| July 2013 | July 2012 | ||||
| Wk 1 | Wk 2 | Wk 3 | Wk 4 | ||
| Unconditional Sales | 120 |
256
| 381 | 513 |
523
|
| New Listings | 315 | 622 | 919 | 1123 |
1242
|
| Active Listings | 4762 | 4817 | 4855 | 4836 |
5178
|
| Sales to New Listings |
38%
| 41% | 41% | 46% |
42%
|
| Sales Projection | 552 | 588 | 584 | 590 | |
| Months of Inventory |
9.9
| ||||
Reasonably solid week with 132 sales compared to 110 in the same week last year. I suspect this pattern will continue for the rest of the summer and possibly the year unless mortgage rules are tightened again. Compared to last year market conditions will look better, but make no mistake it is still weak out there. July MOI will come in between 8 and 8.5. Interestingly enough, active listings actually declined last week which usually doesn't happen until late August.
Joke of the day comes from DavidL who says "I hope that VREB will avoid spinning this as "sales volume up 5% over 2012""
73 comments:
Girl at the gym said they pulled their condo listing because it's "too slow" right now. They're re-listing in September.
^ I hear this a lot. It has been ridiculously slow since April 2010 and counting. A lot of people don't realize the "too slow" component could easily go another 5 years.
Ah September, traditionally the hottest time of year in Victoria real estate.
Asking price well below assessment, limited time to present offer,
Realtor® playing old trick?
Asking price well below assessment, limited time to present offer,
Realtor® playing old trick?
No tricks in my opinion. This will definitely go above asking given location and lot alone. You always see a few of these per month.
Last week 1575 Jasper was listed for $399,900. They had showings for three days and then took offers. Sold for $441,000.
"But a Conference Board of Canada report Monday said new young families and increased levels of international immigration should boost the demand for single-family homes in the future, at least partly offsetting any increase in the supply of baby boomers’ homes for sale."
“If a flood of homes did come on the market, I think the situation would correct itself very quickly,” he said. “Prices might drop but people who don’t have to sell would take their homes off the market, so it becomes a self-controlling mechanism.”
People who don't need to sell will pull their houses off the market and watch their neighbors who DO have to sell slowly erode their property value. "Give it another year honey, prices will come back and we can finally retire."
Single-family home values will survive baby boomer sell-off, economists say
Marko, i know it's common practice in larger cities, but at one point and time wasn't there something in the Realtor Code of Ethics that addressed under pricing a listing in an attempt to get multiple offers (as in, don't do it)?
I haven't looked at it in at least 5 years, but I swore I read that at one point and can no longer find any reference?
Am I imagining things? In other industries it would be considered something akin to a bait and switch.
How would it be a "bait and switch"?
I have a product that I want to sell. I want to attract offers. The perceived market value is not working. So I lower the price.
If people want to bid up the price, that's their problem.
If you don't like bidding wars, don't participate.
Akin to "bait and switch" in that there is a home advertised at a price, but it isn't really available to buy at that price.
"I have a product that I want to sell. I want to attract offers. The perceived market value is not working. So I lower the price."
That's not the scenario we're discussing here. We're talking about listing at a price that the home will obviously not sell for (and that the sellers would probably not accept even if you offered full price):
"This will definitely go above asking given location and lot alone. You always see a few of these per month."
My question was simply, wasn't there a provision against this kind of tactic in the realtor code of ethics at one point in the past, or am I misremembering?
"and that the sellers would probably not accept even if you offered full price"
Oh, ok, that changes things.
"and that the sellers would probably not accept even if you offered full price"
I guess that's the grey area and how Realtor® get away with it. Unless there is only one offer at the full asking price, and the seller rejects it, you can never prove the Realtor® is doing "bait and switch".
"Unless there is only one offer at the full asking price, and the seller rejects it"
to correct -
"Unless the highest offer is the full asking price, and the seller rejects it"
Akin to "bait and switch" in that there is a home advertised at a price, but it isn't really available to buy at that price.
The listing price for a property is a solicitation for bids only. It does not constitute any obligation or guarantee to sell at that price. At no time is the vendor obliged to accept that price or any other price. In this respect it's completely different from the list price of a consumer good.
Marko, i know it's common practice in larger cities, but at one point and time wasn't there something in the Realtor Code of Ethics that addressed under pricing a listing in an attempt to get multiple offers (as in, don't do it)?
There are a number of codes and acts with many provisions pertaining to various scenarios.
This is what it essentially boils down to. The average seller is not in the business of selling homes (they are not Walmart or Futureshop); therefore, there are various provisions and there is nothing wrong with listing a home at price point xxx,xxx and asking for all offers to be submitted a few days later.
We're talking about listing at a price that the home will obviously not sell for (and that the sellers would probably not accept even if you offered full price
Simply not true. This is why you never see homes listed at 20-30% below market value. It is usually only 5 to 10% off market value. You often seen homes with 4-5 offers and they sell at asking price (sellers accept the highest offer which may be only full asking). If an offer is made on a property that is completely unconditional with the completion date that sellers are requesting and the seller does not accept he or she may be breaching the terms of the listing contract. I'll leave it at that.
All of the codes and acts aside let's use a bit of common sense.
For example, I own a condo and I've been looking for a rare acreage for a long time. That perfect acreage comes up for sale and I make an offer on it subject to financing for 10 business days. In order to secure financing I need an unconditional offer on my condo within 10 business days. I call a REALTOR®, and tell him or her, "the identical unit below me sold for $200k and it took 60 days, let's price mine at $175k as I need it gone quick and we'll entertain all offers in two business days and I'll go with the highest offer."
REALTOR® says, "Sorry, that is unethical, can't do it."
Does that make sense? Not to me.
If an offer is made on a property that is completely unconditional with the completion date that sellers are requesting and the seller does not accept he or she may be breaching the terms of the listing contract. I'll leave it at that.
Just to clarify my above comment....a full price offer.
I wasn't referring to the scenario where someone needs to make a quick sale. I wouldn't disagree with you there - I don't see anything unethical in that situation, although I doubt it is very common.
Maybe it doesn't happen as often in Victoria as in Vancouver or Toronto, or maybe it just isn't happening as much anymore because it's too risky in a slow market, but we all know that many listings, especially when the market was hot, were deliberately priced well below market value, at a price the sellers wouldn't realistically accept, in an attempt to incite multiple offers.
A quote from Somerville that I found when I was searching for anything on the ethics of inciting a bidding war:
"But others - like Tsur Somerville of the UBC Sauder School of Business - say under pricing listings is a typical real estate maneuver.
"If you can get a bidding war going, more people in the bidding war does tend to boost the price," he said. "The incentive for realtors tends to be more aggressive pricing on the low side and a faster sale."
But Somerville suggests it's only misleading for a realtor to list below market price if potential buyers think that's the price they're going to pay."
Sounds like it could always be misleading (aka unethical) then... how can one assume they know what the buyer is thinking.
Here's an example from another ctv article:
For example, a $550,000 house is best priced at $499,000 with a set "offer date." This brings in a sub-set of buyers with a $500,000 cap that would otherwise never see the house. If some buyers offer $499,000, $505,000, $510,000 and so on, this just means the astute, informed buyer who is looking at $550,000 will have to pay more.
People are competitive by nature -- one buyer will get caught up in the bidding war and overpay. That's all a seller needs. That buyer might come in at $560,000, but once the frenzy begins he could walk away with the house at $591,000.
Ultimately, that house would never sell for $591,000 if it were priced at $591,000. The only way to get that money is to price at $499,000.
In some situations you might have a grey area where you could argue that the listing is priced low because the sellers need a quick sale, but here you have a realtor describing exactly how he uses a low price to lure in a sub-set of buyers that will never get the house, just to increase competition.
Anyways, didn't mean to argue about whether it is unethical or not (I'm not sure that you could convince me the above scenario isn't unethical, although I may be in the minority on that point). I simply wanted to know if at one point it was expressly labeled as unethical in the Realtor Code of Conduct...
...which I'm starting to think it wasn't since I can't find reference to it anywhere...
Oh well, interesting topic anyways :)
Ultimately, that house would never sell for $591,000 if it were priced at $591,000. The only way to get that money is to price at $499,000.
Great theory but zero evidence to support it. If the maximum sale price was to be achieved by pricing a home below market value you would think more people would be doing it.
Reality is you take a massive risk. What if the perfect buyer for the home is on vacation during your three days of showings? Sometimes you can get more pricing higher and waiting. It all depends, there are a million variables.
Plus, who cares about competition? I've seen people get caught up in ridiculous emotional bidding wars in court on foreclosures.....I don't remember the judging say, "hmmm, this is unethical, the competition is driving up the price."
When representing my buyers in multiple offers I always tell them, "ignore the fact that there are other offers and offer what you are comfortable with."
My final thought is if a REALTOR® executes a successful bidding war and gets his client, the seller, the most amount of money seems fairly ethical to me.
Interesting comments and insights, Marko.
"The Bank of Canada and many financial advisers have warned that when interest rates rise from their current rock-bottom levels, many Canadians will find it increasingly difficult to keep up with loan and mortgage payments."
The ultimate bait and switch.
14% of Canadians with debt say they'll never pay it off, poll says
Can anyone tell me how much 3827 South Valley Drive sold for when first built in 2008 (or 2009)?
David Madani chief economist at Capital economics quote
“There is always a stand-off period at the end of a housing bubble, when prospective buyers refuse to meet the price of sellers, who refuse to drop the asking price,” he said in a note. “Eventually it begins to dawn on sellers that the market has shifted and, as they become more desperate, they eventually agree to lower their asking price. But until that happens, any stagnation in prices can be misinterpreted as a successful soft landing.”
Thursday August 1, 2013 7:55am:
July July
2013 2012
Net Unconditional Sales: 583 523
New Listings: 1,213 1,242
Active Listings: 4,772 5,178
Please Note
•Left Column: stats for the entire month from this year
•Right Column: stats for the entire month from last year
Lots of listings dropping off.
First time in 4 years we've had more than 530 sales for July.
Looking at how badly sales dropped off in the second half of last year we might close out the year at more sales than last year. Only 152 sales behind last year YTD.
Marko said - Looking at how badly sales dropped off in the second half of last year we might close out the year at more sales than last year. Only 152 sales behind last year YTD.
____________________________
And how many off 2011, 2010? At a conservative $400k per sale that is a loss to the economy of approx $61 million (minimum) ....nothing to brag about I would think.
A house trading hands at 400 K is not a 400 K contribution to the economy. Purchase or sale of capital goods is not considered a contribution to GDP. If it was we could goose the economy by just buying and selling more in the stockmarket
Associated activities like RE commissions, lawyers fees, moving costs etc do go towards GDP, so a slowdown in sales does effect GDP, but not by nearly the amount implied by the sale price.
effect => affect just in case Introvert is reading
Moose Jaw residents irate over Victoria poster campaign mocking the city
Let's be honest, though: Moose Jaw is a hell-hole. It's confirmed; I've been there.
As for Victoria's putting down other cities, I think it's funny and I don't really have a problem with it :)
caveat - The fact that you respond makes my point but I am not talking about GDP - a bit of a reach on your part. I am talking exactly loss of jobs, loss of fees, land exchange, etc.
To extrapolate further try 450 or 500k per sale. These are big hits to any economy and as the saying goes "denial is the first stage of acceptance"....
City of Vancouver taxpayers facing upwards of $300-million loss on Olympic Village: Expert
"The Province’s analysis shows that with marketing costs still mounting, and about 130 hard-to-sell village homes left, when the last unit is sold final taxpayer losses of over $300 million seem realistic."
"The problem is, real-estate experts say the remaining village homes generally have the worst layouts and views. "
"The latest court-ordered marketing update from Ernst & Young shows that as of June, 339 units have been sold by the receiver, for proceeds of $331 million. The receiver gave the city $250 million. The rest of the money was gobbled up by real-estate-agent and marketing costs, strata fees, mounting legal fees, unexpected repair and maintenance bills and the receiver’s management fees of over $5 million."
THREE HUNDRED MILLION DOLLARS
J and C
If I buy a home tommorow for $600K that does not provide anything like a 600K boost to the economy. There is a boost, but it is a small fraction of the sale price.
Not sure what I am supposed to be in denial of? I have always maintained that a serious real estate crash if it happens will be accompanied by an economic downturn.
The actual figures for employment by industry.
Canada is losing manufacturing jobs at about 4% a year while adding carpenters and drywallers at the same rate
Neither figure is supported by Statscan. Statscan or bearded prophet - who to believe?
http://vreb.org/pdf/historical_statistics/MSS1307.pdf
VREB stats
@ caveat
You have disputed one stat in my post. Are you claiming that it poves that my overall point is wrong? When you take one stat out of someone's post you should explain how you think it changes the overall point of the post. I'd appreciate that. I've noticed that some other regulars on this blog do the same thing.
I could take both lines containing the 4% loss in manufacturing jobs per year out of my post and the overall message would still be maintained.
I noticed you haven't come up with any reasons to support the claim (by some) that Canada's housing market will not crash.
@info
two wrong facts (+4 increase and +4 decrease) in your post don't necessarily invalidate the mix of facts and opinions that make up the rest of your post.
In fact I agree with at least one of your points - namely that an increase in house affordability would benefit many Canadians
That said if someone presents an argument and I find that easily verifiable facts are wrong it makes me suspect that other parts of the argument might not stand up either.
I suspect I am fairly typical in that respect.
The Canadian economy is doing worse than what many thought it would do.
As Garth points out, big corporate mergers such as Loblaws and Shoppers are defensive moves based on weak future sales projections. That means they will be cutting jobs soon and the number of jobs lost will be substantial. It's a sign of the times.
Garth also explains that 900,000 people in Canada build condos and houses. In contrast, there are only 225,000 employed in the entire energy, oil & gas and mining sector. This is what I call a "housing market economy" and it is unsustainable.
What about Victoria? I heard on the news recently that Victoria's economy was the weakest among all major Canadian cities. Many young people are leaving Victoria in search of work elsewhere. What will stop the young people from leaving Victoria? I think there would have to be a new local source of jobs that will be able to supply enough young people with adequate incomes. I don't see this source of employment magically appearing at any point. I think it's only logical to assume that Victoria's weak economy will only weaken further as house prices continue to decline and this will, in turn, cause more downward pressure on house prices.
As well, the positive effect that the baby boomers had on Victoria real estate in past decades has run its course. For the next couple of decades the fact that the boomers will be selling and downsizing will most certainly have a negative impact on housing prices in Victoria.
Can someone come up with one good reason that the housing market in Victoria will not tank? I'd really like to hear it.
David Madini of Capital Economics now thinks that there will be no soft landing for the Canadian housing market. "I think people are really under-estimating the risks to the housing market", he says. "Is no one worried about this?"
The housing market crash in the US has proved to be a good thing for the country in many ways. The average family can now afford the average home. A family with an income of $35,000 per year can afford a house (in many areas) since house prices are now half of what they are in Canada. The US and Canada have about the same household income. Since the cost of living has decreased substantially in the US as a result of cheaper houses, many corporations and manufacturing companies have moved back to the US and are providing work once again for Americans. High house prices are really bad for any country.
Canada's economy will have no solid base on which to build and grow until housing prices move back down to where they are supported by fundamentals. Until then the economy will sputter along and become weaker each year as more jobs move to counties where the cost of living is cheaper. Manufacturing (and other) companies cannot operate profitably in Canada and it is a direct result of the housing bubble that has pushed the cost of living into the stratosphere.
Canada's "housing market economy" will soon be a thing of the past. The sooner this happens, the sooner the true underlying economy can reset and start to build a solid foundation for future growth.
As Garth points out
Great source....as Garth pointed out 5 years ago interest rates should be at 8% now.
The city's chief industries are technology, food products, tourism, education, federal and provincial government administration and services.[citation needed] Other nearby employers include the Canadian Forces (the Township of Esquimalt is the home of the Pacific headquarters of the Royal Canadian Navy), and the University of Victoria (located in the municipalities of Oak Bay and Saanich) and Camosun College (which have over 33,000 faculty, staff and students combined). Other sectors of the Greater Victoria area economy include: investment and banking, online book publishing, various public and private schools, food products manufacturing, light aircraft manufacturing, technology products, various high tech firms in pharmaceuticals and computers, engineering, architecture and telecommunications.
It is surprising how Victoria and BC have the weakest economies. The BCREA shows the “main reason is jobs“
Marko: do you know what MLS 324901 on Matilda sold for? Thanks. It looks like it went before the two on Aloha.
Marko: Can you please tell me how much 3827 South Valley Drive (MLS 326344) last sold for? Thanks!
VREB released their numbers for July 2013. Again, the SFH median ($529.5K) and average were skewed upward and the degree of upward skewing was severe.
The degree of upward skewing is easily seen by comparing two groups of areas within Greater Victoria. The less expensive group is comprised of Langford, Esquimalt, Colwood, Sidney and Sooke. These areas are within the bottom third in terms of price in Greater Victoria. Similarly, I've identified a more expensive group. This group is made up of Victoria, Oak Bay, Saanich East and North Saanich.
I've calculated the monthly SFH total sales for each group going back to the beginning of 2007. I estimate that the average monthly sales total comparison between the two groups is about 100 (less expensive) to 125 (more expensive), or about 44% less expensive to 56% more expensive.
July 2013:
Less expensive area: 88 sales
More expensive area: 143 sales
Again, the long-term average suggests that for every 100 less expensive sales there were 125 more expensive sales. But the numbers for July show that for every 100 less expensive sales there were 163 more expensive sales.
That works out to be 38% less expensive sales and 62% more expensive sales.
I've calculated the numbers for each month (almost) from the beginning of 2007 until now.
The results show groups of consecutive months where the average and median were skewed higher followed by months where the average and median were basically not skewed at all. When the long-term ratio of more expensive sales to less expensive sales was restored, the average and median immediately shot back down to where they should have been without upward skewing. I was able to estimate an "unskewed" SFH median for each month dating back to the beginning of 2007. I also used the Teranet data.
The degree of skewing for July 2013 was severe in comparison to the numbers I've calculated for the past 6.5 years.
After reviewing the numbers, I'm convinced that without this severe upward skewing, the Greater Victoria SFH median for July 2013 would be close to $485 K. The peak "unskewed" median would have been about $580 K (summer 2010). Based on these numbers, the SFH median has now dropped about 16% from peak.
This makes sense when we compare this overall 16% drop to some of Just Jack's numbers.
Recently, Just Jack showed us that the SFH median for Oak Bay has dropped about 8% when comparing the actual median from the first 6 months of 2013 to the first 6 months of 2010. Even though it doesn't represent the total drop from peak (Oak Bay peaked before that 6 month period), it still gives us a ballpark figure. I estimate that Oak Bay has dropped about 9% from peak.
Just Jack also compared the first 6 months of 2013 to the first 6 months of 2010 for Saanich East (-10%) as well as Langford and Colwood (-18%). Note that the actual decline from peak for each area is probably more, but these numbers are ballpark.
Just Jack's numbers appear to support the 16% "unskewed" SFH median price drop from peak that I've calculated.
Koozdra do you mind sending me the updated regional sheet? I'd like to take a look at this skewing thing.
Hmm.. Not really sure I'm convinced. Yes the ratio of sales in the low price regions relative to high price regions is lower after 2010 (~0.7 sales in the low price regions for every sale in the high price regions) than before 2010 (~0.8), but the ratio varies wildly from month to month and there are some anomalies (like Feb 2013 where we had a very low median, but also very few low end sales).
In fact, relatively fewer sales in the low priced regions appear to be correlated with lower medians rather than higher medians, but this could be me picking patterns where none exist.
"the ratio varies wildly from month to month"
Exactly. The fact that the ratio varies from month to month does not take away from the ability of the ratio to "unskew" the median.
There doesn't have to be consistency in the ratio from month to month. The ratio doesn't need to move up or down gradually over time.
For example, assume that one month has 100 lower priced sales to 165 higher priced sales and the following month has 100 lower priced sales to 120 higher sales. The second month sales ratio is close to the long term average which means that the median is close to accurate for that month. However, the sales ratio for the first month is skewed higher and the amount of skewing is severe based on comparisons to other months over a 6.5 year period.
A third month might come in at 100 lower priced sales to 105 higher priced sales. This would suggest that the median was skewed lower for that month based on monthly ratio comparisons over a 6.5 year period.
You can match the magnitude and direction of the monthly "unskewed" median with the Teranet data.
It doesn't matter at all if the sales ratio varies greatly from month to month. The fact that this ratio does vary month to month is the reason I went ahead with this idea in the first place.
"In fact, relatively fewer sales in the low priced regions appear to be correlated with lower medians"
I disagree. I don't see that at all. If, by relatively fewer sales in the lower priced regions you mean in comparison to the sales in the higher priced group then I can't see any data that supports that.
There doesn't have to be consistency in the ratio from month to month. The ratio doesn't need to move up or down gradually over time.
Fair enough. However I don't see how you're unskewing the median.
The average ratio (low sales/high sales) between Feb 2006 and June 2013 is 0.76. June 2013 the ratio is 0.66. How can you use that to unskew the median?
I disagree. I don't see that at all. If, by relatively fewer sales in the lower priced regions you mean in comparison to the sales in the higher priced group then I can't see any data that supports that.
Well just eyeballing here. Would have to plot the correlation to see if there is any.
"there are some anomalies (like Feb 2013 where we had a very low median, but also very few low end sales)."
Feb. 2013 wasn't an anomaly. That month there were 67 lower priced sales vs 93 higher priced sales which converts to 100 lower priced sales for every 139 higher priced sales. Comparing to data over 6.5 years, Feb. 2013 was skewed upward and the degree of skewing was moderate. The long term sales ratio is approx. 100 lower priced sales vs 125 higher priced sales.
I estimate the "unskewed" median for Feb. 2013 to be about $500 K, much lower than the skewed $517.5K.
If you can imagine an "unskewed" median that is quite smooth when plotted on a graph. The thing that varies wildly from month to month is the amount that the reported (skewed) median comes in above or below the "unskewed" median. The sales ratio will vary from month to month and is useful in removing the skewing from the reported median.
Contrasting the landlord that wanted three dollars per square foot for his "executive" condo, this has an amazing 65 cents per square foot.
But do people want to live in Metchosin? The unit we are going to be renting was vacant for six months. The rent gradually dropped by three hundred dollars and still it stayed vacant for months.
$2600 / 4br - 4000ft² - Executive Mountain Top Metchosin (Metchosin)
Feb. 2013
Yeah my dates were off by one.
Can you please tell me how much 3827 South Valley Drive (MLS 326344) last sold for?
$749,900
"The average ratio (low sales/high sales) between Feb 2006 and June 2013 is 0.76. June 2013 the ratio is 0.66. How can you use that to unskew the median?"
I'll assume that your ratio calculations are correct.
Adding the sales for the two groups together we get 271. Historically, that would have meant 120 low sales and 151 high sales to get a ratio of 0.79. However, June had only 108 low sales (-12) and 163 high sales (+12) which resulted in a ratio of 0.69 and a significantly skewed median.
which resulted in a ratio of 0.69 and a significantly skewed median.
Sure, but you're saying you're then estimating the unskewed median. That's the part I don't understand. How to convert a ratio difference of X into a price correction of Y. I don't think it's possible given the data that is publicly available
After reviewing the numbers, I'm convinced that without this severe upward skewing, the Greater Victoria SFH median for July 2013 would be close to $485 K. The peak "unskewed" median would have been about $580 K (summer 2010).
On average, I am not seeing a 16.5% drop.
"On average, I am not seeing a 16.5% drop."
Can you verify that?
"Sure, but you're saying you're then estimating the unskewed median. That's the part I don't understand. How to convert a ratio difference of X into a price correction of Y. I don't think it's possible given the data that is publicly available"
The ratio for some months comes in very close to the historical ratio. Using those months as a general guide and the Teranet data as a guide of sorts, you can plot the monthly unskewed median over time. Sometimes the ratio is only slightly skewed and you can adjust that based on the last month that had an unskewed median, checking your estimations against the amount that the Teranet index went up or down that month.
When the ratio for one month comes in moderately high and the next month it comes in moderately low, you can assume that the median is between the two for both months and then use that to estimate the next month, etc.
Well....for one neither the average nor the median is close to a 16.5% drop on SFH homes and it can only be skewed so much, hypothetically if you theory is correct. Secondly, last year I sold 47 properties and this year I'll sell somewhere around 65 give or take a few so as you can imagine I look at a lot of property history. You find 16.5% drops in certain areas but it certainly is not the average.
A 500k home (at the peak) in the core is not going for 418k now on average. I sold a 2010 peak purchased home in Fernwood and it went from $534,900 to $509,500. It dropped but not 16.5%. Just not seeing that kind of average drop.
@info.
The skewing would only apply to prices. The teranet data would not be affected. Teranet is down only 9% so a 16% drop doesn't hold up.
You can't rely on just one method to guage the marketplace. I think you have to look at several methods then reconcille your findings.
Like the recent sale on Regents Place that sold in October, 2007 for $760,000 and this week went for $750,000. The quality of data is good, being a re-sale of the same property, but this method lacks quantity. A median provides quantity at the expense of quality. Benchmarking the specific property that you are looking at buying works well as does looking how the median price in your hood in relation to the current BC Assessment value has changed from one period to another period works too.
Personally, I have not seen any dagger thrust into the heart of this market. There are still "enough" buyers that are optimistic about the future real estate market to bid against each other. Common sense should tell you to walk away - as there is always another home coming on the market. But humans have to compete against each other - even if it is to their mutual disadvantage.
The only way to win at Tic-Tac-Toe is not to play the game.
@ Leo
"The skewing would only apply to prices. The teranet data would not be affected."
?
I didn't say the Teranet data would be affected. I said that the Teranet data could be used to help guide you as you figure out what the unskewed median would be each month. For example, the Teranet index dropped about 3% in March 2013. That month, I have the unskewed median dropping about 3% or about $15,000.
Unskewed median by month (2013):
January: 505 K
February: 495 K
March: 485 K
April: 480 K
May: 475 K
June: 475 K
July: (waiting for Teranet data)
"Teranet is down only 9% so a 16% drop doesn't hold up."
I've compared the Teranet HPI with the MLS HPI for numerous Canadian cities over many years. The results are almost identical.
You have questioned the sales numbers released by the VREB (realtors) several times on this blog. Like you, I also question the numbers released by realtors. Thus, I don't trust the data that makes up the MLS HPI. Since the Teranet HPI mirrors the MLS HPI almost exactly, I don't trust the Teranet data either.
If the Teranet data for Victoria suggests the market is down 10%, all I can say is that the market is down at least 10%.
If you understood what I have done and went through the process yourself, you would have no choice but to conclude that the SFH median is down 16%.
Of course, now that you have a mortgage you probably don't want to understand what I have done.
If you understood what I have done and went through the process yourself, you would have no choice but to conclude that chem trails are for real......
Info, if it makes you feel better, okay the market has dropped 16%....your dream Oak Bay bungalow is now an affordable 700k.
Again, Just Jack proved that SFHs in Oak Bay are down at least 8% (probably 9%) from peak. He also proved that Langford and Colwood SFHs are down at least 18% from peak. The Teranet data suggests that all properties types across Greater Victoria are down about 10%. That doesn't make any sense whatsoever.
Last summer Leo agreed with me on this blog when I stated that prices were down about 10%. That was conservative at the time. The Teranet has declined about 5% since then.
The methodology for the Calgary and Vancouver MLS HPIs were changed four times each since 2009. Each time the result was a higher reading on the index. Why should anyone trust the MLS HPI? The Teranet HPI is almost an exact replica of the MLS HPI. In a declining market such as that in Victoria, the Teranet HPI data must be questioned. A drop of 10% doesn't make any sense for Victoria.
"Info, if it makes you feel better, okay the market has dropped 16%....your dream Oak Bay bungalow is now an affordable 700k."
As I've said, Oak Bay isn't down 16%. It is down about 9%.
In a declining market such as that in Victoria, the Teranet HPI data must be questioned
As well as the VREB and what any REALTOR® says because we are all just trying to pump the market.
As I've said, Oak Bay isn't down 16%. It is down about 9%.
If Oak Bay is down 9% than where are we seeing the 23% drop to offset it? The areas that have seen the biggest drops (Sooke) don't contribute a huge amount of sales volume to the greater Victoria market which would mean certain areas in the core would have to be more than 16% down.....I don't think so.
I said that the Teranet data could be used to help guide you as you figure out what the unskewed median would be each month.
Right, but it doesn't make sense that prices would have dropped 16% if Teranet only dropped 9.
Like you, I also question the numbers released by realtors. Thus, I don't trust the data that makes up the MLS HPI. Since the Teranet HPI mirrors the MLS HPI almost exactly, I don't trust the Teranet data either.
That makes no sense whatsoever. Your unskewing method is based largely on the teranet, to the extent that without the teranet data you won't even give an "unskewed" number. Then in the next breath you say the teranet data is not trustworthy. You can't decide to trust one dataset when it is going in the direction you want, and then trust a different one when it doesn't.
If you understood what I have done and went through the process yourself, you would have no choice but to conclude that the SFH median is down 16%.
Unlikely. i have the same numbers now and you still haven't given a method of unskewing the numbers based on the sales mix.
"Using those months as a general guide and the Teranet data as a guide of sorts, you can plot the monthly unskewed median over time"
This is not a method. How you went from this to coming up with actual numbers is beyond me.
Yes the sales mix is interesting. In extreme cases like Jan 2013 you can see that the larger percentage of low end sales had an impact on the price, but for most months there is no discernible pattern.
Last summer Leo agreed with me on this blog when I stated that prices were down about 10%. That was conservative at the time. The Teranet has declined about 5% since then.
I can't remember what method that was based on, but sure. 3 month median was down about that late last summer. Again though, you can't really take one series to one point, then continue with another series. Median prices are still down about 9%, and the sales mix now is about the same as last year.
The one problem with the Teranet is it does not break out the tiers like the case shiller. This is about the time in a correction where the lower tier usually drops quickest..
visual from 2010.
With tighter mortgage rules, out migration of young workers, and investors buying up US property until our lower tier flushes...it would make sense there are less lower tier sales which is skewing the median higher, but tough to prove without a lot of data collecting.
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