| April 2013 | April 2012 | ||||
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Uncond. Sales | 116 |
258
|
586
| ||
| New Listings | 345 | 662 |
1470
| ||
| Active Listings | 4323 | 4417 |
4638
| ||
| Sales to New Listings |
34%
| 39% |
40%
| ||
| Sales Projection | 510 | 567 | |||
| Months of Inventory |
7.9
| ||||
Relatively strong week for sales. This is the first sign of life in the spring market, we are now pretty much bang on the sales pace of last year (265 at this point in the month). As the year progresses we will see fewer big YoY declines in sales because we are hitting months that were already starting to slow last year.
When the mortgage restrictions were introduced last July, some lenders predicted that they would take 8-9 months to work through the market, so some of the increase in sales might be due to some of the effects of the mortgage restrictions wearing off. Too early to tell.
soon...
ReplyDeleteThx to Alexandrahere for posting the yr/yr stats - didn't want to have it lost on the end of the last thread.
ReplyDeleteDon't get too excited about the upswing in median - one weeks' worth of data is too easy to be skewed by a couple of high-priced deals.
Here are my stats for 8-14 April 2013.
SFH in Vic,OB,Esq,SE&SW, min 2 beds and 2 baths, priced between $375K & $775K:
Sold: 31
Avg Price: $566K
Med Price: $567K
Thirteen of the 31 sold had secondary suites and 10 of the properties went for below BC assessment.
Five homes sold in the SE areas of Mt Doug, Gordon Head and Lambrick Park for an average price of $602K.
For comparison, having identical criteria, here are the stats for the same week (9-15 April) in 2012:
Sold: 24
Avg Price: $552K
Med Price: $544K
SFH in Vic,OB,Esq,SE&SW, min 2 beds and 2 baths, priced between $375K & $775K:
ReplyDeleteSold: 31
Avg Price: $566K
Med Price: $567K
For comparison, having identical criteria, here are the stats for the same week (9-15 April) in 2012:
Sold: 24
Avg Price: $552K
Med Price: $544K
This particular snapshot has the median at $23,000 more this year. The data are noisy with such low sales numbers, but, in terms of prices, the sky is certainly not falling. Far from it.
Yes, totoro. Just to confirm: I'm not excited about the upswing in median.
ReplyDeleteYep, more signs of a strong Halibut season ahead...
ReplyDeleteTo get to flatland we need a significant increase over last year's sales, or a significant decrease in listings.
ReplyDeleteYes, I was worried about too much excitement along the road to flatland.
ReplyDeleteOr a bit of both.
ReplyDeleteTo get to flatland we need a significant increase over last year's sales, or a significant decrease in listings.
ReplyDeleteAnd to get to Price Meltdown, we need a price meltdown.
Wealth Inequality in America
ReplyDeleteI wonder how Canada stacks up.
In the days before info graphics people just said "the rich get richer and the poor get poorer"
ReplyDeleteWhat is the solution for us all to get richer?
Ok, I'm no gold head but to say there is no reason to invest in it anymore is simply wrong....
ReplyDeletehttp://geology.com/minerals/gold/uses-of-gold.shtml
I'm holding on to my position, small as it is...
Best Reason to own gold
ReplyDeleteThis comment has been removed by the author.
ReplyDelete"House must be sold by April 20, 2013."
ReplyDeleteGood luck with that.
321360
Why is MLS®: 321360 at a competitive price? Is the place thrashed inside?
ReplyDeleteI guess I'm not the only bearish on the Canadian economy.
ReplyDeleteForeign investors slash holdings of Canadian stocks
IMF cuts outlook for Canadian economy
ReplyDeleteThe International Monetary Fund has cut its outlook for Canada’s economy, and is advising the Bank of Canada to leave interest rates low until a recovery is entrenched.
But of course, interest rates could spike "any time," according to a sagely HHV commenter.
We can now start arguing what's worse for the housing market, an interest spike or an unemployment rate spike due to a downturn in the economy. At this point our economy is so fragile and burdened by such an immense amount of outstanding debt that pretty much any event will be very painful.
ReplyDeleteThe doom and gloomers on here must be hoping for a significant crash in order to buy a house they can afford. No?
ReplyDelete"The doom and gloomers on here must be hoping for a significant crash in order to buy a house they can afford. No?"
ReplyDeleteHoping, no, expecting, yes.
While not advertised as a "foreclosure" the property is most likely under duress circumstances to sell quickly.
ReplyDeleteIt seems that the asking price is very competitive of what is listed and what has sold in the neighborhood.
But the market is weak and there are a lot of properties to chose from in the Langford and Highlands areas. So there is a good chance you might be the only bid on this property. The Vendor may likely have vacated and the only approval that's left is the court.
That doesn't mean if you're the only bidder, you're going to get the home at your price. That would be an auction - not a court ordered sale. The court can order the home be put back on the market.
I asked this question a couple of days ago. Why are people reluctant to buy "foreclosure" properties. Is there an agent who reads this blog, that has experience with this type of sale that can comment on the difficulties in marketing these homes?
Maybe as bloggers we should have a field trip and sit in the court room to watch how the court conducts these sales?
I dunno. First time home owners might be afraid to purchase a foreclosure because of the negative aspect which the home is under sale. Psychologically, if the former owner wasn't able to take care of the bills, what else could be wrong with the house? Or perhaps in many cases the houses are trashed inside and need work.
ReplyDeleteI went through a few foreclosed homes back in 2002-2003 and in one case we were told the owners were very unhappy about being kicked out of their home, and would make it difficult. There was even a squatter living in the basement (not present when we looked at the house), the realtor called the squatter a prop to scare off buyers.
Ummm It was built in 2008 and "Needs TLC. Sold as is where is." Sounds like it was a grow up or it's been trashed somehow...
ReplyDeleteYah I thought "grow op" right off the bat.
ReplyDeletedoom and gloomers
ReplyDeleteWhat is doom and gloom about wanting reasonably priced homes with reference to the average salary?
I think gloom is the RE market now - far too much money for far too little home.
I think along the lines of Ernie.
ReplyDeleteCanadians are generally nice people. We feel uncomfortable at profiting at someone's misfortune.
If someone is still living in the home, that makes us reluctant to just view the home. We don't want to appear as "vultures".
And if the home is vacant, we wonder why? And that makes us even more reluctant. As we conjure up thoughts that there must be a reason? Drugs? Death? Problems with the house?
Ironically, this may make the properties sell for a lot less than fair market value and leave the vendor at a greater loss.
Sometimes our cynicism can be our worst enemy.
CBC News: Smoking reduces house value by 30%, realtor survey finds
ReplyDelete"The study was sponsored by Pfizer Canada, a pharmaceutical company whose products include a smoking cessation medication."
ReplyDeleteGood guy corporation.
The ONLY time I have found that massive discount in a smoker's home is when the damage is so great that the stench drives you out of the home. Those who smoke occasionally inside or out on the porch have no effect on price. I suppose it comes down to how much it would cost to install carpets, paint with special paint, etc.
ReplyDeleteI spoke with a painter about smoke stains and she suggested not to wash the walls but to seal them with a special paint. Washing just reactivates the tobacco.
And for you pet lovers - the same is true as smokers. Animal odors that you've become desensitized to have an affect on buyers. Almost always the flooring has to be removed if the animals have urinated in the home.
And the softer the market the bigger the discount.
ha ha "Grow Up"...
ReplyDeleteAt this point our economy is so fragile and burdened by such an immense amount of outstanding debt that pretty much any event will be very painful.
ReplyDeleteActually, B.C.'s debt-to-GDP ratio is quite reasonable. But I don't expect that determination to come from someone who thinks interest rates can spike at "any time."
Actually, B.C.'s debt-to-GDP ratio is quite reasonable.
ReplyDeleteProvincial debt is only one part of the puzzle, and not a very important one at that.
Consumer debt in BC is anything but reasonable, same with savings rates (negative for years).
A poor economy is much worse for the housing market than a good one (which comes with a risk of increasing interest rates).
The doom and gloomers on here must be hoping for a significant crash in order to buy a house they can afford. No?
ReplyDeleteYes.
What is doom and gloom about wanting reasonably priced homes with reference to the average salary?
Some locations become "unreasonably" priced and end up staying that way, more or less. My theory is that Victoria has fallen into this category (along with a few other Canadian cities).
Useful Economic Fact: when a jurisdiction's credit rating gets downgraded, the interest rate(s) on the entire debt owing is not affected; only debt taken on after the downgrade is subject to higher interest rates.
ReplyDeleteInterviewer:
ReplyDeleteDr. Introvert, why don't think interest rates will not rise soon?
Introvert:
It just doesn't SEEM like it's going to happen.
Interviewer:
Have you done any research? Are even familiar with what affects interest rates? Can interest rates even be predicted?
Introvert:
I haven't done any "research" per se, but the major banks are telling us that we shouldn't concern ourselves with such matters and that's enough for me. Interest rates can be predicted. They will rise eventually when it is convenient for Canadians.
Interviewer:
Thank you for the interview and good luck accepting the Nobel prize in economics for your deep insight into the operation of interest rates.
Koozdra is talking to herself again :)
ReplyDeleteSmokers do devalue houses if the smoking is at the level that leaves visible staining and odours. I almost bought one of these homes at a steep discount and that was one of the reasons for the big drop in price.
JJ is right, there is special paint for this issue.
there is special paint for this issue
ReplyDeleteIs it tough to get the smokers to hold still while you apply the paint?
Is it tough to get the smokers to hold still while you apply the paint?
ReplyDelete: )
Kilz paint is somewhat effective removing or rather, blocking in, stains.
ReplyDeleteMy mom moved into assisted housing that a smoker polluted (one of the reasons the person was kicked out).
It took almost 2 years to get rid of the smell, and the place was cleaned several times and repainted. Even so, there is still a very faint smell of cigarettes in her apartment.
Interviewer:
ReplyDeleteThank you for the interview and good luck accepting the Nobel prize in economics for your deep insight into the operation of interest rates.
It's about probabilities. And the probability of an interest rate spike happening in the next year is very low. Two years: low. Three years: low to moderate. The farther out we go, the less accurately predictable interest rates are.
These probabilities do not solely derive from bank forecasts, as you seem to think. They derive from a multitude of loci, including but not limited to the U.S. Federal Reserve and the Bank of Canada and their statements and forecasts; employment numbers and outlooks, foreign and domestic; commodity prices and outlooks; and inflation numbers and outlooks, both foreign and domestic.
I'm afraid to say that, if a Nobel Prize in economics had to go to either you or to me, you wouldn't be pleased with the outcome.
It took almost 2 years to get rid of the smell, and the place was cleaned several times and repainted. Even so, there is still a very faint smell of cigarettes in her apartment.
ReplyDeleteSmoking is disgusting. I'm glad the provincial tax on cigarettes was jacked up in the B.C. Liberals' recent budget. One of the only positive decisions I can point to with this government.
"It's about probabilities."
ReplyDeleteHopefully no events happen that are outside of a "steady as she goes" economic model. Continual growth in the housing market is sustainable, right? The 70% think this is true.
Try finding a painter who doesn't smoke...
ReplyDeleteIt's about probabilities.
ReplyDeleteYou're quite right. Probability of prices staying at these "unreasonable" levels with this MOI? Low.
Probably of prices rising? Negligible.
Probability of prices falling? High.
So the decision is easy. These probabilities exist at today's low rates, so whether they rise or not is secondary. Whether you want to define the decline as a "crash" or a "melt" also doesn't matter. If you're at break even or better as a renter, then any price decline is bonus.
I asked this question a couple of days ago. Why are people reluctant to buy "foreclosure" properties. Is there an agent who reads this blog, that has experience with this type of sale that can comment on the difficulties in marketing these homes?
ReplyDeleteI've been to court three times in the last 1.5 years. Once the property went over market value and twice at market value. One buyer I had to hold back as him and his wife got caught up in the emotional aspect of the procedure and were going to pay way too much. Glad I did as a week later they bought another home (non-foreclosure), much better buy.
All three times my buyer lost out. The problem with foreclosures (being the first accepted offer) is you lose time and money on inspections, due diligence, etc., and then anyone can show up on the court date and outbid you.
Most importantly I just haven't seen the deals. Typically there are no appliances, homes are a bit beat up, and when you account for all of that they go for market value a lot of the time.
Maybe I'll just take a page from koozdra's logic and say that prices in Victoria could increase "at any time." And, like koozdra, I'll just leave it at that.
ReplyDeleteThe 70% think this is true.
ReplyDeleteMany more think it's true but cannot get into the market.
Continual growth in the housing market is sustainable, right?
4% real house price appreciation in Victoria over the past several decades.
Maybe that figure will go down slightly. Maybe not.
That may be the clue, I'm looking for when it comes to foreclosures.
ReplyDeleteIt's better to show up on the court date and bid than lock yourself into the next few weeks until the court date arrives. Since you can't put a subject clause on your offer, you're locked out of the market for that time period. I can also see some agents discouraging buyers from bidding on foreclosures too. As the agent has a better chance of making a sale with the bid, counter, bid, accepted offer way of purchasing.
Hence, if you're going to make and offer before the court date - you bid really low.
In that case, it's really strongly in favor of the listing agent to put the time of the court date in the listing to encourage biding in the court room.
The nice thing about court room bidding is that you know everyone's bid.
It's better to show up on the court date and bid than lock yourself into the next few weeks until the court date arrives.
ReplyDeleteWhen you show up to court your offer has to be unconditional. The first offer has the advantage of making a conditional offer to the bank and doing more due diligence. When they remove conditions the court date is set.
Also typically, depending on the judge, they give preference to the 1st offer. I was in a situation where another offer was $1,500 higher after adjusting for completion dates/interest; however, the judge gave it to the 1st offer.
Since you can't put a subject clause on your offer, you're locked out of the market for that time period. I can also see some agents discouraging buyers from bidding on foreclosures too. As the agent has a better chance of making a sale with the bid, counter, bid, accepted offer way of purchasing.
ReplyDeleteThere was a foreclosure property last year that went in a bidding war for $4.5 million. Imagine being one of the REALTORS® in the room watching the judge open envelopes. If your client's envelope is selected your payday is 68k, if not you make 0k.
This comment has been removed by the author.
ReplyDeleteMaybe that figure will go down slightly. Maybe not.
ReplyDeleteIt is 100% certain that that figure will go down. The question is not whether it will happen, but when.
"What is doom and gloom about wanting reasonably priced homes with reference to the average salary?
ReplyDeleteI think gloom is the RE market now - far too much money for far too little home."
Excellent point.
Think about it from the perspective of a young couple with a baby looking to buy their first home. In order to purchase their first home they will need to buy in at bloated, extreme bubble prices. How depressing. Now that is gloom.
Anyone who is cheering for prices to stay at their current extreme levels is a doom and gloomer since they must also want young families with young children to pay extreme prices for their first home and have little money left over to cover the rest of their living expenses.
"Anyone who is cheering for prices to stay at their current extreme levels.."
ReplyDeleteOr they have a good swig of the Victoria housing market kool-aid.
Foreclosures in BC are called Court Ordered Sales. The process of purchasing a court ordered sale may be different in other provinces and different from a typical real estate purchase.
ReplyDeleteOnce a property has been found, you and your agent will write up an offer just like a regular home purchase with all the standard conditions.
Once the conditions are removed, i.e. Home inspection, financing etc., then that will trigger a court date for the offer to be viewed and approved by a judge. Once your court date has been triggered your offer becomes public information. That means if another buyer is interested in purchasing the same property they will know what their offer needs to be in order to beat your offer. Therefore it is always advisable to attend the court date and have a new offer ready to present to the Judge with a higher price just in case other buyers show up to the court date.
Some important things to remember about your purchase:
The home is “as is”, no representations or warranties whatsoever from the vendor.
There will be no property disclosure statement.
Appliances will not be warranted.
The home may not be in the same conditions as when you saw it. Many upset sellers may return to the home to tear out appliances, cabinets etc., or even cause damage. Appliances, window coverings and other moveable property are not included in the sale and the owner has the right to remove them.
The Judge does not have to accept your offer if the Court feels the offer is unreasonable.
I remember going to view a foreclosure house in the Ten Mile Point area around 2001. My husband and I both felt extremely uncomfortable during the showing, as one of the owners was present in the house, and was obviously not pleased we were there.
ReplyDeleteTo be honest, in the end we really didn't take a proper look at the house - we felt we needed to race through it as quickly as possible, both of us feeling sorry for the lady of the house.
"But the problem with doing so is that it risks even lower interest rates that might convince Canadian households that having a record high rate of debt — 165 per cent of income — is no reason not to mortgage the future on a new or bigger home."
ReplyDeleteNo need to worry, Canadians are a prudent bunch. We won't over stretch ourselves, we promise.
Bank of Canada expected to leave rates steady
It is 100% certain that that figure will go down. The question is not whether it will happen, but when.
ReplyDeleteNothing is 100% certain, Leo. Just a few years ago, was it 100% certain that countless small, crappy, old houses in many parts of Vancouver would fetch over a million dollars each?
Nothing is 100% certain, Leo.
ReplyDeleteThis is. It is impossible for any asset that people have to buy with their incomes to continually appreciate at a positive real rate forever. It can be sustained for a long time as we know (because of demographics, dropping interest rates, etc) but not forever.
These bloated, bubble level Victoria house prices are simply not sustainable. They are dropping and have a long way to go before they hit bottom.
ReplyDeleteMost of you are aware that Victoria's housing market was crashing in 2009 and would have continued to crash if it wasn't for that massive, unprecedented, emergency intervention that turned the market around. There will be no such intervention this time.
This time, Victoria house prices will fall until they are supported by fundamentals such as income.
How did house prices reach extreme, bubble levels? It was government policy that brought in lax lending standards that led to excess credit that pushed house prices to where they are today in Canada. This, of course, happened in almost all western countries in the world. Almost all of those countries have experienced major corrections (including the US) which brought house prices back to the level where fundamentals provided support. The same will happen in Canada.
Victoria's major housing correction has started and people in Victoria are becoming more aware of this each and every day. Prices are falling.
I've missed the words massive and unprecedented.
ReplyDelete"Continual growth in the housing market is sustainable, right?"
ReplyDelete4% real house price appreciation in Victoria over the past several decades.
Which ended in 2010. A market where real prices have fallen 15% or more from peak is not an example of sustainable appreciation.
"Think about it from the perspective of a young couple with a baby looking to buy their first home. In order to purchase their first home they will need to buy in at bloated, extreme bubble prices." There is no need to buy. Rent's are relatively cheap here so how is that a gloomy scenario? Just rent, worry less, and save more money. No need for gloom. I don't think it's a matter of cheering. It is a matter of predicting what WILL happen not what we WANT to happen. This perspective can help one make rational choices. I might add, renting in Victoria is a rational choice right now so no need to panic and revolt....
ReplyDeleteThe government stepped in to stop a crash in 2009. Is it not possible that they would do it again? I think the government would like to see prices come down, but not too much as it is bad for the overall economy.
ReplyDelete>> Which ended in 2010
ReplyDeleteThe 4% real appreciation is over the long term (ie the last 50 years). We have had several corrections in Victoria but they were historically followed by booms of about 10% annual appreciation to catch up
I think the government would like to see prices come down, but not too much as it is bad for the overall economy.
ReplyDeleteNo, the government will let prices royally tank, to vindicate snide renters and to punish the 70% who own. Plus, governments don't care about the economy at all.
But the U.S. government couldn't do anything to stop its housing market crash, you say. Well, at last check, Canada and the U.S. aren't identical in every single way.
We have had several corrections in Victoria but they were historically followed by booms of about 10% annual appreciation to catch up
ReplyDeleteI'm already excited about the next boom!
>> The government stepped in to stop a crash in 2009. Is it not possible that they would do it again?
ReplyDeleteCertainly possible, and if the decline is bad enough I fully expect that they will release some sort of stimulus or mortgage relief program for owners. But unlike 2009, interest rates cannot be dropped nearly as much now, and the political climate has shifted to one of austerity rather than stimulus. Regulators are hugely concerned bout debt levels, as evidenced by all their recent actions to tighten regulations
This time, Victoria house prices will fall until they are supported by fundamentals such as income.
ReplyDeleteOur naive friend is back! We missed you.
I am all for a stable market that offers affordability to those that can manage it, but anticipating a complete crash and trash with gleeful hand rubbing is pretty obnoxious. And we can definitely see that going on with some posters.
ReplyDeleteIt's pretty much a given that prices will fall until they are supported by incomes. The question is only what is the level of support. Clearly info and I disagree on that point.
ReplyDeleteI am all for a stable market that offers affordability to those that can manage it, but anticipating a complete crash and trash with gleeful hand rubbing is pretty obnoxious.
ReplyDeleteBlatantly misleading real estate cheerleading is pervasive in the mainstream media, with press releases from real estate brokerages being released as news, and paid shills being presented as "experts".
While I don't predict a complete crash, this is the place where those theories can be discussed. If you think it's obnoxious feel free to skip those posts.
Blatantly misleading real estate cheerleading is pervasive in the mainstream media...
ReplyDeleteIs blatantly misleading real estate doomsaying any better?
Every perspective needs a venue. At least it is relevant to the blog, which is more than can be said for many posts by a certain someone here...
ReplyDeleteThere would be no debate without all perspectives engaging. Personally I find it informative here as there is a spread of opinions and some genuine number crunching and useful info graphics production (thanks Leo). Heck this place didn't stop me from buying last year but it certainly gave me the motivation to negotiate hard and even re-negotiate after the home inspection. Look that move up on the web and you would think it would make any seller walk. (the estate agent deserved it for not disclosing the vermiculite)... If people come here and are afraid to buy because of it, they shouldn't be buying right now anyway...
ReplyDeleteHey, if you want some market optimism just look to Village Walk.. new development at the corner of Oak Bay Avenue and Foul Bay. 880 square feet condo in the "low 400's" and any one of the four penthouse apartments presale onlyh at over 1 million.
ReplyDeletehttp://abstractdevelopments.com/projects/village_walk/
Why do people think that the government can move markets long term? Yes they can dictate policy to influence but over time government intervention is finite. We are seeing refinancing fatigue at work here. The government does not have infinite resources to stop this correction.
ReplyDeleteI don't think the government wants to stop a gradual correction. I think they do want to prevent a crash and would be willing to put significant resources into this. If only we could view the briefing notes in Ottawa.
ReplyDelete"I am all for a stable market that offers affordability to those that can manage it, but anticipating a complete crash and trash with gleeful hand rubbing is pretty obnoxious."
ReplyDeleteI guess you were against the boom also?
At least it is relevant to the blog, which is more than can be said for many posts by a certain someone here...
ReplyDeleteGod help us if we learn how to write better and more correctly.
The capacity of the middle class to go into debt to run the economy has been saturated. We can't have another boom until we pay back the money. No money means economic downturn.
ReplyDeleteThe government can want to prevent a crash all they want. They'll even try. They will fail just like our neighbours to the south.
Ernie, you seem to be pretty confident on the state of our economy. Perhaps you would like to enlighten us as to what will prevent this crash? Low interest rates? Immigration? First time home buyers returning?
"No, the government will let prices royally tank, to vindicate snide renters and to punish the 70% who own. Plus, governments don't care about the economy at all.
ReplyDeleteBut the U.S. government couldn't do anything to stop its housing market crash, you say. Well, at last check, Canada and the U.S. aren't identical in every single way."
You're in good hands, Introvert. The government would never let anything bad happen to YOU. They are in full control. No need to worry.
"Village Walk was designed by award-winning architect Franc D'Ambrosio of D'Ambrosio"
ReplyDeleteOh I didn't know this was a D'Ambrasio. He's really quite amazing. His work in Polynesia in the 90's was so so. But he's really come back. 880sqft for "low 400's" sounds like a "no brainer" to me.
He, and his firm, are very well recognized architects with a lot of awards and excellent projects under their belt. Perhaps you should research this before slamming him publicly.
ReplyDeletehttp://www.fdarc.ca/recognition/index_01.php
As for Village Walk, seems high but time will tell. They are supposed to finish next fall.
Wow, I checked out Abstract Dev's site. No sign of a slow down for them. Totally sold out developments at 780k a pop town homes!
ReplyDeleteHousing Won’t Bounce Back So Quickly This Time — Dunning
ReplyDeleteOf course the regulation changes are the problem not a symptom.
------------------------
Ah yes, D'Ambrasio. Guaranteed value retention.
"For Victoria it was the largest monthly decline in the entire period of almost 23 years over which the Teranet-National Bank index has been calculated for that city."
ReplyDeletehttp://www.housepriceindex.ca/Default.aspx
I'm gleefullly rubbing my hands...for all those young FTBs!
Wow, I checked out Abstract Dev's site. No sign of a slow down for them. Totally sold out developments at 780k a pop town homes!
ReplyDeleteBased on what are you coming to that conclusion?
They have three townhouse developments listed:
Brownstone: Completed sometime around 2011, sold out, advertised prices high $600s.
Terra Verde: Completed late 2010, one unit still for sale ($750,000)
City Park: Under construction, 4 of 14 sold. Prices $450,000 to $550,000.
This comment has been removed by the author.
ReplyDelete@Koozdra you realize that article is written by a mortgage broker who would prefer those mortgage restrictions be relaxed?
ReplyDeleteWow, big drop in the Teranet. Seems it is getting a little unstable with such few sales. However it is now matching up better to the median prices again.
ReplyDeleteSales pair count
March 2013: 166
March 2012: 266
This comment has been removed by the author.
ReplyDeleteThat is a long time for a unit not to have sold re. the Terra Verde development.
ReplyDeleteI know the rest have sold, but the fact that they have one unit that has not sold for more than two years seems to indicate the price might be too high.
It will be very interesting to see if they get the more than $400 000 they are setting the price at for a 1bed 1den 880 square foot condo at Village Walk.
I bet the units will be very well designed and very high quality, but all the streets around are time limited parking (few spots on the Avenue) or residents only parking.
Apartment owners, businesses and their employees and customers, tenants and their guests cannot park in residential only parking as it is limited to duplex and single family residential parking on the same block.
Village Walk has only 36 parking stalls total. With 22 units and 5500 square feet of office/retail where is everyone going to park?
"@Koozdra you realize that article is written by a mortgage broker who would prefer those mortgage restrictions be relaxed?"
ReplyDeleteI like to read mortgage broker news. It's a good leading indicator to the state of the market. The louder they complain, the worse it's getting. They are getting louder by the day.
"Village Walk has only 36 parking stalls total. With 22 units and 5500 square feet of office/retail where is everyone going to park?"
ReplyDeleteIt'll make a nice holder for the for lease sign.
>> you realize that article is written by a mortgage broker who would prefer those mortgage restrictions be relaxed?
ReplyDeleteGiven that the whole point of the regs was to slow down the market, I can't imagine why Mr Dunning thinks that pointing out they have been effective will persuade the govt to reverse course
From Carney's question period after rate announcement:
ReplyDelete"It is a concern that people are taking on long term debt when interest rates will be adjusted upwards in the future."
What a doom and gloomer. Doesn't he know that low interest rates are now the key to housing affordability in this country?
The Bank of Canada is now a doom and gloomer.
ReplyDeleteCutting their growth projections twice in two and a half months.
Of course no one is calling for NO growth. Unthinkable.
Central bank's key interest rate kept at 1% as economic outlook dims
"... If there were a sudden weakening in the Canadian housing sector, it could have sizable spillover effects on other areas of the economy."
ReplyDelete2013-04-17 MPR Press Conference
"This is a steal"
ReplyDeleteI've been watching this one for a while. Started at 449 last year, now at 329.
Assessed: $378,000
The motivated sellers are starting to drag down the market.
http://www.realtor.ca/propertyDetails.aspx?propertyId=13061823&PidKey=-597503905
CBC News: Bank of Canada stands pat as outlook darlens
ReplyDeleteAlthough the interest rate remains unchanged for now, Carney said that it is likely to rise at some point in order to achieve the bank’s target inflation rate of two per cent.
"After a period based on several factors which we list [including the evolution of the housing market and the evolution of household balances], the next move is likely to be up," Carney said.
http://909dalestreet.epropertysites.com/indexGo2.htm
ReplyDeleteIs Canada’s condo boom coming apart at the seams?
ReplyDeleteAnd while we aren't mentioned, Victoria has its own little condo problem. I expect them to be hit significantly harder than SFHs
ReplyDelete"the next move is likely to be up"
ReplyDeleteIn other words contemplates that the next move "could" be a cut. Not that that's such a great thing. A BoC cut would only happen if the economy really goes in the tank.
But just another sign that sharp interest rate increases are not likely for quite some time. Likely we'll enjoy the "dramatic, emergency" low interest rates for a while longer.
Which is probably good news for folks waiting on the sidelines. You can wait for the market to deflate for a while longer AND most likely still get ridiculously low mortgage rates.
Missed opportunity for "massive" and "unprecedented" to make another appearance.
ReplyDeleteanticipating a complete crash and trash with gleeful hand rubbing is pretty obnoxious
ReplyDeleteIt may or may not be realistic, but what's obnoxious about wanting to avoid paying your lifetime discretionary income to some boomer who paid off their mortgage at the age of 29?
What unearned, untaxed gain the vendor makes, the buyer pays out of hard earned income.
I don't think the government wants to stop a gradual correction. I think they do want to prevent a crash and would be willing to put significant resources into this.
ReplyDeleteYep, the Tories are toast if the market crashes. Probably they're toast, anyhow.
Sales are picking a bit - I think we'll clear 600 for the month. Lots of accepted offers right now as well out there.
ReplyDeleteSFH average has moved up to 619k and median is 534k.
The Fernwood sale of $1.05 million for a 2,800 sq/ft continues to re-enforce my theory that newer build homes are still in good demand in the core, combined with poor inventory.
ReplyDeleteI believe gold popping is sadly another nail in the real estate coffin. You can see here how linked both were since 2001. Twas a good run while it lasted.
ReplyDeletehttp://vreaa.wordpress.com/2012/01/12/vancouver-as-one-of-9-trendy-bubbles/
"I believe gold popping is sadly another nail in the real estate coffin" How so?
ReplyDeletePossible effect from return to PST?
ReplyDeleteThe Fernwood sale of $1.05 million for a 2,800 sq/ft continues to re-enforce P.T. Barnumn's theory...
ReplyDeleteAn interesting comment thread over at the thirties grind
ReplyDeleteAn interesting comment thread over at the thirties grind
ReplyDelete+ 1, very interesting.
Is it made out of gold?
ReplyDelete322124
Apple stock has sure fallen from grace - around $700 last fall to around $400 now.
ReplyDeletehttp://www.geoffandstacey.com/Properties.php/Details/107
ReplyDeleteIt's a typo - should be 249,000
Yes, what is up - or should I say down - with Apple?
ReplyDeleteA truly astonishing price for a new home in Fernwood. Even astonishing for a new home anywhere in the core including South Oak Bay - for basically an 1800 square foot home with a 1,000 square foot basement suite.
ReplyDeleteDoes this mean Fernwood is becoming the next premier neighborhood?
Nope.
It simply means one person bought a home at over a million. And that isn't a guarantee that if they re-sold in a year that they would get close to the price they paid. Nor does it mean that the adjacent neighbor's 50 year old home has increased because of this one sale. Nor does it mean that the neighborhood has had a substantial jump in value because of this one sale.
Because - One Sale does not make a Market.
"Apple stock has sure fallen from grace - around $700 last fall to around $400 now." Don't I know it... I've been in apple long enough to see it coming. When I bought them they were "going the way of Beta Max" even though they had no debt, loyal customers, and tons of cash, even way back then...
ReplyDeleteI didn't see it hitting this hard though! The latest price puts them at a lower valuation then DELL! Again, this shows that the investing herd does not follow fundamentals... Anyway, I'm sticking to my plan of selling when they launch their television. I might carve off a corner if they hit close to $700 again though ;-)
Re Apple. The market has been negative on apple forever. Only several years of blowing past analyst expectations got them to a sensible valuation. Then their growth slowed down and people went immediately negative again. Sure the days of apple domination in mobile are over, but they're still printing money there and won't stop even if most of the market is low cost android devices. I sold everything around 650 on the way up, and bought back in at 450 thinking that was close to the bottom. Wasn't quite the case but I'm fairly confident there will be another upswing past at least 500.
ReplyDeleteI should have done the same and when it broke $700 I was agonizing about doing it and set 750 as my mark to do just that. Live and learn... Again, need the time machine....
ReplyDeleteWell, it sounds interesting. I'd love a Leo graph of bond rate vs cap rate of Vic RE. Not sure how feasible that is though.
ReplyDeleteDave3
LeoS: Thanks for the thread, some interesting comments...particularly from "Richard, April 14".
ReplyDeleteI don't think you could compare a bond rate to a cap rate in real estate for several reasons.
ReplyDeleteThe most important is that homes people buy to live in are not bought on their potential income stream. Otherwise, no one would buy waterfront or acreage. Too costly for the income you could get from the property. No one would buy vacant land either - there is no market for renting residential land.
Second, if you want to compare Canadian bonds - one CSB is identical to the next one. In real estate - all the homes are different. Different sizes, different ages, different condition, etc.
And to compare the two rates you would have to compare their net incomes to each other. That would mean you would have to subtract for the different taxes, insurance, maintenance, etc amongst the different homes.
Then what kind of bond would you compare it too. You could not use a five year bond. Because the cap rate for a home would be in perpetuity.
The math for real estate and bonds seems to be very similar but that doesn't mean a comparison between the two is meaningful.
The price/earnings ratio is a nice way to compare different stocks and bonds. But, for those reason above, makes no sense in real estate unless you are comparing very similar properties to each other and adjusting for the differences in their expenses and vacancy rates. And it becomes nonsense if you're trying to compare two different time periods with different economies.
He was comparing avg two bedroom condos in Vancouver.
ReplyDeleteHouses have gone up by 100% over the last ten years. If that's not a bubble what is? 150%? 200%?
ReplyDelete"Carney said he believes Canada's housing and household debt issues were both moving in the right direction, but if the problem returned, interest rates could be raised sooner than otherwise might be necessary to avert a bubble."
http://www.cbc.ca/news/business/story/2013/04/18/business-carney-banks-bail-in.html?cmp=rss
Bread prices have gone up by almost 100% in the last ten years. Home heating oil has gone up more than 150%. Water and gas up almost 100%. Money loses half it's value every ten years... Unless you are buying technology and other stuff made in China....
ReplyDelete"Bread prices have gone up by almost 100% in the last ten years. Home heating oil has gone up more than 150%. Water and gas up almost 100%."
ReplyDeleteWages haven't gone up but the amount of outstanding debt is growing at a rapid pace. What comes next?
Well, it seems like most people are buying more technology and cheaper bread...
ReplyDeleteTrue, prices have gone up substantially in the last decade. But how about monthly mortgage payments? They haven't doubled.
ReplyDeleteAt the same time the minimum down payment went from 10% to 5%. Most of us have a 5% downpayment in the credit card limits in our wallet.
The question really should be why home ownership is not MORE than 70 percent.
And with almost every new home having a basement suite and I would guess one out of every five older homes now having a suite. Together with our population growth at only 1 percent a year - who the heck is left to rent?
I would also guess at this time, that we are probably losing more people to other provinces than are moving here.
Just a quick look on Craigslist's mapping of suites to rent. There's likely more than a thousand places to rent within an 8 mile radius of the core. There are probably more suites to rent today than the total number of people that will move to Victoria in the next 6 to 12 months.
I know that purpose built apartment buildings are having their highest vacancy rate in decades. And the property managers that I have spoken with have said that the vacancy rate is higher for homes.
Yet, the advertised monthly rents seem still high and people that I have spoken with that are looking to rent are happy to get a one-bedroom basement suite (inclusive) for $750 in say Fernwood. Two-bedroom for $1,200 inclusive.
I believe the home on Roseberry that Marko called a tear-down has been lipsticked up and they are now asking $1,600 a month for the whole home - but not including utilities. I bet the utilities and heat on that home will average close to $300 a month. That's a ton of money each month for what some have called a tear-down. Purchased for around $375,000 with only $1600 a month rental income. Assuming conventional financing leaves a negative return on their equity. And expect lots of tenant turn over. Because if the tenant can afford $1600 a month - they can also afford to buy.
On my block in OB there is a 3 bedroom home in decent condition that has been up for rent and empty now for coming up on 6 months.
ReplyDeleteGreat neighbourhood - why is it not renting? Price.
I think there are just so many inexpensive, newer condos now for rent with the majority of utilities included that many people wince at the relatively high cost of houses, the maintenance even when renting and the utilities.
This will get interesting since so many depend on suites to make mortgages. But, honestly, who wants to live in someone's basement? Especially when you can live in a swishy condo downtown close to the action for the same price.
This, like the bend on a river, will erode the bank until it all of the sudden collapses.
Speaking of mortgage payments not doubling, my friend bought a house on Haultain in the 80s. He paid $85 000 with minimum down. His mortgage was $1800 a month at 20% interest. You could pay a $400 000 mortgage with $1800 a month these days.
ReplyDelete"Speaking of mortgage payments not doubling, my friend bought a house on Haultain in the 80s. He paid $85 000 with minimum down. His mortgage was $1800 a month at 20% interest. You could pay a $400 000 mortgage with $1800 a month these days."
ReplyDeleteThe modern day Marie Antoinette. Let them have condos.
I had no problem renting a suite out this month. If your price is correct for the market, in a nice area, and the place is nice, there will be no problem. We had competing offers on our other unit rented back in October.
ReplyDeleteVacancy kills landlords. You are far better to lower the price by $300 dollars a month for a full house than have six months of vacancy.
It only takes one renter. If you are going to rent out use craigslist. Usedvictoria is not good for this. Vice versa on selling goods.
1980 is 30 years ago. That $1800/month inflation adjusted is$3,893.97/month. You could pay for a mortgage of $850 000-$900 000 with this amount today.
ReplyDeleteIronically, the landlord had been using craigslist and all of their few applications were from people they did not feel comfortable renting to.
ReplyDeleteSounds like a house in my hood. Its been up for rent for over a year at $2,150 per month. That's for the whole house including a suite that the main floor tenant can rent to another party. That's the owners break even point, he won't take less rent. The suite is the problem, you have to be really short to live in it - basically its just storage space.
ReplyDeleteMaybe the best you could get for rent is $1800 for the entire home.
At this point, the guy can't sell the home as he is into it for more than market value. He is taking a loss every month until the market improves and he hopes he can recover the loss. Maybe this Spring he'll give it another try.
One of my mentors once called this type of investing as:
being between a rock and a hard place
>> The math for real estate and bonds seems to be very similar but that doesn't mean a comparison between the two is meaningful.
ReplyDeleteI think Richards point was not to equate them, but to show that yields are coming down in all sorts of investments in a low interest rate environment, so we shouldn't expect real estate cap rates to be what they used to be either.
I'm don't follow the argument that this means Vancouver real estate is fairly valued, but the point is a good one
>> Well, it sounds interesting. I'd love a Leo graph of bond rate vs cap rate of Vic RE. Not sure how feasible that is though.
ReplyDeleteTough because the only rental data I know of is the CMHC apartment rents. Calculating cap rates based on that and condo price wouldn't be very accurate. However it might e interesting as a historical comparison. Ill take a look
If I understand your Marie Antoinette quote (there is no evidence that she ever muttered those words) Condos are our replacement for a detached house being your first purchase. And to a point I think that's correct. As prices are going up, people tend to buy what they can afford and not what they want or need.
ReplyDeleteHowever, when the market declines steeply, very few people want or need a condo. The result is a glut of condos that can take a decade to erase - if not longer.
That glut taints every market segment from rentals to single family homes.
This comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteI'm in one of the big block apartment buildings. Lots of vacancies. It's hard to find a building that is full.
ReplyDeleteThe real estate "cap rate" should increase as housing is perceived at a greater risk than before.
ReplyDeleteYou should see that first in multi-family apartment buildings of say 6 suites or more. Victoria being so small, we just don't have the sales activity needed to judge what is happening to cap rates. We have lots of opinions - but no clear trend. I think big block apartment buildings might be back to a cap rate of close to 7 to 8% - but that's more guess than calculation
Apartment blocks of less than 6 units will be riskier investments. Mostly because the income stream of big block apartments is more secure than small owner occupied/rental buildings. Ergo, a cap rate for a house would/should be north of 8%.
However they aren't. In relation to current rents and house prices those cap rates are running at half that rate.
That basically means if you're renting a house that nets after taxes, etc. say $20,000 at a cap rate of 4% the value of the home would be around $500,000.
But the 8% cap rate that investors are looking at in bigger complexes would put the value of a home at $20,000 divided by 8% or $250,000. That means a home owner is placing a BIG MOTHER of a premium on home ownership.
>> The real estate "cap rate" should increase as housing is perceived at a greater risk than before.
ReplyDeleteYes, but this requires some sophistication on the part of the investor. Large apartment building owners may have that sophistication, but individual owners with suites certainly don't.
Well put, Jack.
ReplyDelete--Richard’s argument of “The “average” condo yield, at 3.5%” justifying our prices, is all fine and dandy until you look at the myriad of safer places to park your money. The question becomes, should an investor choose a 3.5% yielding condo, with such lofty capital risk, or a condo across the border yielding two to three times that with potential for capital gain? The imbalance is beginning to correct itself, as Americans and other foreigners are now perceiving the risk of investing in Canada.
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/foreign-investor-interest-in-canada-fades-fast/article11256621/?cmpid=rss1
Amazon P/E 3,166.07 Apple P/E 8.876 .... Investors don't pay much attention to the fundamentals of now, it's all about buying for what the future holds it seems....
ReplyDeleteI wonder how much of Victoria is globally owned. What will happen in the eventual investor pull out.
ReplyDelete"Having better data would also help inform the conversation about whether Canada should follow the example of countries like Australia and place greater restrictions on foreign ownership of property, he said."
Foreign investors prominent in Canada's luxury real estate market
Grandpa Carney is wagging his finger at Canadians. Stop borrowing you damn kids.
Carney warns of quicker rate hike if household debt not tempered
Not. Borrowing. A. Penny.
ReplyDeleteand I love the feeling.
Borrowed lots and very grateful. Thank you rental income for paying the mortgages off and I'll check back in 10 years when I'm ready to sell one.
ReplyDeleteAwesome - we both win!
ReplyDeletePS - I have borrowed in the past for homes and land.
All this talk about investing in real estate... my Sentry REIT (NCE205) currently pays a 8.25% dividend. The portfolio is about 24% retail, 22% residential, and 13% offices. I put up the cash and someone else does all the work for me.
ReplyDeleteI agree that no loans is best if you want to focus on lifestyle here and now.
ReplyDeleteHaving nothing is a much simpler life ;-)
ReplyDeleteI think most real estate investors are passive investors. That is to say, they just follow what other people are doing and hope that everything works out for them too.
ReplyDeleteNot that this is a bad thing to do. It certainly has worked well for the last dozen years. But not understanding the what, when, how, where and why of real estate means they hang on too long and lose a lot of their paper gains before reality sinks in.
It really is quite easy to collect real estate, all you need is a willing banker, realtor(R) and broker. And there hasn't been a shortage of them in the last dozen years.
But there is no one that teaches you the absolute MOST important thing about real estate - when to sell.
Someone who arbitrarily says 10 years, tells me more about their investment strategy than anything else could. It tells me they don't have one.
18 SFH sales so far MTD over $1 million. SFH average has been pushed to $648k with a median of 541k.
ReplyDeleteCarney is going to be pissed!
ReplyDelete8 SFH sales so far MTD over $1 million. SFH average has been pushed to $648k with a median of 541k.
ReplyDeleteStill no price crash. What a shame.
Nope, not a crash in prices.
ReplyDeleteHomes are just a little bit cheaper - about the cost of a new basic model BMW or about 18 fewer monthly payments to make to pay off the home over the course of a 25 year amortization. If you had put 5% down all of your equity would be lost.
No big deal. I'm sure in the next 25 years there's a chance the home will get back to what you paid for it - as long as the interest rates stay low and the taxes and utility rates don't increase significantly and that you get regular pay increases.
I got a call earlier this month from the property managers who look after my apartment wondering if I was interested in buying the place. I told them I was not, as I was sure that the price that would work for me would be far, far, below what the owner was looking for and there was no sense creating bad blood.
ReplyDeleteIf anyone more motivated than I is willing to run the numbers: Rent is 1100/month, condo is assessed at 300k includes parking and hot water, 700ish sq/ft one bedroom and den.
They backtracked quite quickly when I mentioned I was not interested so I think it was more the lamentations of an owner who missed the peak than a serious intent to sell, but I could move down a few floors in the building to another unit for a slight reduction in rent and very little disruption.
Not owning is a lifestyle choice for me. Have been lucky enough to have the income and freedom to do largely as I please and a house would be one more thing to take care of.
"18 SFH sales so far MTD over $1 million. SFH average has been pushed to $648k with a median of 541k."
ReplyDeleteHence the once wealthy are finally heading for the exits. Better to take the 15% haircut now, than a scalping later ;-)
A government dependant on this tax will be hesitant to repeal it. Plus who cares? Total cost is now an abstract concept. Just look at your monthly payments. They are low. Therefore affordability is still in the market. Well, while the country is in a structural recession. Continue the recession government.
ReplyDelete"In the 26 years since the PTT was introduced, the average price of a home in Greater Vancouver has increased 499 per cent, yet no government in BC has adjusted this tax to account for these changes and home buyers continue to bear the brunt of this inaction," Eugen Klein president of the Real Estate Board of Greater Vancouver (REBGV) said. "Over the course of the upcoming election campaign, our Realtors will enlist the help of the public to send a message to the next government that this tax is unfair, out of date and needs to be adjusted."
Good guy
® ® ® ® ® ® ® ® ® ®
® ® ® REALTORS® ® ®
® ® ® ® ® ® ® ® ® ®
Hence the once wealthy are finally heading for the exits. Better to take the 15% haircut now, than a scalping later ;-)
ReplyDeleteLove how this is spin each month. If $1 + million sales happen to be slow in any particular month the wealthy have realized the market is tanking and are holding off on buying.
If anyone more motivated than I is willing to run the numbers: Rent is 1100/month, condo is assessed at 300k includes parking and hot water, 700ish sq/ft one bedroom and den.
ReplyDeleteI am renting my 200k one bedroom downtown for $1,175. Had eight people take a look at it over two days - rented it out right away. $200 cash flow positive each month plus more than half of mortgage payment paying off principal.
My friend on the same floor rented his out for $1,200 and the previous 1 year lease he was getting $1,100 for it. Same with an investor on another floor in the building. Increased the rent by $100 and managed to rent it quickly.
I was running numbers on the pre-sale I bought at the Promontory and I think I'll be able to amortize a 20% down mortgage over 13-14 years while remaining cash flow neutral.
Not all doom and gloom out there.
Love how this is spin each month. If $1 + million sales happen to be slow in any particular month the wealthy have realized the market is tanking and are holding off on buying.
ReplyDeleteGotta agree with you there.. :)
What's behind the increase in sales? Perhaps the return of the PST, perhaps price drops resulting in sales, perhaps a partial recovery from the mortgage regs, perhaps a blip.
What's behind the increase in price? Nothing, trying to explain it is trying to explain randomness. Monthly numbers are meaningless, so mid-month numbers are doubly so. At 3 months we can start debating about trends, but even that is very doubtful. Wait and see.
I expect that comment on the arbitrary 10 year window and lack of strategy by JJ was directed at me.
ReplyDeleteWhy in the world would you think that anyone would sell at a specific date if the market was not suitable and they do not have to?
Ten years is my current window as I believe that is a safe time period for the market to have dipped and recovered. I plan to have already retired by this point.
If the market is not good, I won't sell. I am cash flow positive now and this will only increase as rents increase, while my mortgage amounts decline.
What other strategy do you need if you have a long-term low rate mortgage?
If you can afford to hold you are never at the mercy of the market.
As far as it being easy to collect properties, it is not for most. You need to be able to come up with down payments and closing costs and meet the bank ratios.
It is far more difficult to qualify for a rental property than one primary residence.
In addition, you need to have the depth to carry a property through vacancies and repairs. You need to be able to identify good rentals that will have the appropriate ROI and will not be a headache.
This requires some experience and comes with a degree of risk that many would not be comfortable with.
"Love how this is spin each month. If $1 + million sales happen to be slow in any particular month the wealthy have realized the market is tanking and are holding off on buying."
ReplyDeleteNot a day goes by without a bunch of million dollar properties getting listed. No need for spin.
"REDUCED $20,000!! OVER $60,000 IN UPGRADES!"
ReplyDeleteWhere oh where have the buyers for this segment gone?
Why are these guys even selling? Just rent the place out.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12764434&PidKey=406455872
Totoro;
ReplyDeleteI would certainly say that you are a far more sophisticated landlord than most and your intelligence and the market conditions from 2000-2008 have done wonders for your position.
You have done well - I think we can all agree on that.
But, if you were all out right now and held just cash in this market would you do the same thing you did ten years ago? (serious question, not a trap).
"REDUCED $20,000!! OVER $60,000 IN UPGRADES!"
ReplyDeleteWhere oh where have the buyers for this segment gone?
Why are these guys even selling? Just rent the place out.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12764434&PidKey=406455872
Who would want to rent it, it's out in the middle of no where and the rent would be high.
"Owner will sell the 11 acreas for $300000 on a cash offer OWNER WILL CARRY SOME OF THE FINANCING"
ReplyDeleteThey're getting desperate up there.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12897745&PidKey=231386452
Built in 2007. Five units listed at the same time. Same realtors. Same descriptions.
ReplyDeleteInvestor pull out?
http://www.realtor.ca/propertyDetails.aspx?propertyId=12767351&PidKey=922010821
http://www.realtor.ca/propertyDetails.aspx?propertyId=12767367&PidKey=-1837824986
http://www.realtor.ca/propertyDetails.aspx?propertyId=12767366&PidKey=1812157249
http://www.realtor.ca/propertyDetails.aspx?propertyId=12767358&PidKey=-2057829704
http://www.realtor.ca/propertyDetails.aspx?propertyId=12767369&PidKey=-1409356708
I bought one place ten years ago, but that has since been sold. The most recent purchases were 2008, 2010 and 2012.
ReplyDeleteThe 2012 property was absolutely a good buy - walking distance to everything and rental income that reduces monthly payment to almost zero.
The catch - it needed work which we are almost done with now. I expect the value of this property will decline somewhat, but we plan to stay and it is very affordable and convenient and we know our payments will not rise over the next ten years.
In my view prices are high and will likely drop, but not crash. I'm no oracle so who really knows.
I don't know when interest rates will rise. If I was a first time homebuyer I would wait for the best possible to deal to arise or hold a bit longer for more of a drop.
If the market is not the best for buying (ie. high) you had better buy something that does not put you in the hole at the end of the day and have a long-term mortgage rate.
If you don't have rental income as a buffer you might want to continue to rent.
koozdra said...
ReplyDelete"Owner will sell the 11 acreas for $300000 on a cash offer OWNER WILL CARRY SOME OF THE FINANCING"
They're getting desperate up there.
Not really, it's a tenancy in common property off in the boons, has no power, no city plumbing, prolly can't develop on it.
Location location location.
ReplyDeletehttp://www.realtor.ca/propertyDetails.aspx?propertyId=12754053&PidKey=-1935617222
http://www.realtor.ca/propertyDetails.aspx?propertyId=12897746&PidKey=-1160746493
http://www.realtor.ca/propertyDetails.aspx?propertyId=12733280&PidKey=-246024731
What's behind the increase in sales? Perhaps the return of the PST, perhaps price drops resulting in sales, perhaps a partial recovery from the mortgage regs, perhaps a blip.
ReplyDeleteWhat's behind the increase in price? Nothing, trying to explain it is trying to explain randomness. Monthly numbers are meaningless, so mid-month numbers are doubly so. At 3 months we can start debating about trends, but even that is very doubtful. Wait and see.
I think it is just random. Market is still very slow in the grand scheme of things. Next month average and median will come down for sure; however, I think all the noise will even out and we'll finish the year around 2-4% down on average and median.
"Who would want to rent it, it's out in the middle of no where and the rent would be high."
ReplyDeleteIndeed, Ernie, indeed.
The farce that we call Canadian real estate has created a bunch of over priced homes occupied by people that can't afford them. The are under water. They owe more than they can sell the house for.
Totoro thinks that people that sell at a loss are stupid. The people that walked away from their homes in the US could have just rented them out to the limitless number of available renters.
Why sell? Why not just rent out the house?
Thanks Tototo.
ReplyDeleteThe diversity of this board is great and it also demonstrates that there is no one right approach to RE for everyone.
sorry - Totoro.
ReplyDeleteI hate that we cannot edit posts!
"Amazing value Priced $52,000 below assessed value! - Original purchase price of $308,500 in 2009! 2 bedroom, 2 bathroom condo at The Blackberry"
ReplyDeleteListed: $249,900
Right now people are taking hair cuts. Soon they'll be full on decapitations.
http://www.realtor.ca/propertyDetails.aspx?propertyId=12911797&PidKey=-1914301744
Well, I can't vouch for condos in Langford. I never got that in the first place. The point of having a condo is you are in town and can walk to everything. You live outside in the coffee shops, bars, restaurants, theaters, your work etc. The Langford lifestyle was about having a big yard, not having to mow it, driving to COSTCO, driving to hockey practice, driving to silver city and parking in your yard along with your RV, boat, and your four other vehicles, not all of them fully working....
ReplyDeleteDitto Dasmo.
ReplyDeleteExactly Dasmo. Real estate has become a speculative mania. It doesn't matter where a property is or in what level of disrepair it's in, it has value. Why? Because there are people willing to pay whatever price you wish to set. You have to delude yourself pretty hard to not think there is a bubble out there.
ReplyDeleteAll types of properties in all segments have experienced huge gains.
Yes, but some more than others as per my "equalization" theory. The hype was oversold an bought hook, line, and sinker. Sooke should be cheaper than Victoria. Sure maybe in the future the metro area will engulf all those spots, maybe. This is why established areas can command a premium. You know what you are getting now. Developments like the "capital city center" are selling a future possibility at a premium. It's not even in the capital city... This should not sell at a premium but should rather sell at a discount since anyone buying in now is taking a risk. A development like Bayview is much less risk as it's not relying on an entire neighbourhood being built and the surrounding town gentrifying to match. Condos like the Era are even less risk as the surrounding area is already there. The risk is how the area might transform over time.
ReplyDeleteSo, although I am a Halibut. I am less so when it comes to the outlying area and in particular, condos in the bush...
My sentiments too, Dasmo.
ReplyDeleteWhen a few developers began building condominums in Langford I thought this would be a disaster. In relation to new downtown condominiums, a developer would have to sell at a steep discount to attract buyers from the City core to buy in Langford.
But that's not what happened.
Instead the few developers hung together to sell their developments at downtown prices. They had a strangle hold on the condominium market - a monopoly of sorts. You want a condo in Langford - you paid their price. And no developer dropped their price.
After a few years, re-sales began to compete with these developers and prices came down. That has meant big losses for those that initially purchased a strata home in Langford.
Greed played a big part on both sides. Buyers smoked the Opium of Langfords transformation, that was being peddled by the developers and city council. Densification and gentrification were tooted as why Langford is different. Good-bye to the old Langford that was perceived as the land of greasers and rusty pick up trucks. They were to be magically transformed into Starbuck guzzling urban professionals.
That greed clouded condominium buyers judgement is undeniable. Instead of taking a step back and logically thinking that if houses are cheaper in Langford than Victoria - does it not make sense that condominiums should be too.
Appraisers knew it and explained this to the banks. The banks solution was simple - get rid of the appraisers and use automated computer models to value the condominiums. Contract prices were wrongly deemed to be Market Prices and the highest sale became the basis for the next sale. Peak pricing was the new market value system.
No wonder a graph of market appreciation resembled the trajectory of the Space Shuttle. No one was checking - and no one gave a damn.
I do not believe that CMHC or the banks were doing their due diligence. One might go so far to say that CMHC was manipulting the market so that CMHC could add billions of dollars to the government coffers in insurance fees. And because of this, I do not think home owners that have lost their homes should have to pay anything back to CMHC.
PS - my keyboard is stuck on French, so I get buyerès when Ièm typing - so I have dropped the apostrophes.
Now I will reboot and be back in English mode.
"A development like Bayview is much less risk as it's not relying on an entire neighbourhood being built and the surrounding town gentrifying to match. Condos like the Era are even less risk as the surrounding area is already there."
ReplyDeleteDo you really think that people buying condos today are thinking they are taking a risk? I highly doubt it.
When people think that buying a condo is risky, we will see massive numbers of buyers on the sidelines.
Maybe it's already happening.
Buyer's
ReplyDeleteit's
developer's
ahhhhh - better.
Most definitely buyers are underestimating the risk of home ownership.
ReplyDeleteI think most investors have a better grasp on what could happen in the future because of what they've experienced over the last 2 or 3 years. Not many of them are buying anymore - the numbers don't come close to making sense.
But buyers really don't have that much control over prices. Most home sellers should have a fat cushion of equity built up. They're not highly motivated to sell, unless they've bought something else. Sometimes if they get a good deal on what they just bought, they might let the property sell for less than they think their first property is worth. But they don't have to drop their price much on the average property to spark activity.
So you're not going to find deals on Gordon Head boxes, there still someone standing behind you that wants to buy it. 20 acres of forage land in Central Saanich - that's a different story. Or waterfront acreage in North Saanich. Or a farm house in the ALR. Great deal for some people because when you spend a millions on farm land your property tax exemption allows you to pay less taxes than a someone with a one-bedroom condominium.
What about the future?
ReplyDeleteReal Estate activity usually see-saws from the inner core to the outer core then back to the inner core and repeats itself.
As the price differential between the inner and outer areas gets larger, more inner core households that don't have to rely on working downtown (we are a retirement community - are we not) will opt for selling their inner core property and buying in the country at the same time stuffing their bank accounts with pretty plastic portraits of Sir Robert Laird Borden.
Most likely it's happening already. Which might be the reason why the only thing seeming to sell in the Westshore is new, low maintenance housing.
There might be a time in the future when we'll see the obverse of today's market. That the months of inventory will be higher in the city core than in the Westshore.
Marko: Not a bad property it would seem at 1180 Craigflower. Huge lot allowing for a new build strata duplex with secondary suite(s)? Sold for $340K. What do you think?
ReplyDeleteAlso another property I like went for $537K at 4275 Parkside in Mt Doug area. Great 1960's home and nicely updated. Great open floor plan .... but only one bath. With a little tweaking, the bright 2 bedroom suite down would get you a nice rental income.
6300 sq ft lot with house on Newton (2072) just sold for $442K. Asking price was $489K and assessed for $520K.
ReplyDelete4275 Parkside in Mt Doug area for $537K - I see MLS shows it at $569K - how long was it on the market?
ReplyDeleteNice looking area. What is the area like? Much activity at 500K?
Oops, looks like austerity isn't the way to go. This will be good information to know in our upcoming recession.
ReplyDeleteMeet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement
@simple man re: Newton
ReplyDeleteDo you think it'll be a tear-down? Did you take a look inside when they had the open houses?
@Rick re: Parkside
Can't speak to the market there, but it's a nice neighbourhood in general. My parents have been there for about 15 years and I visit often.
Dave3
Well, I can't vouch for condos in Langford. I never got that in the first place. The point of having a condo is you are in town and can walk to everything. You live outside in the coffee shops, bars, restaurants, theaters, your work etc.
ReplyDeleteThe point about a condo in Langford is that you can walk to a coffee shop, bar, restaurant, etc. in Langford.
I mean, if you are employed in the dynamic West shore economy — yer know, the casino, car dealerships, the university, hospital, dog grooming, free-range eggs, manure, whatever, you don't want to go to a coffee shop in a boring dormitory suburb like Oak Bay, Gordon Head or East Saanich.
The fact is OB is not the center of the universe, even though almost everyone here seems to think so.
But the core chauvinists will never get it.
"6300 sq ft lot with house on Newton (2072) just sold for $442K. Asking price was $489K and assessed for $520K."
ReplyDeleteA full 15% below assessment. It would be interesting to find out how much value it had lost compared to peak assessment.
No area of Greater Victoria will be spared from this major, multi-year correction.