Thanks to Marko for the early update:
February 2013
Net Unconditional Sales: 394
New Listings: 1,039
Active Listings: 4,072
Sales down 20.7%, new listings down 21.2%
SFH Median = $517,500
SFH Average = $601,377
Condo Median = $270,000
Condo Average = $299,412
We'll update with the official VREB numbers when those come out.
In the meantime, here's a new graph. Thanks to our local gal Info for the idea.
In the meantime, here's a new graph. Thanks to our local gal Info for the idea.
UPDATE:
The VREB release is out and it's a doozy.
They lead with an amazing 34% increase in sales from January. Truly a testament to the strength of this market when February sales are higher than January. That normally never happens. They like this theory so much they use the rest of the release to restate it in various forms.
To be fair, they do go on to comparing year over year, where for the second month their calculator is on the fritz, pegging the sales decline at 18.26% rather than the actual 20.7%.
I think if there's one positive thing in this February's numbers, it's the listings falling short of last year. If that continues the market might retreat from the current strong buyers market to something closer to what we've seen the past two years.
31 comments:
During the run up the bear blogs are easily dismissed.
When the decline is occurring, suddenly the bear blogs are the cause.
A note to sellers:
We are doing good friends. New listings are down. But we need to take that extra step. Take East Sooke as an example of what needs to happen. There hasn't been a new listing there in a couple of months. See, they have the idea. Pull all the houses off the market. Lets just take a break for a couple of years. Buyers are scarce out there so what's the point of continuing this charade. We all know prices won't come down.
Prosperity is just around the corner!
I know this is pretty inconsequential, but at what specific point did we learn that info was female?
Just a theory. There's a commenter at GreaterFool that posts the same content as info does here and in a similar style For example.
Canada’s economy still ‘sickly’
Canada’s economy expanded at a snail’s pace as 2012 ended.
Gross domestic product grew by just 0.6 per cent, on an annualized basis, in the fourth quarter of 2012, Statistics Canada said Friday, close to what was expected but a weak end to a year that saw crucial commodity prices soften, the housing market slow down, and retail spending slip.
On a monthly basis, GDP fell by 0.2 per cent in December alone."
Parksville & Alberni y-o-y average down -17% & -26%. Parksville on higher sales! That could sour some metamucils this morn.
U.S. retailer brings parity pricing to B.C. stores
"Why have stores in Canada if people are going to go to cross the border and shop in the states anyway?"
Good point American retailer.
Paying the same amount for things that they do in the states?
Seems un-Canadian somehow.
The Canadian way is to pay more and not ask too many questions. It's not polite to be critical of anything.
There is no question the West is in a depression due to (a) globalization which has put many Western workers in direct competition with four billion Third Worlders of whom many are still working for pennies an hour, and (b) massive accumulations of debt.
But Bernanke, Krugman, and the other Keynesians say we've learned the lesson of the Great Depression: never allow the money supply to contract. On the contrary, the thing is to print without limit, to maintain aggregate demand.
So are governments about to Weimar?
If so, we might all think about stocking up on copper. And even RE, provided one is not vulnerable to an eventual sharp rise in interest rates.
However, the current trend in Canada seems to be for austerity and balanced budgets, in which case, Info Girl's Victoria RE outlook looks realistic.
Gotta say I can understand why some things cost more than in the States - shipping from the US via courier has such freaking high brokerage fees that it is seriously painful. And some of our suppliers don't listen no matter how often you say "No couriers". We've taken to refusing the shipment if it doesn't come by Canada Post as we always request. Of course, we're talking to our Sales contact - the guys in shipping pay no attention.
My gifts to you, Introvert. Slang AND starting a sentence with an "And". You may also feel free to quibble whether semi-colons would be more appropriate than dashes.
"Option to purchase all furnishings & boat with motor... JUST TURN THE KEY & YOU'RE HOME!"
So after I pay an outrageous amount for this boat house I have the option of purchasing further items from the seller. What an amazing feature.
Priced: $300,888
Add some eights to the price. Maybe some rich asians will come and save the day.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12145020&PidKey=778916452
Who is the target market here?
1072 sqft, condo
Price: $689,900
Are they looking for families to occupy these places? Why wouldn't you just buy a house?
Developers have completely lost their minds. Do they think that people want the downtown experience that much?
Rich retirees? maybe? at this price?
I'm sure years from now we'll remember our monumental housing collapse and have a good laugh at these kinds of listings. Well, not all of us will be laughing. Some will be crying.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12658982&PidKey=-1182119694
@koozdra
"wonderful views of harbour activity"
Translation. It sounds like a float-plane just flew through our bedroom. But on the plus side you will never again have to worry about sleeping past 7AM.
I like that graph. I was considering doing the same thing myself.
The current 3-month SFH median is nearing the low point of 2009 (the bottom of the last correction). Condos are already there.
This data jives with the word on the street. I've met a number of people who bought near the low of 2009. They tell me that recently sold comparables are back down to the price level at which they purchased in 2009. This includes SFHs, townhouses and condos.
The march release has given up using yoy for it's chart. Only comparisons to last month are made. Hey, at least there are some up arrows.
But Bernanke, Krugman, and the other Keynesians say we've learned the lesson of the Great Depression: never allow the money supply to contract. On the contrary, the thing is to print without limit, to maintain aggregate demand.
Actually, the stimulus package that was passed by the U.S. after the financial meltdown was too small to create sufficient "aggregate demand." Krugman and other Keynesians were rightly pointing this out before the legislation was passed.
So I love it when people say or imply that the Keynesian approach was a failure, when in fact it wasn't properly attempted.
My gifts to you, Introvert. Slang AND starting a sentence with an "And".
Sorry to let you down, but I don't mind slang. And I don't object to sentences starting with "And."
You may also feel free to quibble whether semi-colons would be more appropriate than dashes.
No, I'm good. But thanks for thinking of me!
Well started the process for a self-directed RRSP mortgage.
More info is here if anyone else is interested in how this works:
http://www.cwt.ca/iris/mortgage_broker/IMBA_docs/PersonalMortgageFULLPackage.pdf
Actually, the stimulus package that was passed by the U.S. after the financial meltdown was too small to create sufficient "aggregate demand." Krugman and other Keynesians were rightly pointing this out before the legislation was passed.
But some argue, plausibly if not correctly, that no amount of money injection would have prevented then, or could prevent now, the private sector deleverage that has occurred since 2008, when US private sector debt reached 350% of GDP.
Alan Greenspan admitted that the Fed bore responsibility for the financial crisis because it used the "wrong model." Perhaps the Fed is still using a "wrong model," or perhaps there is no right model.
In extenuation of the muddled syntax of the pre-penultimate sentence of my last comment, here is a clearer statement by Steve Keen as to why Fed money creation don't amount to nuthin'.
Yet Steve Keen appears to believe that government deficit spending covered by printed money will create the 10% plus annual inflation he believes is needed to bring down the real value of outstanding private debt to a manageable quantity.
So, yeah, we could have lots of inflation soon.
Maybe?
"There is currently considerable pressure on North Saanich council to approve several high density housing proposals."
We need to build more! This slow down is only temporary. Developers are experiencing the bull hubris of the century.
http://www.peninsulanewsreview.com/opinion/letters/191464371.html
"So, yeah, we could have lots of inflation soon."
Canada will experience RE and other asset deflation for many years, no matter how much money is printed. Other things, such as food and fuel will inflate, causing even more RE deflation as households will be forced to spend more on the necessities.
As well, interest rates will rise, eating up income gains.
There is no easy way out of this one. With record household debt, Canada is now entering a long and necessary period of deleveraging. Debt must be paid off. The US has been going through it since 2006. The average American today has a much different attitude toward taking on debt than they did back in 2006. This will happen in Canada as well.
Leo's 3-month median price chart for Victoria tells the real story about our real estate market.
Notice the absence of big fluctuations from month to month.
The 3-month time frame is long enough to eliminate a lot of the noise, yet small enough to catch any new trends that may be developing.
The use of the median instead of the average tends to eliminate the ability of upper end, expensive home sales from skewing the data higher.
No wonder the US uses the median and not the average.
For those of you who think that residential land prices in Victoria cannot go lower, think again.
This article shows that residential land prices in Japan started to decline around 1992 and are currently only a fraction of what they once were. Today, the value of land in this small, crowded country's 6 largest cities is about 1/3 of what it was in 1992.
Japan's housing market started its crash in the early 1990s and has yet to show any real signs of recovery.
According to the OECD, Housing Expenditure in Canada is 23%. Japan is also at 23% but you only get 1.8 rooms per person. Canada is number one in this category amongst other countries with 2.5 rooms per person.
So the market has been crashing in Japan for 20 years but you still get more house in Canada.
Marko, housing expenditure is the total amount spent on shelter - by owners and by renters - divided by GDP.
It actually doesn't change much during RE cycles because the number of people buying at any point in the cycle is vastly outnumbered by people who already own and by renters.
OECD says:
Housing expenditure: 23%
Average annual increase since 1995: -0.1%
Yep, that's correct. Negative 0.1%.
Ownership costs definitely increased significantly since 1995, as shown by the RBC affordability report. So unless rents massively decreased relative to income, or there was a huge increase in people with no mortgage whatsoever, I'm gonna say the OECD stats aren't accurate.
Re: In the event of substantial inflation
Other things, such as food and fuel will inflate, causing even more RE deflation as households will be forced to spend more on the necessities.
Sounds logical, although if inflation is the object of government policy, it may run for a long time before there is any attempt to rein it in through increased interest rates.
Under those circumstances, one might expect considerable panic buying to protect savings from destruction.
Some will prefer gold and other commodities, but as gold has risen almost six-fold in the last dozen years while RE has increased only 100-150%, RE may be seen as a better bet.
Moreover, those who own RE and manage to hang on to it whatever may happen with interest rates will likely come out of a major inflation/currency war relatively better off than those hoarding cash.
Meantime, China stands ready to wage currency war, while Japan pursues its trash-the-Yen policy.
So if QE by the US picks up we could soon see all currencies driven to nothing!
And since debts that cannot be paid won't be paid, QE may be the only option the US has — other than ending the wars, which appears not to be an option.
A friend sent a funny article from 1980with the headline dollar could be worthless in two years
The funniest part is the people who paid $1600-$2600 to sit through a 3-day seminar. Meanwhile the US dollar soared from 1980-85. It's gained ~10% in the last two years, and looks ready for lift-off yet again.
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