Tuesday, August 20, 2013

Market update: August 20


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.


August 2013August
 2012 
Wk 1*Wk 2Wk 3Wk 4
Unconditional Sales181
305



462
New Listings337
568


1025
Active Listings4661
4663



 5034
Sales to New Listings
54%
54%



 45%
Sales Projection568
496



Months of Inventory
10.9

*Week 1 being 7 weekdays

Sales continue to pace around 16 per day. Apologies to Leo if I did the sales projection math wrong...

Some friends of mine sold their house in the past month or so. They'd owned it for not quite four years. From purchase price to sale price they got about 20% more. Crazy considering they hadn't done anything significant to the property other than slap on fresh paint and replace a small rotted deck. Individual house transactions can be completely disconnected from 'the market' eh?


102 comments:

DavidL said...

Thanks HHV. I would be surprised if actual sales come in at (or below) last years' 462 sales. You don't get many sales at the end of summer holidays ...

Leo S said...

Thanks. Was on a bike trip and incommunicado.

Leo S said...

Sales projection method is different between week 1 and 2, hence the big drop. Using weekdays we're at 559

Marko said...

I think we'll hit around 550 sales this month. We've had 55 sales over the last two days which is a solid clip for a Monday/Tuesday. Friday is typically the best day for sales. I have four conditional offers sitting on my desk and two buyers have 2.89% rate holds that needed to be exercised via completion prior to end of September. Could be helping the market a bit?

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

Ah, the rate hold sales bump.

DavidL said...

CBC News: No plans to intervene in housing market, Flaherty says
Federal finance Minister Jim Flaherty said today he is satisfied with the measures his government has already taken to calm the housing market and has "no plans" to intervene any further.

koozdra said...

No overt changes but covert changes are ongoing. Can the housing market survive with a diminished CMHC?

We'll see.

StalJ said...

"Resource-based provinces will lead the country in average salary increases in the next two years with Alberta either at or near the top of the pack."

"A clear divide between the provinces continues, with resource-rich provinces coming in between 3.2 to 4.0 per cent, with the rest of Canada predicting increases of 2.1 to 2.6 per cent, all of them at or below the national average," it said.
http://www.calgaryherald.com/business/Alberta+leader+salary+increases+next+years/8810348/story.html

What are the projections for Island sectors?

"Leisure/Hospitality (two per cent), Retail, Consumer Durables and Forestry & Paper (all at 2.1 per cent). Overall, the public sector is forecasting noticeably lower salary increases.."

StalJ said...

2014 country projections for comparison...
Japan (2%)
Italy (2.2%)
Canada (2.6%)
US (2.8%)
UK (2.9%)

koozdra said...

Renters rejoice. The area in which I store my vehicle can now be your new home. No extra charge for exhaust smell.

"Garage portion not included."

They're going to have people lined up around the block for this place.

One bedroom house

info said...

The umemployment rate for Victoria is currently 5.8%. However, that number doesn't accurately gauge the current strength/weakness of Victoria's economy.

The unemployment rate represents the number of (EI eligible) workers who have (recently) lost their jobs and who are currently living in Victoria and collecting benefits.

Workers whose benefits have run out (benefits don't last very long) are not counted in the unemployment rate. So a construction worker who lost his job in Victoria last year and didn't find a job before his benefits ran out will still be unemployed but will not be counted as unemployed.

Another construction worker who lost his job in Victoria and is currently receiving benefits but has moved to Alberta will not be counted in the Victoria unemployment rate.

Compared to 2009, the availability of suites, houses, townhouses and condos for rent has increased dramatically. Take a look around. Historically, Victoria has had a very tight rental market, but today it is difficult to find an apartment building without at least one unit available.

Many renters are young people. The dramatic increase in the number of units available for rent in Victoria proves that many young people have left Victoria in recent years. Obviously the lack of jobs in Victoria is the reason that many of these young people are moving away. The unemployment rate doesn't take this into account, yet it is an obvious indication that Victoria's economy is struggling.

The significant departure of young people from Victoria is pushing the 5.8% unemployment rate lower than it should be.

The Mustard Seed downtown has run out of food and temporarily closed its doors several times in the last 2 weeks after not having to close its doors for this reason for 25 years. Victorians are cutting back their food donations dramatically - another sign that Victoria's economy is struggling.

Victoria's economy is much weaker than what the 5.8% unemployment rate suggests.

Leo S said...

>> Victoria's economy is much weaker than what the 5.8% unemployment rate suggests.

Yes, but the same factors apply to every other city. Unemployment is measured the same everywhere.

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

">> Victoria's economy is much weaker than what the 5.8% unemployment rate suggests.

Yes, but the same factors apply to every other city. Unemployment is measured the same everywhere."

I showed that Victoria is losing a lot of its young people due to the lack of jobs here. A lot of them leave within a month or two of losing their job, while collecting EI benefits, which pushes Victoria's unemployment rate lower.

On the other hand, Calgary, for example, is where some of these young people are moving to find work, while collecting benefits. This would push Calgray's unemployment rate higher.

DavidL said...

@info
The dramatic increase in the number of units available for rent in Victoria proves that many young people have left Victoria in recent years.

I don't think that anything is "proved"; instead there is a correlation that does not imply causation.

I would suggest that the increase in units available for rent are because of three other reasons:
[1] a large increase of suites added to detached houses (as "mortgage helpers") over the past ten years,
[2] oversupply of unsold condominium apartments now being rented out, and
[3] the slow but steady increase in home (apartment/townhouse/house) ownership which makes for more "owners" and less renters.

dasmo said...

So, you have your own stats that are created by what you imagine?

dasmo said...

The economic impact of Greater Victoria’s high-tech industry has hit the $3-billion mark, according to information released this week by the Victoria Advanced Technology Council.

On the eve of its annual awards show at the Victoria Conference Centre, the high-tech advocate released its VIATeC 25 — an annual listing of the top 25 revenue generators in the industry that shows the top generators have combined for nearly $1 billion in revenue.

“We always expect the tech sector to continue to show growth, but we did not expect to see 18 per cent growth over last year,” said VIATeC executive director Dan Gunn.

This year’s top-25 represent $964 million in revenue, up from $819 million last year.

Gunn said the $3-billion figure is conservative given the VIATeC 25 combined revenue has grown significantly.

The region now has nearly 900 high-tech companies, and the sector has an even greater economic impact than it did in a 2009 study valuing it at $2.65-billion industry.

“The top 25 companies alone are a billion-dollar industry. Since 2009 the VIATeC 25 combined revenue has grown by more than $200 million since then and we think the other 850 companies will match that overall growth,” he said. “I think the VIATeC 25 shows the industry continues to grow. It’s resilient and that it has nowhere near reached its full potential.”

caveat emptor said...

The unemployment rate represents the number of (EI eligible) workers who have (recently) lost their jobs and who are currently living in Victoria and collecting benefits.

Yet another Info whopper!

The statistics Canada definition of unemployment DOES NOT require you to be EI eligible!

Look at their guide to the Labour Force Survey, it's easy to read.

"the operational definition of unemployment is based primarily on the activity of job search and the availability to take a job."


Interestingly they also mention that adjusting Canadian rates to US methodology for the employment statistics lowers our rates by about a percentage point.

caveat emptor said...

"So, you have your own stats that are created by what you imagine? "

Info tortures the numbers until they agree to support her narrative of crumbling economy and crashing house prices.

Reality, as you have frequently pointed out, is more boring and halibut-like.

Jack and Cate said...

Yes the unemployment stats are as accurate as real estate stats. Probably set by the same media outlets.

Nanaimo sees best stats in history, bah humbug. The wages here are degrading, the quality of work pitiful and lots gone to Fort McMoney on a regular basis,. Just walk downtown or check out the half full malls.

Crap fed by more crap is still ______!

Nanaimo boasts...

caveat emptor said...

The dramatic increase in the number of units available for rent in Victoria proves that many young people have left Victoria in recent years.

The dramatic increase is not showing up in the official stats, though knowledgeable people quoted in the article do say that the vacancy rate has gone up more than the stats indicate

Phil said...

Rob Hunter of Devon Properties, which manages about 3,800 units in Greater Victoria, said the local vacancy rate is actually closer to six or seven per cent. “The market in the last two years is the softest we’ve seen it in 20 years,” he said.
Many owners and managers surveyed by CMHC are embarrassed to give out their actual vacancy rate, Hunter said.

Phil said...

Globe, Aug. 21 2013, 3:29 PM EDT
Mortgage rates are again on the rise in Canada, increasing the likelihood of a slowdown in the national housing market.
On Wednesday, Royal Bank of Canada hiked its five-year, fixed-rate mortgage by 20 basis points to 3.89 per cent, one day after the Bank of Montreal raised its benchmark rate to 3.79 per cent.

While there have been false starts in the inevitable climb of mortgage rates over the past couple of years, the recent rate hikes could mark the first phase of a long-term trend. “I think this is the real thing,” Mr. Tal said.

CS said...

Here's a comment from GT's blog, which suggests one factor that may explain in part the continuing rise in SFH prices as recorded by Terranet, etc.

T.O. Bubble Boy

I’m still going to point to renovations (a Canadian addiction) as one of the main drivers for increased house prices. Look around almost any Toronto neighbourhood, and you’ll see a ton of McMansions where bungalows once lived, and almost any SFH has put tens or even hundreds of thousands into new kitchens, dug out basements, 2-3 storey extensions, and all kinds of other creations. These are not the “general maintenance” type work, where you get a new roof or fix a deck — these are significant changes to the house, and the owners all expect (thanks to HGTV) to get all of that $$$ back on the selling price.


When prices are rising, renovations appear to enhance the returns from flipping, whereas they likely increase losses during a falling market.


These effects may make a market reversal, if it occurs, more extreme.

koozdra said...

“We are cautioning people not to assume too much long-term debt on the assumption that interest rates will stay as low as they are — because they won’t. We want to make sure Canadian households plan ahead and know, if they renew a mortgage in the next several years, it’s likely that the interest rate will be higher. Interest rates have nowhere to go but up.” -Flaherty (from Garth's blog)

Two years later and Canadians have taken Flaherty's words to heart. Credit growth has slowed significantly and Canadians are paying off their mortgages at record paces. "This is the best time to pay off your mortgage. These low rates means I'll be mortgage free years before I would at a higher rate" -Joe Everyman.

unclebob said...

Hi I think rents are too high because there are close to 300 units on craigslistwhich is close to the highest available when the demand is the highest due to students returning

koozdra said...

TD, RBC follow other banks in hiking mortgage rates

"rates have moved up by a third in the last five months"

Wait till Jill and Aaron Everyman hears about this. "Honey, we can afford this right, don't you have a raise coming?", "Nope, I haven't gotten a raise in several years".

caveat emptor said...

Why do real estate agents still exist?

koozdra said...

From the CBC article above.

"This generation of Canadians has never experienced high or even rising interest rates and may be surprised at the higher costs they face, said Benjamin Tal of CIBC World Markets economics department."

Good thing most of "this generation" has left Victoria. We should be fine.

Alexandrahere said...

Marko: I don't have the MLS #, but could you please tell me what #404-1035 Southgate street went for, Thanks so much.

Alexandrahere said...

Marko: the mls was 327100

poobserv said...

With respect to the employment numbers, it seems like the 5.8% figure for Victoria is probably not too far off, but it doesn't tell the whole story. There are a lot of part time workers in Victoria. These workers are correctly classified as employed, but incomes from many service industry jobs that only offer 20 hours of work or less per week are very low.

Alexandrahere said...

So far this week, my pcs is showing five homes sold in Gordon Head and one in Mt Doug area. The average selling price so far is slightly over $595K. The highest selling price was $740K on King Alfred Court, and the lowest selling price at $483K on Llandoff. Three have secondary suites.

dasmo said...

True the employment numbers don't take into account every nuance. Lets not forget the underground e onomy. Drugs and prostitution are big industries here....

koozdra said...

The cheapest house in Vancouver

When this bubble will be remembered, we will wonder why anybody thought this was normal.

info said...

"The dramatic increase is not showing up in the official stats, though knowledgeable people quoted in the article do say that the vacancy rate has gone up more than the stats indicate"

Privately rented condos, houses, townhouses, etc. are not included in the vacancy rate. Thus, the vacancy rate only tells part of the story.

I doubt there has been a time in Victoria's history when renters have had more of a choice than now.

info said...

"So, you have your own stats that are created by what you imagine? "

"Info tortures the numbers until they agree to support her narrative of crumbling economy and crashing house prices.

Reality, as you have frequently pointed out, is more boring and halibut-like."

Find an example to prove these accusations.

When did I say the market is crashing?

info said...

"So, you have your own stats that are created by what you imagine?"

The umemployment rate tells part of the story, however, there are many other things that also indicate the strenth/weakness of Victoria's economy.

You can keep your head in the sand and live in denial if you choose, but Victoria's economy is weak and getting weaker.

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

"The umemployment rate tells part of the story, however, there are many other things that also indicate the strenth/weakness of Victoria's economy."

Enlighten us? Garth Turners TVP doesn't count....

info said...

"Enlighten us? Garth Turners TVP doesn't count...."

Another Garth hater.

Read my earlier posts about the high number of young people leaving Victoria in search of work elsewhere, the fact that the Mustard Seed downtown has been running out of food lately - something that hasn't happened in 25 years, etc.

info said...

"Info tortures the numbers until they agree to support her narrative of crumbling economy and crashing house prices."

Recently, I've questioned some stats put out by the real estate/banking cartel and have been able, with the help of Leo and Just Jack, to show that these numbers were indeed giving an unrealistic snapshot of the current overall health of the housing market in Victoria.

I explained that the recent spike in the median and average was not due to rising prices, but was easily explained by extreme skewing. Leo's graphs prove it.

Teranet claimed that Victoria house prices increased 2.6% in July, despite very high inventory, tons of rentals available, many young people moving away from Victoria, etc.. I questioned this. With the help of Just Jack, it was shown that SFHs in the core areas actually dropped 1% from a month earlier by using the amount above/below assessment that houses sold for in those areas during the month of July.

I didn't torture the numbers. I simply offered explanations and Leo and Just Jack performed the calculations.

It's all legit, caveat.

dasmo said...

"Another Garth hater."
I don't hate him at all. I read his blog even. He has good points and it's entertaining. I am just calling thinly veiled promotion when I see it. He always comes back to the need for a financial adviser and buying REITs and ETFs.

"Read my earlier posts about the high number of young people leaving Victoria in search of work elsewhere"

Where is your evidence? I live and work in Victoria. I see the shops full, streets busy, restaurants buzzing.

" the fact that the Mustard Seed downtown has been running out of food lately" That would mean people aren't leaving.... Or are you saying that because people are giving less they must be gone?

info said...

"Yet another Info whopper!

The statistics Canada definition of unemployment DOES NOT require you to be EI eligible!"

"Am I eligible for EI regular benefits?

You may be entitled to receive EI regular benefits if you:
•have paid premiums into the EI Account;
•lost your employment through no fault of your own;
•have been without work and without pay for at least seven consecutive days in the last 52 weeks;
•have worked for the required number of insurable hours in the last 52 weeks or since the start of your last EI claim, whichever is shorter;
•are ready, willing, and capable of working each day; and
•are actively looking for work (you must keep a written record of employers you contact, including when you contacted them)."



Only those who have paid into EI are eligible to receive benefits. The unemployment numbers only take into account those who are currently receiving EI benefits.

The unemployment rate does not take into account those who had not been paying into EI and lost their jobs.

info said...

"I live and work in Victoria. I see the shops full, streets busy, restaurants buzzing."

I know a woman who works at Tillicum Mall. She said there is a lot less traffic there now than in previous years. She also said that sales in most stores this past Christmas were down.

I know several people who own restaurants in Victoria. They have all told me that about 30% of restaurants in Victoria are in distress/struggling compared to recent years according to the results of a survey. Several restaurants have closed down in the past 2 years.

I live and work in Victoria as well. However, I also know a lot of people who are in the know.

dasmo said...

Tillicum Mall has been struggling for a while now.With the advent of uptown the one crappy mall was usurped by an even better crappy mall. So I'm sure that makes it even worse although nothing new nor revealing of hidden unemployment figures... Restaurants were hit after the decline in US tourism, also many years ago now. Nothing new.... Or has it gotten worse since then?

info said...

"The region now has nearly 900 high-tech companies, and the sector has an even greater economic impact than it did in a 2009 study valuing it at $2.65-billion industry."

Good for you dasmo, you have found an industry that appears to be growing in Victoria.

It is obviously not doing enough to turn Victoria's sluggish/weak economy into a strong economy. If it was Victoria would be experiencing a noticeable influx of workers for those occupations and the vacancy rate/ general availability of rentals and resale inventory wouldn't be sky high.

Just Jack said...

I just don't know what high-tech is?

I don't think I have ever bought anything that is made in Victoria that's also High-Tech.

With 900 companies in Victoria that do High-Tech - you would think I should have by now?

Or maybe I have?

Can anyone tell me of anything that they have bought that is made in Victoria High-Tech?

dasmo said...

I just bought a book through Abe books the other day and purchased a tumblr skin from Pixel Union a month ago.

Renter said...

RE: Victoria tech sector

I guess none of you play with Zynga games. Or Microsoft games. Actually, there are a lot of little gaming companies in Victoria.

However, a large portion of Victoria's high tech sector is not geared for end-user products. IBM sells to businesses and governments. Carmanah makes solar systems and LED lights. Genologic sells in the health sector. Etc, etc, etc. If you personally don't work in the tech sector, you probably never heard of most of them.

Renter said...

Re: restaurants

I've been to a few pubs over the last year and they were generally packed, even on a weeknight. However, many of the restaurants were not so lucky. Been to quite a few with a lot of empty tables. (And others that were packed to the gills, so take that however you want.)

There's one Indian restaurant I go to every year for my birthday. Most years it's packed and you can't get in without a reservation. This year it was practically empty. The difference was really stark - we all commented on it because in the past we were packed in like sardines almost.

Just Jack said...

Sounds more like re-clasifying existing service and manufacturing businesses as High-Tech rather than new start up companies.

koozdra said...

Finance minister cautious on Canada's economy

Flaherty says they've put a banker at the head of the CMHC that dealt with Freddy and Fanny in the states. An interesting comparison.

CMHC funds first time buyers which in turn creates a cascade of move up buyers (and a lot more debt). If the CMHC takes a break for a couple of years maybe we'll take a break from the housing market for a couple of years. Well that would be the best case scenario.

Marko said...

Marko: the mls was 327100

$195,000

info said...

"" the fact that the Mustard Seed downtown has been running out of food lately" That would mean people aren't leaving.... Or are you saying that because people are giving less they must be gone?"

This has nothing to do with people leaving Victoria. It shows that Victorians are feeling the effects of a tough economy and are donating less as a result.

dasmo said...

I was standing under a Carmanah solar Led light on the weekend set up my own shop on Diggit.

dasmo said...

I don't see any bad news about the mustard seed running out of food...

info said...

"Flaherty says they've put a banker at the head of the CMHC that dealt with Freddy and Fanny in the states. An interesting comparison."

Speaking of Freddy Mac, is it true that they were only allowed to insure properties that were valued up to $429 K during the US housing price run-up? Does anyone have information about this?

info said...

"I don't see any bad news about the mustard seed running out of food..."

It was on the local news last week.

Marko said...

5.8% unemployment is not bad at all in my opinion as a percentage of the population is not fit enough to be in the workplace.

If you are somewhat intelligent, willing to hustle and work hard plenty of opportunity other there in a variety of sectors including IT.

info said...

"If you are somewhat intelligent, willing to hustle and work hard plenty of opportunity other there in a variety of sectors including IT."

If that was true then people would be moving to Victoria for jobs instead of moving away to find work elsewhere.

There is a ton of available houses, condos, townhouses and apartments for rent in Victoria, as well as a huge inventory of resale properties. This wouldn't be the case if there was "plenty of opportunity other there in a variety of sectors including IT."

dasmo said...

Our Vacancy rate is around 3.5% hardly a huge inventory....

Phil said...

Rob Hunter of Devon Properties, which manages about 3,800 units in Greater Victoria, said the local vacancy rate is actually closer to six or seven per cent. “The market in the last two years is the softest we’ve seen it in 20 years,” he said.
Many owners and managers surveyed by CMHC are embarrassed to give out their actual vacancy rate, Hunter said.

http://www.timescolonist.com/business/greater-victoria-rental-rates-still-favour-tenants-1.327667

Phil said...

Worse than vacancy is the coming mixture of over supply with rising rates. It would be different if Victoria had a strong jobs market and low vacancy with people moving in instead of out.

Globe, Aug 16, 2013
Toronto-Dominion Bank economist Dina Ignjatovic said in a recent research note that an estimated oversupply of 250,000 new homes - more than a year's worth of construction - is expected to hit the market over the next 18 to 24 months.

Globe, Aug 16 2013
Foreign investors went on an unprecedented selling spree of Canadian bonds in June, offering further evidence of Canada’s fading international appeal.

There’s a psychology behind it. If people believe that everyone is buying Canadian-based assets, then they’ll also buy. It’s very much self-fulfilling. It’s the reverse when things are selling.”
If the July figures disappoint further, anti-Canada sentiment could gain momentum, she said. And not just outside Canada. The report also showed domestic investors buying up foreign assets at an increasing pace.


I’d say the sentiment is gaining momentum with how much rates have risen this summer.

Phil said...

Re: “5.8% unemployment is not bad”

Here’s a perfect example of how you can’t tell if it’s bad from the unemployment rate.
Nanaimo’s unemployment rate was 4.8 per cent in April, steadily declining from 6.5 per cent in February and a stark contrast to the 16.3 per cent of last April.

The question becomes is it because Nanaimo created thousands of jobs OR the jobless people left for work elsewhere?

Unemployment isn’t that helpful for measuring job growth. Another example is how Calgary and Edmonton are creating many thousands of jobs per month, yet their unemployment rate can go up because so many people are flooding into the province. It can take a few weeks for the newcomers to find their perfect job. If you just looked at the unemployment rate you would think the province is not doing well some months.

caveat emptor said...

"The unemployment numbers only take into account those who are currently receiving EI benefits."

Repeating that twice doesn't make it true info. If you want you can find out how the rate is calculated. Read the labour force survey, or even just wikipedia for god's sake.

Repeating blatant untruths after they are pointed out to you doesn't do much for credibility.

dasmo said...

So quoting a guy being quoted making up statistics gives your made up statistics more validity?

Just Jack said...

Just because our vacancy rate has gone from a low of 0.5 percent to 3.5 percent in the last decade doesn't directly translate into a decline in rental rates.

You'll find that property managers, like Rob Hunter, would rather keep the suite vacant than make a rent reduction that he might have to match with the existing tenants in the building.

As for suites in houses. If your suite is close to downtown, clean and well maintained you should have a lower vacancy and turn over rate.

With the new waste water tax that will be on utility bills, which is usually paid by the tenant, I don't think there is much chance for a rent increase over the next few years.

dasmo said...

...And I was at a show a few week back and they were using a Mackie mixer (designed here) and the band was using a TCHelicon Voicelive Play.....

caveat emptor said...

Is the Victoria economy weak?

I'd say the answer is "It depends"

What is the metric for economic "strength"? Unemployment Rate? Per capita GDP? Growth rate? Personally I think Bhutan is on the right track with their measure of "Gross National Happiness" since the economy should exist to serve human needs rather than the other way around.

By traditional metrics (income, employment) Victoria is stronger than much of BC. But of course if the comparison is to Alberta, BC as a whole is much weaker on those measures than Alberta.

I think looking at employment (rather than unemployment) is interesting.

Total population has grown slowly and steadily. However the "labour force" = working age unemployed plus employed, shrank after the finacial crisis, but is now climbing slowly back.

Total employment (# of jobs) peaked in 2008, fell thereafter and is now recovering.

Part time employment was 22.5% of total employment in 2008, climbed to 24.8% in 2009 and in 2012 was back down to 23.3%.

Some of the metrics have turned back down in the last few months, but overall the picture they paint is one of a halfhearted recovery rather than a decline.

caveat emptor said...

"If you are somewhat intelligent, willing to hustle and work hard plenty of opportunity other there in a variety of sectors including IT."

Since moving here 5 years ago I have been suroprised by the diversity of the economy. I always had victoria pegged as a 1 industry town (government). I keep meeting people doing really interesting careers that I didn't even know existed here. I've also met a number of consultants that have been able to combine the strength of the Alberta economy with the lifestyle of Victoria. Their clients are in Alberta but they live here for the superior climate and recreation opportunities

koozdra said...

"Housing is affordable the same way that naive consumers think that minimum payments on their credit cards are affordable.." -GM comment

Fiduciary said...

I've been in IT in Victoria for the past 7 years, and in my opinion if you're looking for physical products produced by the "high-tech" sector in Victoria you're missing a large portion of the work that comes out of this town - software. A lot of money goes into our local economy from both our provincial government and other provincial/national/state governments. So I wouldn't think of it in terms of what you've bought recently that was made in Victoria, I'd think of it as what you've used recently that was made in Victoria. Granted, that's harder to figure out.

Also, Marko, I've also had the experience that for good people in IT, there is always work here. Granted, I'm probably talking the top, I dunno, 30% of workers, so I imagine that's true of many sectors.

CS said...

Talking of prices, how about this? Seven, sixty-four square feet cutely priced at $327,777, or just $429.00 per foot. Built in 1930 on a miniscule lot, the ideal condo alternative in Esquimalt.

CS said...

I just ... purchased a tumblr skin...

What's a tumblr skin? Maybe I need one. Perhaps if we all bought one it would give the local economy a real shot in the arm.

CS said...

If you are somewhat intelligent, willing to hustle and work hard plenty of opportunity other there in a variety of sectors including IT.

Ha! but what if you are not "somewhat intelligent." Like maybe your IQ is only around 100 or a bit below, like half the population. Then screw 'em?

I've also had the experience that for good people in IT, there is always work here. Granted, I'm probably talking the top, I dunno, 30% of workers...

Oh, so it's actually the lower 70% who perhaps can't hack it.

The fact that the unemployment rate can vary widely over time, which suggests that most people will work if given an opportunity, but there are times when there are many who find no opportunity and thus finish up sleeping in a cardboard box or whatever.

CS said...

However, a large portion of Victoria's high tech sector is not geared for end-user products.

So you're in the high tech sector if you write software or do engineering design for someone else or if you make something really weird like a Tumblr skin, but it's just regular business if you, say, write software, as we did, for use in providing some mundane product such as smoked fish or a service such as the controlled microbiological disposal of septic tank sludge.

Just Jack said...

901 High-Tech companies in Victoria now. I just re-clasified myself from being a service industry to high-tech.

As I use a state of the art computerized ordering and delivery system. Digital photography and laser measuring with real time communications. Using cutting edge information systems to provide unique and mass automated valuations to anywhere in the World.

Alexandrahere said...

Marko: Thanks for the info. I looked at that condo and although it only had the one bath, it was very large at over 1000 sq. feet and in great condition. For $195K, it just shows how the older condos have dropped tremendously in value....

Phil said...

So much for the US housing recovery

New Home Sales Crater To Lowest Since October; Biggest Drop Since May 2010; Median Home Price At 6 Month Low

Renter said...

@ JustJack

So how would you define high tech companies if you don't like the one in use?

I'd have thought it obvious that any company writing software (including games), designing electronics, dabbling in biotechnology, or engineering robots (etc!) would qualify.

Fiduciary said...

So you're in the high tech sector if you write software or do engineering design for someone else or if you make something really weird like a Tumblr skin, but it's just regular business if you, say, write software, as we did, for use in providing some mundane product such as smoked fish or a service such as the controlled microbiological disposal of septic tank sludge.

CS, I wasn't saying that the examples you gave weren't high-tech. I would consider anyone that writes software to be in high-tech work - there was no intention for my definition to be exclusive, I was intending to broaden Just Jack's definition.

info said...

Victoria’s economy is weak and getting weaker.

When considering the health of the economy of any Canadian city, one must keep in mind that there has been unprecedented stimulus spending since 2009 as well as emergency interest rates for an unprecedented length of time, both, of course, adding much support to the Canadian economy in general.

What would Victoria’s already weak economy be like without this unprecedented stimulus? Well, the fact of the matter is that it would be much weaker than it is.

The most useful way to gauge the general strength/weakness of Victoria’s economy is to consider the overall amount of available rental accommodation, including houses, townhouses, condos and apartments and the resale inventory. Why? I’ll give an example to show why this gives an accurate assessment of the health of a city’s economy.

Edmonton is known for its booms and busts. When the economy improves and there are jobs up for grabs in that city, it experiences a massive influx of young people to fill those jobs, despite the cold climate. As this happens, the vacancy rate goes down as does the general availability of rental accommodations. As well, the inventory of resale properties decreases. It has happened many times in the city’s history. Most recently, there was a big influx of young people in the early to mid 2000s at which time the effect I described above took place.

When Edmonton’s economy slows down and becomes sluggish, young people move away as many lose their jobs. This causes the vacancy rate, the general availability of rental accommodation and the inventory of resale properties to increase dramatically. Again, this cycle has occurred many times in Edmonton’s history to varying degrees. It has happened so many times that it has become a very useful gauge of the strength/weakness of the city’s economy.

continued...

info said...
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info said...

We can also use this effect to gauge the overall strength/weakness of Victoria’s economy.

Victoria’s housing market has had an unusually large supply of resale inventory for some time. As well, the amount of available rental accommodation is very high when compared to 2009 and earlier. Indeed, the city’s vacancy rate has increased by 600% over the last decade.

What this means is that Victoria’s economy is so weak that it is unable to provide nearly enough employment to reduce the large number of rental vacancies or the large supply of resale properties. If the economy was strong and the job market was at all attractive in our city, then people would be moving here to find work, just as they do when the job market in Edmonton is firing on all cylinders. What makes this worse is that it all comes at a time when emergency interest rates have been in effect for 4 years and the Canadian economy has been benefiting from an unprecedented amount of stimulus spending since 2009.

Yet, there are those who ignore this and choose to point to employment numbers as the main reason to think that Victoria’s economy isn’t struggling. Lately, the unemployment numbers for Victoria have been painting a much brighter picture of the overall health of the economy than what is warranted. Consider that many young people who have lost their jobs in recent years have left our city in search of work elsewhere. This has pushed Victoria’s unemployment rate lower, making the economy look better than it actually is.

The unemployment rate does not take into account "discouraged workers" - those who have lost their jobs and have given up looking. An example can be used to emphasize the fact that this lowers the unemployment rate. If 99% of those currently employed in Victoria lost their job today, looked for a job, couldn't find one and then became classified as discouraged workers, the unemployment rate would be extremely low, even though 99% of those who had been working a year earlier (or whenever the jobs were lost) would be jobless. The unemployment rate definitely has its limitations in terms of being able to accurately reflect the strength or weakness of an economy.

I talked with a guy who owns a car repair shop. He told me that business is down dramatically from a year earlier. I also talked with a guy who runs a flower shop that has done deliveries to all areas of Greater Victoria for many years. He hires many drivers for the busy times of the year. He said that the number of deliveries this year on Valentine’s Day and mother’s day were down to about half of what they were in 2012, which was down from 2011. This is valuable information that definitely points to a struggling/weakening economy.


StalJ said...

On the topic of high-tech, the Govt of Canada has Calgary as having "the highest number of technology start-ups per capita."

Just Jack said...

The point about "high-tech" is that what a decade ago would have been called manufacturing or a service industry is being re-branded as high-tech. If your company makes light bulbs - its a manufacturing company. If your company makes LED lights - its high tech. If your company does software support - its high tech. If your company helps people in book keeping - its a service industry.

However, if your accountant helps you by interfacing through the computer then his businees is now high tech.

So what is high-tech? High-tech isn't just software its more of way to rebrand your company as being cutting edge or state of the art. Which were also sound bites of the past that meant little.

CS said...

, I wasn't saying that the examples you gave weren't high-tech.

No, I understand. But its worth noting that if companies that develop proprietary technology for their own use are included, then the high tech sector comes to include many players in most industries.

But I'm doubtful that the mere use of the product of technology development, e.g., Just Jack's laser tape measure, makes one part of the tech sector. Depends, maybe, on the originality and technical virtuosity of the purpose to which JJ applies his high tech software and equipment.

Chickinvic said...

Marko,

I was wondering if you could please tell me what #110-2721 Jacklin Road sold for (in July I believe).

Thanks!

Fiduciary said...

Well if we're discussing definitions it may be useful to reference to BC Employment Standard Regulations that define high-tech workers and high-tech companies. Those regulations are what decide if an employee is eligible for things like paid overtime, etc.

http://www.labour.gov.bc.ca/esb/facshts/high_tech.htm

CS said...

it may be useful to reference to BC Employment Standard Regulations that define high-tech workers and high-tech companies.

These definitions were created to establish who would qualify for certain incentives for R and D in BC. They are not too useful in establishing how widely and how deeply technology development contributes to the economy, local or otherwise.

probably the largest R and D contributions to the economy both in total cost and economic effectiveness are made by giant corporations such as Kraft, Intel, Exxon, Boeing, GM, the forest companies, etc., notwithstanding that their tech workforce accounts for only a small proportion of their total payroll.

CS said...

Her's the StreetView image of that 1930's 700+ square foot beauty on Lyall St. (price $327,777) showing the well landscaped back yard.

Considering only lot value, the price is $161.47 per square foot, which is almost twice what you'd pay for the most expensive Oak Bay Waterfront home, offered at a mere $85.00 per foot -- the nicely renovated 10,778 square foot house being included at no extra charge.

Is there something slightly screwy about the bottom end of our housing market, or what?

Marko said...

Considering only lot value, the price is $161.47 per square foot, which is almost twice what you'd pay for the most expensive Oak Bay Waterfront home, offered at a mere $85.00 per foot -- the nicely renovated 10,778 square foot house being included at no extra charge.

If a one acre property is $500,000 there is no way a five acre property is $2,500,000. It doesn't work that way. Once you hit a certain threshold each subsequent unit of land goes for less and less.

Marko said...

I was wondering if you could please tell me what #110-2721 Jacklin Road sold for (in July I believe).

$292,000

CS said...

Once you hit a certain threshold each subsequent unit of land goes for less and less.

Here's a smaller piece of E Saanich waterfront, half the size of the OB waterfront linked above, and its only $31 per foot, less than half the price of the OB property and a fifth the price of the property on Lyall Street. So how small do you have to go before you start paying a silly price for non-waterfront in a non prime area?

CS said...

Oops, the link.

Chickinvic said...

Thanks Marko

Just Jack said...

If you are going to compare building lots, then they all should be roughly the same size.

And for waterfront land. The lots will sell at a price in relation to the surrounding non waterfront lots. For example, if 6,000 square foot non waterfront lots in Esquimalt were selling for $300,000. Then a 6,000 square foot waterfront lot in Esquimalt may sell at twice that amount or $600,000.

In Oak Bay, a non waterfront lot may sell for $500,000 and the same size Oak Bay waterfront at twice that amount or $1,000,000.

There's a lot more than just a price per square foot rate when comparing water front properties. I only wish it were that simple.

koozdra said...

The frantic hourly craigslist repost period begins as landlords are try to attract the mythical "mature extremely quiet professional or student".

koozdra said...

Winners and losers as Canada bids adieu to record-low interest rates

"The general consensus has always been that interest rates could not stay so low indefinitely."

Of course everybody acknowledged that there was going to be trouble when rates rise. But don't worry, they said, that won't happen for the foreseeable future.

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