Monday, July 15, 2013

July 15 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.


July 2013July 2012 
Wk 1Wk 2Wk 3Wk 4
Unconditional Sales120
256


523
New Listings315622

1242
Active Listings47624817

 5178
Sales to New Listings
38%
41%

 42%
Sales Projection552588


Months of Inventory
9.9

Might as well repost last year's numbers they are so close.  What's interesting though is that last year we had these month end anomalies with the inventory, where the weekly updates showed a couple hundred less active listings than were reported in the month-end from VREB.  For example, July 30, 2012, the reported active inventory was 4939.  However two days later, it was apparently 5178. 

This year this is not happening, and month end numbers are basically what one would expect given the weekly updates.  Last year Marko explained it was a different algorithm run at the end of the month, but I don't understand what algorithm is involved in counting.   Data fudging or what is going on here?

56 comments:

Seth Perry said...

VIREB STAT PORN, more, more, more...

Cigarette?

koozdra said...

Ah, the beauty of leasehold...

Cheanuh Campground at Beecher Bay scheduled to close, residents to vacate in less than one month

subprime11 said...

Oak bay price reductions.

1220 beach reduced to $899 assessed at $1,028M

Big reduction at 2109 Windsor to $1.1M assessed is $1,076M.

Dan McLean said...

I don't know what's happening in Oak Bay. This month to date only one house has sold between $500,000 and $900,000 and it sold at the end of June taking effect in July. Everyone else is lowering their asking price, sometimes two or three times. This flies in the face of stats saying its the same as last year. Not here its not. We'll see if the next two weeks are any different. Never mind August when traditionally its not a good time to sell here.

Dan McLean said...

I don't know what's happening in Oak Bay. This month to date only one house has sold between $500,000 and $900,000 and it sold at the end of June taking effect in July. Everyone else is lowering their asking price, sometimes two or three times. This flies in the face of stats saying its the same as last year. Not here its not. We'll see if the next two weeks are any different. Never mind August when traditionally its not a good time to sell here.

subprime11 said...

Agreed. Is Oak Bay crashing? Many price reductions and few sales. Prices gravitating to assessed value which is not always an accurate gauge of value but it a trend that is different from Oak Bay sales over the past 3 months.

Jack and Cate said...

Housing, stock market, employment numbers....

Just Jack said...

There have been three "quick" sales in Oak Bay. A quick sale is a house listed and sold in under 30 days.

The Sale to Assessment ratios for these homes ranged from a low of 97.3 to a high of 100.9 percent of their assessed values.

As for list price to assessed value. 75% of the 115 homes for sale in Oak Bay are listed at or above their assessed values. And 50% of the homes sold in the last 30 days sold above their assessed values. The median and average Sale to Assessed ratio being 99% of the assessed value.

Oak Bay has 5 Months of Inventory and a Sales to New Listings ratio of 62%. Which is indicative of a stable market.

In my opinion, the Oak Bay detached house market doesn't appear to be "crashing".

info said...

Last week was interesting on this blog. Up to that point, some of the regulars were convinced that SFH prices in Oak Bay had been flat (basically) since reaching peak values in 2010.

However, last week it was shown on this blog that SFH prices in Oak Bay have declined 8.1% when comparing the first 6 months of 2013 with the first six months of 2010. The actual decline from peak would be more than 8.1%, since Oak Bay actually peaked in May 2010 and not June. However, the point is that Oak Bay SFHs have not bucked the trend of falling prices in Greater Victoria since 2010.

It was also shown that Saanich East is down about 10% from peak. As well, Langford and Colwood are down about 18%. I'm willing to bet that prices in all areas of Greater Victoria have declined from peak and that the size of those declines are not insignificant.

Greater Victoria's price decline has been happening while the household debt to income ratio in Canada has been steadily increasing. It has reached a record high (164%) and is much higher than the peak reached in the US (120%) immediately before their housing market started to crash. In my opinion, the big price declines in Victoria cannot happen until that ratio starts to head south. When this happens, housing prices in all major Canadian markets will start to decline.

Leo S said...

The length of the peak also plays a role. We can argue about decline from peak using various ways to measure it, but if the peak only lasts a couple months, it is less relevant. Seems that there was a few months of higher prices in early 2010, then a long flat period until now. With a market as small as Oak Bay, that means only maybe a hundred people actually bought at peak prices (of course if this is the start of another leg down, then everyone that bought since then will also be losing).

info said...

I should also mention that we have Just Jack to thank for the 6-month median calculations. Valuable data indeed.

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

@ Leo

The fact that house prices in Greater Victoria remained relatively close to peak values from 2009 until March 2013 means that all of those people who bought during that time bought (basically) at peak prices. As prices decline, it will mean that most of those buyers (especially those will little equity to start with) will be stuck in their homes unable to sell if they had to. This will, effectively, eliminate many of these buyers from moving up over the next number of years. That can only result in lower sales, foreclosures, etc. and, ultimately, lower prices.


koozdra said...

Failed sales continue to make their way to the rental market.

$2,300.00 to rent or $3,976.26 to own. Even at 2300 they'll have a hard time finding a renter.

Leo S said...

The fact that house prices in Greater Victoria remained relatively close to peak values from 2009 until March 2013 means that all of those people who bought during that time bought (basically) at peak prices

Agreed. This is basically dasmo's argument that it is more or less flat with various fluctuations (higher in 2008, lower in 2009, higher in 2010)

koozdra said...

$669,900
349 Lampson St, Esquimalt, BC


or rent for $2500

but wait.. there's more..

"Absolutely no pets and no smoking unless choosing the "rent to buy" option which will offer a reduced rent of $2400.00. Vendor will assist with financing via second mortgage if you are interested in purchasing this house."

Oh boy, sign me up.

koozdra said...

A note to landlords.

All caps does not work in your favor.

Phrasing your ad like an senile old man would yell at passing kids to get off their lawn will not attract renters.

"NO SMOKING , NO DRUGS , NO PETS"

Interesting order.

CHARACTER 5 BEDROOM

Marko said...

An old condo in Fairfield sold today for $220,000. Previous purchase price $290,000 in 2007 and $339,000 in 2008 and $145,000 in 1994.

Ouch. Age restricted/no rental/no pet condos taking a massive hit. Seems like more restrictions = bigger losses.

dasmo said...

Old condos must be hard to sell right now. Most of the new ones look very well built so how can you ask a similar price for a sagging 80's wood frame in need of an update? For the same price one can get new and concrete but with less space mind you....

subprime11 said...

Only 3 sales to date in Oak Bay this month between $500 - $900 so far. 14 sales last month. Also Garth references the dismall Oak Bay sales in his recent post. Nicely updated 1035 Oliver sells below assessed. Oak Bay crashing???

a simple man said...

I think it is starting to tip - I can't remember the last time there was this much for sale in the Estevan/Henderson area at this time of year. And they are just sitting. Something has changed.

Seth Perry said...

Relevant

subprime11 said...

I've heard that home sales always slow down in July but this is crazy. If you have read the blog by Ross Kay. A Burlington realtor who speaks the truth. His real estate trends index is worth a look which shows that by July 19th - Aug 19th consumer sentiment would be clearly shifting.

http://www.rosskay.com/

Leo S said...

I wouldn't read too much into the weekly sales. I've seen weeks where suddenly almost nothing showed up as sold on PCS and remarked about it here, and then they all come in the next week. See what the next update says. Last year this was the week where the market slowed significantly due to new mortgage rules (and end of spring season). We'll see if this year is the same.

subprime11 said...

My realtor claims that he's seen many deals fall through lately resulting from failure to secure financing. Not sure the scope of this issue but would have an effect on the $500-900K price range.

DavidL said...

CBC News: Homeowner shocked after house mistakenly demolished

dasmo said...

That sounds like a jackpot for them since it was sitting vacant waiting to be renovated. Their insurance will brutalize them because of that I'm sure but if they get the dough, what luck!

fatjay said...

Interesting read. I haven't made it through the whole report yet, but thought I would pass it on:

Canso Investment Counsel - The Canadian Housing Market

koozdra said...

Our race car is starting to run out of debt loving middle class fuel.

DavidL said...

@fatjay

Interesting article and nice analogy with the racing cars.

From the final paragraph: “The Canadian housing race driver, “Jumping Jim” Flaherty, stepped on the gas and the overheating engine laboured to accelerate. As the car entered the last straightaway, smoke began to rise from the engine compartment. A few grinding noises and the screech of abused metal didn’t distract Flaherty. He kept his foot to the floor, hoping to gain the momentum to coast to the finish line. As flames began to shoot from the engine, Flaherty
shifted into neutral, hoping that he would coast over the finish line before the car exploded...”

Seth Perry said...

@fatjay, thank you for a posting. Fascinating read. Very thorough, well researched and well written.

Even with a defensive hat on I believe it would be difficult to completely disagree with their conclusions.

Scary times ahead for those who are highly leveraged with the majority of their personal wealth in real estate.

"We hope very much to be proven wrong, but the analysis is clear. Canada borrowed its way out of the 2009 Recession by stoking our residential housing market to absurd levels. We cannot afford the houses we are living in."

For anyone that missed it, here is the link:

Canso Investment Counsel - The Canadian Housing Market

Seth Perry said...

BC Premier: "I think the market’s good, it's a buyers market. I want to make sure I get in before prices start to rise."

In Kelowna on Thursday, Clark said she has already been on the Internet looking for a home but would also like to hear from anyone in real estate about a home that requires low maintenance.

"I have a cat, but I won’t be bringing her. So no pets, no smoking and low maintenance,” she said.

The premier told reporters at her victory party on Wednesday night that she didn’t want to be "presumptuous" and start looking for a house while she was campaigning, but she’s getting serious now.

"I think the market’s good, it’s a buyers market. And you know the riding is really getting stoked again, so I want to make sure I get in before prices start to rise."

The Times Colonist, 11 July 2013

koozdra said...

Time to sell the east sooke waterfront "investment". The richies are talking amongst themselves and hearing that nothing is selling for "some" reason.

koozdra said...

Majority of retired Canadians in debt: poll

Borrow now or be priced out by rising interest rates.

Just Jack said...

A quote from that article "Calgary Certified financial planner Kevin McLeod, president of MoneyAdvisor.ca Financial Ltd, points out that it’s important to distinguish between good and bad debt.

“Not all debt could be considered a burden,” McLeod says. “Good debt is things like mortgages and other long term investments. At today's low interest rates, they [seniors] may be taking advantage of the low rates to increase their net worth. At these low interest rates, it might make more sense for someone to keep their money in their investment accounts instead of taking big lump sums to pay off their debt.”"


So what is a long term investment to an 80 year old person - Kevin? I remember speaking with a 90 year old man about his long term planning and it was:

"I don't buy green bananas"

dasmo said...

I guess you don't have kids....

koozdra said...

You can't spend money you don't have.

Wait, that's not true anymore.

You can't spend more money than you can service by monthly payments at super low rates.

better...

n.y.k. said...

-- "what is a long term investment to an 80 year old person?"

-- "I guess you don't have kids...."

Nightmare scenario: being a retiree in your 80s and lowering your standard of living so you can use a portion of your fixed income to service new debts for your baby boomer kids who are close to retirement themselves.

Maybe they'll turn into Boomerang Boomers. I like the sound of that. Everyone can live in grandma's condo.

koozdra said...

"The real question might be what are you going to do if rates rise to 5%."

That won't happen, right?

Can you handle higher interest rates?

dasmo said...

Rates will go up 100% it's only when...

dasmo said...

"Nightmare scenario: being a retiree in your 80s and lowering your standard of living so you can use a portion of your fixed income to service new debts for your baby boomer kids who are close to retirement themselves."

I agree....

StalJ said...

Marko said
"An old condo in Fairfield sold today for $220,000...$339,000 in 2008"

Another example of 35%+ off, to add to a growing list. After accounting for transaction costs and rental savings, the persons could have saved about $3000 per month over the last 5 years. That is near the average persons entire salary. I hope it was not their retirement savings.

koozdra said...

"Return to normal? For Canada it's a ten year bond rate of 6.2%. That would be a catastrophe for this economy"

The longer Canadians continue to get high on low rates the harder it will be to kick the habit. The long running "normal" would crush the middle class. But, in the words of Stephen Poloz, "I'm sure Canadians are running the numbers".

Oh Steve...

Rate reaction

koozdra said...

"Rates will rise if the US recovers"

"Diverging our economic strategy from the US not being a good idea"

"interest rate ceiling between 3.5% and 4%"

Scary stuff.

koozdra said...

The average Canadian mortgage is $175,000. A two percent increase would add $200 to monthly payments.

Why Are Mortgage Rates Rising, Expert Interview | REW.ca

koozdra said...

"We're seeing a lot of young workers unable to find work in their field and find themselves working in coffee shops for a period of years."

These usually university-educated workers often realize their stop-gap employment has become more long-term and they are motivated to turn these positions into good jobs, he added.

The move seems to mimic a similar trend among janitors across the country, as well as one that saw Halifax's casino workers unionize in 2007, he said.


Are these the people that are going to fund your retirement?

Second Cup workers try to organize

koozdra said...

Is there some kind of limit to the amount of time a sold sign is supposed to hang around?

I've noticed several that have been there for a good month now.

I guess it's free advertising as long as the buyers don't care.

Leo S said...

I think those signs are usually up in the period between condition removal and possession. That could be a month or two. I don't think a new owner would leave it on their lawn unless you were getting a kickback from the realtor.

Marko said...

I think those signs are usually up in the period between condition removal and possession. That could be a month or two. I don't think a new owner would leave it on their lawn unless you were getting a kickback from the realtor.

The period between conditions being removed and possession is on average 7 to 8 weeks and as long as 6 months. I leave my sold signs up for about 5 to 10 days unless a busy street than I'll do 10 to 15 days. As soon as I get a new listing to save on time I go to the sold sign, pick it up, drop it off at the new listing and switch the topper from sold to my website.

Other than that, who cares how long a sold sign is up? I use to use "New Listing," toppers a few years ago and would get emails from randoms along the lines, "Your listing at such and such street has been on the market for 30 days and you still have the new listing topper, just thought I would let you know." My thought was, do people have nothing better to do with their lives?

Jack and Cate said...

I get a kick out of the realtor who lists and the one who sold it fighting for prime real-estate on the curb. Never used to see a sign for who sold your property over the original lister and certainly not with the 12 properties we have sold in the past couple of years--- until now.

Phil said...

The condominium developers look to be catching on in Victoria after years of over building.

http://www.bcstats.gov.bc.ca/Files/d34b6809-451e-43f3-81b5-8cd9b8521b0c/BuildingPermitsbyRegionalDistrict.pdf

Condo building permits for CRD:
2007 1623
2012 1302
J-M 2012 746
J-M 2013 293

On last page of pdf.

Phil said...

This one shows the owned price index only down to 101.3 for Victoria, from 109.4 in 2009. What’s impressive is the Water-Fuel-Electicity line shooting from 127 to 164.1 over the same period. Renters take note, been wise to have your heat & hot water included.

http://www.bcstats.gov.bc.ca/Files/c47f9646-750c-4797-a27a-2c1497910d98/ConsumerPriceIndexData1306.pdf

BC and Victoria as well look to be slipping into negative inflation again in 2013,now one percent lower than 2009.

Leo S said...

"Your listing at such and such street has been on the market for 30 days and you still have the new listing topper, just thought I would let you know." My thought was, do people have nothing better to do with their lives?

Haha no kidding. Retirees I'm guessing.

koozdra said...

"Renewal offers on mortgages are commonly sent out automatically to customers, but it appears some banks have changed their practices."

You mean... that banks don't only worry about monthly payments? As Garth says... what will this mean when property values sink?

Will the bank think twice before renewing your mortgage even if you are always on time with your payments?

No.. no.. our too big to fail bank friends would never do that to us. This article is just about Alberta.

Wary lenders reassess value of flood-damaged properties

Marko said...

Monday, July 22, 2013 8:00am

MTD July
2013 2012
Net Unconditional Sales: 381 523
New Listings: 919 1,242
Active Listings: 4,855 5,178

Please Note
Left Column: stats so far this month
Right Column: stats for the entire month from last year

Rico Mando said...

We should try to re-organize our people that handles our business. Make sure that they handle our Property Investment Portfolio well. We have to ensure that everything really works as what we have planned.

http://investments-in-real-estate-australia.blogspot.com/2013/08/property-invesments.html