| May 2013 | May 2012 | ||||
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Uncond. Sales | 96 |
235
| 367 | 520 |
659
|
| New Listings | 277 | 584 | 916 | 1173 |
1740
|
| Active Listings | 4568 | 4642 | 4724 | 4745 |
5015
|
| Sales to New Listings |
35%
| 40% | 40% | 44% |
38%
|
| Sales Projection | --- | 600 | 602 | 664 | |
| Months of Inventory |
7.6
| ||||
Another mini sales surge like we saw in mid April. Again we will hit last year's sales numbers +- some small percentage. Sales rate of 28.9/business day is identical to last year's 29 at this time in the month, but last year we had 16% more new listings.
A small sign of life, but still nowhere near any kind of sensible sales/list ratio. In the boom times this was around 75%, while in the 90s flat market it bounced between 50% and 60%.
In other news we bought a house.
217 comments:
1 – 200 of 217 Newer› Newest»I don't think we'll break 600.
"I'm betting on nothing getting resolved, and chaos to ensue. Hence why I'm continuously going further and further into gold and silver."
SilverSurfer Nov 30, 2011
"My gold is still up, but then again I bought in early 2008."
SilverSurfer today
Case in point of why I view any internet claims of investment returns with great skepticism. And while I realize that there ARE ways that those two statements can BOTH be true the appearance is a conflict.
I don't think we'll break 600. Will definitely break 600. We'll have 30 or so sales today plus 40-50 or so on Friday, plus Tuesday, Wednesday, Thursday.
Marko said:
"It is just the bold predictions that people seem to make with 100% confidence that are annoying."
"Will definitely break 600. We'll have 30 or so sales today plus 40-50 or so on Friday, plus Tuesday, Wednesday, Thursday."
Sounds bold to me! :-)
Because will all know sales can all of a sudden drop from the current 540 (including the 20 sales so far today)?
It is much easier to predict with certainty something that is very linear (sales increase from start to end of month) versus stocks or commodities which go up and down.
I had to rerent a suite for July 1.
I advertised it Saturday, had over forty replies (I had to stop the ad), scheduled eight showings (based on first to respond) in a 2-hr window and signed the agreement today. I was able to pick between four applicants.
If you have a nice places in a nice area and set your rent at market I can't see that there is any problem right now.
There is never a problem if you rent at market.
The landlords who have problems are the ones who think that they can set the price, rather than the market.
Yes, just that there has been a lot of talk on the board about rentals being difficult to fill that it made me wonder if I would need to drop my price - I didn't. I agree that if you are at market you can rent.
The problem is some people don't know the market rents, and they set their rents to what they need to cover their mortgage.
If you get 40 replies in 2 hours that means you are below market rent, not at.
I didn't get 40 replies in 2 hours. I got 40 plus replies in 24 hours - sorry my post was unclear. The showings were Sunday.
I scheduled 8 showings in 2 hours (every 15 mins.). I think I'm $50 below market on that unit - which is about where I like to be. Lets me choose from a number of applicants and I don't have to spend much time on it.
I wonder if you were an employee of a property management company if your boss would see things the same way as you?
good thing i'm not - there is a reason i've chosen to work for myself.
as far as property management companies go, i suspect they don't care too much about the $50/month unless their client does. they generally make a percentage of the rental value and five dollars more or less a month vs. a vacant month or a lot more showing effort... math is even more favorable for them to rent quickly and have low turnover.
kind of like realtors actually, a ten thousand dollar drop in price is a drop in the bucket for a commission... not so much for a homeowner.
"No doom and gloom" -Experts
Canada's Flaherty: No 'doom and gloom' in Canada housing market
good for you, Totoro. The house on my block for rent? Extensive renos right now, hopefully renting in July.
Surprisingly enough I find the properties rented by property management companies are more reasonably priced than those advertised by owners.
Not surprising to me given the fact that they work on commission based on money received for rents.
Surprisingly enough I find the properties rented by property management companies are more reasonably priced than those advertised by owners.
Completely agree.
Our current property management company has also been fantastic in responding to maintenance issues. It's a simple professional relationship with none of the quirks that can come with some owner-landlords.
As for attracting renters, I've noticed a big difference in how much effort the Victoria property companies put into their ads. The ad for the new place we'll be renting in July outshone most realtor's pages. But I've seen other companies post two lines of text, no pictures.
Congratulations. Now that is news!
I was just thinking that Leo had probably bought a house... been a bit quiet lately :)
Congrats!
@Leo
Congratulations on the house purchase. I'm sure that you'll be very happy with your new home.
Congratulations Leo!
Thanks. Was a bit earlier than expected, we were thinking this fall, but the right place came up.
Like I said a few days ago, I have incontrovertible proof that the market will crash later this year. :)
Speaking with our mortgage broker... there are some pretty shady things going on out there to get around the mortgage rules.
Congrats Leo!
I missed the newsy bit under the graph on my first read
Sneaky! I missed the line about your house purchase. I'm glad you found something right for your family.
And thanks for triggering the crash for the rest of us. ;)
Wow congrats Leo!
Dave3
"Like I said a few days ago, I have incontrovertible proof that the market will crash later this year. :)"
Haha, I was wondering what you meant by that.
Ooooh, so hard to choose...
"Luxury" townhouse middle of nowhere.
Price: $689,900
13104575
3330 sqft house on players drive in bear mountain.
price: $699,000
12614228
Good for you, Leo. Are you willing to share any details on your new home? Is it in Gordon Head?
Cheers!
Koozdra thank you for showing those two properties. Great example of why you have to stay with the same style and type of ownership when comparing properties. Just because the price is the same - doesn't make them comparable properties. Everyone looking to buy a detached home would not also be considering a town home and vice versa.
The same is true in building styles. The retirement market is not typically looking for homes with stairs or suites. Comparing a basement entry home with a no step rancher isn't capturing the same target market. And wouldn't be much of a help if your trying to value your home. Something that Zoocasa should put a lot more thought into in their zooappraisal program.
@Just Jack
Something that Zoocasa should put a lot more thought into in their zooappraisal program.
I totally agree with your comment. The Zooappraisal estimate is often wildly off from the expected resale value. They estimate my house at close to $100K more than the assessed value - not likely in this market!
My house is 140k over assessed! A conspiracy perhaps?
Gordon Head yes. Maybe we're neighbors? Not hard to figure out the place with some Internet sleuthing.
Zoopraisal is a joke. $170k over the tax assessment and bank appraisal.
Zoopraisal, just as good as Emili. Good thing nobody is relying on these ridiculous computer generated appraisals.
"5 yr Govt of Canada bond yields are up over 30bps in May. We should expect fixed mortgage rates to increase if they hold at this level. If you are thinking of buying, refinancing or if your mortgage is coming up for renewal, I suggest you contact your mortgage broker and get some rates held. This could be the beginning of the long-awaited mortgage rate hikes."
5 yr Bond yields up significantly.. expect fixed rates to go up..!
Leo: Did you get that fixeruper on Teakwood for $502? Are you going to put a 2ndary suite in? Anyway, I know you would have made a good deal...enjoy your new home!!
Teakwood is a nice quiet little cul de sac in a walkable location. My friend's parents live there and they have never had trouble renting their suite to students.
Teakwood: no.
OSFI should can the EMILI program immediately. There is no independent verification of the program's reliability. In otherwords only CMHC knows how reliable the program is - and they will not discuss or disclose anything about the program to anyone.
Not hard to figure out the place with some Internet sleuthing.
Was it that one on San Juan Ave, beside Tyndall Park?
re bond yields:
It is very hard to know whether this is another bond market head fake (like late 2012 early 2013) or a "real" increase in bond yields that will stick for a while.
While I have little doubt that bond yields will rise at some point I still think this latest rise will be reversed given weakening economy and near zero inflation.
Leo
If you don't mind me asking did you go with 5 or 10 year fixed? (or something else?) and what was your rationale for what you ended up choosing?
@Introvert maybe.....
Bond yields.. Too early to tell, but certainly current yields aren't out of the range we've been in for the last couple years.
Mortgage term. 5 year fixed. I'm not overly concerned about rates rising at this point, so the 1% premium for 10 years doesn't seem worth it. Maybe if conditions look to be turning around a few years down the line we'd look into refinancing. Of course it's all a gamble. No such thing as an educated opinion when talking about rates that far in advance, it's all just a guess.
San Juan in Gordon Head. That brings me back. My friends and I rented a basement suite there in our college days.
@Introvert maybe.....
If it is that one, it looks nice. Congrats. Welcome to G Hood.
Thx
Steady as she goes at BoC
Shoot Leo, That was a real buzz killer...
I'm on Pender Island today. Prices here have really fallen off a cliff and lots of inventory still on the market. Interesting to see what will happen going forward considering everyone I am seeing has grey hair(average age has to be much higher than Victoria).
@Mayfair Man
I'm on Pender Island today. Prices here have really fallen off a cliff and lots of inventory still on the market.
Interesting point ... A family member purchased a quarter-ownership rental property on Pender in 2005. By 2008, the resale value ballooned to 60% over original selling price. Now in 2013, the resale value has now slumped to about 30% less than the selling price.
If someone purchased in 2008, the property would have now lost more than 50% of it value. Not to mention the very high monthly carrying costs (strata fees, etc.)!
Pender Island - did someone mention Pender Island!
92 homes for sale on the island and on average only 3 sale a month.
2.5 YEARS of inventory! Average days on market 235. On average the properties are selling at 92 percent of their assessed value.
Prices range from a low of $125,000 for a heated shed with enough land to grow your special crop to $625,000 for 2600 square foot home on a half acre of waterfront.
Median price for a home is $340,000 or about $400,000 less for an equivalent home in Victoria. Or about 60 percent more than the median was ten years ago. Or about what properties were selling for back in 2005.
6 months ago I spoke with a Vancouver fireman who was hot to buy on Pender Island. Why? His rational was that prices had to go up on Pender - because they are so much cheaper in comparison to Vancouver. This was going to be his fourth home and he was going to use it to earn money as a vacation rental. The thought that Vancouver was too high or that demand for real estate is local or that he was over exposed in the market having to already cover a loss between the rents he was getting and the mortgage payments never entered into his brain.
BOC makes the news twice in one day.
Bank of Canada cries fraud on $90K 'Duffy buck' cartoon
Why Mark Carney's Canadian success story may be about to fall apart.
Quoting:
"Just as he is packing his bags, there are worrying signs that the Canadian economy is coming off the rails. Increasingly it looks as if he is getting out before it crashes."
Carney kicked the can down the road in 08-09 with all the stimulus that was thrown at the housing market to push prices much further into bubble territory. Canada's housing market economy masked the economic problems of this country for a couple of years, but a temporary fix like that quickly wears off.
Now Canada must face the consequences that it should have faced in 08-09. The housing market will be feeling the effects of a struggling economy for years to come.
The BoC doesn't need to raise rates for the cost of ownership to rise dramatically in Canada. This, in my opinion, will be done by increases in the 5-year fixed-rate, which is controlled by the bond market.
As Garth Turner explains:
"So the Big Bank in Ottawa doesn’t need to change its own rate one sous for the cost of home loans to rise, as they are now. This is something nine in ten realtors don’t understand, as they cling to the myth that emergency rates are now permanent."
The OSFI (the bank cop) has been forcing lenders to jump through new hoops. Again, Garth explains:
"As one senior bank lender put it in an email to realtor clients this past weekend:
“What this means to me is…. (1) It is more important than ever that your clients are “future proofed” with their mortgage…..a customized strategy to prepare them for the eventual rate increase they will inevitably face. (2) documentation requirements and due diligence on the part of all lenders has gotten tighter recently, as a result of OSFI audits being conducted at all lenders…..and we should not expect this to change any time soon….. getting a mortgage now….is not as it was 3 years ago….so we need to work together to align client’s expectations as to the paperwork that may be requested.”"
As long as the household debt to income ratio in Canada keeps rising, I will argue that the housing market correction in this country has not really started. Yet, it is obvious that Victoria's correction is in full swing.
Victoria's housing market will experience its biggest losses once the household debt to income ratio starts to decrease in Canada. This is always the case as national housing bubbles (and there have been many) deflate.
How does some one get foreclosed on in a sub200k condo downtown? You could probly make end meet with a shift at 7eleven and by renting out the second bedroom.
http://www.realtor.ca/propertyDetails.aspx?propertyId=13094221&PidKey=1772259193
"How does some one get foreclosed on in a sub200k condo downtown?"
This could be part of someone's real estate collection.
I can't believe our fearless leader purchased a house. That's like William Wallace saying "sorry lads but I think I'm going to fight for King Longshanks"!
More people being fired at CMHC
The fraud and incompetence that OSFI are uncovering at CMHC must be quite epic. I would love to hear what is going on internally. This is going to be interesting.
Housing slowdown starting to be felt in bank profits
The banks will survive, but the gravy train might be delayed for a few years.
Two things have to be addressed in Canadian real estate. The high cost of housing and the high level of home ownership. Both have to be brought down gradually in order to avert an American style housing crash.
Tighter universal lending policies, enhanced due diligence by the lenders and accountability on the part of the loan originators.
That would likely mean going back to 10 percent downpayments, the end of a MacDonald's like fast loan approval systems. Heavy fines on mortgage brokers and a mandatory cooling off period for real estate transactions of at least 7 days. A real estate transaction must have a minimum 7 days between the date of offer/acceptance and the date of subject removals. No more 24 or 48 hour clauses - no more hard sell tactics by agents.
The industry has proven that it can not self regulate itself and both OSFI and the government have to step in to protect the consumer.
So the Big Bank in Ottawa doesn’t need to change its own rate one sous for the cost of home loans to rise, as they are now.
First part of the statement is true. second isn't really true yet. 2.79 5 yr, 3.69 10 yr is still widely available.
Most likely the cost of variable and fixed rates will go up somewhat in tandem. BoC takes cues from the bond market and vice versa.
Garth may be wanting to distract attention from his looking increasingly likely to be wrong prediction that the BoC would be raising rates twice this year.
"The fraud and incompetence that OSFI are uncovering at CMHC must be quite epic. I would love to hear what is going on internally."
I agree that there are loopholes (and fraud) at all levels, including CMHC, mortgage brokers, realtors, etc. that have allowed people who do not qualify for a mortgage to get one anyway.
No wonder the household debt to income ratio in Canada has kept increasing since the new mortage rules were brought in almost a year ago. Instituting new mortgage regulations is one thing, but enforcing them at all levels is another.
"First part of the statement is true. second isn't really true yet."
The only thing that matters here is that the first part of the statement is true. The BoC does not have to raise rates for the cost of ownership to increase dramatically in Canada. The bond market will take care of that in short order.
"in short order" - care to tell us what you mean by that?
I predict that 5 year sub 3% will still be widely available at the end of the year. What's you call?
"How does some one get foreclosed on in a sub200k condo downtown?"
This could be part of someone's real estate collection.
--------------
....or the beginning of the demise of the "shouldn't/couldn't afford it in the first place hipster purchase
Any new rules have to be universal to all lenders.
At 5% down, the lenders can shuffle things around, brokers can push appraisers to value the property a little higher. A squeeze here, a push there, shuffle this, don't report this, etc. Fudging 5% is worth the risk in relation to what the banks earn on a mortgage. Fudging 10% - not so much. You have to remove the economic incentive to cheat and that means a higher down payment.
At 10% down the difficulty of trying to get a mortgage that shouldn't fly to comply with all the requirements is substantially much more difficult.
When did $200,000 become meaningless?
Most of us would have an extremely difficult time trying to pay off a $30,000 credit card bill that we have amassed over several years.
That's the same as when you owe $200,0000 in mortgage debt and you are under foreclosure. You can't finance yourself out of this debt any longer. There are no terms, no amortization periods. The money is payable and there is not a lender that will help you. Add in fines, penalties, fees, etc. - you're toast.
@subprime11
I can't believe our fearless leader purchased a house.
I think that Leo has just been living up to the title of this blog - he house hunted for quite a few years!
@Leo S
The fraud and incompetence that OSFI are uncovering at CMHC must be quite epic. I would love to hear what is going on internally.
CHMC has been internally posting a few senior IT positions. I can't help but wonder if there are plans to overhaul of EMILI?
congrats, Leo. I wish you many happy days in your new home.
I think that Leo has just been living up to the title of this blog - he house hunted for quite a few years!
Yup. Round about 5 years. Started vaguely looking in 2008. Friends were buying condos, and that's what we could have bought, so we looked at condos.
Stumbled across Garth's site, then Prairieboy's and started following the market a bit. Crash of 2008 and in early 2009 we decided against a condo and started looking at little starter shacks instead. 1000sqft on busy roads... selling for about $400,000k back then.
Then the market recovered, Prairieboy bought a house, and I migrated over to HHV. Renting an apartment, so it was a no brainer to keep waiting.
Last fall, baby on the way so needed more space.. Threw some offers around and had one accepted for $510,000 on a 60s place on Howroyd. Decent area, but backed out after the home inspection due to expensive issues with drainage and other things. Moved to an identical rental house instead, and very glad we didn't buy that place. Now the equation was a little different, since if prices stayed steady it would be a wash between renting and buying. Any price declines would be money saved (assuming constant interest rates).
Plan was to stay in that place for a year, then buy a place this fall. Figured that if prices were coming down, they would have come down some more by then. If they weren't coming down, then I figured they weren't going to come down at all, so either way would buy.
Then this place came up and we tossed in an exploratory offer. Didn't think we were going to get it, so did it without a realtor. Everything came back clean so we went ahead with it.
Doesn't change the market of course. It is still sliding and will almost certainly continue to do so for some time. Up to 10% further decline I'd be ok with. Planning to stay there for the long term. Anything more than that and I'll be kicking myself :)
What are some of the more desirable areas to live within Victoria? (the under 600K price ranges)
You can live in any area of Victoria for under $600K, but it depends on what kind of living arrangements you need.
re: I think that Leo has just been living up to the title of this blog - he house hunted for quite a few years!
Congrats Leo, I'll get over it I guess. My wife would not live in an apartment when we were pregnant with our first child so I understand the nesting urge with a young one.
If you go outside the core there are any number of very nice SFHs for under 600 K. Closer to the core you can get decent value in SFHs in Vic West and Esquimalt. Esquimalt's pretty spotty though. There are some really nice areas and some areas to avoid!
For 600K you can even buy a small house, or a house needing work/upgrades in many of Victoria's "best" (=priciest) areas
Forget about fraud at CMHC. What about the fraudulent predictions offered up on this blog over the past six years? I'm calling for a thorough investigation.
"What about the fraudulent predictions offered up ..."
How can a prediction be fraudulent?
Forget about fraud at CMHC. What about the fraudulent predictions offered up on this blog over the past six years? I'm calling for a thorough investigation.
Fraud... That word doesn't mean what you think it means.
My wife would not live in an apartment when we were pregnant with our first child so I understand the nesting urge with a young one.
Mostly about the impracticality with that apartment. 1BR, so just plain too small for all the baby stuff. Also laundry in the basement which would have been a huge pain.
Also we lived beneath a couple with a screaming baby in a previous apartment, and we didn't want to inflict that on anyone :)
We are renting a house with numerous kids. But in an apartment - no, I can't see it working - renting or owning.
Here is a snapshot of Victoria's neighbourhoods and what kind of home you'll generally find and the price you may typically pay for it.
Burnside:
A circa 1945 home having some 1,932 finished square feet and located on a 7,000 square foot lot for $458,450
Central Park
Circa 1912 built home
1625 finished square feet
5,000 square feet lot
$465,000
Vic West
1913 built home
1623 sq. ft
5,000 sq. ft lot
$441,000
Downtown
Not enought data
Fairfield East
Circa 1949 built home
2,060 sq. ft. finished
6,250 sq. ft. lot
$672,500
Fairfield West
Circa 1922
2,132 sq. ft
5,880 sq. ft.
$682,000
Fernwood
1912 built home
1,758 sq. ft.
5,715 sq. ft.
$529,000
Hillside
1928 built
1,962 sq. ft.
5,400 lot
$500,000
Jubilee
1918 home
1,565 sq. ft.
5,500 lot
$507,500
James Bay
Circa 1922
1,737 sq. ft.
4,500 lot
$643,250
Mayfair
1947 built home
1,822 sq. ft.
6,000 lot
$476,000
Oaklands
1947 built home
1,529 sq. ft.
5,500 lot
$468,500
Rock Bay
Not enough data
Rockland
1956 built home
2,600 sqare foot home
8,586 sq. ft lot
$843,000
Fraud... That word doesn't mean what you think it means.
Third definition of "fraud" (Dictionary.com): any deception, trickery, or humbug.
Leo, if you like, from now on I'll only use words in their primary or secondary sense, so that you don't get confused.
any deception, trickery, or humbug.
And? None of that here. Deception means willful attempt to mislead, not "opinion you don't agree with".
Are you able to edit your comments, Leo? I swear that you just wrote something and then changed it.
I can't edit my comments, but I can delete them completely on articles that I posted.
I must be going crazy. I'm sure you don't disagree.
Oh, I get it. Did you delete a comment completely and then post a differently worded one?
Leo
Congrats! Were you happy with your inspector? Would you share their name?
Cheers
We know Leo's inspector wasn't Just Jack. "Wood? This house won't last much longer."
Relative to past single family home values, I'm seeing some great sale prices this week.
Like 1897 Gonzales in Fairfield. This home was built and sold in June 1995 for $340,000. Re-sold in 2006 for $690,000 and just sold again for $670,000.
BC assessment was $838,000
A fixer upper on Forrester in the Camosun neighborhod. Bought October 1997 for $209,500. Court order sale completed this week at $429,000
BC Assessment was $500,800
102 Joseph Street in Fairfield West. Bought June 2008 for $579,000. Sold this week $500,000
Manufactured home in Shawnigan Lake bought March 2009 for $76,000. Sold this week for $16,000.
Assessed at $52,000
I can see why those who have been watching the market are jumping in. Good selection of homes for sale and some of the best prices I've seen in more than a half dozen years.
1897 Gonzales Ave sold for 20%below assessed. Sold $670K assessed at $840K. Good location.
3072 Cadboro Bay rd sells at 17% below assessed. Sold $688K assessed at $829. Strange house but good lot.
Garth's post is very interesting today. "house horny" index is at an all time low as of May 19th.
Is what's happening on craigslist normal for this time of year?
What, you mean the student exodus?
Demographics and housing prices...
Maybe this link was posted in the past. It's too complicated for me, but it might interest some of you lovers of statistics and demographics.
http://www.slideshare.net/nhrccnrl/implications-of-population-aging-on-real-housing-prices
Real Housing Prices
>> Were you happy with your inspector?
He was ok. Same guy we used last fall. Pretty thorough, decent knowledge. But it was really more a formality, we always do a separate inspection ourselves and bring my contractor brother in law, so we already knew most everything before the inspection.
Myles Braid from Homeguard
Several showings tonight in our rental. Overheard from one of the prospective renters: "yeah, the market is going to totally crash in the next 6 months".
Fess up, which one of you was it? And when it does, dot rub it in too much.
Landlord extremely stretched. Close to 1.5 million in real estate on one income. Wonder how much of that is out there. And we were stressing out about ratios 6 times lower than that.
Global House Prices with an interactive Chart from Economist Magazine:
http://www.economist.com/blogs/dailychart/2011/11/global-house-prices
"A slowdown is on the way and there’s a 50-50 chance of recession in Canada by the middle of next year, argues Berezin, managing editor of the monthly newsletter The Bank Credit Analyst."
Hadekel: Even chance of Canada slipping into recession - economist
And we were stressing out about ratios 6 times lower than that.
Leo, what percent was your down payment, if I may ask? Also, were you able to secure a super-low fixed rate?
We should count on predetermined home loan rates to raise should they store when it reaches this level. If you are thinking of buying, replacing or maybe if your home loan can be coming up pertaining to restoration, You might want to call your own large financial company and get a few rates held. This is the beginning of the actual long-awaited home loan price outdoor hikes.
http://www.edmontonpropertypros.ca/edmonton-real-estate/condos-for-sale-in-edmonton/
Let's all agree to never click on a "Jim Ricks" link. The internet world will be better for it.
> 20% down. 2.79% for full featured 5 year. Not exceptionally low, just what was commonly available.
Nothing i want more than a condo in Edmonton.
Yes - it is a small market of Victorians that dream to have a condo in Edmonton.
> 20% down. 2.79% for full featured 5 year. Not exceptionally low, just what was commonly available.
2.79% is exceptionally low, historically speaking.
Did you go through a mortgage broker, a credit union or a bank? Did you have to haggle much?
Leo, there is a comment from "coastal" on the greaterfool site that is not happy with your recent home purchase.
Coastal is being a little harsh.
Why are people commenting over there about comments here?
Make your comments here, all comments are welcome!
hmmm was this about me?
"- Victoria has a Mediterranean climate
- It doesn’t rain much in Victoria
- 50-80 year old houses like the ones they bought hold up better than newer ones
That’s just in the last week! And they get mad if they hear of real estate fraud being reported. Not mad at the fraud happening but mad that it was being reported in the media. "
LOL!!!!
Student exodus?
Never seen a graphic map in the past so it's hard to compare. Put's it into perspective though. I know from my renting days that you were waaaay better of looking in June than September. It was night and day. Looking at that map is seems like a general exodus! It would be interesting to take a shot again in July and then October to compare how the Student exodus affects that.
By the way,
It doesn't rain much in Victoria proper, and according to Canadian geographic...
""Most people think of this area as lush and full of greenery and for the most part, that’s true," says Tim Ennis, director of land stewardship for the B.C. region at the Nature Conservancy of Canada. "But the east sides of Vancouver Island and the Gulf Islands can also be very dry because of the rainshadow climate caused by the mountains."
This unique Mediterranean-like climate is an ideal growing environment for Garry oak ecosystems — home to more plant species, such as the camas lily, than any other terrestrial ecosystem in coastal B.C. and one of Canada’s most at-risk natural habitats."
The greater fool comments are posted on the right site. Keep up the crazy talk, all that hot air is keeping the site from deflating.
2.79% is exceptionally low, historically speaking.
Yes, I meant relative to the market. If I had more time to haggle I think I could have brought that down another 0.05-0.1%. Were a bit rushed though, so didn't have the time to do that. Happy with the terms though. We used Tyler McTaggart, whom I've met a few times to BS about the mortgage market in general. He seems good.
Leo, there is a comment from "coastal" on the greaterfool site that is not happy with your recent home purchase.
Oh yeah. Coastal already hated the HHV blog and me before this, so I'm sure this didn't help. I tried to invite him/her to comment here but it seems they prefer the echo chamber that is greater fool.
Deserves a repost I think:
coastal on thegreaterfool.com The Victoria crash indicator alarm just went off, the local house blog webmaster jumped off the fence, pen in hand,and signed his life away because the new baby needs a yard . Yikes. No more unbiased info on that blog now,but was there ever when the resident agent know-it-all gets his ass kissed day in and out ? Greater fools alive and well in V-town.
Correction: The new baby already had a yard, so it's not about that. And I'll still be posting updates, but I imagine I will be spending less time on analysis. So, someone want to step up to post things? Either you can ask HHV to add you as a contributor, or you can send things to me and I will post them on your behalf. leo.hhv@gmail.com
House prices in Victoria have recently fallen to lows not seen since mid 2009, just after the crash was halted by that dramatic, unprecedented, emergency intervention.
House prices have also broken though major support (see chart) that had been present for a full 2 years.
The trend is definitely down. New lows will be the norm for the next number of years.
A clear downward trend has been established despite falling interest rates.
This is about to get very interesting. Actually, it already is.
No more unbiased info on that blog now ...
Unbiased before? Good one.
Leo, now that you're an owner, you're always welcome to join our camp, the long-term bulls and short-term halibuts. You may never publicly subscribe to this outlook, but I bet you will privately.
Perspective on the market remains the same. More declines coming but no all-out crash likely.
What changes is the wish. Before I wished for a crash, now I don't. Simple human nature that no one can avoid, but I'm sticking with my predictions based on affordability.
Also I don't expect any appreciation even in the long term. I would not be at all surprised if the place is still worth the same in 10 or even 15 years.
FYI, these guys are offering a 2.69 five year fixed
http://www.mortgagepal.ca/rates/
@ Leo
Does your idea of affordability assumes permanent emergency level interest rates?
We all know that interest rates will be rising over the next number of years in Canada.
Your idea of affordability competely ignores the metrics of affordability that economists worldwide (and our very own Mark Carney) use and have used for decades: price to income and price to rent ratios. According to those two main measures of affordability, Canada is the least affordable country in the world when it comes to real estate.
Interst rates move up and down, however, national housing bubbles always correct fully and completely despite interest rate moves, once extreme price to rent and price to income ratios are reached.
By 2009, the US housing market had been crashing for 3 years. Emergency interest rates were brought in that year, yet the US housing market continued to crash for at least another 2 years. Interest rates did not stop the US housing market crash.
By 1992, Japan's housing market had reached bubble territory in terms of price to income and price to rent ratios. Emergency interest rates were brought in shortly after that, yet Japan's housing market continued to crash for years after that. To this day there have been no signs of recovery.
Obviously interest rates influence house prices, but once price to income and price to rent ratios reach extremely high levels, a sudden and dramatic drop in interest rates can't stop a national housing market from correcting fully. The correction always goes back to where incomes and rents are once again able to support house prices.
Canada is in a much worse position in terms of interst rates than the US was during their crash. Canada does not have the option of slashing rates (effectively) from 5-6% to 2-3%, like the US did when their housing market started to crash. Canada already has emergency level interest rates. Even if there was another drop in interest rates in Canada (there won't be), but even if there was, it would be tiny in comparison to the rate slash that the US experienced during their crash. If a major rate slash during the US housing crash did not stop their crash, then there is no way a tiny rate drop in Canada will stop our correction, once it starts across Canada.
The current peak of Canada's housing price run-up is much higher than the peak reached by the US in 2006. The US housing market crashed and there is nothing to support the view that Canada's housing market will not crash.
Info -while I'm also convinced a crash lies somewhere in the future, never underestimate what the government will do to make the banks and most of the population (ie homeowners) happy. It's going to take a while.
Starting to see more sales occurring in the Western Communities as people take advantage of the large spread in prices between the core and the Westshore. You don't have to be a slave to a mortgage as $340,000 now buys a 1980 split level home in Langford. Nice home in a nice neighborhood and you can take the family to Disney Land every year.
Now its the core districts that have to moderate lower as the market place teeter-totters between the two areas.
Slowing sales in the core will push inventory over 6 months by the end of summer. Right now there are about a dozen court ordered listings in the core. As the inventory climbs, the "foreclosure" market will put a drag on prices.
FYI, these guys are offering a 2.69 five year fixed
Those mortgages are called "no frills" or "low frills".
Specifically the following is a deal breaker for us:
5% Annual Lump Sum Payment
5% Regular Payment Increase
For comparison, our terms are 15% annual lump sum and 100% regular payment increase. Well worth the extra $20/month.
Good point Leo I didn't see that. I'm looking into a place right with a 3.05 which is a bit of a bummer but they allow us to pay up to 20 percent, their penalties are lower than other banks if we break terms, they are also paying for the appraisal on our house and lawyer fees (we are breaking our current terms, ends up being a wash with the penalty vs interest savings over the year).
Does your idea of affordability assumes permanent emergency level interest rates?
For the next ~2 years yes, at which point they could gradually rise without necessarily impacting nominal prices.
price to income and price to rent ratios
Those are not measures of affordability. Those are measures of price to income, and price to rent. Not the same thing.
By 2009, the US housing market had been crashing for 3 years. Emergency interest rates were brought in that year, yet the US housing market continued to crash for at least another 2 years. Interest rates did not stop the US housing market crash.
Low interest rates were too late. The decline had already triggered a foreclosure snowball that drove the market down further.
By 1992, Japan's housing market had reached bubble territory in terms of price to income and price to rent ratios.
Prices in Japan were in a different league though, as I've pointed out before.
Not saying it won't crash, but I don't see it as a certainty.
"The seller would be interested in renting back from the new owner."
Good guy seller.
12848486
Poor old Victoria.
Any competent stock trader would immediately recognize the recent breakout below long-time support for Victoria's house price chart on Teranet's index.
The high (and start of the pattern) was mid 2010, since then there have been lower and lower highs. On the bottom, support at slightly below 140 has been tested at least 3 times since the pattern began forming. The recent breakout (March 2013) pushed through the support for the first time since the pattern began forming. This is a very bearish sign. As is usually the case, the breakout (March 2013) was a very strong move downward, in fact it was the biggest single month price drop in the history of data calculation for Victoria.
Compare Victoria's chart to this stock chart. These patterns are basically identical and very common.
Victoria's recent breakout below support strongly suggests declining house prices for at least 3 years. All of this happened while interest rates were declining and affordability (on Leo's chart) improving. Isn't that interesting?
I think I saw the face of Jesus in my toast this morning....
Really? I saw Introvert on my waffle.
:-) nice
Any competent stock trader would immediately recognize the recent breakout below long-time support for Victoria's house price chart on Teranet's index.
Any competent stock trader would know technical analysis is basically useless. Again, not saying that prices aren't declining (they are) or won't crash (they might), but the fact that our house price chart looks similar to some random other chart has exactly zero predictive value.
"Canada’s housing market is showing “ominous” signs of the same slowdown that hit the U.S. housing market before its devastating meltdown so it’s too soon to celebrate a soft landing, says Capital Economics."
Finally, a non-Duffy story. Let's get back to business.
Housing market shows ‘ominous’ signs of downturn: report
"says economist David Madhani, who first predicted a downturn in house prices of up to 25 per cent two years ago.".... So far he hasn't been right....
Well, for what it is worth, you and I now agree on the state of the housing market Leo.
I'm just heading back from the Okanagan. Prices have fallen a bit more there than Victoria, but there is no crash as far as I can tell. There is not a lot of new residential being built except for senior's housing though.
>> you and I now agree on the state of the housing market Leo.
I guess then we always agreed.
I'm just heading back from the Okanagan. Prices have fallen a bit more there than Victoria, but there is no crash as far as I can tell.
50%-Off in West Kelowna
I have also seen a house in Penticton for sale for 50% off the previous sale price.
Aww don't stop there!
How about a look at Saanich East. What kind of house do you get for your money?
In the Arbutus neighbourhood that would be a 1976 built home. With some 2,550 finished square feet on a large 10,000 square foot lot. Price tag - about $675,000.
Blenkinsop - is where the gentlemen hobby farms are located. Million dollar plus homes on acreage close to town. And a couple of ordinary 1960's subdivisions around Pierce Cresent with prices around the $550,000 range.
Broadmead. A mid 1980's development where Victoria builders made their first attempt at building luxury housing. Men still were the predominate designers and architects then - and it shows as most of us think BIGGER is BETTER. In general,$735,000 will get you a 2,700 square foot home on a 12,000 square foot lot.
Cadboro Bay. What makes this hood difficult to assess is the varying water views. You can have a shack at $515,000 fit enough to keep a pack of wet dogs in or waterfront for $2,000,000. It seems being so close to Oak Bay's Uplands neighborhood it doesn't rain in Cadboro Bay it "perspires"
Camosun
A 1950's area built by returning WWII soldiers. This was your plain "meat and potatoes" answer to housing. Build em fast - build em cheap and have yerself a beer before 3:00 and pissed by 6. $545,000 gets you the same house as your neigbors as his neighbor as the neighbor across the street, down the street and around the corner. 1,877 square feet and a 6,600 square foot lot.
Cedar Hill. Once more a mid 1950`s era of housing built for a man, a woman and 5 children. $535,000 for 2,050 square feet home on 7,600 square feet of land.
Cordova Bay. Old farmland developed with homes begining in the mid 1980s. Some with views on hillside lots. If you don`t mind getting squashed by an 18 wheeler any time of the day or night you can get a home along the Pat Bay highway for $390,000 or you can buy high bank waterfront along Parker for a million or two. $757,000 gets you 2,660 square feet and an 11,000 square foot lot. And your kids get to go to a school that won`t rain bricks down on them during an earthquake.
Next up Gordon Head!
Nope - better leave this one alone. Let`s just say this is why Valium was invented for stay at home mom`s in the 1970`s.
More to come - if you want.
Had to repost as I originally wrote Prosaic. And I thought Introvert would correct me that it was Valium in the 1970`s.
There was an overbuild in high end condos in the Okanagan. Developers priced too high and the market was saturated. I don't know a lot about that segment. I don't follow it as I don't buy this type of housing.
50% off a 50% overprice is market. I'm also not sure if that particular development was on reserve in Westbank.
If you are looking for 50% off peak for an average sfh in Penticton or Kelowna you are going to be disappointed. I am.
Another interesting intersection on the venn diagram.
Group A:
People who own RVs.
Group B:
Single people that rent one bedroom 800 sqft suites in houses in the "boonies".
Now consider all the individuals in the intersection of A and B.
"based on single occupancy."
$995 / 1br - 800ft² - SUITE + GARAGE + R,V, +PARKING
More to come - if you want
Absolutely! Looking forward to Lake Hill and Swan Lake.
Probably better off living in the RV
"Completely renovated in 2008, this architecturally inspired West Coast Contemporary family home"
I wonder how Teranet handles a property such as this. Sold in 2008 for around $1 million, the house was torn down and a new house built, i.e., another $1 million or thereabouts invested.
So does Teranet record this as an increase in price of $1 million?
And is that the reason the realtor is reporting this as a "reno" not a new house?
"Any competent stock trader would know technical analysis is basically useless. Again, not saying that prices aren't declining (they are) or won't crash (they might), but the fact that our house price chart looks similar to some random other chart has exactly zero predictive value."
This comparison is competely legitimate. I know people who use this exact chart pattern (and others) to make a living trading the stock market and have for years. It doesn't matter whether you are trading gold, oil, oranges or houses, that chart pattern works.
Much of the technical analysis like MACD and stochastic, etc. are not useful at all, in the opinion of successful stock traders.
The recent breakout from the pattern that had been forming for 3 years is a very bearish indicator for the future of house prices in Victoria.
The recent breakout from the pattern that had been forming for 3 years is a very bearish indicator for the future of house prices in Victoria.
Time to short a house based on the recent breakout.....oh wait, you can't short a house and people don't buy and sell houses based on chart breakouts.
No more unbiased info on that blog now,but was there ever when the resident agent know-it-all gets his ass kissed day in and out ? Greater fools alive and well in V-town.
Some bitter people on Garth's blog.
"price to income and price to rent ratios
Those are not measures of affordability. Those are measures of price to income, and price to rent. Not the same thing."
You are wrong. Price to income and price to rent ratios are measures of affordability.
Vancouver Housing Affordability Ranks 2nd Worst In World: Demographia
Quoting:
"Vancouver is the second least affordable city in the world when it comes to housing, according to a U.S. think-tank.
Demographia ranked the B.C. city second only to Hong Kong on housing affordability, although it is getting better on Canada's West Coast.
Demographia measures affordability using the "Median Multiple," which multiples the median house price in a given market by its median household income.
Vancouver's median multiple rated 9.5, meaning the median house price was about 9.5 times higher than the city's median household income, placing it in the "Severely Unaffordable" range."
It is clear from this quote that affordability is calculated using price to income ratio and has nothing to do with interest rates. I have made this point several times on this blog. You have ignored it every time.
Another calculation of affordability does include interest rates. However, you think there is only one way to measure affordability, and for you that must always include current interest rates.
The Economist also measures affordability with price to income and price to rent ratios. Every major news source that ran this story also used the same wording.
"By 1992, Japan's housing market had reached bubble territory in terms of price to income and price to rent ratios.
Prices in Japan were in a different league though, as I've pointed out before."
Where is the link to prove this?
Canada's housing price run-up is at a level much higher than that of the US as it reached its peak in 2006.
The US housing market crashed. What will stop Canada's housing market from crashing. Canada also has a higher price to income ratio than the US did at peak. Canada's household debt to income ratio is at 164%, while the US reached a peak of 120%, and their market crashed. This will not end well for Canada.
"The recent breakout from the pattern that had been forming for 3 years is a very bearish indicator for the future of house prices in Victoria.
Time to short a house based on the recent breakout.....oh wait, you can't short a house and people don't buy and sell houses based on chart breakouts."
Who said anything about shorting the Victoria housing market? I certainly did not.
The recent breakout from the chart pattern is valuable in that it strongly suggests that houses will be trading hands at lower and lower prices than those seen inside the pattern over the last 3 years.
@ koozdra
"Canada’s housing market is showing “ominous” signs of the same slowdown that hit the U.S. housing market before its devastating meltdown so it’s too soon to celebrate a soft landing, says Capital Economics."
It's always entertaining to read fluff pieces and hear people talking about a soft landing. There will be no soft landing, it is simply not possible.
If the price bubble that existed in Canada in 2006 was allowed to deflate at that time it wouldn't have been a soft landing. Add in all of the interventions and the further price run-up since that time and you now have a monster of a bubble. Much worse than the bubble in the US in 2006. There is absolutely no possibility of a soft landing.
"50% off a 50% overprice is market. I'm also not sure if that particular development was on reserve in Westbank."
Incorrect. 50% off of a 100% overprice is market.
Example:
Market = 100 K
Overpriced = 200K
50% off 200 K = 100 K
100% overpriced at 100 K = 200 K
Yes - you are right - miscalc.
"Info -while I'm also convinced a crash lies somewhere in the future, never underestimate what the government will do to make the banks and most of the population (ie homeowners) happy. It's going to take a while."
The government's hands are tied now in terms of intervening the way they did (through CMHC) in 2009. There are very serious consequences for taxpayers and the country as a whole when you do as they did in 2009. The total mortgage insurance exposure (CMHC and private) in Canada is already at $1.2 T. This is at a very extreme level. Canadian banks have all been downgraded within the last year. The IMF has been warning Canada....
In my opinion, there will be no intervention this time that will be big enough to stop the housing market from correcting fully, as all national housing bubbles inevitably do.
This comparison is competely legitimate. I know people who use this exact chart pattern (and others) to make a living trading the stock market and have for years. It doesn't matter whether you are trading gold, oil, oranges or houses, that chart pattern works.
Read some actual studies that measure the effectiveness of technical analysis. Study after study has shown it has little or zero value. Even if some measure had some validity, as soon as people were made aware of it and started trading based on the measure, it would distort the market and change the outcome. This is really common sense. If it was a method that worked then everyone would be a millionaire from the stock market
Another calculation of affordability does include interest rates. However, you think there is only one way to measure affordability, and for you that must always include current interest rates
Ignoring interest rates makes the measure completely artificial. When you ask yourself whether you can afford something, you think about dollars, not ratios. Only way to do that is to factor in rates.
Of course low rates mean more interest rate risk, but that's a separate issue
>> Where is the link to prove this?
Prices in Tokyo got up to tens of thousands per square meter. Google it.
Yep, even now a new condo goes for about $880/sqft in Tokyo. Even crazy Vancouver isn't that hight at $525/sqft....
50% off of a 100% overprice is market.
The "overprice" was also market. Market doesn't mean good value, it means whatever the public is willing to pay.
Info
- I believe it has been mentioned before. There ARE more than seven countries in the world.
Trumpeting Vancouver as the second least affordable city "in the world" based on study that looks at seven countries lacks crredibility.
"It doesn't matter whether you are trading gold, oil, oranges or houses, that chart pattern works."
If it works so well why is info bitterly moaning about house prices when she should be using her trading wealth to build her own mansion?
Overpriced means that it is above market value. I'm not sure what your point is. The word is self-explanatory. It does not mean "good value" or "market value".
Overpricing may result when developers go in with sales projections based on a market that was hot at the start. By the time the build-out is finished, the market has been saturated with similar-type product or market conditions have changed.
There is a set market absorption rate for new condos and, unfortunately, when you have a whole load of them come on-stream at once the problem is compounded.
Penticton, Vernon, West Kelowna (Westbank) and Osoyoos cannot absorb more than 20-40 new units per year right now. When you have 70-80 units in a condo development you can run into problems.
In the case of the development you referenced, they were heavily leveraged and went into receivership, as did one development in Penticton (Alysen Place).
Many developers try to do as many presales as they can so that there is some security. People buying on presales can sometimes get out of the contract if there are material changes/delays.
Lots of risk and not my area of interest.
Overpriced means that it is above market value. I'm not sure what your point is
I have already given my point. Market price, or market value which is the same thing as far as I can see, is what a member of the public is willing to pay for something in an open transaction.
For example Nortel's market value in 2000 was over $100 a share. Was it overpriced? From today's perspective, obviously. Likewise US RE in 2005, or dare I say Victoria RE in 2010. But what matters in investing is what you can see looking forward, not backward.
Overpriced can mean different things to different people. Your definition appears to be post hoc, i.e. a past price which was higher than today's price. To me it's a price which is too high relative to rents.
It's unclear from that article whether the places were actually selling at full price, then got reduced to 50% off, or whether they were advertised at full price, and then had to be cut in half to sell. If they were selling substantially then that was market. If they weren't, then that was just overpricing.
Agree that the 50% off claim may involve some creative arithmetic and special circumstances. I haven't been able to find from the usual sources what the units had previously been selling for.
It does seem that the general Kelowna market is down at least 20% from peak. Call that what you want.
Kelowna
What's it worth?
A question that can be difficult to answer. You have to look back at what market value is before you can attempt to answer the question. Part of what Market value comprises is choice. You choose one object over another because you perceive more value to that object over that of the other. But, not everyone agrees with your choice and they may choose to pay more for the other object. What one person pays is market price.
But when you have a concensus among buyers of which item should be worth more that's market value.
Well what's it worth then!?
To you it's worth what you paid for it. To someone lending you the money to purchase the object it's worth what the concensus of buyer's are willing to pay for the asset. As lenders want to be assured that they can re-sell the object at around the same price as they lent against.
No. Recreational is down 20% in the Okanagan and I can agree with that. Particularly hard hit are ski condos. I was even thinking of buying one, although decided against it in the end.
Residential is not down 20%. Here is data for Kelowna from 2002-2013:
http://www.trishwise.com/market-watch.html
New condo developments may be down 20% from peak. This market is saturated all across the Okanagan because of overbuilding.
"Residential is not down 20%. Here is data for Kelowna from 2002-2013:"
http://www.trishwise.com/market-watch.html
totoro, your math skills are slipping this sunday morning.
From your own link it shows average house prices are down near 25% since spring 2008. I would not be surprised if K town gets back to '03 levels.
It would be great if there was a blog like this for the Okanagan. I haven't found a reliable source of analysis which sets out medians or neighbourhood-type stats like JJ.
It appears to me that you are picking a short term average and comparing it to another short-term average. I don't find this particularly reliable. The numbers can be skewed by the volume and type of sales quite easily.
What I can tell you with certainty is that SFH prices for places up to $450 000 in Kelowna, Penticton and Summerland within walking distance to the beach are not down 20%.
This is the only market segment I follow closely and have followed since 2007. I also own in this market segment.
Nothing will replace real neighbourhood analysis by someone motivated to follow individual sales closely.
As StalJ pointed out, the current monthly average ($416,000) is down 24.6% from the peak in April 2008 ($552,000).
It appears to me that you are picking a short term average and comparing it to another short-term average. I don't find this particularly reliable. The numbers can be skewed by the volume and type of sales quite easily.
Sure, but if you want to argue about whether something is down by a certain percentage, then you need a way to measure that. You're making a quantitative claim (market not down 20%) based on non-quantifiable metrics (your impression of a very narrow market segment). That doesn't hold up to any scrutiny.
Yes, probably the best way to measure would be to find the annual medians for SFH in each of the areas.
As we know from Victoria, there is a big difference based on location and housing type. I don't have this information for the Okanagan or any of its sub-areas - I'm not sure if anyone else on the board does. This kind of points out the advantages of this board to me.
The only stats I do have right now are the Kelowna prices for average residential (not sure how this is defined) month by month.
IMO, an annual average would also be more accurate that picking one high and one low point - too much room for swinging up or down when million dollar places are sold.
Annual averages for Kelowna:
2008 $501,143
2012 $465,916
This accords with my view of what has occurred so far based on my regular reviews (since 2007) of listings that I'm interested in.
I don't remember how a crash is defined here but does less than 10%meet the criteria? It doesn't for me.
All depends on how you compare prices. Declines are usually measured based on monthly data, not yearly. That causes some problems in low-volume cities like Kelowna and Victoria, so you can average several months to get a more stable measure.
Declines in the US are stated based on monthly figures. You can use yearly if you want, but that is really flattening out a lot of the details. Think about buying in spring of 2008 VS December. Massive difference that you are just ignoring by taking the yearly average.
Maybe. Maybe not. Unless you know a low volume market well I'm not sure that the monthly stats will tell you what is really going on.
In any event, I'm satisfied that I understand the market I'm interested in well and declines have not been above 10%.
Probably the wrong place to discuss this and pointless given no-one here appears to be very experienced in this market.
I live in Kelowna and follow the market fairly closely.
I would say that Kelowna is down about 20% from peak. That of course varies between neighbourhood or price bracket, but I don't know of anywhere in Kelowna that is less than 10% off of peak.
Unfortunately, I don't have access to a boatload of stats so I just go off of resales where I know two selling prices, whether because I was watching them or from aquaintances who have bought/sold.
The average here is an unreliable gauge, in part because of low volume, but also because of new housing stock and tons of renovation during the boom years. The new stock tends to be higher end, and there is a substantial amount of it.
Recreational is down anywhere from 20-50% from peak. Foreclosures at Big White and condos that were pre-selling in 07 seem to be the biggest losers.
I know of one Big White condo that sold for less than it's 2002 price, and know of 2 other units that were sold between 40-50% off of their previous purchase price (both forclosures).
There were also condos in town that were fairly hard hit. Invue was marketed by Bob Rennie, and a few years ago slashed priced by 40% after it was already almost half sold.
Southwind at Sarsons slashed prices and had a "Price Drop Guarantee" and a big billboard with their fantastic motto: "We need you to move in so we can move on". I think they were about 30-35% off peak, but they have actually sold and started another phase now.
MOI has been high for a long time, around or above 12 months, and downward pressure has been fairly constant since '08. I would say that after an initial drop 08-09, most residential has been falling a few percent each year.
Slow enough decline that people don't call it a "crash", but to people who are selling for a 20% loss it probably feels like one.
Another note on Kelowna: I noticed that things picked up substantially this April, but can't think of any reason why except for psychological reasons (maybe the GST?). Was Victoria similar?
May seems to be slowing down again, but I guess I will see when the numbers come out:
http://www.omreb.com/page.php?sectionID=2
Time for another circle argument.
Patriotz: "Kelowna general market is down about 20% from peak"
Totoro: "No, only recreational is down 20%, residential market is down less, here are the stats"
StalJ: "Those stats show a decline of 25% in the overall market"
Totoro: "The stats aren't representative of what's going on. I've been watching a small segment of the market and it's not like that. You people don't know anything".
More like:
"The stats are representative or not representative depending on which time period you compare."
As far as not knowing, there is not a site like this that I am aware of for the Okanagan. It would be helpful if there was.
"Unfortunately, I don't have access to a boatload of stats so I just go off of resales where I know two selling prices, whether because I was watching them or from aquaintances who have bought/sold."
Ditto. I have close friends in Kelowna selling their home and looking to buy a different one. They are just listing now and bought in 2006 so we'll see where they land up at. They've had a hard time finding something good to move to in their price range (under $500 000).
Leo, I do my best to provide information based on real life.
I'm not a statistician, I'm a small-level investor with personal and professional experience with what I speak about.
My views are based on my experiences only. I actually do live in the Okanagan part-time and own there. I am involved in some of the developments there.
I don't appreciate the "you people don't know anything comment". It is both rude and uncalled for. If my comments came across this way, it was not deliberate.
This reminds me of why I chose to remove myself from this site before. Think it might be time for another break. Best of luck on your move.
totoro: You're the one that linked to the data. When it is pointed out that it doesn't support your argument, you change your argument to say that one segment of the market declined less. Fine, but that wasn't the original argument.
In any event, I'm satisfied that I understand the market I'm interested in well and declines have not been above 10%.
Statements like that illustrate that clearly you aren't interested in any different points of view, because you've already made up your mind.
I don't appreciate the "you people don't know anything comment". It is both rude and uncalled for. If my comments came across this way, it was not deliberate.
When you say it is "pointless" to discuss this issue because you're the only one that has experience in this market, I'm gonna go out on a limb and say you were meaning to give the impression that people arguing against you don't know what they're talking about. That ain't just me.
And another thing, when you say "Residential is not down 20%", how the heck is anyone supposed to know you really mean "SFHs up to $450,000 within walking distance of the beach are not down 20%"?
Again, if depends on how you view the data. I did review it before posting and, based on an annual average approach, it supported the proposition that there has not been a 20% decline in residential.
Could the drop be more than 20% in some neighbourhoods? Maybe, especially given that in my view there has been less than 10% in other neighbourhoods. If the residential definition includes condos, that could add a greater % to the drop.
If someone wants to compare one month in 2008 with another in 2012, they could have a different opinion which I would not agree with.
As far as the "pointless" comment, it is, imo, pointless to debate a set of average stats back and forth if you don't have on-the-ground experience. We could get into a loop/circle.. oh, maybe we did?
Given that this blog is called househuntvictoria and the posters up to tanjay have no experience in the market that they have disclosed, I find the debate more in the nature of an argument and an "I'm right, no, I'm right" loop than something that gives useful information.
I have no interest in being "right", and I am not interested in making decisions based on a wide-angle view of stats that are not grounded in real experience.
I also know for a fact that where I own is not down that much as my neighbour's home (almost identical to mine) sold last year, and across the street sold this year. Where I am looking is also not down that much - although it is down some and a good deal is easier to come by with a less desirable property.
I just spoke to my friend who is selling and actively looking. Her neighbourhood in Kelowna - SE up on the mountain - has had a number of recent sales. Prices are down 12%-15% from 2008.
Where they are looking, Lower Mission, is not down as much in her estimation. This is an area they know well as they previously lived there.
As far as how is anyone supposed to know what I'm using as a comparison? I guess they don't.
I know what I know because of my experience, but no-one knows what they don't know. If the information seems suspect to you, maybe you should ask some more questions?
That is the good thing about reasonable and civil debate, it allows to you examine your unexamined beliefs/opinions and hopefully make better decisions because of it.
If someone wants to compare one month in 2008 with another in 2012, they could have a different opinion which I would not agree with.
This is peak to trough comparison. Pretty standard if you want to talk actual percentage gains or drops. Not like we're picking two random months here, it's the peak month compared to the most recent one.
pointless to debate a set of average stats back and forth if you don't have on-the-ground experience.
And yet fatjay does have on-the-ground experience and his impressions back up the stats. Shows how much different peoples' impressions of the market can differ, and hence how these impressions are certainly no substitute for actual data.
The overall market average is nowhere near as good as a repeat-sale index by neighbourhood, but at least it is an objective measure not based on memory of sales over a 6 year period.
I also know for a fact that where I own is not down that much as my neighbour's home (almost identical to mine) sold last year, and across the street sold this year.
That's the problem. Those places sold at various times along the way, but you don't know what they could have sold for at the absolute peak of the market. So the decline you are observing is not from peak but rather from somewhere close to peak.
Only looking at every single sale would give a decline from peak value.
You get to make your investment decisions - or not - based on your views and I get to make mine on mine. Good thing too. No-one is ever going to look after your money like you will.
This conversation is kind of pointless Leo. Your view of peak to trough big picture stats does not match my real life experience.
Is this because of a flawed six-year memory on my part? It's a possibility.
Could it be because the picking of monthly peak to trough stats doesn't tell the whole story or even an accurate story for all neighbourhoods? Also a possibility.
This conversation is kind of pointless Leo. Your view of peak to trough big picture stats does not match my real life experience.
The only sensible way to discuss anything quantifiably is by agreeing on some basic terms. When discussing unemployment, you use the unemployment rate, not the fact that there is huge demand for hairdressers right now.
Could it be because the picking of monthly peak to trough stats doesn't tell the whole story or even an accurate story for all neighbourhoods?
Could it be that no one ever made that claim, and in fact we are discussing the performance of the whole market and not individual segments?
Wrote a lot of offers this weekend but not many coming together. Not too many keen sellers out there.
Monday June 3, 2013 8:40am:
May May
2013 2012
Net Unconditional Sales: 659 659
New Listings: 1,428 1,740
Active Listings: 4,783 5,015
Please Note
Left Column: stats for the entire month from this year
Right Column: stats for the entire month from last year
Sales dead even with last year. But let us not forget last year was historically a disaster for sales.
Haha nice
Leo, I hold you personally responsible for the sales rate not coming in lower than last year...
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