Tuesday, May 21, 2013

May 21 Market Update


MLS numbers update courtesy of the VREB via Marko Juras. These numbers are for the Victoria Real Estate Board's reporting area, including Sooke, Shawnigan Lake and the Gulf Islands.

May 2013May 2012 
Wk 1Wk 2Wk 3Wk 4
Uncond. Sales96
235
367

659
New Listings277
584916

1740
Active Listings4568
4642
4724

 5015
Sales to New Listings
35%
40%
40%

 38%
Sales Projection---
600
602

Months of Inventory
7.6

We won't hit last year's sales but listings are down to match,   Looks like MOI will be lower than last year again.

213 comments:

1 – 200 of 213   Newer›   Newest»
Leo S said...

>> I also don't see that buyers are as hesitant to buy right now as you might expect. There are a fair number of sales.

You have to go back almost 15 years to find worse sales numbers YTD. Population adjusted the current sales rate is likely the slowest since we have data

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

Quite a lot of full houses for rent are starting to hit craigslist.

This one was listed on MLS for a time. No takers.

$2700/month

Good luck.

koozdra said...

Addendum to my post above:

According to the assesment website it sold last year for $525,000.

Assessed: $595,000

Tried to sell:
$557,000


Quick buck did not work, off to craigslist.

koozdra said...

"Should interest rates rise sharply, Ms. Dickson expressed greater concern for debt-saddled consumers than the big banks. The banks “can be standing at the end of the day…but consumers may not be,” she said."

What is Julie Dickson talking about? That is not how rates work (at least according to consumer sentiment). Rates don't "rise sharply", they "remain low for the foreseeable future".

Canada’s Bank Regulator Keeps Close Watch as Super-Low Rates Persist

not yet said...

what method did you use that results in estimated 600 sales?
I get a much lower estimate.

CS said...

According to that WSJ article:

"Low interest rates are squeezing the banks’ net interest margins, defined as the spread between what’s earned on loans and what’s paid out on deposits."

But what has the rate paid on deposits got to do with mortgage rates?

There is no limit on how much Canadian banks can lend relative to the money deposited with them. So they can print as much as they like, up to the limit set by the reserve ratio.

But mortgage paper can be counted as part of their reserves -- that's if the Government of Canada is unwilling to buy the banks' dodgy mortgages for cold hard cash, as they did in 2009.

So again I would like to raise the question, why in a competitive market, should mortgage rates ever rise, except in response to increased costs of mortgage insurance reflecting a increased risk of non-repayment.

I am not asserting that there is no reason. I just don't see what that reason is.

koozdra said...

@CS

Are you thinking rates will never rise? What are the influences on rates? Are the banks solely responsible for setting these rates?

------------------

“Consequently, the real estate lending market has been a significant area of focus for OSFI, because of the significant incentives for consumers to borrow and for banks to maintain revenues, the size of mortgage lending portfolios, the concerns about some markets being overvalued, and the possibility that customers’ debt serviceability could be masked by low interest rates,” she said.

Take on debt now. You'd be stupid not to. Hold the debt too. The banks are just giving away the money.

G&M
Transition to higher interest rates ‘could be very painful’: OSFI’s Julie Dickson

Just Jack said...

As long as there is a viable rental market in the city core, market prices should stay stable.

That may change if the price differential between the Western Communities and the core continues to widen. At some point, renters may choose to buy a home outside of the city rather than rent in the city.

You can buy a detached home with high ratio financing in Sooke for as little as $1,200 a month today. That's going to make a lot of renters re-think the necessity of being located in the city.

The desire to own a home being stronger than the inconvience of commuting to the city.

info said...

"So again I would like to raise the question, why in a competitive market, should mortgage rates ever rise, except in response to increased costs of mortgage insurance reflecting a increased risk of non-repayment."

Bad news for you CS, mortgage rates will be moving much higher no matter how much you try to convince yourself that these extremely low levels are here to stay. The 25 year average for the 5-year fixed-term mortgage rate is 8%.

Far too many people (with no money)were given mortgages at these extremely high bubble prices and extremely low interest rates. Now they are banking on extremely low rates to become a permanent thing because they know that if rates rise, they will not be able to afford their monthly mortgage payments.

CS said...

Are you thinking rates will never rise?

Some, probably most, rates will rise if inflation returns.

This can be seen with Japanese Gov't. bonds. The 10-year rate has rocketed upward more than 50% since April when the Japanese Government embarked on its printing-our-way-to-inflation-or-bust policy.

What are the influences on rates?

Bond rates and presumably many other rates are determined strictly by market forces, which in turn are largely dictated by expectations about future inflation. Hence the slump in Japanese bond prices.

For example, Are the banks solely responsible for setting these rates?

What I am suggesting is that the Canadian banks can set the mortgage rate pretty well wherever they like, because the money costs them little or nothing.

Even if every dollar of mortgage finance had to be backed with reserves at the BoC equal to 11% of the loan amount, the cost of the money to the banks is relatively low.

for example, if market rates, e.g., the Canada 10-year bond went to 10%, every dollar held with the BoC would cost the banks (i.e., have an opportunity cost of) 10 cents per year, but would support 9 dollars in mortgage credit, currently earning about $2.97 per year.

So why would a rise in market rates radically affect Canadian mortgage rates?

But there seems to be a time bomb that can utterly devastate the RE market, which could (will?) be detonated as follows.

Expecting the current slide in RE prices to continue, purchases will be deferred and the slide in prices will tend to accelerate. Banks, will then panic over their bloated mortgage inventory and stop issuing mortgages except on a very sure thing at a high rate.

Then, affordability to the average buyer will be shot. Then the market nose-dives and defaults sky-rocket. The rest, as they say, is history, i.e., the history of the US housing market repeated North of the border.

For these reasons, I do not believe that the government will intentionally pursue austerity programs to the point of crushing the RE market. But the risk of miscalculation seems to be approaching 100%.

In which case, the only remaining question of interest is whether the crash can be averted until after the next election when the Liberals will most likely have to carry the can.

Hey, Justin, what you gonna do about that?

The sensible thing, I suggest, would be just to print up a bunch more money and hand it out to all and sundry, with the condition that debtors use the funds to pay down debts. Sounds crazy, but it's the best that anyone's yet come up with, as far as I know.

What will actually happen, of course, is that vulnerable mortgage holders will be hounded into bankruptcy and bank losses will be made good at the taxpayer's expense and bank
CEO's will continue to collect their 8 digit annual salaries.

CS said...

Bad news for you CS, mortgage rates will be moving much higher

Why is this bad news for me?

I have no mortgage. My only exposure is shares in Canadian banks yielding 5% plus and, in recent years, a nice rise in capital value — entirely dependent on the involuntary generosity of the Canadian taxpayer (thanks to one and all).

As to mortgage rates rising, I have already explained why I think that that will occur although it will not be compelled by any market force and could, in fact, be prevented by government fiat, without bankrupting the banks.

Indeed, an unnecessary but panic-driven rise in mortgage rates is what will bankrupt the banks, because it will kill the RE market and force many to default on their mortgages.

But it is clear that the whole financial system is now rigged with massive government intervention at many points. Therefore, it is not inconceivable that the Government of Canada will come up with mechanisms, i.e., counter-market interventions, that succeed in propping RE.

But to be successful in that, they will have to insist on mortgage rates remaining stable and low for many years to come.

koozdra said...

They like the stimulus from low rates. What low rates has done to the housing market is actually bad for the economy. How to fix this?

Dampen the housing market while keeping low rates. In theory this should provide a soft landing as houses deflate slowly.

But, as you say, they will mess it up and pop the bubble. That is if the bubble isn't popping on it's own already.

CS said...

they will mess it up and pop the bubble

Meantime, anxiety abounds.

Doug Porter, chief economist at the Bank of Montreal said:

"There is also no urgency for the Bank of Canada to raise interest rates, Porter said, adding there is a case for the country’s central bank to drop its tightening bias because the housing market has cooled."

CS said...

The same article states:

"The difference between the return of the benchmark 10-year bond and the annual rate of inflation, known as the real yield, widened to 152 basis points on May 17, after Statistics Canada said consumer prices fell to 0.4 % in April. That’s above the average of 114 basis points since before the start of the global financial crisis in 2008."

Yet according to Marko, Mortgage rates are lower than ever, which seems to confirm my assumption that mortgage rates are not dictated by the same market factors as bond rates.

nan said...

@ CS: The reserve ratio requirement for Canadian banks is zero. The amount of lending permitted in the banking system is only limited by the pool of qualified buyers that fit within the banks respective qualifying standards whatever those might be.

Since the banks don't really need your money in Canada to create loans, when the CMHC increases the insurable ceiling it effectively creates "lending inventory" for the banks. The CMHC's looser requirements can now be used instead of the banks lending requirements, creating an instant pool of new "qualified" borrowers.

All the banks know this so any expansion or availability in the cap is met with fierce competition by banks to lower rates until every last dollar of the cap is loaned out, ultimately resulting in a race to the bottom as far as interest rates are concerned.

Canadian banks fight each other to lend to as large a portion of the new "qualified" lender pool as fast as possible to absorb/ originate as much of the available ceiling as possible.

Combine the CMHC and the zero reserve requirement and you have the reason why both lending and depositor interest rates are low - the banks don't need you to deposit anything for them to make a loan with a 0% reserve ratio.

In my opinion, the rate paid on deposits should be much higher than mortgage rate: in a typical 10% fractional reserve system, each dollar backs 10x that in loans. Why should the depositor (i.e. you) not get any of the benefits of the banks leverage? for every dollar you have in the bank, the banking system is lending it out 10 times @ 2.99% = 29.90% each year on your deposit and you are tantalized into the bank for a competitive 0.75% on your deposits!

If a larger portion of Western society really understood how much value was being created with their money, I don't think they would take to kindly to giving it away for free.

Introvert said...

VanIsle is the "Hawaii" of Canada. Go look out your window.
People listing in this market are victims of bad decisions.
IMHO at worst a flat market for 10 years. Good luck with your crash though ;)


Ha! Welcome aboard, westcoast. You're a beauty.

CS said...

Nan,

What you say is, so far as I am aware, correct.

What I called "reserves" in my post at 12:19 I should have called capital. And as far as I understand, the Canadian banks must have a capital adequacy ratio of about 9:1, i.e., they must hold liquid assets equal to 11% of what they lend.

Your account of the role of CMHC in creating a "lending inventory" clarifies one of the ways in which the Government of Canada rigs the mortgage market, and thus makes it more or less independent of market forces that determine interest rates in other markets.

koozdra said...

"Good luck with your crash though ;)"

Thanks. Of course it will our crash but let's not niggle on details.

CS said...

VanIsle is the "Hawaii" of Canada.

Jeeze, first we had people on about Victoria as the Mediterranean of Canada. Now the temperature has briefly reached double digits we have Introvert raving about Victoria as the sub-tropics of Canada.

info said...
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info said...
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info said...

As housing bubbles burst and the inevitable correction/crash takes over and plays out, the drop in value of many individual houses in a particular city is always much more than the reported price drop for the city as a whole.

Once again, the US provides us with excellent examples of this. Please note that this happens in Canada as well. Toronto experienced a housing market crash starting in the early 90s. I personally know people who bought near the peak of that bubble and then sold a couple of years later for less than half of what they paid. The reported price drop for Toronto was something like 25%.

The Los Angeles housing market peaked at 2.74 times the price level of the year 2000. The market, officially, crashed 41.9%. However, thousands of desirable houses lost more than 41.9% of their value.

This Los Angeles house lost 62.5% of its value.

Seattle's housing market peaked at 1.92 times the price level of the year 2000. Not that much of a price run-up in comparison to Victoria and many US cities. Officially Seattle lost 32.7% in total. Similar to Los Angeles, many Seattle houses dropped in value much more than 32.7%.

This Seattle house lost 47.6% of its value.

Victoria's housing market peaked at 2.47 times the price level of the year 2000. This ranks Victoria right up there with the biggest gainers in the US at the peak of their bubble.

As Victoria's correction/crash plays out, the total loss for many desirable houses in Victoria will be much more than the official correction for the city as a whole.

Just Jack said...

I would never live in Hawaii. Saying that Vancouver Island is Canada's Hawaii is a put down of our island.

CS said...

As Victoria's correction/crash plays out....

The real question, though, Info, is not whether prices will fall, but when?

In the fullness of time, we can be fairly confident that all trace of human habitation will be effaced from the tip of Vancouver Island and that the land will once again be enveloped in ice, or populated by tree ferns, or it will simply sink beneath the waves.

But before that happens house prices in Victoria might be engineered to keep rising for years to come.

So please give us a time-line. Only with a clear idea of the timing can we turn the coming housing disaster into a profit opportunity.

dasmo said...

We used to go to Hawaii every year for a stretch when I was but a young lad, from Edmonton. Oh the air! I could breath! I had the same experience coming here. That had a play in the family moving here. That and the flowers in January. My father simply called home and said "we are moving" He never went back to Alberta except to visit....

dasmo said...

This LA home increased in value y 1.5X even after the crash...

Leo S said...

>> what method did you use that results in estimated 600 sales?

Sales by business day

koozdra said...

"So please give us a time-line. Only with a clear idea of the timing can we turn the coming housing disaster into a profit opportunity."

Don't worry, you won't have to wait much longer. Read some mortgage broker news. They are all a flutter about what is currently happening.

Oh, won't somebody think of the poor renters.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2013/05/mortgage-rules-fuel-rent-hikes.html

Just Jack said...

Certain neighborhoods and certain types of housing have already had significant declines in values. There isn't a neighborhood in Greater Victoria that hasn't experienced a decline in prices.

Tell me where you live and I can show you by how much your neighborhood's home prices have fallen.

Leo S said...

The biggest drop will be in condo values as always. People will be pissed at the property ladder fairy tale they were sold by the industry

Just Jack said...

Buying a condo today is like hanging a dead Albatross around your neck.

info said...

"But before that happens house prices in Victoria might be engineered to keep rising for years to come.

So please give us a time-line. Only with a clear idea of the timing can we turn the coming housing disaster into a profit opportunity."

It is impossible for prices in Canada to keep rising unless another major intervention happens. It will not happen.

Victoria's housing market correction/crash is already in full swing. Where have you been?
There is no turning back now.

In March the Teranet index for Victoria showed its biggest one month price drop in 23 years of data recording. This includes the year 2009 when prices were crashing in Victoria. April showed another drop. March and April almost always show gains for Victoria, but not this year.

DavidL said...

Tell me where you live and I can show you by how much your neighborhood's home prices have fallen.

I have a relative who lives in the Cedar Hill neighbourhood and is thinking of selling her house. What would you estimate the average decrease for SFH's is for this neighbourhood since the 2010 peak?

Just Jack said...

I hear it more and more the story of someone who bought a character home 3 or 4 years ago in the $500,000 to $700,000 and can't keep up with the rising bills. $5,000 in property taxes plus another $5,000 a year in operating costs.

Sure enough the old timer home goes back on the market 3 or 4 years after they bought the home.

Most will take a loss just to get rid of the money pit.

dasmo said...

"$5,000 in property taxes plus another $5,000 a year in operating costs." Huh? That must be some kinda mega mansion!

Just Jack said...

There have only been a few sales over the last 6 months in the Cedar Hill neighborhood. But the style of home for this hood is homogeneous with the surrounding neighborhoods. That would mean the Cedar Hill neighborhood has lost at least 8% in the last three years.

For Example 3919 Cedar Hill just recently sold for $470,000 and it was bought in 2010 for $524,000

Just Jack said...

The older mansions along the waterfront can cost over $10,000 a month to operate.

Even a starter home will cost you on average $300 a month and with property taxes most starter homes cost around $6,000 a year to operate.

Why not tell us what your bills are if you don't believe me?

patriotz said...

In my opinion, the rate paid on deposits should be much higher than mortgage rate: in a typical 10% fractional reserve system, each dollar backs 10x that in loans.

That is completely wrong. For every dollar it has loaned out, the bank has borrowed at least one dollar through deposits or securities. Read a bank balance sheet.

CS said...

"$5,000 in property taxes plus another $5,000 a year in operating costs." Huh? That must be some kinda mega mansion!

Sarcasm, I take it.

Our house in OB is assessed (excluding land) at about $150 K, hardly in the mansion league at all, but the taxes are more than $5000 and the major reno, we were thinking of – no addition, just bathrooms, floors, roof, deck, fences redecoration, etc., etc. – would likely set us back $150 to 200 K.

CS said...

Victoria's housing market correction/crash is already in full swing. Where have you been?
There is no turning back now.


Crash already in full swing? You mean the minus 8% in the last three years plus the uptick of 6% last month?

I think that's the kind of crash that Dasmo and others will be willing to live with.

If it's going to be worse than that, you have to be more specific. How far and how fast will it fall in, let's say, the next three years.

CS said...

For every dollar it has loaned out, the bank has borrowed at least one dollar through deposits...

That makes sense. For cash advanced as a mortgage must be paid to a vendor/builder who, in the first place, will deposit the cash in their bank account.

Where else could the money go. I suppose the recipient might buy securities, e.g., government bonds. But then the government will likely spend the money, which will then end up in someone's bank account.

dasmo said...

My property taxes are under 2k after the grant. Then again the assessment has my house devalued to almost nothing.... The place I recently purchased is assessed at just under $550,000 and its taxes are $3700, no grant.

koozdra said...

"The place I recently purchased..."

HELOC for down payment?

Just Jack said...

That's an 8 percent decline in a desirable area of the core for the most often bought style of home. That's your hard core middle income family purchaser. The strongest market we have for real estate. And that is net of any
"up tick" in prices.

But what does an 8% drop really mean. Well for the high ratio purchaser that means they are worse off than they were three years ago when they had $50,000 in their bank account earning money. They are now paying a premium every month in a mortgage payment over what they could rent the home they now live in. And that premium isn't going into equity it's just gone - along with another half of the mortgage payment that is interest paid to the bank.

Money they are likely never to see again. Gone

That's what 8% means.

Introvert said...

Crash already in full swing? You mean the minus 8% in the last three years plus the uptick of 6% last month?

Doesn't seem very crashy to me.

Introvert said...

Tell me where you live and I can show you by how much your neighborhood's home prices have fallen.

Gordon Head. Thanks.

Introvert said...

And that premium isn't going into equity it's just gone - along with another half of the mortgage payment that is interest paid to the bank.

Money they are likely never to see again. Gone


JJ, I assume you're socking away over $2,000 a month, investing it, and making a solid rate of return, right?

And I bet you've been doing that for years and years, right?

totoro victoria said...

dasmo - congrats on the purchase!

jj- first of all, you are presuming they don't have a suite. second, prices will one day rise. third, were is your accounting for principal paydown? fourth, monthly payments are more affordable than at many points in history - look a the last post's graph. if you are banking on a much more affordable future i'm not sure you'll come out ahead.

the same math that applies on the way down applies on the way up - you get full depreciation on the house value no matter how much is mortgaged. 4% on a $600 000 home is $24,000.

lot to gain or lose in a year. none of it really matters until you sell.

totoro victoria said...

as far as house sales being down, i can't argue if those are the stats! what i can say is there have been A LOT of sales in my area in the last two or three weeks. even that place on foul bay across from the little grocery store that sat for months has finally sold.

Just Jack said...

Gordon Head hasn't been doing too badly. Prices are back to where they were in September 2007. Although some of the one storey homes have taken a bigger hit. There will always be a demand for the "family stackers" of Gordon Head. Gordon Head is a more stable market than some of the closer in hoods like Central Park.

Just far enough away from the inner city problems - but not too far that you can't bike to work.

Generally it's a bit of a boring community of three house designs - but that's what makes it stable. You mention Gordon Head and everyone has an idea of what your home looks like and if they should go to the right or left to find the bathroom.

totoro victoria said...

"Tell me where you live and I can show you by how much your neighborhood's home prices have fallen."

I'd like to know OB, Jubilee, Fairfield and Camosun slope.

Introvert said...

Gordon Head hasn't been doing too badly. Prices are back to where they were in September 2007.

Global financial meltdown ... five or so years elapse ... Gordon Head prices still about the same.

Works for me.

When is the real estate crash gonna happen again?

Leo S said...

>> When is the real estate crash gonna happen again?

I have incontrovertible proof that it will happen later this year.

totoro victoria said...

i meant "where", not "were"... in case you were really confused

koozdra said...

Garth blogged about this today.

How to take more money from idiots, oh oops, customers.

Payment Vacation

subprime11 said...

The final bears are falling into the trap now. Those who need to have a house this spring for the usual reasons..kids going to a new school..the dream of living in the most desirable neighborhood - O/B of course..unhappy wife..low rates. My guess is the market starts to tank in the 4th quarter.

dasmo said...

"HELOC for down payment?" Nope, Cheddar. Only 5% and purchased for about 10% under assessment. Right now it's being rented as we plan to build new.

koozdra said...

"Only 5% and purchased for about 10% under assessment. Right now it's being rented as we plan to build new."

Good luck.

Ernie Fallows said...

How to take more money from idiots, oh oops, customers.

Nah he didn't say that, that's doosh talk.

koozdra said...

"Nah he didn't say that, that's doosh talk."

It offers no benefit to the consumer. You still have to save up the money. On your own. You aren't taking a break from paying. You are giving them more money in the short term and increasing your outstanding debt.

Explain to me what the benefit of this would be.

Just Jack said...

Individual performance opf your property, like your stock portfolio, will differ from the market. If you want to know how your distinct property has appreciated, or not, just tell me the following:

when your home was built
the finished floor area
the lot size
the location
and what month and year you bought.

And as it seems quite a few of you put a lot of reliance on the assessments I'll run the average sale to assessment ratio for your type of home and location.

Some restrictions do apply. The longer that you have owned your property the less reliable the results and if you have had a sewage treatment plant, gas station or crack house moved or recently built in your hood that will skew the results.

Basically - just use your common sense.

dasmo said...

"Payment vacation". Ingenious. They don't like their profits being taken away from those 30-35 year amortizations. This is one way to get them back I guess...

caveat emptor said...

"$5,000 in property taxes --- must be some kinda mega mansion!"

In Vic City 5K is very roughly what you would pay in taxes on a 800 to 850K house once you add up all the levies and net of basic homeowner grant.

So hardly a mansion by modern standards albeit not a shack either and probably better than what about 90-95% of the world's population lives in

dasmo said...

It's the combo of 5k in taxes and 5k on maintenance that got me. I would hope 850k gets you more than a fixerupper.... Otherwise I visualize a rundown mega mansion.

Leo S said...

Are you kidding? 5K/year in maintenance cost is hopelessly optimistic. Like CS said, you factor in the periodic necessary renos and you will be far over that. I think the rule of thumb is something like 1-3% of value every year.

Leo S said...

"a common shorthand calculation being to spend about 2 to 4 per cent of the value per year."

"Ms. King estimates that the total amount you should budget is $4,500 to $10,000 per year."

"mortgage-data firm HSH Associates suggests that homeowners assume they will come to about 1% of the property’s value"

Best to be a bit more systematic about it. But even that article misses lots of things that might need to be fixed that are hard to predict but happen regularly. Siding paint, flooring, cracked foundation, perimeter drains, the update you're going to want to do periodically, etc

dasmo said...

I'm not sure I would call renovating my kitchen maintenance....

dasmo said...

"improvements" are optional, maintenance is necessary...

Leo S said...

Depends. If you don't improve it your property will devalue because of it. Sure you don't need a new kitchen or bathrooms every 30 years, but you definitely will lose out trying to sell a place that hasn't had those updates.

dasmo said...

I have spent about 2k/year on maintenance including some that was deferred when I bought the place ten years ago. Another 2k if we include improvements.

Leo S said...

So that's about right then. 4k/year sounds like about 1% or so, and I'll bet you haven't hit all the big expenses in that 10 years so that will increase over the long term. So how is $5000/year for a place worth double that unbelievable?

dasmo said...

Well my place had a lot of deferred maintenance so one would have to consider that. Anyway, if you include improvements then I would say "budgeting" 5k / year for your 850k home is probably conservative. However if I am redoing my gutters, roof, and furnace within ten years of buying an 850k home I would have to surmise I bought a very large house with deferred maintanence....

a simple man said...

A third of Canadians live paycheque to paycheque.

http://www.cbc.ca/news/business/story/2013/05/22/business-bills-survey.html

Marko said...

Depends. If you don't improve it your property will devalue because of it. Sure you don't need a new kitchen or bathrooms every 30 years, but you definitely will lose out trying to sell a place that hasn't had those updates.

Not in terms of pure finances. If you buy a home with a 20 year old kitchen you have two options.

1/ Add a brand new kitchen (30k)
2/ Leave the existing kitchen and invest 30k

When you go sell in 15 years your 15 year old kitchen will be dated anyway and there won't be a massive difference between the 15 vs. 35 year old kitchen in terms of value. Some people might want to renovate the 15 year old kitchen too.

Marko said...

Zoocasa has lauched their new website -> http://www.zoocasa.com/en

Leo S said...

Heck of a difference between a 35 year old kitchen and a new one though.

Marko said...

Heck of a difference between a 35 year old kitchen and a new one though.

Yes but once again in terms of finances is it easier to sell a home for 500k with a 35 year old kitchen or a 530k home with a new kitchen? Up for debate by certainly no clear answer.

You "devalue" your home by not doing improvements; however, that money can be invested in turn.

Leo S said...

It's not just the kitchen of course. Everything else on the inside of the house that doesn't have to be done will deteriorate over time. You don't have to refinish those floors, you don't have to rip out that carpet, you don't have to replace the wood paneling, but it certainly will make a difference to the value of the place.

Especially in this market, old and out of date places are taking a beating while the "ready to move in" places are still selling.

Leo S said...

>> is it easier to sell a home for 500k with a 35 year old kitchen or a 530k home with a new kitchen?

We can argue about the numbers but certainly it would be easier to sell to us with some updates. Doesn't have to be new, but it's very hard to get over paying half a million dollars for a house that's a bit of a dump.

We have a list of "must haves" and "nice to haves" for buying a house. First on my wife's list of "must haves"?

"Not a shithole"

Just Jack said...

Sooke: The Anatomy of a Crash

242 houses for sale
20 sales in the last 30 days

12 Months of Inventory

0.35 Sales to New listings ratio or 3 homes listed for every one being sold in the last 30 days.

Median Sales to Assement Ratio shows homes in the last month selling between 85 to 90 percent of their current assessment


1 quick sale (under 30 days on the market) in Sunriver Estates at $456,000. Same property purchased August 2008 at $510,000.

May 2005 the home was bought from the developer at a contract price of $329,900 plust tax.

koozdra said...

"Seller says get it gone. REDUCED!!"
...
"VENDOR MOTIVATED - Has Already Purchased."

Desperation is now a selling feature.

12473502

Marko said...

Just saying, financially you are probably better off doing just maintenance on a home and no improvement as your improvements will age by the time you have to sell.

Would I ever do that? Absolutely no. I would do a huge amount of improvement for person enjoyment but not because it is a wise financial decision. It isn't in my opinion.

LeoM said...

Deflation??
If you have any lingering doubts that we are in deflationary times or that the 'Stimulus' programs are intended to hide the intense deflationary pressures, then just ask Bernanke. Bernanke now refers to deflation on a regular basis. If deflation (inflation of less than 1%)accelerates, then we can expect house prices to accelerate downward too.

http://www.bbc.co.uk/news/business-22623574

Introvert said...

Sooke: The Anatomy of a Crash

Saanich: The Anatomy of How Things Are Just Fine

totoro victoria said...

We've had the maintenance discussion before, but things cycle back.

The 1% rule is ridiculous. My house in the Okanagan would be $200 000 more here than it is there and it would not cost me $2000 more a year to maintain.

Here is an analysis of costs from the US in 2005:
http://www.nahb.org/generic.aspx?sectionID=734&genericContentID=35389&channelID=311

Average maintenance was $558/year in 2005. For me, maintenance is probably about $1000 a year per property (not per unit) not counting my time. My houses do not have a lot of deferred maintenance. All have newish roofs (within five years).

The only big thing I have had to replace was one furnace at a cost of $3500 and hopefully it is good for 20 years now. I plan to sell this place in 10 years or so and I don't think there are any big ticket items set to expire before this point as it is in good shape right now (fingers crossed).

Improvements are another thing though. They generally improve the value as much as they cost if you are doing them economically.

I do improvements up front as fast as I can, budget allowing. I usually use second-hand materials and appliances where possible and do some of the unskilled labour myself. I have suited two properties this way.

One of the bigger expenses for me has been putting high quality laminate flooring in. It has a 30-year warranty so I hope it holds up. I think this is an improvement and not maintenance though.

Right now I'm working on a landscape plan for our house. It won't be cheap, but this is where we plan to stay and I like to garden, so the value is there for us now, nevermind what it adds to the bottom line later on.

Introvert said...

When you go sell in 15 years your 15 year old kitchen will be dated anyway and there won't be a massive difference between the 15 vs. 35 year old kitchen in terms of value. Some people might want to renovate the 15 year old kitchen too.

So true.

Best is to sell during a boom; then, kitchens typically take a back seat to things like layout and location. "We have to jump on this house; I can live with the kitchen."

dasmo said...

RE: "http://www.bbc.co.uk/news/business-22623574" sounds like lower rates are here for a bit longer still....

totoro victoria said...

I agree with Marko and Introvert.

An updated kitchen and bathroom might make a sale easier and you might get the full value back of the improvements, but location and configuration (ie. usable floor space and a second bathroom) will sell a home.

If you put the money into improvements they should be for personal enjoyment and some future payback - or they should really pay off now ie. in higher rental value or a suite.

Introvert said...

I would do a huge amount of improvement for person enjoyment but not because it is a wise financial decision. It isn't in my opinion.

Yes. Do improvements that augment your enjoyment of the home; if those changes happen to significantly boost your home's value, consider it a bonus.

koozdra said...

"May 2005 the home was bought from the developer at a contract price of $329,900 plust tax."

Wow.

dasmo said...

I've done some major things with my 4k/year (not weighted for deferred maintenance upon purchase); new kitchen, bathroom, 50 year roof, refinished floors, interior paint, exterior paint, updated laundry room, fence, shed, patio. Then again I lived with my 70 year old kitchen for ten years before updating it. I also did a lot myself and did not gut anything. My kitchen is inspired by what I've seen in Europe where they interface the new with the old. This makes it more difficult to design and implement but the results are less expensive look cool higher end and respect the craftsmen who built the place originally! I'm glad no one updated my kitchen. Those 80 year old fir cabinets are beautiful and will last another 80 years....

William Valgardson said...

Maplewood

Leo S said...

>> not counting my time

Bingo. If you consider your time to be free, lots of things are cheap. That's the fundamental disconnect in most arguments we have.

Introvert said...

So Sooke's numbers look crashy. Shocking that a bedroom community with the worst commute times to Victoria would face any issues.

totoro victoria said...

Home improvements are really a learning curve. I have no skills, although my partner does have some - but also has a FT job.

Finding good tradespeople has presented a challenge at times. Still, we have done a lot of the unskilled stuff together and its been fun.

I like designing my kitchen reno and seeing how little we can spend for a good result (hopefully - it's not done yet). So far we are recycling solid wood cabinets, using second-hand appliances and probably going with Ikea butcher block countertops. The countertops are the most expensive part.

Making things look better is pretty satisfying. The fact that you get to enjoy it now and maybe get the money back later is win:win imo.

totoro victoria said...

Yes, I consider this my hobby.

Just like no-one is paying me to post on this board, no-one pays me to sketch out a kitchen plan and look on usedvictoria for materials.

I would prefer to work on the kitchen than go out to dinner. Luckily, my hobby is something that pays for itself even if you counted my time by my calculations :)

caveat emptor said...

To be fair it's not really correct to count the time you spend doing maintenance yourself at zero cost. It is only zero cost if there is nothing you would rather do instead.

There are people who really enjoy home maintenance/renovation but for most it is just another thing eating up their precious free time.

Little/no time on maintenance is one of the benefits of renting.

Introvert said...

If you consider your time to be free, lots of things are cheap.

When I'm doing stuff I really enjoy, I readily consider that time to be free; when the job sucks, the opposite.

Of course, everyone's idea of what's enjoyable is different.

totoro victoria said...

Exactly. That is how I measure things too. I hire out most types of jobs because of my lack of ability and I would not enjoy learning to do these tasks. However,finding places, running the numbers, doing budgets, coming up with systems to manage things, furnishing places, renting out, and doing my own personal space design is fun for me and I consider it my hobby.

totoro victoria said...

As far as my own time goes, that is why I have chosen to work for myself.

I value my time as "do I want more or less of this in my life". If I want less then I starting thinking of ways to make that happen. Also an enjoyable past-time which has had very high ROI.

Just Jack said...

Eighty years for stick frame construction is pushing the end of its physical life. The wood in your home has lost most of its moisture content. That makes the wood brittle and prone to breaking during heavy snow storms or earthquakes. If you own one of these older homes go outside and look at the roof line (ridgepole) or apex, it may have already started to sag in the center. Then there is the cast iron plumbing that is being choked with sludge, copper wiring that is getting brittle. oudated electrical panel boxes with ancient breakers and fuses.

Most of these older houses contribute very little to the price of the whole property and in some case they actually hinder the best price you could get for the property. When the value of your house only constitutes 15 percent or less of the entire property value - it really is bulldozer material. Why Victoria has so many of these homes still around is more to do with how stingy home owners of the past have been.

Anyone thinking that they are going to get another 80 years out of these stick frame homes without a massive renovation is smoking crack.

subprime11 said...

Does anybody know what 396 King George Terrace sold for in 2009/10?
Now listed at $949K since March 11th.

Introvert said...

Anyone thinking that they are going to get another 80 years out of these stick frame homes without a massive renovation is smoking crack.

Like Rob Ford.

caveat emptor said...

"Anyone thinking that they are going to get another 80 years out of these stick frame homes..."

Is that really true? I have relatives in Europe living in wooden houses that are over 300 years old. Different construction methods admittedly, but the lifetime of the wood doesn't seem to be an issue if it is protected from rot/weathering

subprime11 said...

I would imagine most timber used 300 years ago in Europe were much more substantial than the 1 1/2 by 3 1/2 used here. I'm always impressed when I find true 2" joists in older 50's homes but I imagine that's nothing compared to 300 year old European construction. Not to mention that they would likely have used old growth hardwoods back then instead of fir or spruce.

koozdra said...

I know craigslist ads aren't a good indicator of vacancy rates but check out their map view. Rental opportunities abound.

I've been watching a few month to month. They refuse to lower their price but keep the suite vacant for several months.

People love losing money.

Oh well, time to dip into that heloc again.

totoro victoria said...

http://log-homes.thefuntimesguide.com/2007/03/life_expectancy_of_homes.php

The link is to the expected utility of various housing components. You can keep renovating an old house, it just starts to get more expensive. I don't buy past 1950 for this reason.

CS said...

I have relatives in Europe living in wooden houses that are over 300 years old.

Yeah, and these joists at the Tower of London, dating from the 13th Century, still look OK.

Perhaps there is be greater longevity to English Oak than the prime old-growth fir used for construction in the 30's. But what I'd worry about if buying today is how long these ingenious new structural products made from glued together twigs and slivers are going to last.

totoro victoria said...

There is always more rentals on the market for June 1 - tied to the university schedule.

totoro victoria said...

are always

dasmo said...

"Eighty years for stick frame construction is pushing the end of its physical life" Lol. Tom, Norm and Bob would beg to differ. Odense, Denmark has a timber-framed house that was built in 1570.... The benefit of old growth fir and cedar construction.

Just Jack said...

Even concrete foundations have a limited life expectancy. And you see this in the older homes with the foundation crumbling. After a hundred years the cement is nearly completely dried out.

And it doesn't help living in a rain forest. Lots of insects and bugs that love to lunch on old wood.

koozdra said...

Cooling housing market will cost us 150,000 jobs, mortgage group warns

koozdra said...

"There is always more rentals on the market for June 1 - tied to the university schedule."

Thanks, I'll keep that in mind.

a simple man said...

Odense, Denmark - I went to a conference there as a grad student - lovely place. Also on an island in an ocean. I remember most meals revolving around fish and cheese. Great cheese.

In other news, cbc.ca headline:

"Cooling housing market will cost us 150,000 jobs, mortgage group warns
Fewer housing starts mean fewer jobs in everything from mortgage financing to furniture sales"

http://www.cbc.ca/news/business/story/2013/05/22/business-mortgage-economy-caamp.html

totoro victoria said...

Actually, June 1 is a very good time to rent. Less competition and greater vacancies. Conversely, September 1 is not so good - much more competition.

Introvert said...

Is that really true? I have relatives in Europe living in wooden houses that are over 300 years old.

Just Jack tends to focus on and exaggerate things that make homeownership seem unappealing and even disastrous. I can't tell you how many times I've woken up in the middle of the night worrying about the durability of wood.

Just Jack said...

Would have been rebuilt several times during the centuries and hard to tell what if any remains of the original home of 1570.

The older homes in Victoria are now starting to be replaced. No need to keep them as the cost to repair is too expensive.

Never going to see any of the stick frame houses in Victoria reach 300 years old unless they are completely re-built several times. Even back east around Niagara -very very few stick frame homes have survived.

Those 150 year and older homes were not built with butt joined and nailed 2 x 4's. They were hand hewed mortice and tendon joints and built by ship carpenters.

The home you're living in was probably built in under 4 months by a farmer in his off season.

LeoM said...

Re: 396 King George Terrace

It sold in about 1978 for $85,000

totoro victoria said...

I don't care about lifespan of my home unless it is shorter than my window of ownership or affects resale or causes excess ownership costs.

My current home was completely rebuilt in the 2000s. My others are 1980s but recently renovated. I expect they will outlast me by quite a bit.

I would worry with a pre-1930s house that had not been renovated - unless you are handy.

dasmo said...

Concrete gets stronger as it gets older....

subprime11 said...

re: 396 King George Terrace.
Thanks Leo. 1978 is the last time it sold? I was sure it sold in 2009.

Just Jack said...

And what is Tom, Norm and Bob doing with these homes?

Big time renovations to repair the damage of a hundred years. And they're always surprised to find that the home has survived. And those homes are not in a rain forest like Victoria.

Water is the biggest enemy of any kind of construction. That we have more rainfall than any other province or state in North America only speeds up the deterioration from rot and insects.

The next time we have a big snowfall, people like Introvert will be worrying about the durability of wood and how solid is that roof over her head.

totoro victoria said...

Are you really a girl Introvert? Not that it matters but I assumed otherwise.

a simple man said...

We lived in a pre-1900 house in OB when we first moved here. Just terrible - scary dilapidated.

dasmo said...

My house is built with old growth true dimension fir with clear grain cedar siding. It's not going anywhere and will outlast any house built from the 70's to the 90's... if maintained ;-)

But I'm glad people think like you JJ. This is why I was able to buy it for so cheap, even by 2003 standards. It wasn't maintained and most people don't understand materials. The cedar siding hadn't been painted for many decades so was mottled and blackened. I was able to see past that and see that it was in great shape underneath that. Each corner of the siding has a compound miter! No part time farmer made this house. Even the estate agent thought differently about the place after I refinished the outside....

Just Jack said...

Concrete takes about 50 years before it is fully cured. Lasts about another 50 years and then starts to deteriorate. Concrete is a poor building material unless it is re-inforced with steel. Go outside and look at your chimney. The concrete mortar is flaking and falling out unless it has been re-pointed. Now look at your ninety year old foundation - you can dig out the stone pebbles easily with a nail. The foundation will also have a half dozen cracks that can let water into your basement.

You bought an older home because it was a lot cheaper than a new one. Don't fool yourself into believing your home will be here eighty years from now.

Introvert said...

Are you really a girl Introvert? Not that it matters but I assumed otherwise.

I'm an anonymous blogger whose sex is unspecified.

Just Jack said...

Doesn't matter anymore that it was full dimensional old growth. The wood is dried kindling now.

A grease fire in the kitchen and the fire will be too far along to save the house by the time the fire truck arrives.

totoro victoria said...

Just as I pictured you Introvert.

Introvert said...

The next time we have a big snowfall, people like Introvert will be worrying about the durability of wood and how solid is that roof over her head.

Being worried about snow on the roof? In Canada's least snowy climate?

JJ adds yet more evidence to my earlier claim.

Introvert said...

A grease fire in the kitchen and the fire will be too far along to save the house by the time the fire truck arrives.

More!

Introvert said...

For JJ, it's become almost pathological.

Introvert said...

JJ, don't ever buy a house. Clearly, home ownership is not for you!

Leo S said...

>> Just Jack tends to focus on and exaggerate things that make homeownership seem unappealing

The responses here are pretty hilarious though. "nuh uh! There's this one place in denmark that lasted a long time, and the tower of london has wood in it!"
As if that had anything to do with the longevity of the typical wartime shack in fernwood.

Leo S said...

I adjusted the valves on my motorbike and synched the carbs for the cost of a couple feeler guages.
Applying HHV comment logic, that means maintaining a motorbike is basically free!

Leo S said...

Continuing the analogy: I sold my last bike when I noticed the head gasket was on its way out. That means maintaining a bike is basically free because all I ever did on that one was oil changes!

dasmo said...

Funny is better than the depressing world perspective of JJ (who seems to have lost his sense of humour I so enjoyed).... I have friends that live in a house that was built in 1890 with a stone foundation. I have at least another 40 years left....

I choose to live my short life enjoying it. I love my old house and find joy in keeping it in good shape for my lifetime in the hopes that someone else who enjoys such things will continue such endeavours in my absence :-)

Introvert said...

Applying HHV comment logic, that means maintaining a motorbike is basically free!

Leo, since when does one person's opinion equal "HHV comment logic"?

Leo S said...

A realistic expectation of building lifetimes is completely orthogonal to whether someone has a positive outlook.

Introvert said...

More accurately, HHV comment logic: the Victoria real estate crash is imminent, and has been for the last six years.

Just Jack said...

These are simply the facts of owning an old timer home.

You're not going to get energy efficiency, you're not going to get safety features like sprinklers, you're not going to get less maintenance than a new home. The kitchen cabinets will not close property, closet doors will tend to swing open and the floors will be like walking on a ship deck in a mild sea.

Any repairs can quickly escalate. Open up a wall and find more damage that has to be fixed before you can put that new tub or sink in. Go to replace the roof and find four layers of shingles, broken trusses and rotted plywood that all has to be replaced. Chimneys that have to be re-pointed and lined before using your fireplace or like most people do - close off the damper and stick a plant in it.

It's the hidden price of an old home. The people that sold you the house knew that - that's why they never updated. They just sold it to you and moved on.

There are nice features of these old time homes - like plaster walls. They take a really nice paint - after you've repaired the settling cracks. The painted walls have a warmth that gyprock can't match. Floor plans usually suck and any addition over the years,like a main floor family room, really looks odd and out of character.

With all the lathe and plaster it's tricky repairing electrical lines and pipes. Ka Ching! Any windows you replace are likely going to have to be custom made too. Ka Ching!

And that oil tank! Ka Ching! Ka Ching!

I can see why in the ninetys, in Vancouver's older areas, they just started the diesel bulldozer up on one street and plowed the houses under until they reached the next street.

In fact, it might be a good idea for the City to encourage the demolition of these homes - far better idea that allowing a glorified garage in your back yard for a tenant. Yeah - a tax free holiday for five years on new construction in the city.

I love the smell of diesel in the morning - it smells like Victory!



Just Jack said...

Dasmo, in all likelyhood the next buyer for your home is only going to want the land.

dasmo said...

It sounds like you are writing the script to The money pit 2. I

dasmo said...

"In all likelyhood the next buyer for your home is only going to want the land." Maybe. That's their prerogative. Maybe one day ill try to get a heritage designation. Just to spite you.

totoro victoria said...

You could pay for a lot of maintenance and upgrades if you got rid of your car. It appears that the average cost of owning a car is $8946 per year:

http://www.autoblog.com/2012/05/04/average-cost-of-car-ownership-rises-to-8-946-per-year/

Motorbike analogy? If you maintained it yourself and sold it for the same as you bought it after adding in materials then it did not cost you anything.

If you want to count your time as a cost I guess you lost money...

Motorbikes are depreciating assets. Fortunately, land is not over the long-term.

If we measure ROI in happiness Dasmo is doing pretty good separate and apart from the money. Seems a pretty good measure to me.

Life is short. This video kind was a pretty powerful reminder. You won't be wasting your time if you watch it:

http://www.upworthy.com/this-kid-just-died-what-he-left-behind-is-wondtacular-rip?c=fea (22 min documentary - watch first)

http://www.youtube.com/watch?v=sDC97j6lfyc (a song by Zach)

http://www.youtube.com/watch?v=7zxXAtmmLLc (celebrity tribute)

Leo S said...

Leo, since when does one person's opinion equal "HHV comment logic"?

More accurately, HHV comment logic: the Victoria real estate crash is imminent, and has been for the last six years.

I guess you've answered your own question.

Introvert said...

Dasmo, in all likelyhood the next buyer for your home is only going to want the land.

Good thing the land in Victoria is worth more than the land in most other Canadian cities.

Just Jack said...

More like a remake of Pacific Heights with Zack Galifianakis playing the tenant.

Just Jack said...

It's the only thing worth more - because the houses sure aren't worth it.

Dave said...

First time buyers used to be able to afford a Goldwing. Now they'll be lucky to save enough for a scooter. But I have relatives in Italy and they all do just fine on Vespas so people here should be happy to ride scooters!

Plus I give my coworkers a ride to work for a bit of gas money which subsidizes the cost of the scooter. You can't adequately calculate the cost of scooter ownership if you don't factor in potential scooter-pooling revenue.

Ok I'm done. That was fun!
Dave3

Leo S said...

Motorbike analogy? If you maintained it yourself and sold it for the same as you bought it after adding in materials then it did not cost you anything.

No.

It cost your time. The fact that you enjoy working on houses and I enjoy working on motorbikes is perhaps interesting to note but doesn't change any facts. It costs significant time and money to maintain both. Denying the maintenance costs just because you like to do it yourself is not a realistic portrayal.

When someone asks me "how much does it cost to maintain a motorbike?", I don't say "almost nothing" because I do the work myself. That would not be accurate.

koozdra said...

When consumers believe that the housing market is infallible we have a problem.

When the banking system believes that the housing market is infallible we have a disaster.

dasmo said...

"More like a remake of Pacific Heights with Zack Galifianakis playing the tenant." Perfect choice! "The story ends with the couple having a private discussion about making an offer of $850,000, which is $100,000 more than what Drake and Patty had originally paid for it."

totoro victoria said...

Well, that is your interpretation. Mine is different. Difference of opinion.

I do pay for maintenance and upgrades. I never said it cost me nothing. I do also spend my own time on some things as already mentioned.

So the question then is whether you are counting every hour of your life as a dollar equivalent irregardless of activity? Like, you go to the gym and have to pay for and have to spend your time so it is worth an hour of your equivalent in wages?

I guess if you choose to account for your time like this you can. I don't.

I do it different. I evaluate my non-work time based on my enjoyment of it for me or others and not on all the hours I don't bill out otherwise.

I already choose to work pt. I could double my income by making a different choice. Would be tempting if money was where it is at.

For me, it is not. It is about having enough to have the freedom to make choices based on other values.

I choose to not look at my time based on money or I never would have stopped working - my time would have become too valuable to "waste it" on anything else...

Ernie Fallows said...

I choose to live my short life enjoying it. I love my old house and find joy in keeping it in good shape for my lifetime in the hopes that someone else who enjoys such things will continue such endeavours in my absence :-)

You got it. You only live once, and life is short. If you can afford to own a house and it's something you want to do, go for it. Personally, with my current situation I would never go back to renting unless I had to. I suspect lots of folks waiting for a crash want to enjoy the same thing we do.

Marko said...

Speaking of motor bikes, I remember an intensivist at Vic General showing me a study that you are 26x more likely to die in a motorcycle accident versus car. Food for thought.

koozdra said...

"I suspect lots of folks waiting for a crash want to enjoy the same thing we do."

Correct Ernie. Except you are taking all the risk.

On behalf of all Canadian I would like personally thank you for running our economy for the last couple of years. Without the devotion and blind admiration of the housing market that you possess we would be in a recession right now. Instead we have economic growth.

Again, thank you for taking on piles of debt. The crash will not be kind to people like you.

info said...

Seattle didn't experience much of a price run-up compared to Victoria and a lot of US cities. Officially the price correction for Seattle was 32.7%. However, we know that the price correction for thousands of Seattle houses was much more than 32.7%.

This Seattle house lost 62.2% of its value.

This Seattle house lost 52.1% of its value.

I would say that Seattle got slaughtered in that correction. If Seattle got slaughtered, then Victoria will get eviscerated.

koozdra said...

Is Introvert the only housing market believer that is not a land mogul?

caveat emptor said...

The average person is way more likely to die in a car accident than a motorcycle accident.

Which isn't inconsistent with what Marko said. It's just that the high risk of riding a motorcycle only applies to that small proportion of the population that spends any time riding a motorbike.

info said...

"Good thing the land in Victoria is worth more than the land in most other Canadian cities."

Japan has a much higher population density than Victoria and land is scarce. However, that didn't stop Japan's housing market from crashing, despite emergency interest rates.

caveat emptor said...

That we have more rainfall than any other province or state in North America only speeds up the deterioration from rot and insects. - JJ factoid

Annual Precipitation
Oak Bay - 607 mm
Toronto - 834 mm
Ottawa - 914 mm
Montreal - 1062 mm
Quebec - 1230 mm
Halifax - 1508 mm
St John's - 1513 mm

A few American cities with more precip than Victoria - Miami, Chicago, Minneapolis, New York, Washington, Portland, Seattle, Philadelphia, Dallas.

So yes - other than all those other places, our houses are uniquely primed to rot away.

caveat emptor said...

Info has discovered that some houses fell more than average in the US bust.

I am still waiting for her to discover that some fell less than average

Just Jack said...

WAR OF THE ROSES:

A man walks into a lawyer's office looking for a divorce, and the lawyer tells him he has to be SURE this is what he really wants.So, the lawyer begins to tell him the story of Mr. and Mrs. Rose...

We watch them meet, fall in love, and get married. Mr.Rose works hard and rises in his business. They have children...overweight, demanding, ungrateful children, but still the standard P.C. number and distribution of 1 boy, 1 girl. We see Mrs. Rose get the Home of her dreams and as the years pass, her children grow up, her husband moves further into his career, and she creates the vision she has always imagined this home could be, but ... then what?

Where do you go in life when you are locked into what everyone else in your life perceives you to be? She must act just SO for the dinners with clients and bosses, and only THIS way for her children. Trapped in her Rapunzel life, Mrs. Rose begins to branch out with a catering business. However, it does not alleviate the pressure that has built up inside her, nor does it change the attitudes of those who have kept her in this "tower" for all these years. Mrs. Rose begins to grow thorns!

What begins as your average domestic dispute escalates to proportions hitherto unheard of either in legend or in any episode of COPS! Their sharp tongues, deadly aim, and battle tactics just get bigger, grander and better while you alternately laugh and cringe! You keep thinking, "This has to stop, right?". Well, by the time they have divided the house between them and their lawyer friend (the narrator, remember?) is trying to express his concern to Mr. Rose - who replies, "I have more square footage!" with a maniacal gleam in his eye, you can be assured it has all edged into the realm of madness!

dasmo said...

Right now Tokyo Japan has a price to income of 15X we are 6.42X. To use a popular phrase here, you can't compare us to Japan....

http://www.numbeo.com/property-investment/rankings.jsp

Just Jack said...

And those cities are predominantly brick construction - not wood.

info said...

All national housing bubbles burst and correct back to where they started.

To refute this, you must find many examples of countries that had experienced massive price run-ups in a relatively short period of time and then maintained those prices to within 5 to 10% of the peak for a number of years. There has never been an example of this.

Housing price bubbles are like hurricanes, in particular the wind speed of a hurricane.

The wind speed of a hurricane is, obviously, abnormal and unsustainable. It builds rather quickly, reaches its peak, and then slows back down to normal. The extreme wind speeds of a hurricane do not stay within 5 to 10% of the peak speed for 2 weeks.

Similarly, the abnormal, unsustainable prices in a national housing bubble increase rather quickly, peak, and then go back down to normal. The extreme bubble prices of a national housing bubble do not stay within 5 to 10% of the peak for 6 to 8 years and then create a new peak. It has never happened.

With national housing bubbles, house prices are either moving higher and creating a new peak every month or two, or prices are moving lower and creating a new low every month or two. There is no such thing as a permanently high price plateau.

Canada's housing bubble will deflate.

Victoria's housing bubble deflation has already begun.

info said...

@ dasmo

"Right now Tokyo Japan has a price to income of 15X we are 6.42X. To use a popular phrase here, you can't compare us to Japan...."

As I have said many times before, numbeo does not calculate price to income ratio properly. Victoria's price to income ratio is over 8. Vancouver's is over 10 and is among the highest in the world.

caveat emptor said...

"And those cities are predominantly brick construction - not wood."

JJ - you are reaching. Rumour has it that there are a few wood frame houses in the roughly 40% of the North American landmass that has more precipitation than Victoria.

info said...

@ caveat

"Info has discovered that some houses fell more than average in the US bust.

I am still waiting for her to discover that some fell less than average"

Did I say this wasn't true? Are you serious?

That doesn't, in any way, take away from the point that I made. You argue like Introvert and dasmo.

a simple man said...

But much of the precipitation elsewhere in Canada falls as snow.

caveat emptor said...

Housing price bubbles are like hurricanes - LOL

Let's have an (inapt) analogy contest!

Housing price bubbles are like........ because ......

Housing price bubbles are like supernovas because they rise quickly to a peak and then fade forever into oblivion.

Introvert said...

Annual Precipitation
Oak Bay - 607 mm
Toronto - 834 mm
Ottawa - 914 mm
Montreal - 1062 mm
Quebec - 1230 mm
Halifax - 1508 mm
St John's - 1513 mm

A few American cities with more precip than Victoria - Miami, Chicago, Minneapolis, New York, Washington, Portland, Seattle, Philadelphia, Dallas.

So yes - other than all those other places, our houses are uniquely primed to rot away.


JJ's finding out that facts can be a bitch!

koozdra said...

"Housing price bubbles are like........ because ......"

Housing price bubbles are like your mom because no matter how fat she gets she still thinks she's a "normal" weight.

Introvert said...

The crash will happen. The crash has already started. Rinse. Repeat.

caveat emptor said...

simpleman - all of the Canadian cities I listed also exceed Oak Bay's precipitation based on rainfall alone (ignoring snow)

Canadian Climate Normals

Introvert said...

JJ's finding out that facts can be a bitch!

Reminds me of the time JJ said that Langford's weather was the same as Oak Bay's. Oops!

Damn those weather stations collecting hard data!

Just Jack said...

You mean like obfuscating the facts by only using Oak Bay rainfall data taken from one location on the leeward side of Gonzales Hill and that all precipitation is equivalent to rain.

How many people really believe that Ottawa, Quebec, Montreal or Dallas Texas gets more rain than Victoria?

Introvert said...

The rainforest of Victoria!

Or is this unfair because it's the leeward side of Mount Tolmie?

totoro victoria said...

I do.

The annual average precipitation in Dallas is 37.05 Inches. Victoria gets 23.9.

Tofino gets 130.2. Houses must be mouldering into the rainforest leaf litter.

http://www.currentresults.com/Weather/Canada/British-Columbia/precipitation-annual-average.php

Leelan said...
This comment has been removed by the author.
dasmo said...

Same. It doesn't rain all that much in Victoria proper. I can only assume JJ doesn't leave his computer terminal in his dark, rotting, bug infested, leaky, Langford basement apartment much....

caveat emptor said...

"How many people really believe that Ottawa, Quebec, Montreal or Dallas Texas gets more rain than Victoria"

Rather than go with what people believe I'd look at the data from the relevant agencies:

Looking at RAIN only
Oak Bay - 583 mm
Ottawa - 733 mm
Central Saanich - 822
Montreal - 835 mm
Quebec - 923 mm
Colwood - 999 mm
Dallas 940 - 1030 mm (this is for all precip, but I am assuming it is mostly rain there)

The Oak Bay station is on top of Gonzales Hill and should be representative of Southern Victoria and Oak Bay. Precipitation increases to the north and west

a simple man said...

It is a little known fact that in the summer Victoria is the driest major Canadian city.

Ernie Fallows said...

On behalf of all Canadian I would like personally thank you for running our economy for the last couple of years. Without the devotion and blind admiration of the housing market that you possess we would be in a recession right now. Instead we have economic growth.

We bought our house coming on 11-12 years ago. Since then its value has climbed significantly. Purchasing our house ended up being cheaper than the rent we were paying to someone else for their cramped shitty condo. Even if the market goes crashy as you are so bitterly hoping, our mortgage payments are still cheaper than renting a property of the same size in the same area. I suspect I'm not too worried. But please, continue to sit behind your computer and try to make home owners on here somehow feel bad about their lifestyles.

koozdra said...

"continue to sit behind your computer..."

I sit in front of my computer.

totoro victoria said...

must be hard to type that way

koozdra said...

"must be hard to type that way "

Sitting behind a computer implies that it faces away from you. It is much easier to type when you are in front of your computer.

When you go to the bank and you are facing a teller, are you behind or in front of the teller?

totoro victoria said...

thanks for the explanation, with emphasis, and example. i'm sure resolved the confusion.

a simple man said...

Remember the movie "Do the right thing", by Spike Lee, released in the 90s?

In the words of Mister Senor Love Daddy:

"Whoa. Y'all take a chill. You got to cool that sh** off. And that's the double-truth, Ruth."

caveat emptor said...


When you go to the bank and you are facing a teller, are you behind or in front of the teller?

Is that a trick question?
During a typical transaction probably both. While the teller faces you, you are in front of him. If he has to turn his back to you at any point to get something done or to grab something then you are behind him.

DavidL said...

I agree with all the comments about Victoria having fairly low rainfall levels - even in the winter!

As for cement, it can be formulated to last for a millennium or more (Roman aqueducts, anyone?) That said, most crumbling and breakdown of cement foundations in Victoria is because the cement was poorly formulated (when cast) or the foundation was poorly built. Properly cured cement on a bedrock foundation will last until the next "big one" shakes down all our houses.

Just Jack said...

Well Ernie, you've done pretty good for yourself. Your home has almost doubled in the last dozen years.

That's a lot of equity in one asset. If this is what makes you happy in life - you should be estatic.

The mere thought that anyone would suggest that this is just a fleeting moment in your life must be very disconcerting to you. Because Ernie, it really sounds that you define yourself by what you possess.

I also sense a feeling of inadequacy in your posts. A well adjusted person would not need to flaunt their wealth over the "have nots" unless their is something lacking in their lives. Ernie, you have to ask yourself - am I a better person for doing this?

Or Ernie - are you the kind of person that would kick a kitty through a fan.

Just Jack said...

I'm just glad that none of my posts stated Oak Bay had more rainfall than those cities.

My post was to do with the province in relation to other provinces and states. Although I suspect there is something odd about those stats be it snow or hurricanes. But for the most part Greater Victoria gets about 140 to 150 days of rain each year. Maybe the rain drops are just a little bit bigger in Colwood.

totoro victoria said...

I don't think anyone wants to see anyone not do well. The board is more about market timing and what might affect the decision of when to buy or to buy at all.

I have an appreciation for what it is like to start from nothing and if that is where you are, so what.

The main measure of success should be happiness, and a lot can be done about this whether you rent or own.

If you have not much to get started with that doesn't mean you won't get where you want to go - crash or no crash.

DavidL said...

Real estate site Zoocasa adds MLS listings, agent recommendations
Rogers-owned company becomes licensed brokerage, but won't have own agents

Alex Thomo said...
This comment has been removed by the author.
dasmo said...

"Maybe the rain drops are just a little bit bigger in Colwood" Nope, it's just past the rain curtain as I like to call it. It's right around Thetis Lake when one is driving out of town ;-)

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