Tuesday, April 2, 2013

Spring Perks Up Victoria Market

To celebrate the continued existence of the blog, here a VREB-like upbeat take on our March numbers.

Marko provides us the early update.

March 2013
Net Unconditional Sales: 483
New Listings: 1,231
Active Listings: 4,333

Clearly the sunny weather has brought out the buyers last month, with sales exploding by an amazing 22% over February. My friend a realtor says "We're definitely seeing some more traffic at open houses". Meanwhile with interest rates remaining low, it's never been a better time to buy in Victoria. Months of inventory at 9 reflects a balanced market in Victoria.

Update: 
The VREB release is out.
"The market continues to unfold as predicted," says Shelley Mann, President of the Board.
Hmm...  What was that prediction again?  Oh yeah:  "sales volume will increase 4% this year over 2012, but prices will remain flat."
"With sales below the historical norm, there is potential pent-up consumer demand developing in the market. We expect quarterly activity to increase over the next two quarters"
Potential yes.  But what's stopping those buyers?  If they want to buy there is lots of selection, so I don't see why they don't go out and buy.  It seems rather more likely that slow sales will create pent up supply, with people that maybe would have liked to sell last year or the year before for top dollar getting a little more serious.
"The first six months of 2012 were reasonably strong, and then mortgage amortization rules changed in July"
This is a bit of revisionist history.  The first 6 months of 2012 were pretty weak, and then the year got weaker after July.

"With different lending rules in effect, it is challenging to compare the first six months of 2013 with 2012," she adds.
The median price of a single-family home is $510,777 compared to $555,000 in March 2012, a decrease of 8%. The six-month average shows a decrease of less than one percent month-over-month. Annual differences are skewed by four single-family home sales over $2 million in March 2012. 
 Challenging, but together we can do it!  Those darn outliers, always shifting the median price, which as we know is especially susceptible to just that...

87 comments:

Marko said...

SFH Median = $510,777
SFH Average = $583,886

Condo Median = $265,000
Condo Average = $288,310

a simple man said...

Thanks Marko. 15% lower sales than last March and inventory basically the same (ever so slightly higher).

Marko said...

New listings down 13%.

a simple man said...

Now - that new listing on Dufferin assessed at $645K but for sale at $800K. Estevan lunacy continues.

Nice yard.

Marko, I am assuming you did not have anything to do with pricing - although the Hamiota listing makes this one look like a bargain.

Leo S said...

Beginning of month the projection was 474. Not bad

Marko said...

Mere Posting. Home does have a very nice late 1990s addition.

koozdra said...

Less people are listing their houses because they think this is a temporary slow down. Their optimism is so cute.

subprime11 said...

Hamiota and Dufferin are "bull traps". I'm surprised that the $600K place on Dunlevy didn't sell yet.

HouseHuntVictoria said...

"meanwhile, with interest rates remaining low there's never been a better time to buy in Victoria"

April fool's was yesterday. You owe me a new iPad on account of coffee laughter spit damage of old.

Introvert said...

Their optimism is so cute.

So is your pessimism.

Leo S said...

All about perspective. I'm optimistic that houses will continue to get more affordable, that young people will not be doomed to be debt slaves, and that people will have some money left to retire with, not just a house.

Pipe dreams I know.

info said...

March 2013 sales for Greater Victoria were 20% lower than March 2009 (when prices were tanking).

March 2013 = 483 total sales

March 2012 = 570
March 2011 = 622
March 2010 = 789
March 2009 = 602

a simple man said...

vreb release:

VICTORIA BC - Greater Victoria's real estate market is following tradition with a spring upswing in activities with month-over-month increases in showings, new listings and total sales.

The Victoria Real Estate Board reports a total of 483 sales processed through the Multiple Listing Service (MLS®) in March 2013, an increase of 23% over the previous month. Sales figures are 15% lower than March 2012's 570 sales.

"The market continues to unfold as predicted," says Shelley Mann, President of the Board. "March resulted in the highest number of sales since July 2012 when the lending rules changed. With sales below the historical norm, there is potential pent-up consumer demand developing in the market. We expect quarterly activity to increase over the next two quarters.

"The real estate market peaked in 2008, and then the market adjusted during the global economic crisis. The first six months of 2012 were reasonably strong, and then mortgage amortization rules changed in July. The revised lending rules affected buyers' abilities to qualify for mortgages and we are still feeling those effects on the market," Mann explains.

"With different lending rules in effect, it is challenging to compare the first six months of 2013 with 2012," she adds.

The median price of a single-family home is $510,777 compared to $555,000 in March 2012, a decrease of 8%. The six-month average shows a decrease of less than one percent month-over-month. Annual differences are skewed by four single-family home sales over $2 million in March 2012.

There were 121 condominium sales in March, with a median price of $265,000 - down 3.3% year-over-year and 2% over last month. Townhouses saw increased sales in the past month with a median price of $384,450, an increase of 2.86% year-over-year and 13.91% since February 2013. Current active listings at the end of March were 4,333.

Total Waterfront Single Family Dwellings sold: 13, down 1 over March 2012
Total Non-waterfront Single Family Dwellings sold: 264, down 47 sales from March 2012
Single Family Dwellings sold over $1 million: 15 (1 over $2 million)

koozdra said...

"...there is potential pent-up consumer demand developing in the market. We expect quarterly activity to increase over the next two quarters."

I think Shelley is mixing up demand with supply. It's supply that is piling up.

Where oh where did all the investors go? Don't they realize that our housing market is immune from regular market forces?

They'll be back.... next year.

Leo S said...

@info. March 2009 was about the start of the bounce back actually. Prices were no longer tanking in March.

a simple man said...

Based on the very simple 8% drop in median from last March I saved a whole whack of money by renting and waiting the market out. Tens of thousands over my expenses.

Have to remember to send my landlord a fruit basket or something.

Introvert said...

Have to remember to send my landlord a fruit basket or something.

You're both saving money and helping pay off your landlord's mortgage; it's a mutually beneficial relationship.

a simple man said...

Symbiosis. A beautiful thing.

Introvert said...

simple man, I've never felt closer to you than I do right now.

Leo S said...

Simple man & Introvert

koozdra said...

In other news...

DavidL said...

I've updates my data/charts showing Nine Years of March SFH Sales for Victoria. We have a long way to go to 2005 prices! That said, the median for March 2013 is beginning to approach March 2009 level.

Additionally, the Months of Inventory (MOI) comparison (third tab) reflects the usually high MOI that we are currently seeing.

koozdra said...

What happened to Canada’s economic miracle?

Could it be the bursting of the biggest bubble in Canadian history?

No, no, if it was we would have ridiculous things happening like the finance minister calling private banks and asking them to stop loaning out so much money for so little.

koozdra said...

I don't mean to offend, I'm simply curious.

Marko can you explain to me how much work is involved in a mere posting? Your service costs eight hundred dollars.

"Essentially what a Flat Fee MLS® listing, or ‘Mere Posting,’ amounts to is a For Sale by Owner (FSBO) with MLS® System exposure. After the home is listed, the homeowner takes control of the selling process. At www.flatfeelistvictoria.com we offer this service for $799+HST. Please follow the links below for more information!"

Where does the 800 dollars go?

It seems all you are doing is doing is 3 minutes of data entry.

Marko said...

Just to put things into context if you sell an average $600,000 home using a mere posting the cost will be $799+GST up-front plus $595+GST if it sells. That is a total of $1,400+GST for the listing portion cost of the sale.

A REALTOR® may charge you 3.0%100k+1.5%balance for the listing portion of a full service commission. That is $10,500+GST on a $600,000 home for the listing portion cost of the sale.

A mere posting is a small fraction of a full service listing but the list to sales ratio is the same (at least on my mere postings it is). This year so far I've sold 5 full service listings and 6 mere posting listings!

Where does the $800 go? Well, first of all $250 goes to Fair Realty. $45 goes to the Victoria Real Estate Board. My other expenses also add up. A large component of it is my time (I actually go view the home and evaluate the situation even for mere postings). The time is usually not during business hours either.

I am going to raise it to $899+GST in a few months. There are other companies doing it for cheaper and my intent is not to compete with them. If sellers want to mere post with a company in Vancouver via email for $500 it is what it is.

Consumers deserve options and I don't expect everyone to use my services by any means.

koozdra said...

Thanks for the response Marko.

No question this service is much cheaper than the alternative.

If I become a realtor could I offer to list homes for 350 dollars and just enter them into the system on evenings and weekends? Or is there some safeguard in place that nobody can charge that low of an amount. Would the problem then be advertising?

DavidL said...

I suspect that I've viewed a few "mere postings" on my PCS and VREBMatrix. I've been really surprised with the poor quality photography of some listings. Some have been so bad that it is very hard to get a reasonable impression of the property being sold!

Marko said...

If I become a realtor could I offer to list homes for 350 dollars and just enter them into the system on evenings and weekends?

Well I guess if you can make the numbers work give it a try.

Leo S said...

If I become a realtor could I offer to list homes for 350 dollars and just enter them into the system on evenings and weekends?

$350
- $250 to brokerage
- $45 to VREB
= $55

For that you have to talk to the client, enter it into the system, and pay back the time/money for the course. Doesn't sound worth it.

Then again there's lots of unemployed realtors out there now. Maybe you can strike up a deal. Charge $400, then you enter the listings as their assistant, split the profits.

koozdra said...

How much do you really have to talk to the client?

You offer a no frills service. Send me pictures, a description and I'll type it in. That can be where the business relationship ends.

House sells, doesn't sell, I don't care.

Ok, lets say It's 400. That means you are getting 100 dollars for something that literally takes minutes to do.

I'm thinking this could be a part time job even. Are realtor's allowed to sell houses as a part time job? Would this type of job even be considered "selling houses"?

a simple man said...

A lot of realtors seem to be part time - I know a number of waiters and waitresses that are.

koozdra said...

Well, I just did some research and there are many sites in Canada that offer this service already for less. Although many of their urls are not working any more.

MD80 said...

@DavidL
I've been very surprised of the quality of pictures from some full-service Realtors.

example: MLS#320768
Am I buying a house or dinner?

DavidL said...

@MD80

LOL. You are buying "tranquil country atmosphere with secondary income potential".

A photographic peave of mine is lowering the camera height (to about 4' 6") in low basements to make the walls appear higher. The doors (typically 6' 6" high) are always a giveaway...

dasmo said...

I'll pay them $250 to list their house. I'll make it part of a social networks iOS app and just get investors to pay my salary....

koozdra said...

"Attention family pets! Tell your owners about a great condo alternative! A small home, but well proportioned & tastefully updated."

http://www.realtor.ca/propertyDetails.aspx?propertyId=12897620&PidKey=-771105786

The future of advertising.

Animal Spirit said...

DavidL - try inflation adjusting the median and average prices at 2.5% per year. Real 3 month rolling median SFH prices are down to August 2005 to February 2006 values if one accounts for inflation (nominal 3 month prices were around 425K in 05/06).

To me, March sales are quite a bit weaker than they appear. There wer lots of new house sales pushed forward by the HST/PST change - April and May could be weaker than expected because of this. Could also cause medians to go wonky as well.

koozdra said...

Only salaries move up with inflation (some of the time).

Manitoba's Land Transfer Tax - Compare Price Increases

DavidL said...

@Animal Spirit

Good point. I may try doing that...

dasmo said...

I received one of those 0% for 12 months offers today. Reflecting back on those earlier posts about taking that offer and investing the cash advance in the stock market I looked into the interest rate if you are late on a payment and what the standard rate is after the 12 months...wait for it...
"Cash advances: 24.99%"
Ouch!

totoro victoria said...

Joe William, a realtor in Ottawa, offers flat fee MLS listing for $109.

http://www.walletpop.ca/2010/04/23/a-conversation-with-ottawas-most-hated-realtor/

a simple man said...

wow - $109 is unreal. Must have some sort of different arrangement than Marko has.

dasmo said...

$109 sounds like a lost leader to me. It costs him $ to list on MLS. It also takes time to communicate to the client and take a picture. The article says he makes his money selling second mortgages, probably for down payments....

koozdra said...

How much does it cost to run the MLS per year?

Look at craigslist and usedanywhere. These services offer free listings. Ok, MLS is flashier and they might have a bigger dev team. Let's face it, MLS is a huge money grab. They are the biggest player in the game so no one complains (too loudly). They just pay the price that is advertised. The consequences of monopolies.

yogurt said...

Does anyone know where I can find how many new listings appeared each month in 2012?

My wife is concerned that everyone is done listing their 2013 properties now and we need to get searching right away.

I'd like to see when new listings typically trail off.

(I'm bearish on real estate, but our rental is aggravating her allergies, and we will need to move this year. Moving into a different rental is possible, but it's hard to find a suitable place.)

dasmo said...

Sorry Introvert.... Loss leader....

a simple man said...

yogurt - I think that April and May are the peak for listings, so there is far more to come. June and on seems to drop off in terms of new listings.

If you go back to each of the posts near the first of the month from this blog, you can see the monthly listings.

Diane said...

Unconditional sales 483 this March vs 570 in 2012, in what way is the market picking up? The prices will fall further and that is why people are not buying at the moment. Tighten the belts folks!

a simple man said...

oh, and yogurt - don't get caught in the bulltrap. There are more rentals now that in recent memory so there is lots to choose from. Get a rental with all hardwoods.

yogurt said...

Thanks simple man. I had forgotten the archives here were organized by month, making it a piece of cake to find the old stats. You were right, Apr and May are peak.

For the curious, here's the new listings from the first half 2012:
Jan 978, Feb 818, Mar 1066, Apr 1372, May 1437, Jun 1137, Jul 1114, Aug 810.

Definitely keeping an eye out for a hardwood rental. I've become attached to our current neighbourhood, but need to get over that.

a simple man said...

Which neighbourhood are you looking in?

a simple man said...

Should be a lot of rentals coming soon as a lot of University students just finished their year.

yogurt said...

@simple man -- Lake Hill is ideal, because it lets my kid walk to school. We're looking at the neighbouring areas too though.

a simple man said...

Lakehill is a nice area, but it is tougher to find rentals. Hope it can happen for you.

DavidL said...

@yogurt
Does anyone know where I can find how many new listings appeared each month in 2012?

Check out Sales versus New Listings (second tab) for a nice chart covering 2011, 2012, and so far this year.

Just Jack said...

For the Victoria Core districts, the City of Victoria had the best sales activity. With 110 current listings and 38 sales last month, The Months of Inventory (MOI)dropped to 2.9

The City also had the highest sales to new listings ratio at 0.74

Median price was $601,000 with an averaged 41 days on the market.

Have a couple of back to back months of low MOI and a low replacement rate of new listings might result in an increase in prices for the City.

The opposite seems to be true for Oak Bay. 6.2 MOI and a sales to new listings ratio at 0.43 Means a lot of selection and competition among home owners.

Median price was $770,000 with an averaged 44 days on the market.

This is a small sample over a short time period and with all small samples you will have greater variability.

Just Jack said...

Condominiums appear to be underperforming the rest of the market segments in the core districts.

661 current listings and 92 sales last month. With a steady supply of new listings at a 0.4 sales to listings ratio.

Median price was $284,950 with an averaged days on market of 72.

With condominiums, new or pre-construction units tend to skew any sales analysis. Strip away the new and pre-construction units results in 7 MOI and a sales/new listing ratio of 0.45

Median price $276,000 and 71 days on the market.

Lots of variability in this market. With condos selling at at 75% to 125% of their assessed values.

Leo S said...

@diane Unconditional sales 483 this March vs 570 in 2012, in what way is the market picking up?

It was a joke. VREB releases optimistic updates like this even when the market is in the toilet.

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

"What you are not being told about housing... and why you should care"

Quoting from Abbotsford Today:

"As the real estate balloon, which many say burst last December, (the market peak was actually in May 2012) is quickly deflating all over the Lower Mainland, across BC and across the country, who is warning the homeowner?"

This article also reminds us that we need to take everything that the mainstream media says about real estate, in general, with a grain of salt. Why? As the (mainstream) authors point out: "... real estate and the newspaper industries -– two industries which have been glued at the hip for 50 years".

koozdra said...

"Home sales in Lower Mainland were up over February, but down from both historical averages and March 2012, the area real estate boards reported Wednesday."

A comparison to February, very creative.

http://www.vancouversun.com/business/real-estate/Vancouver+home+sales+still+well+below+historical/8189597/story.html

Just Jack said...

When you start looking outside of the core districts you get to see how truly bad our market can turn.

There are some 588 homes listed for sale in the Western Communities with only 56 sales in March. Sales to New Listing ratio is 0.36 Those numbers pretty much suck.

Median price $421,250 with an average 72 days on the market.

That means tough times for real estate agents selling in the Western Communities. Lots of money spent marketing homes and little money coming in.

Cheap housing in Sooke Village starts at $240,000 and that gets a 1965 basement entry home with a one-bedroom suite. The property rents for $18,000 a year or about a buck a square foot!

And that's an asking price!

I hear so many people say that if house prices fell in Victoria they would buy them up quickly. Well prices have fallen in Sooke - And no one is rushing to buy them!

Introvert said...

I hear so many people say that if house prices fell in Victoria they would buy them up quickly. Well prices have fallen in Sooke - And no one is rushing to buy them!

For the umpteenth time, Sooke is not Victoria. No one flips a coin between buying in Sooke and buying in Fernwood. They just don't.

The Gulf Islands are no different. Salt Spring, for example, is a niche market. There are limited job opportunities. And many retirees are hesitant to move to such a small community. And I haven't even mentioned the ferry fares.

Also, Sooke has different weather than Victoria. Don't make dasmo bust out the rainfall numbers again.

Leo S said...

@davidl

No need to scrape those together separately.

Here's all the data from the VREB (ok all data I'm interested in, I don't have the prices for all the different housing types).

koozdra said...

For the umpteenth time, Victoria is not Vancouver. No one flips a coin between buying in Victoria and buying in Vancouver. They just don't.

Leo S said...

For the umpteenth time, Sooke is not Victoria. No one flips a coin between buying in Sooke and buying in Fernwood. They just don't.

They don't have to be the same person. The point is that when prices decline people tend to buy less, not more.

DavidL said...

In response to Animal Spirit's suggestion, I've updates my data/charts showing Nine Years of March SFH Sales for Victoria. Both nominal and inflation-adjusted values are now available. Inflation is based on the CPI calculated by the BOC.

A couple things to note: [1] the inflation adjusted prices show that the current median and six-month average are back to 2006 values, and [2] the average is now dipping below the six-month average. Considering that historically, prices peak in the spring and drop in the fall/winter - this is an indication of the fast rate of which current prices are falling.

DavidL said...

@Leo S
Thanks for the data! :-)

yogurt said...

@Introvert, when we were starting out, we moved from Victoria to Sooke because that's what we could afford. We were choosing between a condo in Victoria and a house in Sooke.

Many of our neighbours in Sooke had made the same decision. They still worked in Victoria and drove or took the bus in every day.

In hindsight, I think it's a bad decision. That drive is harder than people imagine, and I saw many people leave Sooke again within three years. But it's a decision many people make.

That's why Sunriver Homes advertises their $329K houses on that sign on Blanshard.

SJ said...

Here's an interesting new listing in Oak Bay:

2857 Dewdney Ave
MLS 321387

A nice looking character home in Estevan, listed at $629,000 but assessed at $750,000.

Wonder if this will create a bidding war?

a simple man said...

SJ - that house was up for a long time previously, but at a much higher price - $775K seems to ring a bell. It needs to be significantly upgraded or razed. Likely better the latter.

For the money it is just not worth it - even at the new price.

Interesting to see another 6000 sq foot lot with house on Newton for sub $500K ($489K).

Prices are coming down. DavidL is right.

dasmo said...

From HHV:
"Craig said...
2857 Dewdney Ave just dropped $100,000 to $649,000
July 16, 2011 at 9:13 AM"

SJ said...

@ a simple man

It's a funny old market - there's Dufferin assessed at $645,000 and listed at $799,000. Then, there's Dewdney assessed at $750,000 and listed at $629,000!








a simple man said...

Seems that in OB asking prices are based on sellers' wishes and little else.

These will soon butt heads with the wishes of the increasingly-selective buyers who want to pay what the property is really worth.

koozdra said...

"Low interest rates have failed to jump-start the housing market, as sales in major Canadian cities in March fell sharply below where they were last spring."

At least they were up from February.

http://www.theglobeandmail.com/report-on-business/economy/housing/real-estates-late-spring-sales-rebound-fails-to-blossom/article10712624/

Leo S said...

Seems like a lot more low end sales recently while the high end has dried up. Effect of the mortgage rule changes starting to lessen?

a simple man said...

I think the bull trap has mostly been sprung. A lot of the people who were waiting jumped in at the start of last month and now most left are those who are inclined more to wait than panic.

This will get interesting.

subprime11 said...

Agree with Leo..High end homes above 1 million are slowing. Lots of listings with few sales. If you can afford over a million and wait a few months it might pay off. I think things are starting to shift out there. Have a feeling that there are more pent up sellers than buyers at this stage of the game but that's just a hunch.

subprime11 said...

Ditto, simple man. Early spring market buyers are dwindling and the rest of us are willing to wait it out.

Introvert said...

This will get interesting.

Thousandth time that's been said. Rarely, if ever, has it been true.

koozdra said...

This will get very interesting.

a simple man said...

Come on, introvert. It has all been interesting!

Leo S said...

Introvert's life is so exciting he has to come here to wind down a bit.

koozdra said...

Why is it such a bad thing if people can't sell their overpriced property?

A healthy economy requires mobility. The ability of the actors to move around the country to fill vacant positions as they become available. This is why there seems to be a labour shortage. We have the jobs and the people to fill them. However, the people can't move because they are sitting on an asset that nobody is willing to pay them what they have paid in recent years.

Study after study comes back and says that people are unwilling to relocate to take jobs. The government has the solution. We will change EI rules so that you have to take a lower paying position or your EI will be cut off.

So what happens?
Joe the builder gets laid off at his local company. He find another job in another province that has a shortage of people in Joe's trade. Joe would like to relocate but his family bought a house in a seemingly invulnerable housing market. Joe stays put on unemployment and the position never gets filled.

What are the options you have to consider in this situation?
1. Sell the house
Not an option they are under water.
Even selling at a loss is terrible. You will burdened with debt for years and years.

3. Put the house up for rent
Oops, the rental market only has a fixed capacity. And all the previously despised renters keep moving to cheaper and cheaper accommodations. Scum!

4. Accept a lower paying job.
The local economy isn't doing to well. They are getting hundreds of applications at Mcdonalds. No matter, that entry level retail job won't pay that hefty mortgage.

4. Bankruptcy
Declare bankruptcy and move and rent.

All this so you could live in the house of your dreams. Of course nobody could have seen it coming.

koozdra said...

What a joke. No bubble here.

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