Wednesday, October 16, 2013

Oct 17 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.

October 2013October
Wk 1Wk 2Wk 3Wk 4
Unconditional Sales89

New Listings240444

Active Listings44084390

Sales to New Listings

Sales Projection--546

Months of Inventory

A strong start to the month.  Don't believe that sales projection as sales will slow down, but there is a real dearth of new listings (active listings still high) out there right now and relatively (to last year) decent sales.   October is about the last month that could be affected by ultra-low rate holds, so either this is the last hurrah or rates increasing are having very little effect.  As a point of reference, last Oct 15th we had only 166 sales and 483 listings, and that was with 2 mondays to that point where this year we only have one month to date.

Had a Jehova's Witness REALTOR® drop off a letter today...
Dear Homeowner,
I am pleased to let you know that the house as <neighbour's address> has just been unconditionally sold.  The property was sold before it was actually listed which is an indication of a strong interest for homes in established areas such as yours.  The offer that was accepted came in close to the asking price and both parties are very happy with the outcome.
Should you have any questions related to this sale or any other real estate inquiries, feel free to get in touch etc and so on.  
Well I guess you don't get in the top 10% of realtors in this market by sitting around!

I do wonder about who is basing their decision to sell their house on what the neighbours are doing, rather than what their own plans are...


Leo S said...

Clearly I've shown that the Teranet is biased upwards and the market is much weaker than it appears from their numbers.

I guess I missed this clear explanation.

patriotz said...

The property was sold before it was actually listed... The offer that was accepted came in close to the asking price...

So the owner accepted an offer below asking (had to be below, if it was above the realtor would have said so) before the property hit the MLS and that's supposed to be a sign of a strong market? Sounds like a sign of a nervous seller to me.

CS said...

Some numbers from a Oak Bay:

Residents in the same dwelling for more than 5 years:

1991: 55%
2006: 88%

Residents 55 or older:

1991: 40%
2011: 56%

So Oak Bay residents are getting significantly older and with age they appear to be less likely to sell their house.

Rapid aging with a decline in mobility seems to go a long way to explain low sales in OB.

The decline in SFH sales to condo sales in the period 2000 to 2006 (see last thread) presumably explains in part the post-2008 moderation in SFH prices.

But the price data we have are mainly for Greater Victoria, whereas the aging/mobility data cited above are for OB alone, so it is difficult to draw very definite conclusions!

caveat emptor said...

interesting numbers

Obviously there are a host of issues causing the current low sales volume (regionwide not just in Oak Bay). Seems like age could be a factor - my anecdotal observations would suggest that past a certain age people only move when they HAVE to (infirmity, death, financial straits).

The low sales volume isn't totally a bad thing in my mind. Moving frequently when you own (and "have to" sell and buy) is financial harikari except in a rapidly inflating RE market. Moving has huge costs - RE fees on sale, PTT, legal fees, financing fees, moving costs, big cost in time spent and usually a big bill in decorating and furnishing the new place as some stuff just doesn't fit. Less playing "musical houses" will actually benefit most Canadians' finances though it definitely impacts RE dependent industries.

StalJ said...

@cav emp
"Seems like age could be a factor..."

I think the greatest challenge facing Oak Bay is the tidal wave of residents becoming net-selling age.

The net sell rate becomes substantial once people hit their seventies.

info said...

The following is a simplified (exaggerated) version of yesterday's post.

March - May:

Expensive group (group A) sales:
600 K, 600 K, 600 K, 600 K

Less expensive group (group B) sales:
400 K, 400 K, 400 K, 400 K, 400 K

Misc. group (group C) sales:
500 K, 500 K, 500 K, 500 K

3-month median:

Group A: 600 K
Group B: 400 K
Group C: 500 K

Overall median: 500 K

July - September:

Group A sales:
540 K, 540 K, 540 K, 540 K
540 K, 540 K, 540 K, 540 K

Group B sales:
360 K, 360 K

Group C sales:
450 K, 450 K

3-month median:

Group A: 540 K
(median dropped 10%, as a result of a declining market)

Group B: 360 K
(median declined 10%)

Group C: 450 K
(median declined 10%)

Overall median: 540 K
(increased 8% as a result of upward skewing, despite the fact that prices were down in each (separate) group)

Group A = Oak Bay group
Group B = Langford group
Group C = any area that doesn't fit into A or B

From May to the end of September, the SFH 3-month median for

Group A dropped by 10%
(Oak Bay group dropped by 3.6%)

Group B dropped by 10%
(Langford group dropped by 1%)

Group C dropped by 10%
(Misc. group dropped by 1%)

Overall 3-month median (Groups A, B and C) increased by 8%

Overall 3-month median (Oak Bay group, Langford group and Misc. group) increased by 1%

Prices have declined since May (Oak Bay group -3.6%, Langford group -1% and Misc. group -1%) as a result of a weak and declining market.

The overall 3-month median shows an increase of 1% as a result of upward skewing.

From May to the end of September, total sales of the Oak Bay group dropped only 7.7%, while total sales of the Langford group dropped by a whopping 22%. In other words, there was a significant change in the sales mix between May and September. September had a higher representation of Oak Bay sales and a lower representation of Langford sales compared to May. This pushed the overall median higher, despite falling prices in all 3 groups.

That is how upward skewing works.

caveat emptor said...

Even scarier than OB demographics is Sidney and Parksville. Both with median ages quite a bit older than OB.

The question is whether those areas will continue to attract new residents (and at what housing price) to replace existing residents as they die off.

Just Jack said...

Oak Bay has a high satisfaction with home owners with 27 percent of the properties listed for sale being purchased prior to 2000.

Yet some do buy too much home and quickly realize that they are bleeding bucks. That's one reason why 31 percent of the homes up for sale today were purchased after 2009.

And then there is the seven year itch when people want to change houses and spouses. In just years 7 and 8 of owning a home in Oak Bay 34% of people are wanting to sell.

I would wrap it up this way. 31 percent screwed up and bought too much house. 34% got caught by their spouse with their pants around their ankles. And the last third are likely downsizing to a condo, assisted living or Ross Bay cemetary.

Leo S said...

That is how upward skewing works.

I realize that. But the teranet, being a repeat sale index, should not be affected by such sales mix changes. That was the discussion.

Leo S said...

Even scarier than OB demographics is Sidney and Parksville. Both with median ages quite a bit older than OB.

The question is whether those areas will continue to attract new residents (and at what housing price) to replace existing residents as they die off.

We basically have our answer already. Sidney population declined in the last 5 years. The prices are still too steep to keep people there.

caveat emptor said...

Oak Bay and Sidney both declined slightly, though given the small numbers probably within the margin of error of the census, so pretty close to zero growth over five years. Parksville meanwhile grew quite fast. Perhaps prices there are cheap enough to be an attractive retirement destination still?

Raphael Jenks said...
This comment has been removed by the author.
Raphael Jenks said...

Looks like Capital City Centre just went capoot. I wonder how this is going to affect Colwood?
So much building going on, is there really a market for all these houses and condos?

CS said...

The question is whether those areas will continue to attract new residents (and at what housing price) to replace existing residents as they die off.

We are, it seems, as a biological entity, a failing society:

Fertility rates for BC 2007-2011
1.52 1.51 1.50 1.43 1.42

Only two-thirds of the replacement rate and falling. What are VREB and the construction industry doing about this?

CS said...

Maybe the solution is for us geriatric Oak Bay residents to designate our homes as mausoleums, so that we can continue to occupy them, at least until property taxes wipe out the rest of our estate. That should stave off the price collapse for a few years.

kabloona said...

Yeah, Rachelle was right all along....

dasmo said...

CCC going under would be a good thing IMO. The investors lost their money as soon as it went in. 3% management fees among other ways to pull money out pretty much guaranteed that. Now it's what's best for the area and the sooner the lot can be repurchased at a reasonable price the better. Hopefully with someone that has a more appropriate vision for the area....

StalJ said...

Sad how many people lost a lot of money.

Just Jack said...

It's important to get the foundation poured before declaring bankruptcy on the project. Otherwise it might be difficult to argue that the company wasn't in the business of just raising money.

If the project goes into bankruptcy and is sold for nickles on the dollar, the project will become economically viable.

Any guesses on who might be the directors of the new numbered company?

StalJ said...

Strange...the TD housing outlook released today has Victoria as the only major market that will experience declining home sales in 2014 (-10%). 5581 this year, 5021 sales next year. Not sure I agree.

Leo S said...

More estimates from thin air. Funny how they put 5021 sales for 2014, and 5022 for 2015. Down to the single sale!

Why not just admit that at best they might be able to guess the first digit? It's reasonably likely sales will be somewhere in the 5000s. Thats all anyone can say.

Marko said...

Funny how they put 5021 sales for 2014, and 5022 for 2015. Down to the single sale!

In my opinion pinning it down to a single sale doesn't give the report a lot of credibility. Makes it look ridiculous.

Jack and Cate said...

Unique ways to finding a place to live or owning a home - now whether they are smart ideas is up to the reader...

Struggling with expensive market

Renter said...

re: Gen Y living in shitty rooms, boats, and vehicles

Yeah it sucks, but has everyone forgotten that they're not the only generation to have to deal with this kind of thing? I know for a fact Gen X did, and I'm sure that the Boomers did too in their hippie days.

I personally have had several co-workers who lived in boats and vans, lots of others who lived in scary, crappy rooms with a shared kitchen and bathroom down the dank, mildewy hallway, and plenty that went from couch surfing to house sitting to couch surfing again. I myself once shared a 1 bdrm apartment with 5 other people and also spent a year and a half couch surfing aka "technically homeless", all while attending my last year of high school and university.

I guess maybe there were articles like this back in the 80s/90s too; I just never read them without the Internet. (BBSs just weren't the same.)

Alexandrahere said...

Good Monday Afternoon all:

Just a few tidbits.

Last week, SFH within my criteria had the lowest Median price at $510K, since I began tracking that stat two years ago in Oct of 2011.

My criteria is SFH in Vic,OB,Esq,SE&SW, with a min of 2 beds and 2 baths, priced between $375K and $775K.

The highest selling price was $745K on Grafton in Esquimalt and the lowest was $367K on Cedar Hill.

The SE areas of Mt.Doug, Gordon Head and Lambrick Park did well with 3 sales, averaging $613K.

info said...

The peak for the upper end of the Greater Victoria SFH market (Oak Bay, Saanich East and North Saanich) was reached in April 2010 (based on sales weighted 3-month median data).

Peak: $684.71 K (April 2010)

Other results:

Since the peak, the low was in February 2013. That value was $607.27 K (11.31% below peak).

September 2013: $611.73 K (10.66% below peak)

I'm currently working on the low end of the SFH market.

Anonymous said...

I've been tracking sales in OB with assessed values around $650. Noted two recent sales that seem to have set a new standard for values in that category. 2770 Thompson listed at $688 sold at $607..assessed at $647 and 2259 Central Ave listed at $659 sold at $607..assessed $644. Watching to see what someone will pay for the listing in the same category on Armstrong.

Marko said...

Monday, October 21, 2013 3:25pm

MTD October
2013 2012
Net Unconditional Sales: 319 373
New Listings: 650 1,068
Active Listings: 4,369 4,876

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

Anonymous said...

Another OB property I'm watching with interest is a listing held by our resident realtor Marko on 2588 Dufferin which was initially listed at a whopping $799,000 followed by a whopping reduction to $719,000. Since it is only assessed at $645,000 similar to the recent Thompson and Central sales at $607,000 I'm interested to see if there are buyers out there still willing to overpay for this dime a dozen category of OB homes.