asset to the seller. I know that with some houses I've examined, the cost of "undoing" the mess and removing these suite is just too much! Perhaps this is a side-effect of rampant growth in real estate?!

koozdra said...

We were thinking the same thing. People won't want to buy the houses with suites. There is going to be so much selection.

Just Jack said...

How much value do suites add to a home over an unfinished basement?

In my opinion, between 2 to 3 years of gross rent for the suite. If the suite rents for $1,400 a month, then the contributory value of the suite to the entire property is between $33,600 to $50,400.

In contrast the suite may cost $75,000 to $100,000 to construct in an unfinished basement.

So why do it!? Because $100,000 will cost only around $500 a month to finance. Leaving $900 to the home owner. If the interest rate was higher, then the benefit of putting a suite into a home quickly disappears.

a simple man said...

And as I have often said, a suite is not a positive attribute at all. First I have to buy it and then pay to have it removed.

Al + TOH said...

And as I have often said, a suite is not a positive attribute at all.

You mean "to you", right? Otherwise Toroto (and a few others) may not agree "at all" :-)

For us, a well done suite is positive, to use for visiting families and friends, even if you don't want the rental; but a badly done suite is definitely negative, and most likely to be removed or redone by the new owner.

a simple man said...

I an sorry - you are correct - to me and my large family a suite is a negative. Plus, so many are illegal and done without permits that you get shoddy work that can end up costing you in the end (ie. shoddy wiring or plumbing).

koozdra said...

"You mean "to you", right? Otherwise Toroto (and a few others) may not agree "at all" :-)"

No he meant they are universally useless. No one has ever benefited or thought a suite in a house was a good idea.

Al + TOH said...

No he meant they are universally useless. No one has ever benefited or thought a suite in a house was a good idea.

Are you sure?

When we sold our older house here at end of 2009, all 16 potential buyers (except two) who walked through the house were there because the house has "suite potential" in the 6'11" (height) basement. There were 5 offers at the end and the buyer did put in a 2-bed (but no living/dinning space) suite half year later, and housing two UVic students 8 months each year since.

Leo S said...

Are you sure?

Whoosh :)

Victoria said...

I ONLY looked at houses with suites when I purchased. The buyer who bought from me years later also ONLY looked at houses with suites. I paid for my son's room and board at University for 4 years from the income that suite generated.

The next house I buy, after the 40% reduction that is coming :-) will also have a suite. Possibly a second 'garden suite' as well.

That income will pay for my six months a year abroad and cover all expenses 'at home'.

It's a suite life if you are smart.


totoro victoria said...

The market for homes with a suite is extremely strong in Victoria. It is extremely strong everywhere else I've looked as well.

If you don't want a suite there is lots to choose from. If you do, and are not entirely handy or rich, a suite is a gigantic plus.

As far as putting in a suite, I've done this twice. It is a lot of work, but at least you know things are done properly and to code.

a simple man said...

I'm not saying suites are bad, just not for me at this stage in our life. I will consult a few extra hours a month to make up for any income that may have come in for a suite. But then, I will not have paid for it at the start either.

I have a soft spot for them - I lived in a basement suite in OB for all my undergrad. I was grateful to have a safe, dry place with good people upstairs (landlords and kids). I still see my old landlords In Estevan village from time to time.

DavidL said...

So much for neutral colours in this kitchen at 2206 Sayward St.

Dave said...

CTV Victoria news

Suite numbers set to skyrocket

"over the next few years thousands more will hit the market…will the glut of condos make it a bust?"

Funny realtor quote:

"usually what happens when there is too much supply prices will come down, however prices will only come down if the developers need to sell."

patriotz said...

The market for homes with a suite is extremely strong in Victoria. It is extremely strong everywhere else I've looked as well.

Could you tell us what "strong" means in numbers? Prices not going down?

koozdra said...

The problem with suites is that you need renters to fill them. As builders build more and more homes with suites, reliance on renters becomes greater and greater.

There must come a point when a saturation point is reached. Where supply out strips demand. Traditionally it has been easy to get renters. If tradition holds then it will be easy in the future. This is true because the vacancy rate does not fluctuate and is not climbing.

First time buyers don't see suites as a want, they see them as a need. As a seller cashes in on their lottery winnings the buyer must now service a house for way more than it is worth. This can only be achieved with a suite.

As prices slip lower and lower, they will, the desirability of suites will wane. Sure there will be people that will want to derive revenue from suites. However it won't be a necessity like it is now.

koozdra said...

"usually what happens when there is too much supply prices will come down, however prices will only come down if the developers need to sell."

Talking to a realtor about how the housing market will behave is like going down to the local Honda dealership and asking where the company is headed in terms of research and development. Yet the media always likes to talk to the experts.

In a down market, developers are the first to liquidate their stock. They undercut people that want to sell. It's a business for them. Holding onto a property as it's losing value might be a "good plan" for the "long term" owner. But a developer that is a losing business plan.

koozdra said...

Where is dasmo? He finds it particularly offensive when anybody mentions over building in Victoria.

He should be posting pictures of the US and Spain showing us how overbuilt they got.

Of course overbuilding in the US and Spain has a direct effect on the ability of the local market to absorb new building stock.

koozdra said...

From the video:

"[when buying condos] I think if people understand that they are investing for the long term"
-Shelley Mann

I remember when I bought my two door Honda Civic. I wasn't really thinking how difficult it would be get a baby seat in there. Now I have to sell it to buy a bigger car.

I guarantee you nobody who is buying right now is thinking they will lose money when they have to upgrade when they need more space.

However interests rates are at an all time low... bla bla bla.

patriotz said...

however prices will only come down if the developers need to sell.

Developers do need to sell, because their construction financing will not allow them to hold the properties long term.

koozdra said...

Price: $699,500
Assessed: $510,000

"What market slowdown?"

http://www.realtor.ca/propertyDetails.aspx?propertyId=12693588&PidKey=-191859075

totoro victoria said...

"Could you tell us what "strong" means in numbers? Prices not going down?"

Strong means that when you try to sell your place a suite generally means more interest, faster sale, and a higher selling price than your neighbour's home without a suite.

The BC Assessment Authority, based on the 2000 assessment in the Greater Victoria area, show an increase in
 value of 8% to 10% for homes with a 900 square foot secondary suite over similar homes with unfinished basements. This analysis is set out in the “Secondary Suites – A Guide To Local Governments”.

For my homes, I believe that a 10% increase in value is an accurate figure.

koozdra said...

"Strong means that when you try to sell your place a suite generally means more interest, faster sale, and a higher selling price than your neighbour's home without a suite."

Traditionally you mean. I hope you aren't talking about how a down market will behave.

totoro victoria said...

"As prices slip lower and lower, they will, the desirability of suites will wane."

"The problem with suites is that you need renters to fill them. As builders build more and more homes with suites, reliance on renters becomes greater and greater.There must come a point when a saturation point is reached. Where supply out strips demand. Traditionally it has been easy to get renters."

Is this based on your own experience cause it sounds a bit like theory without practical experience to back it up. Amazing the tangents that can lead to.

koozdra said...

Totoro

As we must all predicate our future predictions with "in my opinion", perhaps you should include a "back in my day" or "in the hayday of Victoria real estate" before espousing your views.

totoro victoria said...

You may notice that the assessments that were analyzed for the 10% increase were in 2000.

I believe this has held true as prices have risen dramatically and will hold true through all markets.

You are not an oracle, nor am I.

koozdra said...

"I believe this has held true as prices have risen dramatically and will hold true through all markets."

Then you aren't paying attention.

totoro victoria said...

Again, as previously posted, I purchased last in 2012. How is that "back in my day"? Most of your posts are predicting the future but, unless you've mastered time travel, your data is a bit suspect.

Also, you may mean heyday.

totoro victoria said...

Yes, I'm not paying attention.

koozdra said...

"A $500,0000 house? Just come up with $25,000 now and the rest over the next 40 years. Make that now 25 years because we’ve tightened up the rules a bit for consumers."

Canada’s cheap car loans have eerie trappings of housing crisis

koozdra said...

"mastered time travel"

I haven't mastered time travel. But you haven't mastered having an objective opinion.

Don't worry a price collapse can't happen here. It's never happened before.

koozdra said...

This is how we all feel when we make a witty remark on this blog.

http://i.imgur.com/0kjLR.jpg

DavidL said...

@Totoro
... it sounds a bit like theory without practical experience to back it up.

I have personal experience renting in Victoria during the mid 1980's. Due to the high interest rates at that time, many house owners were desperate to "suite up" and get renters to help with the mortgage. I rented about 900 sq. ft. on the bottom floor of a house in Royal Oak for $350/month. I negotiated use of the owners laundry for free. It was easy to find high quality suites at reasonable prices. Poor quality suites remained un rented. Ironically, the owner was in the construction trades, but couldn't find any work in Victoria - so while his family lived upstairs, he was building houses in California.

Leo S said...

an increase in
 value of 8% to 10% for homes with a 900 square foot secondary suite over similar homes with unfinished basements

So they're saying that a house with 900 more finished square feet is worth more than one without? SHOCKING!
That says absolutely nothing about the value of a suite. You would have to compare a house with a suite to a house with a a finished basement of equal size.

Leo S said...

Is this based on your own experience cause it sounds a bit like theory without practical experience to back it up.

Please do explain which of
- suites need renters
- more suites means more renters needed to fill them
- basic supply/demand
- in the past supply has been low and demand high

is a theory.

CS said...

Watch out: helicopter money on the way -- Maybe.

The idea of getting out of a depression by printing money is basic keynesianism. The question is, what to do with the money you print? Currently the policy in the US and UK is for the central bank to buy government bonds, thereby keeping interest rates near zero.

Now the idea is being promoted to just hand out the cash to the people. At the present rate of money printing in the US, that would be more than $1000 per month per family of four.

That would surely stimulate consumer demand, create inflation and make everyone want to invest in RE as an inflation hedge. But without central banks buying bonds interest rates would go sky high, like ten, twenty percent, maybe.

So what will be the net effect of helicopter money — if we have it — on Victoria's RE?

koozdra said...

"helicopter money on the way"

The question will be how people will spend the money. If they are not confident in the economy, they might opt to pay down debt with the money given to them by the government instead of spending it in the economy. Especially if interest rates rise.

totoro victoria said...

1$ in 1980 = 3.57$ today

Your $350 a month suite is equivalent to $1071 a month now. We'd have to know what that suite rents for today to see if there is a difference.

Leo:

Explain how the future prediction that:

1. the desirability of suites will wane when prices drop
2. builders are building more and more homes with suites
3. reliance on renters is becoming greater and greater
4. we will reach saturation point

is not a theory cause it sure seems like a future prediction to me and not an analysis of what has occurred.

CS said...

My feeling about RE prices in OB are similar to Simple Man's: they just look daft. And having prepared adequately for retirement, that's not just for a lack of ready cash.

It seems to me that if you divided by two, the prices would be reasonable though by no means cheap. For that you'd have to divide by three of four.

Folks say that people buying in OB have lots of cash. Well, yeah, they must have. Average family income in OB is close to $100K and those buying single family homes may be close to twice that.

Still people with money don't like losing it. So are these prices sustainable?

OB reminds me a lot of Toronto in 1987 when I took a job their (there? thare?). The best accommodation I could find, while I searched the lower reaches of the market for an affordable family home with more than a twelve and a half foot frontage, was an $800 a month basement suite with a 6' 1" ceiling.

I sat down and communed with myself. Is this success in your career? I asked. The answer had to be no, so I resigned the position.

Within a couple of years the TO market had fallen heavily. Does it seem entirely crazy to think that that's what we face here?

totoro victoria said...

You are correct about comparing suite value to a home with unfinished basement. Not sure where the stats are for this or if we can establish an accurate baseline on the data that is available.

My own experience is that converting a finished main floor to a suite has added more than 10% to the value of my home. I purchased it and had it appraised right after as I was converting it to a rental and needed to capture value. Might not be accurate across the board.

CS said...

they might opt to pay down debt

Some will. That's what Totoro will do. But most people will spend most of it, although some will cease accumulating new debt for a while.

StalJ said...

@CS article
Nothing really new. They have been printing trillions for years now.. partly to lower rates.

from article
“Although Turner is too diplomatic to say so, this is exactly what central banks have been doing since the 2008 financial crisis and what Japan has been doing for 20 years. As a result, the risk is steadily growing that many of the world’s largest economies will suffer a fate similar to Japan’s, their economies permanently distorted by decades of artificially low interest rates, their financial markets permanently manipulated and their national solvency permanently threatened by unsustainable burdens of government debt.”

World=Lenders and Borrowers. Lenders (banks&Feds) fear only two things.. Inflation and Default. They do not want to be paid back in ‘worth-less’ dollars (inflation), and they do not want borrowers defaulting on their loans (deflation can cause this). So, they keep stringing us along just enough to avoid either. Their perfect recipe is 1-2% inflation and just enough econ growth to keep their mortgaged slaves doing the 9-5.

this is from my mentor friend btw.. he also stressed that their current best weapon against the defl/default is making us believe inflation is coming. That way the believers keep spending their money helping them achieve their 1-2%.
“Believe! and you shall be saved my child!”

Just Jack said...

For the last 500 home sales, for 2012, in the Victoria core the median price for a home with a suite was $590,000 and for a home without a suite $550,000.

In 2012, out of the last 500 homes to sell, 115 had suites or 23%.

In comparison, back in 2001, of the last 500 homes to sell, 113 or 23 per cent had suites.

Raw data, the only limits I put on the data was the core location and number of sales. The data is what it is.

In my opinion, using a percentage of your home value to estimate the contributory value of your specific suite is bogus. In my experience, using a pay back period of 2 to 3 years of the gross income of the suite is both reliable and reasonable. I don't accept that the same suite in a million dollar home would add more value as the same suite in a $500,000 home which is implied by using a percentage. Nor would such a percentage reflect the difference in a new suite versus a 30 year old suite. Hence, using a percentage of the home's value is absolute rubbish.

And, it does not appear that the demand for homes with basement suites is increasing either. At least not in relation to the years 2001 and 2012.

info said...
This comment has been removed by the author.
totoro victoria said...

Yes, likely a percentage is not accurate. JJ's method might work in some cases but does not match my experience as my increase was greater than 2-3 yrs payback. Base cost plus local conditions? In any event we have approximately 25 percent - although does that capture listings not reporting suites despite having them?

totoro victoria said...

Hard to get accurate data when many suites are unreported on listings.

Leo S said...

1. the desirability of suites will wane when prices drop

The proliferation of suites is connected to housing prices. Very common in Vancouver and Victoria, not so common anywhere with reasonable prices.

Fundamentally, no one wants a suite to rent out. It's done because of a need/desire for the additional income. A SFH with a suite is not a SFH, it's a duplex of questionable quality. Clearly if money was not a factor, people wouldn't have suites (for rental purposes, obviously some people might want a suite for visitors).

2. builders are building more and more homes with suites

Ok this part is a theory until we have numbers. Just Jack's data seems to indicate the percentage of suites hasn't increased in the the last 10 years, but I suspect it has over a 30 year timeframe.

3. reliance on renters is becoming greater and greater

That directly follows 2

4. we will reach saturation point

Which directly follows 3. Increasing vacancy indicates that already supply is coming closer to matching demand.

Leo S said...

Hard to get accurate data when many suites are unreported on listings.

Not that I've seen. Suites in general add value, so are reported in listings. People don't seem to be shy to advertise illegal suites either.

Just Jack said...

Since we're discussing market value, base costs have nothing to do with the discussion.

However, if you're looking at your base costs you may want to re-think the advantage of having a suite installed when the payback on your construction is 6 years or more. Since the market only recognises 2 to 3 years.

totoro victoria said...

Listings in OB often do not have this information identified on the listing. Those that do often get a visit from bylaw enforcement.

I can afford not to have a suite. I just prefer to retire earlier. People have different views on this.

a simple man said...

I know two people that have bought houses in OB with suites in the past two years. Both were obviously illegal and both were done without permits (because, you know, suites are illegal so how can you get a permit).

Both had to be torn out by the new homeowners and very expensive renos had to be done to bring them back to where they started, sans suite, though.

Suites in OB are a walking timebomb now.

Just Jack said...

Like I said the data is raw. Just because you buy a house with a suite it doesn't necessarily follow that you need the income from a suite.

You tend to find more homes with suites in the transitional neighborhoods from first time home owner to middle income household. Upper income housing not so much.

Definitely true, that as you move up the social ladder, renting a suite is seen as a negative.

koozdra said...

Bear mountain seems to have a very large percentage of listings with suites.

Perhaps the people that really needed the income the most are being let down. Or they confidently bought thinking that a suite in a house is the key to riches.

totoro victoria said...

I think JJ is probably right, but I do know five families high on the social ladder who have suites in very nice homes.

None of them; however, are basement suites, they are attached wings, garden houses or over the garage bonus suites.

The majority of the suites were originally used as nanny accommodation. They are now rented out to UVic staff, locum professionals and family friends.

In one case, my friend's retirement plans include having someone living on the same property to maintain things in exchange for rent.

DavidL said...

@Totoro
1$ in 1980 = 3.57$ today. Your $350 a month suite is equivalent to $1071 a month now. We'd have to know what that suite rents for today to see if there is a difference.

Last time I checked 1980 was not "the mid 1980's". I was paying $350/month in 1986, so according to the BOC Inflation Calculator - that would be $635 in today's cash.

Mind you, I don't have any faith in the how the BOC calculates inflation, as minimum wage was $3.65/hour back then - which which you could buy quite a bit more than with the current $10.25/hour. Itz much harder to get by on minimum wage today than 25 years ago.

Oh, and before you jump to any conclusions, I was making $5.75/hour in 1986. My net pay was $750/month. You could also buy a nice starter home for about $80K. Dinosaurs used to roam the Earth back then too.

totoro victoria said...

I think you'd have to look at what this place rents for today. I'm not sure about the calculator for rents - gets a different result than the CPI calculator.

In the US in 1985 average rents were $375: http://www.thepeoplehistory.com/1985.html

Is there a good source of historical average rents in Victoria?

totoro victoria said...

Didn't dinosaurs roam Royal Oak in 1986?

DavidL said...

I would expect that the suite would now rent for $1000/month, as all utilities were included. The house sold last year (I don't recall for how much). Dinosaurs used to roam Royal Oak... now they are mainly in Oak Bay.

Leo S said...

I can afford not to have a suite. I just prefer to retire earlier. People have different views on this

Right, so it's about the money like I said. Just like I don't need to do consulting beside my regular job but want the extra money. A suite is just another second job. No one elects to do it for fun.

totoro victoria said...

I suppose it is about time.

I could also work a lot more and retire in a couple of years.

There are no guarantees in life.

I prefer not to work more now but less. I think it is your money or your life in some ways.

I like people (in general) and don't mind being a landlord. It is relatively little effort for me. Like pretty much none and I have multiple sets of tenants.

I don't find it stressful and it brings in close to $8000 a month gross. Pays for the costs of ownership plus some. The numbers work better the more you pay down the equity.

Now, this might not work for you. That's okay. It is only one example of one route through.

I think happiness matters much more than the balance sheet in the end. To that end, a good partner is much more valuable than the best investment I could make. But I digress.

The debate for me is not so much what will happen in the real estate market, although that is interesting to me, but whether the decisions you make are going to bring more or less happiness.

For people who do not equate more free time in the present with happiness, things might be evaluated a bit differently.

Al + TOH said...

Actually besides rental/family/friends/house work exchange, a suite could also be used to do house swap with people around the world, for travel purpose.

As long as people are good and reasonable, sharing housing, especially in separate well built and sound-proof suite, is a good thing for the environment. Especially when your own children have grown up and left and you prefer to stay where you are (too big for one or two people).

But again, suite is good for someone, but not good for everyone. For people who dislikes it, there is no point to discuss any possible benefits, period.

Al + TOH said...

Also for people who like the idea of suite, there is no point to list all the shortcomings, as they know them all already and don't mind. Social ladder, what is it? Where and how you live, what car and clothes you wear, for others to view and judge you on the surface? The more you know who you really are, the less you probably would care about the "social ladder".

totoro victoria said...

True. Also, we have done house exchanges. They have worked out great. I much prefer this to hotels for family travel.

Leo S said...

Totoro @8 PM: It is relatively little effort for me. Like pretty much none

Totoro at 8AM: As far as putting in a suite, I've done this twice. It is a lot of work

Lol. I guess you're more of a night person. As long as all the work is not work it's all good.

totoro victoria said...

Suiting is a lot of effort. Especially for me as I'm not very handy.

I don't mind doing labourer sorts of tasks, but I have no other skills except choosing, buying materials, painting and decorating.

Being a landlord has not been a lot of effort - but I suppose it could be.

I've set this all out before, and have been very consistent because it is simply the truth.

You cannot compare building a suite to being a landlord of an already-built suite - they are two entirely different skill sets and jobs. It is comparing skilled labour to paperwork/people skills.

As I've already said, I have the skill set to be a landlord. I don't find it difficult.

Not sure it is fair to pull two sets of comments together about different things in an attempt to discredit what I have said.

I have no interest in being right about what is right for you. I'm only putting out what my experience has been.

That said, the time I have put in choosing, decorating, painting and moving concrete has been enjoyable overall. The results are more concrete than my day job.

Yesterday I came home to finished crown moldings and baseboards and that was pretty nice. We lucked out with finding a great carpenter.

totoro victoria said...

I also think the work of putting in a suite is one that continues to pay off.

I much prefer putting my time/energy into things that will keep making me money than into obtaining an hourly wage. Hourly wages keep requiring more hours of my time.

koozdra said...

Suites are the new path to prosperity and financial independence. The reason they are so popular here, and not the rest of the country, is because people from BC are smarter than the people of the rest of Canada.

They have discovered this new concept called "the suite". Basically, you take your single family home and cut half of it off so that strangers can come and live in your house and pay you rent. In other provinces this type of accommodation is commonly referenced to as a rooming house.

Of course it could also be because people are willing do to whatever it takes to get into the most rock solid real estate market in the entire country.

We know that the people of Canada love real estate and will continue to do so even during a severe decline.

Or maybe we'll return to a time when you didn't have to go into border line financial ruin to afford a basic home.

koozdra said...

A public service announcement to current sellers:

Prices won't come down. If buyer scum can't pay the price that you feel your property is worth, pull it off the market. We have to stand together. If your neighbour is discounting his/her property, go over there and tell them that they are "scabbing". When one person sells at a discount it brings down everybody's values. If they don't cooperate feel free to go to the open houses and sabotage their listing.

Only together can we maintain our lottery winnings. If you didn't cash out yet, hold the line. The good old days of massive yearly appreciation will return... soon.

If you receive a lowball offer it is your responsibility to shame the originator of the offer. Tell them things like "we don't want your kind around here", "are you joking, my neighbour sold for way more that recently" or the classic "I'm offended to even be speaking to a person of your class". In general behave as if you are extremely offended.

Home owners unite!!!

totoro victoria said...

Yes, the case for secondary suites is local and really it is only a rooming house to make money off of strangers.

There are no broader social reasons to support secondary suites and everyone should live in a free standing building.

It is interesting; however, that secondary suites are being promoted in many areas across Canada. Many municipalities give grants and the federal government gives out lots of grants for municipalities to research this.

Edmonton:
http://www.edmonton.ca/city_government/urban_planning_and_design/secondary-suites.aspx

Manitoba: http://www.cbc.ca/news/canada/manitoba/story/2010/06/29/mb-secondary-suites-manitoba.html

Calgary:
http://peoplearemybusiness.com/2009/09/10/calgary-secondary-suites-grant-pilot-program/
http://www2.canada.com/calgaryherald/news/city/story.html?id=4f2d6d8c-6ded-434e-8855-974eb24365cb

Victoria:
http://www.victoria.ca/EN/main/departments/planning-development/development-services/secondary-suites.html

Ontario:
http://www.secondsuites.info/printed_materials.htm with a handy draft budget: http://www.secondsuites.info/calculating%20the%20bottom%20line.pdf
Ever watch income property?

Or the national program for housing low income individuals:
http://www.cmhc-schl.gc.ca/en/co/prfinas/prfinas_002.cfm

Leo S said...

Not sure it is fair to pull two sets of comments together about different things in an attempt to discredit what I have said

You need a suite to rent one out. For you that meant building it, which is a lot of work. For others that means buying one, which costs more and therefore is more work to pay for and potentially down the line to correct problems.

So the claim that renting a suite is not work is clearly not true. Whether or not its worth the work is a different question and highly individual.
I get it, it works for you and you like it better than your day job. That just means you found a job you like, not that it's not a job. I very much enjoy my day job but I'm certainly not about to deny that it is work.

You cannot be a good landlord without putting in the time.

Introvert said...

[Being a landlord] is relatively little effort for me. Like pretty much none...

I second that.

If I were to calculate a "wage" that I make from my suite (i.e., suite income vs. number of hours spent on suite maintenance, repair, and miscellaneous landlord duties) it would probably be something like $3,000/hr. Not bad.

I do basically nothing for extended periods of time; the money keeps rolling in every month; and I don't even feel as though I'm making a huge sacrifice relinquishing my ground-level basement suite because, at this point in my life, I have absolutely no need for all that space in my house.

totoro victoria said...

If you buy or build a suite you are buying a higher priced asset that generates income to pay for itself.

I don't need to work harder to pay for it, I actually work less because of it. A SFH would cost me more each month in after tax dollars/aka my time.

Also, you can be a good landlord without putting a lot of time in past the intial showing, checking out of tenants and entering agreements. Tenants want to feel you are fair and responsive, but they also have lives.

I've never met one of my tenants in person. She took the place sight unseen on a lease, is lovely on the phone, pays on time and hasn't asked for a thing. I have a repair person on hand. My other tenants are responsible for their own yard maintenance.

My point is that the ROI for time spent can be very high with the right place.

If it is a question of economics then it is not much work for the return imo - with a bunch of caveats like don't sell in a falling market and check people out carefully...

If you hate being a landlord then it is just not worth it. I think that is an entirely valid point. Do more of what you like and less of what you don't. Money is only one measure.

Introvert said...

I really like having a suite for the flexibility. Right now, extra space is not important but aggressively paying down my mortgage is. So I rent out my suite.

If I want more space, I can decide to stop renting out my suite and ... POOF! ... my house gets a whole lot bigger--without needing to move to a different property to make it so.

patriotz said...

If I were to calculate a "wage" that I make from my suite (i.e., suite income vs. number of hours spent on suite maintenance, repair, and miscellaneous landlord duties) it would probably be something like $3,000/hr. Not bad.

I'm sure someone buying a GIC would have you beat by a mile by your calculations, since it only takes a minute to buy it online.

There is such a thing as cost of capital you know. And in the case of a house, there is not just the cost of putting in the suite, but the loss of exclusive use of the house. That has a value, which is why whole houses rent for more than the main floor of a house that has a suite.

Leo S said...

I don't need to work harder to pay for it, I actually work less because of it

We'll add that to the list. Suites are a lot of work, suites are no work, and suites are negative work. Which one is true depends on how you want to pick and choose your definition of "suite" and "work".
For example one might say my work is not work because if I didn't have it I might have to spend 120 hours a week begging to make the same income.

I think this has more or less run its course. In conclusion, an ad for first time buyers: "Tired of not being able to afford a house of your own on a simple lawyer's salary? Why work ten days for $3000 when you could earn that in an hour? You have to pay more for a suite but don't worry it's an asset so it doesn't matter. And dont stop at one, tenants never cause problems so buy a house with two suites. Simple math says that you should be making $6000/ hour."

totoro victoria said...

Patriotz - yes, a GIC would beat it on time alone but you wouldn't borrow to buy a GIC for obvious reasons.

It is, of course, also about overall ROI when adding leverage plus costs to get net. Part of the overall rent v. buy calculations.

Time spent as a landlord (vs. building a suite) can have a high return. The main point is that it can be a pretty small amount of work when you have good tenants.

As far as this debate, I have no desire to go further down this path. It's worth it for you or it isn't based on your own views/calculations.

Leo, your comments are normally fair. This last one isn't from my perspective. It reads more as a reaction to something than a reasoned response.

You draw from past statements and present my information in a distorted manner that discredits what I have said. As a moderator/operator of the blog you
set the tone for a lot of debate.

My perspective might be different than yours, and perhaps this is not okay. I do live this experience.

What most people here share is an interest in local real estate. The board is generally a good place for discussion/information which I have appreciated.

Thanks for running the board and all your efforts and analysis. I'll be taking a break from the site and wish everyone the best.

a simple man said...

Let's agree that for some people suites make sense and for some people they don't. I think densification makes sense for a lot of reasons and if people can make some income from sharing space they do not need right now, then good for them.

I still want Totoro as my landlord.

patriotz said...

Let's agree that for some people suites make sense and for some people they don't.

I don't think anyone ever disagreed with that.

The disagreement is about calculating the return from a suite, i.e. what you get versus what you put in. In particular the supposed return on one's own labour, which was the point of my GIC example.

DavidL said...

@Just Jack
You tend to find more homes with suites in the transitional neighborhoods from first time home owner to middle income household. Upper income housing not so much.

My house is located in one of these traditional neighbourhoods. For this discussion, I'm defining a suite as having a separate entrance and see separate washroom and stove.

I've lived in the same house for over twenty years: initially renting the basement suite, then the upstairs, and then buying the house in 2002. Back in 1992, there were only 2 suites in the 22 houses on my street. As of 2013, there are ten suites - two of which are used by family members, the remaining eight rented out. (My suite is used by a family member.) Of those rented eight, seven were added to the house as "mortgage helpers" soon after the house was purchased in 2005 or later.

koozdra said...

Totoro, did you or did you not make money from home appreciation that allowed you to buy a house with a suite with low risk.

You say you don't care about interest rates rising because the amount outstanding is manageable.

This situation is not available any more. Appreciation will not occur any more for a long time.

"I bought in 2012"
You claim this shouldn't be qualified as "back in my day" but it should. 2013 and onwards will look very different than 2012.

You might not need a suite but you arrogantly think that a suite is an option for everybody, it isn't. Homes are ridiculously unaffordable, despite your admonitions to the contrary.

Are the people that have made money from their real estate investment smart or experiencing a condition called bull hubris. They are not smart they have not timed the market. They have made money simply by living during a convenient time. Just as all the paper money appeared randomly it will disappear just the same (not here in paradise of course).

We are in a different time now. This blog is frustrating because everybody in Victoria has their head up their ass.

Businesses closing downtown: no problem

Migration out of BC: no problem

Mounting inventory: no problem

Lower sales: no problem

You aren't paying any attention to what is happening around you because you don't want to.

Wasn't it a short time ago that a decline wasn't even in the picture. People on this blog denied denied denied. Now that a decline is a clear and present, suddenly "well I made the right decision at the time". "my suite is generating income".

Is this blog called "house hunt Victoria" or "tell everybody how business savvy I was to have lived through the biggest national debt fuelled real estate market in Canadian history".

Maybe we should change the name.

Marko said...

I am a huge fan of suites. When I list properties over a million, mortgage free, and they are still renting their suite it tells me something.

Suites also take pressure off rental rates and help out the environment by having more people under one roof. Density is also a positive versus having people commute.

Suites are also just another source of income and in my opinion income diversification is important encase you get seriously sick; lose your job, etc. If you have a good job, you can get some solid dividend income going, suite, plus a few other things it makes life a lot less stressful.

My ideal home would be 2,800 sq./ft. in Fernwood/Oaklands area with a 1,000 sq./ft. 2 bed, 2 bath suite. The suite would rent for $1,400 to $1,500 (I know seems high but the 700 sq./ft. suite on the new house my father built on Shakespeare is renting for $1,300 and I was telling everyone $1,100 to $1,200 when we were selling it :))

That would leave 1,800 sq./ft. upstairs and even that seems like excess. I can't imagine ever needing more space unless I had 3 or more kids. I lived with my parents for a very long time in 805 sq./ft. (basement rented).

The $1,500 per month all off a sudden brings the brand new $800,000 to $850,000 home to $500,000 on a monthly cash flow basis. I would rather live in a brand new home with a suite than a $500,000 Fernwood bungalow with no suite.

Victoria said...

I'm a renter now, having sold both houses in 2010. Prior to this period of time I was a landlord for over 15 years.

Being a landlord is rewarding and yes - easy. Pick your tenants wisely.

To have good tenants you have to offer good quality properties. Nice neighbourhoods, nice homes.

I drive by one of my old houses now and cringe. The gates used to be finicky - we had to fiddle around with them to make sure they closed properly. Now I see them hanging open, green mould halfway up the fence. All the flowers that used to bloom merrily are gone. The BBQ sits in the yard, uncovered and rained on all winter.

I just shake my head. Can't imagine a good tenant wanting to rent the bsmt suite now. Quelle horreur!


Marko said...

We are in a different time now. This blog is frustrating because everybody in Victoria has their head up their ass.

According to this blog businesses have been closing down and the world has been coming to an end since 2007.

koozdra said...

"According to this blog businesses have been closing down and the world has been coming to an end since 2007. "

Ignore ignore ignore. The people making the most money locally are the printers who print the huge for lease signs.

koozdra said...

Marko you seem to an expert on real estate.

Why has the market been flat for so long and now is doing a nose dive?

A detailed analysis please.

koozdra said...

Here's a fun chart that won't happen here but is happening in the second best place on earth.

US cities crash from peak.

The only city hit worse than Vancouver is Miami.

That won't happen here. People aren't in crazy debt here, jobs aren't evaporating.

https://vancouverpricedrop.wordpress.com/2013/02/08/drop-from-peak-chart-january-2013/

Marko said...

Why has the market been flat for so long and now is doing a nose dive?

In my opinion it is not nose diving; but lets see what the next three months bring.

If you are right and it is nose diving it would be to my personal benefit both from my business perspective and buying my home.

koozdra said...

Totoro..
"It is interesting; however, that secondary suites are being promoted in many areas across Canada."

Two incomes don't cut it any more to afford a home. Three incomes are required. Prices have risen dramatically in those markets also.

Prices don't have to be this high for real estate. They won't very soon. This bubble will pop and people like you will say "nobody could have seen this coming".

koozdra said...

"If you are right and it is nose diving it would be to my personal benefit both from my business perspective and buying my home."

That is... if the credit constriction doesn't continue. Or is there no evidence that financing is falling through left and right?

Marko said...

That is... if the credit constriction doesn't continue. Or is there no evidence that financing is falling through left and right?

That is...if the TSX doesn't drop to 5,000 and unemployment doesn't skyrocket in Canada to 20%.

Anything I buy would be 20% down or more, 25 year mortgage so unless they start restricting that I think I am good.

koozdra said...

How many times do I have to reiterate this. Nobody cares about your personal situation. Nobody cares about my personal situation.

It's about the entirety of the market. You have money, I have money but many people don't.

Marko said...

I know the market doesn't depend on my personal situation; however, many on this blog think I am trying to pump the market because I am a realtor which is not the case. My particular business model does much better in a weaker market.

koozdra said...

I agree Marko. I actually like your business model. I think you will do well in a declining market.

Marko said...

It's about the entirety of the market. You have money, I have money but many people don't.

Many people don't have money, but many do as well.

koozdra said...

"Free money!!! The $10,000.00 gov't grant available to 1st time Buyers ends April 1, 2013!!"

"free" is a very liberal use of the term.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12488603&PidKey=1890888369

koozdra said...

So, what do you do if you are listing your house for sale but want to generate rental income at the same time?

http://victoria.en.craigslist.ca/apa/3606486579.html

Marko said...

In the last week alone I received three emails along the lines of....

"Thinking about selling our home, not interested in paying 6%/3% commission, xxxx referred you, can you come over and explain what you offer."

The frequency of these emails has picked up with the poor market. After 5 years of flat people aren't ready to give away their equity to commission just like that.

When the market is doing well and you make $150,000 on a house the commission doesn't seem as important.

koozdra said...

"Many people don't have money, but many do as well."

You are really not getting why this slow down is happening.

Chris said...

Marko said
“If you are right and it is nose diving it would be to my personal benefit both from my business perspective and buying my home.”

We believe you. It only makes sense that a current homeowner and realtor would benefit in a “nose diving” market.

Marko said...

The slowdown is occurring for a number of reason including mortgage restrictions, etc., I am sure Leo_S can do a more detailed analysis but I don't think we'll see a meltdown.

Marko said...

We believe you. It only makes sense that a current homeowner and realtor would benefit in a “nose diving” market.

All I can say is I went from $14.5 million (2011) to $21.5 million in sales for 2012. The total sales volume dropped 5% in Victoria in 2012. You don't have to believe but I know my business model well and the worse the market the better it does.

koozdra said...

Lets take a look at Victoria's amazing rental market. With 2160 listings on Craigslist there is a lot to choose from. Vacancy rate is not climbing though. This will give the pocket bulls (since bulls isn't an apt description) an idea how amazing the rental market is doing.

What do you do when B&B business is suffering all over the island? Turn them into rental suites.

1510 is a little high end though.

http://victoria.en.craigslist.ca/apa/3606323535.html

koozdra said...

Why continue renting in Victoria?

For $1195 per month you can get this.

Two bedroom, two bath. Utilities included. Pet friendly.

http://victoria.en.craigslist.ca/apa/3606462610.html

But wait it gets even better.

These people have had to drop their price dramatically. They started at $1400.

http://www.placebee.com/bc/victoria/1481835

koozdra said...

Delusional prices aren't only restricted to homes in Victoria. People think they can get any amount they want renting out anything they want. I hope they love vacancies.

$1250 to live in a 670 sqft in the Mosaic. Delusional.

Remember buying property and renting it out is "super easy". Everybody should get in on this amazing new concept. It's practically free money.

Wait, I've heard this before. Oh yeah it was the slogan of the pyramid scheme my parents lost money on many years back.

http://victoria.en.craigslist.ca/apa/3604264422.html

Chris said...

Marko said
“I know my business model well and the worse the market the better it does.”

If that were true, you wouldn’t spend so much time cheerleading the market up on various blogs.

koozdra said...

41 rental opportunities tiny little Fernwood.

Fernwood Craigslist

As we all know there are endless numbers of available renters. Oh and one of Marko's buyers managed to rent above what they thought it would.

Nothing of note here I guess.

koozdra said...

What is happening over at Village Green in James Bay.

Location location location, right?

Well these guys have been posting craigslist adds like crazy with no luck attracting renters.

Still no problem though. Traditionally vacancy rates have been extremely low. Which means they aren't rising.

http://victoria.en.craigslist.ca/apa/3545559126.html

Leo S said...

<a href="http://www.newsday.com/classifieds/real-estate/fha-mortgage-premium-costs-set-to-rise-1.4582470>FHA mortgage insurance premiums rising</a>

Likely this will happen here as well as the market turns south nationally. When no private company will touch the risk of insurance without a government guarantee you know the rates are too low.

Introvert said...

You draw from past statements and present my information in a distorted manner that discredits what I have said. As a moderator/operator of the blog you set the tone for a lot of debate. ... Thanks for running the board and all your efforts and analysis. I'll be taking a break from the site and wish everyone the best.

Shame on you, Leo. Go to your room and think about what you have done.

Victoria said...

James Bay is great, the people tend to the liberal, smiley side of life. Village Green is not, unfortunately, that great a place. There is a bit of an underclass vibe and the frequent do-hickey, knick-knack 'sale' on the grass by the sidewalk is a bizarre spectacle.

Marko said...

If that were true, you wouldn’t spend so much time cheerleading the market up on various blogs.

Well if cheerleading is defined as not predicting a 20% drop then yes I am cheerleading.

Marko said...

Thanks for running the board and all your efforts and analysis. I'll be taking a break from the site and wish everyone the best.

You can't take the comments on this blog too seriously.

a simple man said...

Just last week provincial labour minister Pat Bell said at least 6,000 of the latest 16,000 job losses in BC were due to “a real estate slowdown in the Lower Mainland."

koozdra said...

"a real estate slowdown in the Lower Mainland."

Pat Bell must be wrong. According to the bastions of misinformation on this blog only renters and their friends are losing their jobs. Since this segment of the population, commonly referred to as the middle class, has no bearing on local real estate, we have nothing to worry about.

LWilliams said...

You are really not getting why this slow down is happening.
-koozdra

I agree, a lot of people just don't get it in general! My friend recently bought a new BMW. I tried explaining to him that instead of paying $60k+ for a new car, he should have bought an old Honda for $2k and invested the rest in a balanced portfolio (he paid all cash). He told me I was ridiculous. I just shook my head.

DavidL said...

According to my PCS accounts, very little is moving at the < $550K level this past week, while there seems to be more sales in the $550K to $750K range. I expect that the average will climb again, while the volumes remain low. I look forward to Marco posting the weekly numbers tomorrow.

DavidL said...

@Leo

Regarding your post examining the Seattle market and comparing to what might happen in Victoria... I see them as two very different markets. Seattle has a lot of high tech, industry, import/export, and a larger financial centre. Victoria is a combination of middle class (government, health and tech) and a lot of lower paying service industry positions. Not only is it the land of the newly wed and nearly dead - but also the barely fed. Comparisons between Vancouver and Seattle make more sense in my opinion.

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

141 condos listed in Langford and so far 1 condo sale this month. 122 condos listed downtown and 8 condo sales so far this month plus a few pre-sales.

DavidL said...

CBC News: Homeowners stung by botched 'rent to own' scheme

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